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

%

 

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SOURCE BancFirst