Community First Bancorporation Announces First Quarter 2021 Financial Results

Community First Bancorporation, Inc. (OTC: CFOK), parent company for Community First Bank, Inc. (the “Bank”) and SeaTrust Mortgage Company (“SeaTrust”), announced its financial results for the first quarter of 2021. Highlights of the results include:
Total consolidated earnings of $359,000 were recorded for the first quarter of 2021 compared to $355,000 for the first quarter of 2020, an increase of 1.1%. Earnings per common share totaled $.06 for the first quarters of 2021 and 2020. Net income was impacted by merger-related expenses of approximately $371,000, net of tax. Net earnings for the quarter would have been approximately $730,000, excluding merger-related expenses.
Net interest income grew by 13.9% year over year for the first quarter of 2021, driven primarily by solid loan growth during the period. Noninterest income totaled $3,006,000 for the first quarter compared to $1,039,000 for the first quarter of 2020, primarily due to loans originated and sold by SeaTrust. Noninterest income was also impacted by an increase in gains on sales of Small Business Administration (“SBA”) loans (non-Paycheck Protection Program, or “PPP”, related loans) of $175,000 and income from loan referral fees of $38,000 during the first quarter of 2021.
Noninterest expense increased 56.9% year over year. Merger-related expenses of $489,000 were included in noninterest expense in 2021. In addition, a large portion of the increase in noninterest expense relates to commissions paid, software, and other loan related expenses paid on the SeaTrust origination activity.
President and CEO Richard D. Burleson commented: “The first quarter of 2021 has shown great promise for the future of our Company. We believe the investments in systems, infrastructure, products, and services we have made over the last several years are beginning to take root and provide our company with the returns we anticipated. I believe we will experience additional growth in our capabilities as we continue to expand the product offerings of the Bank. With the acquisition of SFB we will be able to offer another level of mortgage products that we did not previously offer in-house. Additional products, coupled with our ability to service our mortgage loans, should have a significant impact on future earnings once we have the program fully implemented and operational in all of our branch locations.”
At March 31, 2021, total gross loans held for investment were $442,236,000, an increase of 9.8% compared to total gross loans held for investment of $402,600,000 at December 31, 2020. During the quarter, the Bank acquired $39,319,000 of loans in its acquisition of SFB. At the same time, loans originated in 2020 under the SBA’s PPP program declined due to forgiveness payments totaling $11,081,000. PPP Loans retired through forgiveness repayments represented 63.3% of the PPP loan balances as of December 31, 2020. The Bank recorded approximately $320,000 of net fee income that was previously deferred on PPP loans.
Total deposits on March 31, 2021 were $527,124,000 compared to $442,868,000 on December 31, 2020, an increase of $84,256,000, or 19.0%, over December 31, 2020 totals. Of that amount, $45,616,000 was attributable to the acquisition of SFB.  
Mr. Burleson commented: “Almost exactly one year into the COVID-19 pandemic, Community First Bank is growing its footprint and its balance sheet. After the pandemic forced us and most other financial institutions in our markets to close our lobbies to in-person transactions, we continued working as a team to serve our communities.”
He also stated: “We welcomed new team members in Tennessee in March 2021, and we expect to fully integrate our systems early in the third quarter. We are excited about the two full-service branches in Elizabethton as well as the loan production office we opened on March 1, 2021 in Kingsport, Tennessee and the mortgage origination office we opened in Murfreesboro, Tennessee.”
The Company’s mortgage subsidiary, SeaTrust, which began originating loans in the first quarter of 2020, now has locations in North Carolina, South Carolina, Florida, and Tennessee. SeaTrust sold approximately $61,000,000 of single-family mortgages during the first quarter of 2021 and contributed $2,160,000 of noninterest income for the quarter.
The Bank continues to have high asset quality. Its nonperforming assets (“NPAs”), comprising nonperforming loans and foreclosed assets, increased to $1,534,000 at March 31, 2021, compared to $976,000 at December 31, 2020. The increase in non-preforming loans was the result of NPAs acquired in the SFB acquisition and does not reflect an increase in the pre-merger portfolio of the Bank. The total includes foreclosed assets of $602,000 and $932,000 of non-performing loans. At March 31, 2021, we had four loans in our foreclosure pipeline and our past due percentages remained excellent. At March 31, 2021, our Allowance for Loan and Lease Losses (“ALLL”) totaled $4,943,000, an increase of 2.74% over the December 31, 2020 level. The ALLL totaled 1.12% of total gross loans held for investment at March 31, 2021. The Bank continues to work with borrowers affected by the pandemic. Four loans with total principal balances of $8,029,000 remain in pandemic-related deferral status. A majority of the outstanding balance of these loans is in the hospitality industry and the subject loans are expected to return to pre-pandemic payment schedules in the second quarter of 2021.
Mr. Burleson noted: “Our highest priority, along with maintaining our well capitalized status and satisfactory liquidity levels, is serving our communities. We are committed to maintaining this priority during these unprecedented times. We continue to work with our affected customers and to be a leader in the communities we serve. The Bank’s Tier 1 Leverage Capital Ratio was 9.70% at March 31, 2021, and liquidity levels remain satisfactory.”
Community First Bank has twelve full-service financial centers in North Carolina, South Carolina and Tennessee, with two each in Seneca and Anderson and single locations in Greenville, Williamston, Walhalla and Westminster, South Carolina, in Dallas and Charlotte, North Carolina; and two locations in Elizabethton, Tennessee. The Company operates loan production offices in Concord and Waynesville, North Carolina and in Kingsport, Tennessee. Through its mortgage subsidiary, SeaTrust Mortgage Company, the Bank operates mortgage banking offices in North Carolina, South Carolina, Florida, and Tennessee.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This News Release contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect,” “will,” “may” and words of similar meaning. These forward-looking statements include, but are not limited to statements of our goals, intentions and expectations; statements regarding our business and strategic plans, prospects, growth and operating strategies; statements regarding the asset quality of our loan and investment portfolios; and estimates of our risks and future costs and benefits.
These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. The Company is under no duty to and do not undertake any obligation to update any forward-looking statements after the date of this News Release.
The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:
Jennifer Champagne, EVP and CFO jchampagne@c1stbank.com
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COMMUNITY FIRST BANCORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
(Amounts in thousands except per share information)
Three Months Ended March 31,
Income Statement  
2021
2020
Change
Net interest income 
 $             4,306
 $             3,779
14.0%
Provision for loan losses
130
196
-33.7%
Other income
3,006
1,039
189.3%
Other expense
              6,557
              4,180
56.9%
Income before income taxes
625
442
41.4%
Benefit (provision) for income taxes
                 (266)
                 (87)
205.8%
  Net income
 $                359
 $                355
1.1%
  Dividends paid or accumulated on preferred stock
                   39
                   39
-%
  Net income available to common shareholders
 $                320
 $                316
1.3%
Net income per common share
     Basic
 $               0.06
 $               0.06
     Diluted
 $               0.06
 $               0.06
March 31,
March 31,
December 31,
2021
2020
2020
Balance Sheet
(Unaudited)
(Unaudited)
(Audited)
     Total assets
 $      630,954            
 $      447,656     
 $       543,988
     Gross loans
442,236
341,995
402,600
     Allowance for loan losses
4,943
3,930
4,811
     Loans held for investment, net
437,293
338,065
397,789
     Loans held for sale
12,655
2,590
14,569
     Securities
55,773
44,015
43,659
     Total earning assets
605,469
426,583
523,161
     Total deposits
527,124
373,555
442,868
     Shareholders’ equity
50,894
49,255
50,788
     Book value per common share
8.69
8.39
8.67
(Continued)
COMMUNITY FIRST BANCORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS, Continued
(Unaudited)
(Amounts in thousands except per share information)
March 31,
March 31,
December 31,
2021
2020
2020
Asset Quality Data
(Unaudited)
(Unaudited)
(Audited)
Nonperforming loans
  Non-accrual loans
 $           932
$           700
 $             487
  Past due loans 90 days or more
              0
                 0
                 0
     Total nonperforming loans
932
700
487
  Foreclosed Assets
          602
             793
            489
     Total nonperforming assets
 $        1,534
$        1,493
 $             976
Net charge-offs (recoveries) year to date
 $             (2)
$               6
 $               29
Nonperforming assets as a percentage of total loans and foreclosed assets
0.35%
0.44%
0.24%
Nonperforming assets to total assets
0.24%
0.33%
0.18%
Allowance for loan losses to
     nonperforming loans
530.36%
561.43%
987.89%
Allowance for loan losses to total loans outstanding
1.12%
1.15%
1.19%
Net charge-offs (recoveries) to total loans outstanding
0.00%
0.00%
0.01%
March 31,
March 31,
December 31,
2021
2020
2020
Capital Ratios- Community First Bank
(Unaudited)
(Unaudited)
(Audited)
Tier 1 Capital (to average assets)
9.70%
10.3%
8.81%
Source: Community First Bancorporation