BancFirst Corporation Reports Third Quarter Earnings

OKLAHOMA CITY, Oct. 15, 2020 /PRNewswire/ -- BancFirst Corporation (NASDAQ GS:BANF) reported net income of $20.9 million, or $0.63 diluted earnings per share, for the third quarter of 2020 compared to net income of $33.4 million, or $1.00 diluted earnings per share, for the third quarter of 2019. The results for the third quarter and first nine months of 2020 were negatively impacted by a higher provision for credit losses. Net income for the nine months ended September 30, 2020 was $64.2 million, or $1.94 per share, compared to $99.4 million, or $2.98 per share, for the nine months ended September 30, 2019. Net income for the third quarter and first nine months of 2020 also includes the net income of Pegasus Bank in Dallas, Texas, which was acquired on August 15, 2019, and the income and expenses associated with the purchase of assets and assumption of liabilities on March 5, 2020, from The Citizens State Bank of Okemah.

The provision for credit losses for the third quarter of 2020 was $18.7 million compared to $2.8 million a year ago. BancFirst Corporation Executive Chairman David Rainbolt commented, "Our provision for credit losses remained consistent with previous quarters as little clarity or improvement was projected for the economic effects of the pandemic.  It reflects an extension, for yet another quarter, of our assumption on the timing of the end of the pandemic and the government's stimulus response to it. We believe this view continues to be aligned with that expressed by the Federal Reserve Board indicating a lack of economic certainty. Absent an improvement in this assessment, we would expect provisions in future quarters to continue to be elevated from historical levels."

The Company's net interest income for the third quarter of 2020 increased to $75.9 million compared to $72.3 million for the third quarter of 2019. The net interest margin for the quarter was 3.40% compared to 3.89% a year ago.  The Company had net charge-offs for the quarter of 0.03% of average loans, compared to net charge-offs of 0.04% of average loans for the third quarter of 2019.  Noninterest income for the quarter totaled $34.6 million, compared to $35.6 million last year. The decrease in noninterest income is primarily due to a decrease in deposit charges resulting from lower economic activity. Noninterest expense for the quarter totaled $66.1 million compared to $62.2 million last year. The increase in noninterest expense was primarily due to salary increases in 2020 related to annual merit increases and the acquisition of Pegasus bank in August 2019. The Company's effective tax rate was 18.4% compared to 22.3% for the third quarter of 2019.  

At September 30, 2020, the Company's total assets were $9.6 billion, an increase of $1.1 billion from December 31, 2019. Debt securities of $597.0 million were up $105.3 million from December 31, 2019. Loans totaled $6.7 billion, an increase of $987.6 million from December 31, 2019. Deposits totaled $8.5 billion, an increase of $1.0 billion from the December 31, 2019 total. The increase in assets, loans and deposits were primarily related to the Paycheck Protection Program (PPP) and other government stimulus. At September 30, 2020, the balance of the Paycheck Protection Program loans was $831.7 million.  The Company's total stockholders' equity was $1.0 billion, an increase of $38.8 million over December 31, 2019.

Nonaccrual loans represent 1.24% of total loans at September 30, 2020, up from 0.32% at year-end 2019. The allowance to total loans was 1.59% up from 0.96% at year-end 2019. The allowance to nonaccrual loans was approximately 129% compared to 302% at year-end 2019.

BancFirst Corporation CEO David Harlow commented, "Pre-tax, pre-provision earnings for the quarter and first nine months of the year were $44.3 million and $136.8 million respectively compared to $45.7 million and $134.7 million for the same periods last year.  Government stimulus and changes in consumer and business spending patterns have combined to increase deposits $1 billion since year-end.  Economic activity and the rate of unemployment in our region have improved from levels experienced in the early months of the pandemic; however, loan demand continues to be soft and year to date loan growth absent PPP has been modest."

BancFirst Corporation (the Company) is an Oklahoma based financial services holding company.  The Company operates two subsidiary banks, BancFirst, is Oklahoma's largest state-chartered bank with 108 banking locations serving 59 communities across Oklahoma, and Pegasus Bank, with 3 banking locations in Dallas, TX. More information can be found at www.bancfirst.bank.

The Company may make forward-looking statements within the meaning of Section 27A of the securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 with respect to earnings, credit quality, corporate objectives, interest rates and other financial and business matters.  Forward-looking statements include estimates and give management's current expectations or forecasts of future events.  The Company cautions readers that these forward-looking statements are subject to numerous assumptions, risks and uncertainties, including economic conditions, the performance of financial markets and interest rates; legislative and regulatory actions and reforms; competition; as well as other factors, all of which change over time.  Actual results may differ materially from forward-looking statements.

BancFirst Corporation

Summary Financial Information

(Dollars in thousands, except per share and share data - Unaudited)




2020



2020



2020



2019



2019




3rd Qtr



2nd Qtr



1st Qtr



4th Qtr



3rd Qtr


 Condensed Income Statements:





















 Net interest income


$

75,852



$

77,208



$

74,073



$

73,939



$

72,287


 Provision for credit losses



18,740




19,333




19,583




1,412




2,758


 Non-interest income:





















Trust revenue



3,131




3,368




3,655




3,682




3,490


Service charges on deposits



19,078




16,760




18,804




19,938




19,866


Securities transactions






(595)




50




(9)





Income from sales of loans



1,873




1,561




781




1,089




964


Insurance commissions



5,197




4,443




5,676




5,076




5,535


Cash management



3,701




4,255




4,320




4,258




4,430


Other



1,595




2,290




1,859




1,490




1,342


Total noninterest income



34,575




32,082




35,145




35,524




35,627























 Non-interest expense:





















Salaries and employee benefits



41,995




42,226




39,756




40,375




40,354


Occupancy expense, net



4,503




3,839




3,546




3,738




3,386


Depreciation



3,795




3,544




3,491




3,355




3,268


Amortization of intangible assets



968




968




964




1,007




842


Data processing services



1,669




1,629




1,692




1,634




1,467


Net expense from other real estate owned



196




(12)




(2,135)




(424)




26


Marketing and business promotion



1,485




1,485




2,355




2,327




2,047


Deposit insurance



723




365




136




147




(81)


Other



10,749




10,607




11,580




14,137




10,882


   Total noninterest expense



66,083




64,651




61,385




66,296




62,191


 Income before income taxes



25,604




25,306




28,250




41,755




42,965


 Income tax expense



4,714




4,576




5,642




6,248




9,597


 Net income


$

20,890



$

20,730



$

22,608



$

35,507



$

33,368


 Per Common Share Data:





















 Net income-basic


$

0.64



$

0.64



$

0.69



$

1.09



$

1.02


 Net income-diluted



0.63




0.63




0.68




1.07




1.00


 Cash dividends declared



0.34




0.32




0.32




0.32




0.32


 Common shares outstanding



32,679,191




32,662,691




32,646,691




32,694,268




32,644,018


 Average common shares outstanding -





















   Basic



32,668,789




32,651,262




32,679,587




32,673,438




32,641,902


   Diluted



33,168,938




33,075,493




33,287,359




33,366,848




33,327,213


 Performance Ratios:





















 Return on average assets



0.86

%



0.88

%



1.07

%



1.66

%



1.65

%

 Return on average stockholders' equity



7.89




7.99




8.87




13.76




13.80


 Net interest margin



3.40




3.54




3.82




3.78




3.89


 Efficiency ratio



59.84




59.16




56.20




60.56




57.63























 

BancFirst Corporation

Summary Financial Information

(Dollars in thousands, except per share and share data - Unaudited)




Nine months ended




September 30,




2020



2019


 Condensed Income Statements:









 Net interest income


$

227,133



$

207,982


 Provision for credit losses



57,656




6,875


 Non-interest income:









Trust revenue



10,154




9,917


Service charges on deposits



54,642




56,643


Securities transactions



(545)




821


Income from sales of loans



4,215




2,530


Insurance commissions



15,316




15,220


Cash management



12,276




12,608


Other



5,744




3,966


Total noninterest income



101,802




101,705











 Non-interest expense:









Salaries and employee benefits



123,977




112,649


Occupancy expense, net



11,888




8,966


Depreciation



10,830




9,268


Amortization of intangible assets



2,900




2,359


Data processing services



4,990




4,209


Net expense from other real estate owned



(1,951)




(361)


Marketing and business promotion



5,325




6,227


Deposit insurance



1,224




996


Other



32,936




30,692


Total noninterest expense



192,119




175,005


 Income before income taxes



79,160




127,807


 Income tax expense



14,932




28,435


 Net income


$

64,228



$

99,372


 Per Common Share Data:









 Net income-basic


$

1.97



$

3.04


 Net income-diluted



1.94




2.98


 Cash dividends declared



0.98




0.92


 Common shares outstanding



32,679,191




32,644,018


 Average common shares outstanding -









   Basic



32,666,554




32,627,924


   Diluted



33,190,294




33,314,298


 Performance Ratios:









 Return on average assets



0.93

%



1.71

%

 Return on average stockholders' equity



8.24




14.14


 Net interest margin



3.58




3.88


 Efficiency ratio



58.41




56.51


 

BancFirst Corporation

Summary Financial Information

(Dollars in thousands, except per share and share data - Unaudited)





2020


2020


2020


2019


2019



3rd Qtr


2nd Qtr


1st Qtr


4th Qtr


3rd Qtr


 Balance Sheet Data:






















 Total assets

$  9,618,728


$  9,612,453


$  8,669,096


$  8,565,758


$  8,388,816


 Interest-bearing deposits with banks

1,609,462


1,583,116


1,356,826


1,646,238


1,476,340


 Debt securities

596,941


608,031


591,987


491,626


555,575


 Total loans

6,660,694


6,696,856


6,006,065


5,673,144


5,622,897


 Allowance for credit losses

(106,126)


(89,500)


(70,080)


(54,238)


(55,928)


 Deposits

8,495,751


8,486,671


7,573,200


7,483,635


7,330,677


 Stockholders' equity

1,043,752


1,034,199


1,023,380


1,004,989


979,752


 Book value per common share

31.94


31.66


31.35


30.74


30.01


 Tangible book value per common share (non-GAAP)(1)

26.74


26.43


26.09


25.50


24.77


 Balance Sheet Ratios:











 Average loans to deposits

78.55

%

79.78

%

77.75

%

75.83

%

76.97

%

 Average earning assets to total assets

91.99


92.23


91.51


91.50


92.23


 Average stockholders' equity to average assets

10.90


10.96


12.02


12.04


11.96


Asset Quality Data:











 Past due loans

$       6,412


$       5,382


$       10,065


$       11,834


$       11,215


 Nonaccrual loans (5)

82,385


49,477


45,181


17,965


19,995


 Restructured loans

7,032


3,213


3,158


18,010


17,504


 Total nonperforming and restructured loans

95,829


58,072


58,404


47,809


48,714


 Other real estate owned and repossessed assets

4,939


4,948


6,001


6,073


7,055


 Total nonperforming and restructured assets

100,768


63,020


64,405


53,882


55,769


 Nonaccrual loans to total loans

1.24

%

0.74

%

0.75

%

0.32

%

0.36

%

Nonaccrual loans to total Non-PPP loans (non-GAAP)(3)

1.41


0.84


0.75


0.32


0.36


 Nonperforming and restructured loans to total loans

1.44


0.87


0.97


0.84


0.87


 Nonperforming and restructured loans to total Non-PPP loans (non-GAAP)(3)

1.64


0.99


0.97


0.84


0.87


 Nonperforming and restructured assets to total assets

1.05


0.66


0.74


0.63


0.66


 Allowance to total loans

1.59


1.34


1.17


0.96


0.99


Allowance to total Non-PPP loans (non-GAAP)(3)

1.82


1.52


1.17


0.96


0.99


 Allowance to nonaccrual loans

128.82


180.89


155.11


301.91


279.72


 Allowance to nonperforming and restructured loans

110.74


154.12


119.99


113.45


114.81


 Net charge-offs to average loans

0.03


0.00


0.02


0.06


0.04













Reconciliation of Tangible Book Value Per Common Share (non-GAAP)(2):












Stockholders' equity

$  1,043,752


$  1,034,199


$  1,023,380


$  1,004,989


$     979,752


Less goodwill

149,922


149,922


149,923


148,604


147,013


Less intangible assets, net

19,914


20,882


21,850


22,608


24,025


Tangible stockholders' equity (non-GAAP)

$     873,916


$     863,395


$     851,607


$     833,777


$     808,714


Common shares outstanding

32,679,191


32,662,691


32,646,691


32,694,268


32,644,018


Tangible book value per common share (non-GAAP)

$         26.74


$         26.43


$         26.09


$         25.50


$         24.77













(1)     Refer to the "Reconciliation of Tangible Book Value per Common Share (non-GAAP)" Table.

(2)     Tangible book value per common share is stockholders' equity less goodwill and intangible assets, net, divided by common shares outstanding. This amount is a non-GAAP financial measure but has been included as it is considered to be a critical metric with which to analyze and evaluate the financial condition and capital strength of the Company. This measure should not be considered a substitute for operating results determined in accordance with GAAP.

Reconciliation of Non-PPP loan ratios (non-GAAP)(4):












Total loans

$  6,660,694


$  6,696,856


$  6,006,065


$    5,673,144


$    5,622,897


Less PPP loans

831,703


825,093


-


-


-


Total Non-PPP loans (non-GAAP)

$  5,828,991


$  5,871,763


$  6,006,065


$    5,673,144


$    5,622,897


Nonaccrual loans (5)

82,385


49,477


45,181


17,965


19,995


Nonaccrual loans to total Non-PPP loans (non-GAAP)

1.41

%

0.84

%

0.75

%

0.32

%

0.36

%

Total nonperforming and restructured loans

95,829


58,072


58,404


47,809


48,714


Nonperforming and restructured loans to total Non-PPP loans (non-GAAP)

1.64

%

0.99

%

0.97

%

0.84

%

0.87

%

Allowance for credit losses

(106,126)


(89,500)


(70,080)


(54,238)


(55,928)


Allowance to total Non-PPP loans (non-GAAP)

1.82

%

1.52

%

1.17

%

0.96

%

0.99

%












(3)     Refer to the "Reconciliation of Non-PPP loan ratios (non-GAAP)" Table.

(4)     Nonaccrual loans to total Non-PPP loans is nonaccrual loans, divided by total loans less Paycheck Protection Program (PPP) loans. Nonperforming and restructured loans to total Non-PPP loans is nonperforming and restructured loans, divided by total loans less PPP loans. Allowance to total Non-PPP loans is allowance for credit losses, divided by total loans less PPP loans. These amounts are non-GAAP financial measures but have been included as they are considered critical metrics with which to analyze and evaluate the financial condition and capital strength of the Company. These measures should not be considered substitutes for operating results determined in accordance with GAAP.

(5)     Government agencies guarantees approximately $8.4 million of nonaccrual loans.

 

BancFirst Corporation

Consolidated Average Balance Sheets

And Interest Margin Analysis

Taxable Equivalent Basis

(Dollars in thousands - Unaudited)



Three Months Ended


Nine Months Ended



September 30, 2020


September 30, 2020





Interest


Average




Interest


Average



Average


Income/


Yield/


Average


Income/


Yield/



Balance


Expense


Rate


Balance


Expense


Rate


ASSETS













Earning assets:













  Loans

$           6,671,344


$           76,744


4.56

%

$        6,376,221


$         232,380


4.85

%

  Securities – taxable

591,933


2,032


1.36


556,557


6,665


1.60


  Securities – tax exempt

33,785


166


1.95


28,579


485


2.26


  Interest bearing deposits with banks

1,567,437


422


0.11


1,509,493


5,586


0.49


     Total earning assets

8,864,499


79,364


3.55


8,470,850


245,116


3.85















Nonearning assets:













  Cash and due from banks

241,160






210,558






  Interest receivable and other assets

619,570






603,167






  Allowance for credit losses

(88,823)






(69,603)






     Total nonearning assets

771,907






744,122






     Total assets

$            9,636,406






$        9,214,972



















LIABILITIES AND STOCKHOLDERS' EQUITY

Interest bearing liabilities:













  Transaction deposits                      

$              678,447


$               125


0.07

%

$           755,835


$             809


0.14

%

  Savings deposits

3,393,158


890


0.10


3,230,145


8,482


0.35


  Time deposits

699,074


1,839


1.04


699,211


6,713


1.28


  Short-term borrowings

3,117


-


0.05


3,306


8


0.33


  Long-term borrowings

2,119


-


-


1,478


-


-


  Junior subordinated debentures

26,804


491


7.27


26,804


1,474


7.33


     Total interest bearing liabilities

4,802,719


3,345


0.28


4,716,779


17,486


0.49















Interest free funds:













  Noninterest bearing deposits

3,722,973






3,414,106






  Interest payable and other liabilities

60,574






46,175






  Stockholders' equity

1,050,140






1,037,912






     Total interest free  funds

4,833,687






4,498,193






     Total liabilities

       and stockholders' equity

$            9,636,406






$        9,214,972






Net interest income



$           76,019






$         227,630




Net interest spread





3.27

%





3.36

%

Effect of interest free funds





0.13

%





0.22

%

Net interest margin





3.40

%





3.58

%

 

Cision View original content:http://www.prnewswire.com/news-releases/bancfirst-corporation-reports-third-quarter-earnings-301153619.html

SOURCE BancFirst

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