SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 1999

                                       Or

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the transition period from _____ to _____

                        Commission file number 001-14417

                              BANKFIRST CORPORATION
             (Exact name of registrant as specified in its charter)

               Tennessee                                  58-1790903
    (State or other jurisdiction of                    (I.R.S. Employer
     incorporation or organization)                   Identification No.)

           625 Market Street
         Knoxville, Tennessee                                 37902
 (address of principal executive offices)                   (Zip Code)

        Registrant's telephone number, including area code (423)595-1100

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days.

                                                Yes X No __

The number of shares  outstanding of each of the registrant's  classes of common
stock as of April 30, 1999:

       Title of Class                                  Shares Outstanding
Common Stock, $2.50 par value                                 11,375,600


<PAGE>


                              BANKFIRST CORPORATION
                                      INDEX

PART I - FINANCIAL INFORMATION

         Item 1. Financial Statements .................................... 3

         Item 2. Management's Discussion and Analysis of Financial
         Condition and Results of Operations ............................ 10

         Item 3. Quantitative and Qualitative Disclosures about
         Market Risk .................................................... 16

PART II - OTHER INFORMATION

         Item 1. Legal Proceedings ...................................... 17

         Item 2. Changes in Securities .................................. 17

         Item 3. Defaults Upon Senior Securities ........................ 17

         Item 4. Submission of Matters to a Vote of Security Holders .... 17

         Item 5. Other information ...................................... 17

         Item 6. Exhibits and Reports on Form 8-K ....................... 17

SIGNATURES

Note: The  accompanying  information has not been audited by independent  public
accountants; however, in the opinion of management such information reflects all
adjustments  necessary  for a fair  presentation  of the results for the interim
period. All such adjustments are of a normal and recurring nature.

         The accompanying  financial statements are presented in accordance with
the  requirements  of Form  10-Q  and  consequently  do not  include  all of the
disclosures normally required by generally accepted accounting principles.

                                        2


<PAGE>

Part I - Financial Information

Item 1. Financial Statements

                              BANKFIRST CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
         (Dollar amounts in thousands, except share and per share data)
--------------------------------------------------------------------------------

                                                            Mar. 31,   Dec. 31,
                                                              1999       1998
                                                            --------   --------
                                                          (unaudited)

ASSETS
  Cash and due from banks                                   $ 34,151   $ 36,136
  Federal Funds Sold                                           1,800      8,850
  Securities available for sale                              133,909    127,862
  Mortgage loans held for sale                                19,425     25,642
  Loans, net                                                 517,056    501,950
  Premises and equipment, net                                 25,294     24,927
  Mortgage servicing rights                                    7,775      7,484
  Federal Home Loan Bank Stock, at cost                        3,244      3,189
  Intangible assets                                            1,963      2,002
  Accrued interest receivable and other asset                 11,171     10,259
                                                            --------   --------

     Total assets                                           $755,788   $748,301
                                                            ========   ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
  Noninterest-bearing deposits                              $103,634   $117,823
  Interest-bearing deposits                                  502,135    500,143
                                                            --------   --------
     Total deposits                                          605,769    617,966

  Securities sold under agreements to repurchase              25,510     22,208
  Federal funds purchased and other borrowings                 3,956      4,166
  Advances from the Federal Home Loan Bank                    27,255     11,884
  Accrued interest payable and other liabilities               9,370      9,236
                                                            --------   --------
     Total liabilities                                       671,860    665,460

Stockholders' equity
  Common stock:  $2.50 par value, 15,000,000 shares
    authorized, 11,375,600 shares
    outstanding                                               28,439     28,439
  Noncumulative convertible preferred stock:  $5 par
    value, 1,000,000 shares authorized, 181,050
    shares outstanding                                           905        905
  Additional paid-in capital                                  34,093     34,093
  Retained earnings                                           19,197     17,160
  Unrealized gain on securities available for sale             1,294      2,244
                                                            --------   --------
     Total stockholders' equity                               83,928     82,841
                                                            --------   --------

     Total liabilities and stockholders' equity             $755,788   $748,301
                                                            ========   ========

--------------------------------------------------------------------------------

   See accompanying notes to the condensed consolidated financial statements.

                                        3


<PAGE>

                              BANKFIRST CORPORATION
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
         (Dollar amounts in thousands, except share and per share data)
--------------------------------------------------------------------------------

                                   Three months ended March 31,
                                            (Unaudited)
                                          1999       1998
                                        --------   --------
Interest income
    Interest and fees on loans          $ 11,896   $ 11,575
    Taxable securities                     1,379      1,429
    Nontaxable securities                    413        454
    Other                                    219         92
                                        --------   --------
                                          13,907     13,550

Interest expense
    Deposits                               5,313      5,339
    Short-term borrowings                    565        455
    Long-term borrowings                      77        208
                                        --------   --------
                                           5,955      6,002
                                        --------   --------
Net interest income                        7,952      7,548

Provision for credit losses                  419        524
                                        --------   --------
Net interest income after provision
for credit losses                          7,533      7,024
Noninterest income
    Service charges and fees               1,102        957
    Net securities gains                      36         10
    Net gain (loss) on loan sales           (332)       203
    Loan servicing income, net of
      Amortization                           807        417
    Trust department income                  264        184
    Other                                    723        241
                                        --------   --------
                                           2,600      2,012

Noninterest expenses
    Salaries and employee benefits         3,985      3,459
    Occupancy expense                        515        679
    Equipment expense                        659        496
    Office expense                           456        309
    Data processing fee                      393        284
    Advertising                              132         89
    Other                                    877      1,137
                                        --------   --------
                                           7,017      6,453
                                        --------   --------
Income before income taxes                 3,116      2,583
Provision for income taxes                 1,047        880
                                        --------   --------
Net Income                              $  2,069   $  1,703
                                        ========   ========

Earnings per share:
    Basic                               $   0.18   $   0.17
    Diluted                             $   0.17   $   0.16

--------------------------------------------------------------------------------
   See accompanying notes to the condensed consolidated financial statements.

                                        4


<PAGE>

                              BANKFIRST CORPORATION
       CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                        Three Months ended March 31, 1999
                                   (Unaudited)
         (Dollar amounts in thousands, except share and per share data)

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                       Net
                                                                   Unrealized     Total
                                               Additional             Gains       Stock-
                              Common  Preferred Paid-in  Retained    (Losses)    holders'
                               Stock    Stock   Capital  Earnings  on Securities  Equity
                             -------- --------- -------- --------- ------------   -------
<S>                           <C>      <C>       <C>       <C>         <C>        <C>    
Balance, January 1, 1998      $24,989  $ 1,093  $23,777   $10,612      $ 961     $61,432

Sale of common stock, 118
 shares                            --       --       --         9         --            9

Conversion of 2,703 shares 
 of Preferred stock into 
 1,669 Shares of common
 stock                              4      (14)      10        --         --            0

Stock options exercised,
 814 shares                         2       --       25        --         --           27

Cash dividend on preferred 
 stock                             --       --       --       (39)        --          (39)

Comprehensive income:
  Net income                       --       --       --     1,703         --        1,703

  Change in unrealized 
   gains (losses), net of
   reclassification                --       --       --        --        330          330
                                                                                  -------
     Total comprehensive 
      income                                                                        2,033
                             --------  -------- -------  --------   --------      -------
Balance, March 31, 1998       $24,995   $1,079  $23,821   $12,276     $1,291      $63,462
                             ========  ======== =======  ========   ========      =======


                                                                         Net
                                                                      Unrealized     Total
                                                Additional              Gains       Stock-
                              Common  Preferred  Paid-in   Retained    (Losses)    holders'
                               Stock    Stock    Capital   Earnings  on Securities  Equity
                             -------- ---------  --------  --------- ------------   -------
Balance, January 1, 1999      $28,439  $  905    $34,093    $17,160     $2,244      $82,841

Cash dividend on preferred
  stock                            --      --         --        (32)        --          (32)

Comprehensive income:

  Net income                       --      --         --      2,069         --        2,069

  Change in unrealized 
   gains (losses), net of
   reclassification                --      --         --         --       (950)        (950)
                                                                                    -------
     Total comprehensive
      income                                                                          1,119
                             --------  ------    -------   --------   --------      -------
Balance, March 31, 1999       $28,439  $  905    $34,093    $19,197     $1,294      $83,928
                             ========  ======    =======   ========   ========      =======
</TABLE>

--------------------------------------------------------------------------------

   See accompanying notes to the condensed consolidated financial statements.

                                        5


<PAGE>

                              BANKFIRST CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
         (Dollar amounts in thousands, except share and per share data)
--------------------------------------------------------------------------------
                                                    Three months ended March 31,
                                                             (Unaudited)
                                                            1999        1998
                                                         --------    --------
Cash flows from operating activities
   Net income                                            $  2,069    $  1,703
   Adjustments to reconcile net income to net cash from
     operating activities
     Provision for credit losses                              419         524
     Depreciation                                             454         413
     Amortization and accretion, net                          429         255
     Net (gains) losses on securities sales                   (36)        (10)
     Net (gains) losses on sales of mortgage loans            332        (203)
     Proceeds from sales of mortgage loans held for sale   52,824      29,806
     Purchases of mortgage loans held for sale             (8,957)    (11,944)
     Originations of mortgage loans held for sale         (39,572)    (30,963)
     Changes in assets and liabilities
       Accrued interest receivable and other assets          (911)     (2,483)
       Accrued interest payable and other liabilities         638      (2,590)
                                                         --------    --------
         Net cash flows from operating activities           7,689     (15,492)

Cash flows from investing activities
   Net cash paid for mortgage company                          --      (7,449)
   Purchase of securities                                  (7,000)     (4,105)
   Proceeds from maturities of securities                   1,384       1,633
   Proceeds from sale of securities                         4,936          14
   Net increase in loans                                  (22,066)    (14,979)
   Purchase of FHLB stock                                     (55)         --
   Premises and equipment expenditures, net                  (367)       (214)
                                                         --------    --------
     Net cash from investing activities                   (23,168)    (25,100)

Cash flows from financing activities
   Net change in deposits                                 (12,197)     17,524
   Net change in securities sold
     under agreements to repurchase                         3,302       2,873
   Net change in federal funds purchased                       --      14,291
   Advances from the FHLB                                  15,371      35,229
   Repayments to the FHLB                                      --     (20,000)
   Repayment of notes payable                                  --      (5,798)
   Preferred stock dividends paid                             (32)        (39)
   Sales of stock and stock options exercised                  --          36
                                                         --------    --------
     Net cash from financing activities                     6,444      44,116

Net change in cash and cash equivalents                    (9,035)      3,524

Cash and cash equivalents, beginning of period             44,986      31,290
                                                         --------    --------

Cash and cash equivalents, end of period                 $ 35,951    $ 34,814
                                                         ========    ========

Supplemental disclosures:
   Interest paid                                         $  5,997    $  6,116
   Income taxes paid                                          254         298

--------------------------------------------------------------------------------

   See accompanying notes to the condensed consolidated financial statements.

                                       6


<PAGE>

                              BANKFIRST CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
         (Dollar amounts in thousands, except share and per share data)
--------------------------------------------------------------------------------

Principles of Consolidation:  The consolidated  financial statements include the
accounts of BankFirst Corporation and its wholly-owned subsidiaries,  BankFirst,
First National Bank and Trust Company (together referred to as the "Banks"), and
BankFirst  Trust  Company,  and  BankFirst's  wholly-owned  subsidiary,   Curtis
Mortgage  Company,  collectively  referred to as the "Company".  All significant
inter-company balances and transactions have been eliminated in consolidation.

The accompanying  unaudited consolidated financial statements have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial  information,   and  accordingly  they  do  not  include  all  of  the
information and footnotes required by generally accepted  accounting  principles
for complete financial statements. In the opinion of management, all adjustments
(consisting  of  normal  recurring  accruals)  considered  necessary  for a fair
presentation  have been included.  Operating results for the three month periods
ended March 31, 1999 are not  necessarily  indicative of the results that may be
expected for the year ended December 31, 1999.

Borrowings:  Repurchase  agreements  and Federal  Funds  purchased are generally
overnight  borrowings.  Federal  Home  Loan  Bank  (FHLB)  advances  consist  of
long-term advances which exceed one year, with both fixed rate and variable rate
terms.

Reclassifications:  Certain  items in the 1998  financial  statements  have been
reclassified to conform with the 1999 presentation.

                                        7


<PAGE>

                              BANKFIRST CORPORATION
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollar
             amounts in thousands, except share and per share data)
--------------------------------------------------------------------------------

Earnings Per Share: Basic earnings per share is based on weighted average common
shares  outstanding.  Diluted earnings per share further assumes issuance of any
dilutive  potential  common  shares.  Earnings  per share are  restated  for all
subsequent stock dividends and splits.

A  reconciliation  of the numerators and denominators of the earnings per common
share and earnings per common share assuming dilution computations are presented
below:

                                   Three Months Ended
                                        March 31,
                                       (Unaudited)
                                    1999         1998
                                   -------     -------
Earnings Per Share

Net income                        $  2,069     $ 1,703
Less:  Dividends declared
on preferred stock                     (32)        (39)
                                  --------     -------
Net income available to common
stockholders                      $  2,037     $ 1,664
                                  ========     =======

Weighted average common 
shares outstanding              11,375,600   9,988,427
                                ==========   =========

Earnings per share                $   0.18     $  0.17
                                  ========     =======

                                       8


<PAGE>

                              BANKFIRST CORPORATION
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollar
             amounts in thousands, except share and per share data)
--------------------------------------------------------------------------------

Earnings Per Share (Continued):

                                    Three Months Ended
                                         March 31,
                                        (Unaudited)
                                     1999       1998
                                   -------     -------

Earnings Per Share Assuming
Dilution

Net income available to common
stockholders                        $ 2,037    $ 1,664

Add back dividends upon assumed
Conversion of preferred stock            32         39
                                    -------    -------

Net income available to common
stockholders assuming conversion    $ 2,069    $ 1,703
                                    =======    =======

Weighted average common shares
outstanding                     11,375,600   9,988,427

Add:  Dilutive effects of assumed
Conversions and exercises:
   Convertible preferred stock     558,992     666,298
   Stock options                   373,976     249,531
                                   -------     -------

Weighted average common and
dilutive potential common
shares outstanding              12,308,568  10,904,256
                                ----------  ----------

Earnings per share
assuming dilution                   $ 0.17     $  0.16
                                    s======     =======

                                        9


<PAGE>

Part I - Financial Information

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

The  following   discussion   and  analysis  is  presented  to  facilitate   the
understanding of the consolidated  financial  position and results of operations
of BankFirst  Corporation.  The  consolidated  financial  information  discussed
herein primarily reflects the activities of the Company's wholly-owned community
bank subsidiaries, BankFirst ("BankFirst") and The First National Bank and Trust
Company ("Athens").  The discussion  identifies trends and material changes that
occurred during the reported  periods and should be read in conjunction with the
consolidated  financial  statements and accompanying  notes appearing  elsewhere
herein.  The periods  included  within this document are the three months ending
March 31, 1999 and 1998.

All  statements  other than  statements  of  historical  facts  included in this
discussion  regarding capital  expenditures,  the Company's  financial position,
business  strategies and other plans and objectives for future  operations,  are
forward-looking    statements.   The   Company   cautions   readers   that   all
forward-looking  statements are  necessarily  speculative and not to place undue
reliance on any such forward-looking statements, which speak only as of the date
made,  and to advise  readers that various  risks and  uncertainties,  including
without limitation, regional and national economic conditions, changes in levels
of market interest rates, credit risks of lending activities and competitive and
regulatory  factors,  could affect financial  performance and could cause actual
results  for future  periods to differ  materially  from  those  anticipated  or
projected.

Overview

BankFirst  Corporation,  a  Tennessee  corporation,  is a bank  holding  company
headquartered in Knoxville,  Tennessee that focuses on meeting the banking needs
of East  Tennessee  businesses and residents  through a  relationship  oriented,
community  bank business  strategy.  The Company  conducts its banking  business
through  BankFirst,  a Tennessee  banking  corporation,  which has 24 offices in
Knox,  Sevier,  Blount,  Loudon and  Jefferson  Counties,  and through The First
National Bank and Trust Company, a national banking association acquired on July
2,  1998,  with  eight  offices  in  McMinn  County.  The  Company's  operations
principally  involve commercial and residential real estate lending,  commercial
business lending, consumer lending, mortgage servicing, construction lending and
other financial services, including trust operations,  credit cards services and
brokerage services.

Financial Condition

Total  assets grew from $748.3  million at  year-end  1998 to $755.8  million at
March 31, 1999, a $7.5 million increase.  The primary changes in assets included
a $15.1  million  increase  in net loans,  offset  partially  by a $6.2  million
reduction in mortgage  loans held for sale. For the three months ended March 31,
1999,  the mortgage  banking  subsidiary of BankFirst  purchased and  originated
$48.5 million of loans and sold $52.8 million of loans purchased and originated.

Total liabilities grew from $665.5 million at year-end 1998 to $671.9 million at
March 31, 1999, an increase of $6.4  million.  Deposits  declined  $12.2 million
during this period,  most significantly in  noninterest-bearing  deposits.  This
decline is  attributable to the Banks'  temporary  seasonal  commercial  deposit
fluctuations. To accommodate the Banks' increased loan demand, Federal Home Loan
Bank advances were increased by $15.4 million,  which accounted for the increase
in total liabilities.

                                             10


<PAGE>

From  year-end  1998 to March 31,  1999,  equity grew by a net of $1.1  million,
consisting of net earnings of $2.1 million less a $950,000  change in unrealized
losses on securities held for sale.

The leverage  capital  ratio  increased  from 10.7% at year-end 1998 to 10.8% at
March 31,  1999 due to the  increase  in net income.  This ratio  maintains  the
Company in the "well capitalized" category.

Management  expects growth to continue  through  expansion of retail  locations,
expansion of products and services,  including mortgage servicing  opportunities
by Curtis  Mortgage and trust services  through  BankFirst  Trust  Company,  and
possible future mergers or acquisitions. At the present time, the Company has no
present  agreements,  arrangements  or  commitments  with  respect  to any other
acquisition.

Results of Operations

Three Months Ended March 31, 1999 compared to Three Months Ended March 31, 1998
-------------------------------------------------------------------------------

Net interest income increased  $404,000,  or 5.4%, to $7.9 million for the three
months ended March 31, 1999,  from $7.5 million for the three months ended March
31, 1998.  The increase in net interest  income was due primarily to an increase
in average  earning assets and an increase in the percentage of average  earning
assets invested in loans, the Company's highest yielding assets.

The Company's net interest  spread and net interest margin were 3.99% and 4.71%,
respectively,  for the three months  ended March 31, 1999,  as compared to 4.14%
and 4.90% for the three  months  ended March 31,  1998.  The decrease in the net
interest  spread  and the net  interest  margin  were  primarily  the  result of
increased  competitive  pressures on loan rates,  coupled with higher  borrowing
costs  associated  with  short-term  liabilities  such as fed funds borrowed and
Federal Home Loan Advances.

The  provision  for credit  losses was $419,000 for the three months ended March
31, 1999,  compared to $524,000 for the same period in 1998. The decrease in the
provision was  attributable to generally stable  delinquency  percentages on the
loan portfolio. The Company experienced net charge-offs of $62,000 for the three
months ended March 31, 1999  resulting in a ratio of net  charge-offs to average
loans of less than 0.1%.

Noninterest income increased $588,000 to $2.6 million for the three months ended
March 31, 1999 from $2.0  million  for the three  months  ended March 31,  1998,
primarily attributable to mortgage banking operations.

Loan servicing income increased to $807,000 for the three months ended March 31,
1999,  as  compared to $417,000  for the same three  month  period in 1998.  The
mortgage company sells loans while retaining the servicing rights, which has the
overall  effect  of  producing  less  immediate  gains  at time of  sale,  while
providing  longer-term  income streams from the servicing  rights of those loans
sold on the  secondary  market.  Net losses on the sale of  mortgage  loans were
$332,000  for the three  months  ended March 31,  1999  compared to net gains of
$203,000 for the same period in 1998. Resulting gains or losses for such periods
correspond to the interest rate  environment  within the secondary market at the
time of sale.

                                       11


<PAGE>

Noninterest  expense  increased  $564,000,  to $7.0 million for the three months
ended March 31,  1999,  from $6.5  million for the three  months ended March 31,
1998.  The primary  component of  noninterest  expense is salaries and benefits,
which increased  $526,000,  or 15.2%, to $4.0 million for the three months ended
March 31,  1999,  from $3.5  million for the three  months ended March 31, 1998.
Salaries and benefits as well as other noninterest expense categories  increased
primarily due to increases in personnel.

Net income  increased  $366,000,  or 21.5%, to $2.1 million for the three months
ended March 31,  1999 from $1.7  million  for the three  months  ended March 31,
1998.

Provision for Credit Losses and Asset Quality

The provision for credit losses represents  charges made to earnings to maintain
an adequate  allowance for loan losses. The allowance is maintained at an amount
believed  to be  sufficient  to  absorb  losses in the loan  portfolio.  Factors
considered in establishing an appropriate allowance include a careful assessment
of the financial  condition of the borrower;  a realistic  determination  of the
value and adequacy of underlying collateral;  the condition of the local economy
and the  condition of the specific  industry of the  borrower;  a  comprehensive
analysis of the levels and trends of loan categories; and a review of delinquent
and classified  loans. The Company applies a systematic  process for determining
the adequacy of the allowance for loan losses  including an internal loan review
function and a monthly  analysis of the adequacy of the  allowance.  The monthly
analysis includes determination of specific potential loss factors on individual
classified  loans,  historical  potential  loss factors  derived from actual net
charge-off  experience  and trends in  nonperforming  loans,  and potential loss
factors  for other  loan  portfolio  risks  such as loan  concentrations,  local
economy, and the nature and volume of loans.

The recorded  values of loans  actually  removed from the  consolidated  balance
sheets are referred to as  charge-offs  and,  after  netting out  recoveries  on
previously  charged-off assets, become net charge-offs.  The Company's policy is
to  charge  off  loans,  when,  in  management's  opinion,  the  loan is  deemed
uncollectible, although concerted efforts are made to maximize recovery.

Liquidity and Capital Adequacy

Liquidity management is both a daily and long-term responsibility of management.
The Company  adjusts its  investments  in liquid  assets and long and short term
borrowings,  based upon  management's  consideration  of expected  loan  demand,
expected  deposit flows and securities  sold under  repurchase  agreements.  The
Company  believes it has the ability to raise deposits quickly within its market
area by slightly  raising interest rates, but has typically been able to achieve
deposit growth without paying above market interest rates.  The current strategy
calls for the  subsidiary  banks to be no higher  than  second  highest in their
pricing as compared to their primary competitors. Deposit growth has funded most
of the  significant  asset growth in the past several  years,  but has decreased
modestly as a percent of total funding.

                                    12


<PAGE>

The Company actively solicits customer cash management relationships which often
includes a securities  repurchase  agreement  feature.  Under these  agreements,
commercial  customers are able to generate  earnings on otherwise  idle funds on
deposits with the subsidiary banks. These accounts are considered volatile under
regulatory  requirements,  although  the  Company  has found them to be a steady
source of funding. The Company has been able to increase customer  relationships
because of its strong business lending  program.  While more costly than deposit
funding,  these deposit-related  accounts are typically the lowest cost borrowed
funds available to the Company.

The primary source of capital for the Company is retained earnings.  The Company
paid cash  dividends of $32,000 with  respect to its  noncumulative  convertible
preferred  stock,  for the first three months of 1999. The Company retained $2.0
million of earnings for the first three months of 1999.

The  Company  and its  bank  subsidiaries  are  subject  to  regulatory  capital
requirements  administered  by  federal  and  state  banking  agencies.  Capital
adequacy   guidelines  and  prompt   corrective   action   regulations   involve
quantitative  measures of assets,  liabilities,  and certain  off-balance  sheet
items calculated under regulatory  accounting  practices.  The prompt corrective
action  regulations  provide five  classifications,  including well capitalized,
adequately capitalized, under capitalized,  significantly under capitalized, and
critically  under  capitalized,  although  these terms are not used to represent
overall financial  condition.  If under capitalized,  capital  distributions are
limited, as is asset growth and expansion, and plans for capital restoration are
required.

Under  guidelines  issued  by  banking  regulators,  the  Company  and its  bank
subsidiaries are required to maintain a minimum Tier 1 risk-based  capital ratio
of 4% and a minimum total  risk-based  ratio of 8%.  Risk-based  capital  ratios
weight the relative risk factors of all assets and consider the risk  associated
with off-balance sheet items.

The  Company's  Tier 1 risk-based  and total  risk-based  ratios were 13.80% and
15.00%  respectively,  as  of  March  31,  1999.  Both  bank  subsidiaries  also
individually met the definition of "well capitalized" as of March 31, 1999.

Market Risk

The Company uses an earnings  simulation model (summarized below) to analyze the
net interest income sensitivity.  Potential changes in market interest rates and
their subsequent effect on interest income is then evaluated. The model projects
the  effect of  instantaneous  movements  in  interest  rates of 100 and 200 bp.
Assumptions based on the historical  behavior of the Company's deposit rates and
balances in relation to interest rates are also incorporated in the model. These
assumptions  are  inherently  uncertain  and,  as a  result,  the  model  cannot
precisely  measure  net  interest  income or  precisely  predict  the  impact of
fluctuations  in market  interest rates on net interest  income.  Actual results
will differ  from the model's  simulated  results due to timing,  magnitude  and
frequency of interest rate changes,  as well as changes in market conditions and
the application of various management strategies.

Even though the Company's  cumulative GAP at one year is negative,  the earnings
simulation  model indicates that an increase in interest rates of 100 bp and 200
bp would result in increased net interest income. This occurs because management
believes that if overall market  interest rates  increase  modestly,  the market
would not require an  immediate,  corresponding  repricing  of non-term  deposit
liabilities.

                                       13


<PAGE>

                              Market Risk Analysis
                               At March 31, 1999

                               Decrease in Rates             Increase in Rates
                               200          100               100         200
                              Basis        Basis    Level    Basis      Basis
                              Points       Points   Rates    Points     Points

Projected Interest Income

Loans                         45,840       47,689   49,537   51,386     53,217
Investments                    7,740        7,874    8,019    8,141      8,273
Federal Funds Sold               122          143      163      184        205
Total Interest Income         53,702       55,706   57,719   59,711     61,695

Projected Interest Expense

Deposits                      19,707       20,152   21,276   22,411     23,312
FHLB Term Advances               784        1,024    1,265    1,505      1,703
Fed Funds Purchased
  & Other Borrowings           1,608        1,758    1,909    2,055      2,173
Total Interest Expense        22,099       22,934   24,450   25,971     27,188

Net Interest Income           31,603       32,772   33,269   33,740     34,507
Change from Level Rates       (1,666)        (497)      --      471      1,238
% Change From Level Rates     (5.01%)      (1.49%)      --    1.42%      3.72%


                         Summarized Market Risk Analysis
                              At December 31, 1998

                               Decrease in Rates             Increase in Rates
                               200          100               100         200
                              Basis        Basis    Level    Basis      Basis
                              Points       Points   Rates    Points     Points

Projected Total
Interest Income              $49,667      $51,888  $54,085   $56,333   $58,546

Projected Total
Interest Expense              20,824       22,594   23,524    25,032    26,394

Net Interest Income           28,843       29,294   30,561    31,301    32,152

Change from Level Rates       (1,738)      (1,287)      --       720     1,571

% Change From Level Rates     (5.68%)      (4.21%)      --      2.35%    5.14%

                                        14


<PAGE>

Year 2000

The Company has  implemented  plans to address Year 2000  compliance.  The issue
arises from the fact that many existing  computer  programs use only a two-digit
field to identify the year. These programs were designed without considering the
impact once the calendar  year rolls over to "00".  If not  corrected,  computer
applications could fail or create inaccurate results by or at the Year 2000.

The Company initiated a comprehensive  Year 2000 compliance program in mid-1997,
including an Awareness and Assessment phase, and a Remediation  phase, and began
a comprehensive  Testing phase during 1998.  BankFirst's data processing service
bureau  implemented  new  software,  which  has been Year  2000  certified,  and
BankFirst  completed  its  conversion  to  this  new  software  in  April  1998.
Conversion  to the new  host  system  necessitated  an  upgrade  of  BankFirst's
personal computers and their operating systems,  which have been tested for Year
2000  compliance.  A new servicing  system for Curtis Mortgage that is Year 2000
compliant is scheduled for implementation by June 30, 1999.  Management believes
the  Year  2000  program  is on  schedule  with  the  goals  established  by its
regulators,  in that it is has 100% of its mission-critical  testing complete in
out-sourced  ,  host-based  services  and 85% of its  internal  and  third-party
supported,   mission-critical  software  testing  complete.  Facilities,  office
equipment, supplies, security equipment, HVAC and elevator systems have all been
assessed and, where possible,  tested. All testing of both internal and external
systems is expected to be completed by June 30, 1999.

The Company has evaluated its Year 2000 compliance-related  credit risk; since a
high  concentration of the Company's customer base consists of larger Commercial
Loan customers  maintaining total credit relationships of $500,000 or more which
have been aggressively  evaluated by their relationship  manager regarding their
possible   Y2K   credit   risk,   management   believes   that  its  Year   2000
compliance-related  credit risk has been proactively addressed. Year 2000 credit
risk analysis is an ongoing monitoring and evaluation effort within the Company,
and although it has taken prudent steps to address the Year 2000 issue, there is
no absolute assurance that there can be no problems relating to this issue.

Management  believes that the total costs of becoming Year 2000  compliant  will
not be material.  During 1998, the Company  projected Year 2000 project costs to
be approximately  $295,700 and incurred approximately $163,750 in costs relative
to the Year 2000 effort. Several vendor charges relating to Year 2000 compliance
testing and  software  modifications  incurred  during  1998 are  expected to be
incurred  by the  first  half of 1999.  Year  2000  project  costs  for 1999 are
projected to be approximately $150,000.

Management  understands the broad scope of the Year 2000 issue and has developed
a plan which includes monitoring of those other entities with which it routinely
interacts  including  suppliers,   creditors,  borrowers,  customers  and  other
financial service  organizations.  While monitoring of these entities allows the
Company to assess its possible  Year  2000-related  risks,  the Company also has
been developing a  broad-spectrum  contingency plan designed to minimize adverse
impact to mission  critical  systems.  The plan  includes  analysis  of customer
demand for currency and funds availability. The plan also consists of developing
and testing  alternative  methods and  locations  for core service  delivery and
operations  support.  Additionally,  the Company's  service  bureaus  maintain a
contingency  plan for data  processing.  The  service  bureaus  house a  second,
tested, Year 2000 compliant system in the event of system

                                   15


<PAGE>

failure.  The service bureaus also maintain an off-site data  processing  system
with a third-party  data processor in the event of critical power failure.  Both
contingency systems have been certified Year 2000 compliant and have been tested
by the Company using post-January 2000 dates.

Management  believes  that the  Company  and its  affiliates  are  currently  in
compliance with each applicable directive issued by Regulatory Authorities.

New Accounting and Reporting Requirements

SFAS No. 133,  "Accounting  for  Derivative  Financial  Instruments  and Hedging
Activities".  SFAS No.  133  requires  companies  to record  derivatives  on the
balance sheet as assets or  liabilities  at fair value.  Depending on the use of
the  derivative and whether it qualifies for hedge  accounting,  gains or losses
from  changes in the value of those  derivatives  would  either be recorded as a
component  of net income or as a change in  stockholders'  equity.  BankFirst is
required  to adopt the new  standard  January  1, 2000.  Management  has not yet
determined the impact of this standard.

In October 1998, the Financial  Accounting  Standards  Board issued SFAS No. 134
"Accounting for Mortgage-Backed  Securities Retained after the Securitization of
Mortgage Loans Held for Sale by a Mortgage Banking Enterprise".  The standard is
effective for the first fiscal quarter  beginning  after December 15, 1998. This
statement  amends SFAS No. 65 on mortgage  banking,  which  required  that after
securitization  of mortgage  loans held for sale, all retained  mortgage  backed
securities   be  classified   as  trading.   This  new  standard   allows  after
securitization  of mortgage  loans held for sale, any retained  mortgage  backed
securities to be classified as described  under SFAS No. 115.  Current  mortgage
banking  activities  for  BankFirst  do not  include the  securitization  of any
mortgage loans held for sale.

FDIC   Improvement   Act   (FDICIA)  of  1991.   The  FDICIA   stipulates   many
responsibilities  of  financial  institutions,   its  boards  of  directors  and
accountants. Many of the provisions have already been effective for the Company;
however there are certain filing requirements which are only applicable to banks
with assets over $500 million.  This threshold is measured on an individual bank
basis, not on consolidated assets. BankFirst, taken alone, is already subject to
this Act.  As a result,  BankFirst  will be  required  to comply with the FDICIA
reporting  requirements  during 1999.  Athens had total  year-end 1998 assets of
$196 million,  and will not be subject to the FDICIA reporting  requirements for
the foreseeable future.

Part I - Financial Information

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The information is disclosed in Item 2. Management's  Discussion and Analysis of
Financial Condition and Results of Operations.

                                       16


<PAGE>

PART II. - OTHER INFORMATION

Item 1.  Legal Proceedings                         None

Item 2.  Changes in Securities                     None

Item 3.  Defaults Upon Senior Securities           None

Item 4.  Submission of Matters to a vote           None
             of Security Holders

Item 5.  Other Information                         None

Item 6.  Exhibits and Reports on Form 8-K

      a.    Exhibits

            Exhibit 27 - Financial Data Schedule

      b.    Reports on Form 8-K
            The Company filed no reports on Form 8-K for the quarter ended
            March 31, 1999.

                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Corporation  has duly  caused  this  report to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                           BANKFIRST CORPORATION
                                           by

Date:  May 14, 1999                        /s/ C. David Allen
                                           -----------------------------
                                           C. David Allen
                                           Chief Financial Officer

                                       17