WALHALLA, S.C., May 9, 2022 /PRNewswire/ — Community First Bancorporation, Inc. (OTC: CFOK) (the “Company”), parent company for Community First Bank, Inc. (the “Bank”) and SeaTrust Mortgage Company (“SeaTrust”), announced its financial results for the first quarter of 2022. Highlights of the results include:

  • The Company earned $1,153,000, posting its highest first quarter results in the history of the Company.
  • The Company paid its first-ever cash dividend on common stock.
  • Total consolidated earnings increased 221% compared to the comparable 2021 period. The first quarter of 2021 included merger-related expenses of $489,000 ($371,000 net of tax).
  • Net interest income grew by 21% year over year.
  • Noninterest income increased 14% over the level reported in the first quarter of 2021. The primary driver of the increase in noninterest income in 2022 was SBA loan sales income.
  • Deposits increased almost 6% during the quarter.
  • On April 28, 2022, the Company announced the sale of its mortgage subsidiary, SeaTrust Mortgage Company, Inc. to Primis Bank, Glen Allen, Virginia.

Total consolidated earnings of $1,153,000 were recorded for the first quarter of 2022 compared to $359,000 for the first quarter of 2021, an increase of 221%. Earnings per common share totaled $.20 for the first quarter of 2022 compared to $.06 for the first quarter of 2021. Net income was impacted by the growth of the balance sheet in 2022 and by merger-related expenses of approximately $371,000, net of tax, in 2021.  

Net interest income grew by 21.3% year over year for the first quarter of 2022, driven by interest-earning asset growth. Average balances of loans were higher by 11.5% and investments were 114.6% higher in the first quarter of 2022 than in the first quarter of 2021.  Noninterest income totaled $3,439,000 for the most recent quarter compared to $3,006,000 for the first quarter of 2021, primarily due sales of SBA loans. Noninterest income attributed to SeaTrust was lower in the first quarter of 2022 than in 2021 primarily due to pricing volatility in the mortgage market caused by rate increases implemented by the FOMC to curb inflationary pressures.

Noninterest expense increased 9.9% year over year. Salaries and benefit costs increased $745,668, or 19.7%, in 2022 compared to the first quarter of 2021. Increased salaries and benefit costs in SeaTrust accounted for $437,459, or 58.7% of the year over year increase. The remainder of the increase was attributable to commissions on SBA loans and a full quarter of salaries associated with the acquisition of Security Federal Bank in March 2021. Occupancy expenses increased $196,000 in the most recent quarter, including an increase of $53,000 year over year in SeaTrust occupancy expense primarily due to an increase in rent and equipment expenses. Marketing costs increased 19.8%, and miscellaneous loan expense increased 43.4% with 83% of the increase attributable to costs in the mortgage subsidiary. Professional fees declined 41.6% in 2022 compared to the first quarter of 2021 primarily due to merger related expenses incurred in 2021. Costs of maintaining OREO declined 68.0% in 2022 compared to 2021, and operating expenses declined 12.8% year over year. A significant portion of the decline in other operating expense during the quarter was $206,000 related to mortgage loans held for sale commitments, which was included in other operating expense.

President and CEO Richard D. Burleson commented: “last year we stated that the first quarter of 2021 had shown great promise for the future of our Company. As noted then, and even more so now, 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. We have experienced organic growth in our capabilities, including SBA loan originations and sales finance, retail, and commercial lending. Additionally, we have gained new competitive mortgage products and capabilities including the ability to retain the servicing of Freddie Mac loans via our acquisition of Security Federal Bank in 2021.

Mr. Burleson continued “the sale of our mortgage subsidiary, SeaTrust, will allow us to focus more specifically on customers in the communities served by our Bank’s branch offices. Rather than originating and selling the loans to a third party, we will strive to offer our customers mortgage loans that we intend to service locally and pair that service with other banking products and services, thereby providing a full-relationship approach to local customers in the markets we serve.”

 At March 31, 2022, total gross loans held for investment were $457,501,000, a slight decrease of .27% compared to total gross loans held for investment of $458,752,000 at December 31, 2021. During the quarter, the Bank sold approximately $4,424,000 of SBA loans that were included in total gross loans held for investment as of December 31, 2021. Average loans held for investment increased year over year from $442,236,000 for the first quarter of 2021 to $460,818,000 for the first quarter of 2022, allowing the Company to increase interest income earned from loans held for investment by 10% in 2022 over the amount earned in the comparable quarter of 2021.

Total deposits on March 31, 2021 were $595,421,000 compared to $563,511,000 on December 31, 2021, an increase of $31,910,000, or 5.7%.   

Mr. Burleson commented: “We are very happy with our quarterly earnings and the fulfillment of past investments in our Company. However, our management team realizes we are not yet at the consistent level of earnings that we desire. The sale of SeaTrust is bittersweet; we built a sophisticated mortgage platform and had a great team of mortgage lenders. However, with our new in-house mortgage capabilities we found a reduced need for a mortgage subsidiary. I believe our shareholders and our Company will be better served with the repositioning of resources into our core business lines.”

He further reported that “the Bank continues to have high asset quality. Its nonperforming assets (“NPAs”), comprising nonperforming loans and foreclosed assets, increased to $1,090,000 at March 31, 2022, compared to $971,000 at December 31, 2021. As of March 31, 2022, we had two loans with total outstanding balances of $66,000 in our foreclosure pipeline and our past due percentages remained well below our peers at .17% for the quarter.  On March 31, 2022, our Allowance for Loan and Lease Losses (“ALLL”) totaled $5,494,000, an increase of 2.37% over the December 31, 2021 level, despite a zero provision expense in the first quarter of 2022.” The Company experienced a net recovery to the ALLL during the first quarter of 2022. The ALLL totaled 1.20% of total gross loans held for investment at March 31, 2022.

The Bank’s Tier 1 Leverage Capital Ratio was 8.93% on March 31, 2022, 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 Waynesville, North Carolina and Kingsport, Tennessee.


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:

  • The ultimate impact of the current pandemic is unknown and may impact the Company in various areas including but not limited to credit risk, liquidity risk, and risk to earnings;
  • We may not be able to implement aspects of our growth strategy;
  • Future expansion involves risks;
  • New bank office facilities and other facilities may not be profitable;
  • Acquisition of assets and assumption of liabilities may expose us to intangible asset risk, which could impact our results of operations and financial condition;
  • The success of our growth strategy depends on our ability to identify and retain individuals with experience and relationships in the markets in which we intend to expand;
  • We may need additional access to capital, which we may be unable to obtain on attractive terms or at all;
  • Our estimate for losses in our loan portfolio may be inadequate, which would cause our results of operations and financial condition to be adversely affected;
  • Our commercial real estate loans generally carry greater credit risk than one-to-four family residential mortgage loans;
  • Construction financing may expose us to a greater risk of loss and hurt our earnings and profitability;
  • Repayment of our commercial business loans is primarily dependent on the cash flows of the borrowers, which may be unpredictable, and the collateral securing these loans may fluctuate in value;
  • We continue to hold other real estate, which has led to operating expenses and vulnerability to additional declines in real property values;
  • A significant portion of our loan portfolio is secured by real estate, and events that negatively impact the real estate market could hurt our business;
  • Future changes in interest rates could reduce our profits;
  • Strong competition within our market areas may limit our growth and profitability;
  • Our stock-based incentive compensation plan will increase our costs, which will reduce our income;
  • The implementation of our stock-based incentive compensation plan may dilute shareholder ownership interest;
  • We are subject to extensive regulation and oversight, and, depending upon the findings and determinations of our regulatory authorities, we may be required to make adjustments to our business, operations or financial position and could become subject to formal or informal regulatory action;
  • We are subject to stringent capital requirements, which may adversely impact our return on equity, require us to raise additional capital, or constrain us from paying dividends or repurchasing shares;
  • We depend on our management team to implement our business strategy and execute successful operations and we could be harmed by the loss of their services;
  • The value of our deferred tax asset could be impacted if corporate tax rates in the U.S. decline or as a result of other changes in the U.S. corporate tax system;
  • We may not be able to utilize all of our deferred tax asset;
  • The fair value of our investments could decline;
  • Liquidity risk could impair our ability to fund operations and jeopardize our financial condition, results of operations and cash flows;
  • Changes in accounting standards could affect reported earnings;
  • A failure in or breach of our operational or security systems or infrastructure, or those of our third party vendors and other service providers or other third parties, including as a result of cyber-attacks, could disrupt our businesses, result in the disclosure or misuse of confidential or proprietary information, damage our reputation, increase our costs, and cause losses;
  • Our stock price may be volatile, which could result in losses to our shareholders and litigation against us;
  • The trading volume in our common stock is lower than that of other larger companies; future sales of our stock by our shareholders or the perception that those sales could occur may cause our stock price to decline;
  • There may be future sales of additional common stock or preferred stock or other dilution of our equity, which may adversely affect the market price of our common stock;
  • We may issue additional debt and equity securities or securities convertible into equity securities, any of which may be senior to our common stock as to distributions and in the event of liquidation, which could negatively affect the value of our common stock;
  • Negative public opinion surrounding our Company and the financial institutions industry generally could damage our reputation and adversely impact our earnings.




(Amounts in thousands except per share information)

Three Months Ended March 31,

Income Statement




Net interest income

$         5,224

$             4,306


Provision for loan losses




Other income




Other expense




Income before income taxes




Benefit (provision) for income taxes




  Net income


$              359


  Dividends paid or accumulated on preferred




  Net income available to common shareholders

$         1,114

$             320


Net income per common share


$               0.20

$               0.06


$               0.20

$               0.06




(Amounts in thousands except per share information)


March 31,

March 31,

December 31,




Balance Sheet




     Total assets

$     695,898

$      630,954

$     672,963

     Gross loans




     Allowance for loan losses




     Loans held for investment, net




     Loans held for sale








     Total earning assets




     Total deposits




     Shareholders’ equity




     Book value per common share




March 31,

March 31,

December 31,




Asset Quality Data




Nonperforming loans

  Non-accrual loans

$         674

$          932

$        438

  Past due loans 90 days or more




     Total nonperforming loans




  Foreclosed Assets




     Total nonperforming assets

$      1,308

$       1,534

$        971

Net charge-offs (recoveries) year to date

$        (127)

$             (2)

$        (250)

Nonperforming assets as a percentage of total
loans and foreclosed assets




Nonperforming assets to total assets




Allowance for loan losses to

     nonperforming loans




Allowance for loan losses to total loans




Net charge-offs (recoveries) to total loans




March 31,

March 31,

December 31,




Capital Ratios- Community First Bank




Tier 1 Capital (to average assets)





Richard D. Burleson, Jr. – President and CEO

Jennifer M. Champagne – Executive Vice President and CFO


SOURCE Community First Bank

Source link