Community First Bancorporation Announces Third Quarter 2020 Financial Results

Community First Bancorporation, Inc. (OTC: CFOK), parent company for Community First Bank, Inc. (the “Bank”) and SeaTrust Mortgage Company (“STM”), announced its financial results for the third quarter of 2020. Highlights of the results include:

·         Total consolidated earnings were $842,000 for the third quarter and $1,307,000 for the nine-month period ended September 30, 2020.

·         Net interest income grew by 11.3% year over year for the nine months of 2020.

·         Non-interest income included results for STM and increased 140% over the level reported in the first nine months of 2019.

·         Total assets as of September 30, 2020 were $518,462,000, an increase of $23,953,000 or 4.8% compared to total assets of $494,509,000 as of June 30, 2020, and an increase of 23.9% compared to total assets of $418,564,000 as of December 31, 2019.

·         As of September 30, 2020, total gross loans held for investment were $395,092,000, an increase of 22.7% compared to total gross loans held for investment of $322,012,000 at December 31, 2019. Loans held for investment included $19,035,000 of loans made under the Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”).

·         Loans held for sale increased 214.8% to $18,102,000 compared to $5,750,000 as of June 30, 2020.

·         Total deposits as of September 30, 2020 were $423,668,000 compared to $353,246,000 as of December 31, 2019, an increase of $70,422,000 or 19.9% over December 31, 2019 totals.

Total consolidated earnings of $842,000 were recorded for the third quarter of 2020 compared to $110,000 for the second quarter of 2020 and $443,000 for the third quarter of 2019. Earnings per common share for the third quarter totaled $0.15 compared to $0.01 for the second quarter of 2020 and $0.07 for the third quarter of 2019. Activity in both STM’s mortgage business and the Bank’s SBA portfolio generated significant increases in non-interest income in the third quarter. Low interest rates and technology paired with our outstanding team have enabled us to capitalize on opportunities available to our mortgage subsidiary. Despite the impact of the COVID-19 pandemic generally and upon our new branch locations in particular, our team still managed to grow deposits by 2.1% during the quarter.

Net interest income grew by 11.3% year over year for the first nine months of 2020, driven primarily by solid loan growth experienced over the period. Net loans held for investment grew $72,232,000 or 22.7% over the nine months ended September 30, 2020. The growth included over $19 million of PPP loans made by the Bank in the communities we serve to over 400 small business customers impacted by the pandemic. However, yields on loans made under the PPP program negatively impacted overall yields on loans during the second and third quarters. In addition, the Company deferred recognition of a portion of the net fee income receivable from the SBA on our PPP loans until those loans are forgiven or repaid. Net loan fees on PPP loans totaled approximately $750,000 at origination. These net fees are being amortized over the life of the loans. Overall loan yields for the first nine months of 2020 were 4.92% compared to 5.26% in the first nine months of 2019. Declines in market interest rates resulting from the pandemic also negatively impacted overall earning asset yields by approximately 34 basis points for the first nine months of 2020 compared to the first nine of 2019. Cost of funds did not decrease by the same magnitude, thereby decreasing our net interest margin by 25 basis points in the first nine months of 2020 compared to the first nine months of 2019.

Non-interest income for the third quarter of 2020 totaled $2,338,000 compared to $1,085,000 for the second quarter of 2020 and $652,000 for the third quarter of 2019. The increase was primarily due to loans originated and sold by STM, which began these activities late in the first quarter of 2020. An additional positive factor in the third quarter was an increase in gains on sales of SBA loans in 2020 compared to 2019. Through the first nine months of 2020 SBA loan sales generated almost $200,000 of additional non-interest income in comparison to 2019.

Non-interest expense increased to $13,567,000 for the nine-month period ended September 30, 2020 compared to $10,979,000 for the nine-month period ended September 30, 2019. Non-interest expenses were impacted in 2020 by several factors. The opening of our Dallas, North Carolina branch in the first quarter of 2020, the opening of a second North Carolina branch in Charlotte in the second quarter and expenditures related to the pandemic all resulted in increased non-interest expense. STM increased both its loan origination and processing capabilities throughout 2020. STM began originating loans in the first quarter with locations in Wilmington, North Carolina, and Seneca, South Carolina. STM has since added production personnel in the Greensboro, Jacksonville and Charlotte, North Carolina areas and additional operations personnel in its corporate office in Wilmington, NC, and originators in Georgia and Florida. To date STM has originated over $77,916,000 in single family mortgage loans, primarily in North and South Carolina.

President and CEO Richard D. Burleson commented: “2020 has been a remarkable year in many ways for Community First Bancorporation. While some of the most challenging times in recent history of our great nation have challenged us all, at Community First the global pandemic has not only forced us to forge new ways of providing services to our customers and communities, but has also presented us with unprecedented opportunities. We are pleased with the results STM has been able to achieve in its first year, and are excited to see what the future holds, especially considering that STM originated its first loan one month before the pandemic began. In addition, our previously announced merger with Security Federal Bancorp, Inc. of Elizabethton, Tennessee will offer us new markets and experienced personnel in both Eastern Tennessee and in mortgage loan servicing.”

Mr. Burleson continued, “On October 20, 2020 the North Carolina Commissioner of Banking approved our first loan production office (“LPO”) in Western North Carolina to be located at 37 Church Street, Waynesville, NC 28780. We believe that this LPO will allow our Bank to capitalize on the disruption in that market arising from several recent mergers and we expect to build out our franchise in Western North Carolina with the initial use of LPOs that will be converted to branches once we have obtained enough loans to profitably open full-service financial centers. These LPOs and future branches will complete the bridge from the upstate of South Carolina into our new markets in Eastern Tennessee.”

Mr. Burleson continued, “The impact of the pandemic on our customer base has been fairly moderate to date. In order to assist our customers in dealing with the pandemic’s impact on them, the Bank granted deferrals of all or a portion of payments on 139 loans with total outstanding balances of approximately $64 million. The majority of loans granted deferrals were with customers in the hardest-hit industries such as retail, hotels and restaurants.”

For additional information, please see our website at https://www.c1stbank.com/About-Us/Newsroom

Media Contact Information

Alisa Suddeth
asuddeth@c1stbank.com
(O) 864-886-7184

Source: Community First Bancorporation