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BancFirst Corporation Reports Fourth Quarter Earnings

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OKLAHOMA CITY , Jan. 21, 2021 /PRNewswire/ -- BancFirst Corporation (NASDAQ GS:BANF) reported net income of $35.4 million , or $1.06 diluted earnings per share, for the fourth quarter of 2020 compared to net income of $35.5 million , or $1.07 diluted earnings per share, for the fourth quarter of 2019.  Net income for the twelve months ended December 31, 2020 was $99.6 million , or $3.00 diluted earnings per share, compared to $134.9 million , or $4.05 diluted earnings per share, for the year ended December 31, 2019 . The results for 2020 were negatively impacted by a higher provision for credit losses. Net income for the year ended December 31, 2020 includes the entire year of 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 results for the prior year include Pegasus Bank acquisition related expenses of approximately $3.1 million .

The provision for credit losses for the fourth quarter of 2020 was $5.0 million compared to $1.4 million a year ago and $57.7 million through the first three quarters of 2020. BancFirst Corporation Executive Chairman David Rainbolt commented, "Our provision for credit losses was substantially reduced from previous quarters due to improvements in projected outcomes for the economic effects of the pandemic. The rollout of the vaccine and extension of the Cares Act stimulus, combined with improved energy prices and jobs data, justify a cessation to the outsized provisions seen in prior quarters."

The Company's net interest income for the fourth quarter of 2020 increased to $79.5 million compared to $73.9 million for the fourth quarter of 2019. Net interest income increased for the fourth quarter of 2020 due to loan growth, PPP fee income of approximately $8.0 million and the decrease in interest rates paid on deposits. The net interest margin for the quarter was 3.54% compared to 3.78% a year ago. The Company had net charge-offs for the quarter of 0.30% of average loans, compared to net charge-offs of 0.06% of average loans for the fourth quarter of 2019. Noninterest income for the quarter totaled $35.4 million , compared to $35.5 million last year. Noninterest expense for the quarter totaled $65.6 million compared to $66.3 million last year. Overall noninterest expense decreased during the fourth quarter of 2020 compared to the fourth quarter of 2019 primarily due to $2.3 million of amortization of new market tax credits in 2019. However, deposit insurance, net expense from other real estate owned, net occupancy and depreciation increased during the fourth quarter of 2020 compared to 2019. The Company's effective tax rate was 20.3% compared to 15.0% for the fourth quarter of 2019.  The effective tax rate for the fourth quarter of 2019 was lower due to the purchase of tax credits during the quarter.

At December 31, 2020 , the Company's total assets were $9.2 billion , an increase of $646.6 million from December 31, 2019 . Securities of $555.2 million were up $63.6 million from December 31, 2019 . Loans totaled $6.4 billion , an increase of $775.1 million from December 31, 2019 . Deposits totaled $8.1 billion , an increase of $581.1 million 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 December 31, 2020 , the balance of the Paycheck Protection Program loans was $652.7 million . The Company's total stockholders' equity was $1.1 billion , an increase of $62.9 million over December 31, 2019 . Off-balance sheet sweep accounts were $2.7 billion at December 31, 2020 compared to $2.0 billion at December 31, 2019 .

Nonaccrual loans represented 0.58% of total loans at December 31, 2020 , up from 0.32% at year-end 2019, but down from 1.24% at September 30, 2020 . Non-performing assets represented 0.90% of total assets at December 31, 2020 , up from 0.63% at December 31, 2019 as a result of loan migration from non-accrual loans to other real estate owned (OREO) during the fourth quarter of 2020. The allowance to total loans was 1.42% at December 31, 2020 , up from 0.96% at year-end 2019. The allowance to nonaccrual loans was approximately 243% at December 31, 2020 , compared to 302% at year-end 2019, and 129% at September 30, 2020 .

BancFirst Corporation CEO David Harlow commented, "In a very challenging year the Company was able to report earnings of $3.00 per diluted share while substantially building loan loss reserves, increasing our dividend for the 27th consecutive year and growing total stockholders' equity and tangible book value per share.  The outlook for 2021 is certainly better today than we would have projected at the outset of the pandemic; however, many consumers and certain sectors of the economy continue to struggle and the ultimate outcome for many businesses when the stimulus subsides is far from certain."

BancFirst Corporation (the Company) is an Oklahoma based financial services holding company.  The Company operates two subsidiary banks, BancFirst, an Oklahoma state-chartered bank with 107 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



2020



2019



4th Qtr



3rd Qtr



2nd Qtr



1st Qtr



4th Qtr


 Condensed Income Statements:




















 Net interest income

$

79,535



$

75,852



$

77,208



$

74,073



$

73,939


 Provision for credit losses


4,992




18,740




19,333




19,583




1,412


 Non-interest income:




















Trust revenue


2,976




3,131




3,368




3,655




3,682


Service charges on deposits


19,796




19,078




16,760




18,804




19,938


Securities transactions


156







(595)




50




(9)


Income from sales of loans


1,852




1,873




1,561




781




1,089


Insurance commissions


5,680




5,197




4,443




5,676




5,076


Cash management


3,135




3,701




4,255




4,320




4,258


Other


1,825




1,595




2,290




1,859




1,490


Total noninterest income


35,420




34,575




32,082




35,145




35,524






















 Non-interest expense:




















Salaries and employee benefits


40,750




41,995




42,226




39,756




40,375


Occupancy expense, net


4,533




4,503




3,839




3,546




3,738


Depreciation


3,779




3,795




3,544




3,491




3,355


Amortization of intangible assets


915




968




968




964




1,007


Data processing services


1,763




1,669




1,629




1,692




1,634


Net expense from other real estate owned


420




196




(12)




(2,135)




(424)


Marketing and business promotion


1,671




1,485




1,485




2,355




2,327


Deposit insurance


857




723




365




136




147


Other


10,923




10,749




10,607




11,580




14,137


   Total noninterest expense


65,611




66,083




64,651




61,385




66,296


 Income before income taxes


44,352




25,604




25,306




28,250




41,755


 Income tax expense


8,994




4,714




4,576




5,642




6,248


 Net income

$

35,358



$

20,890



$

20,730



$

22,608



$

35,507


 Per Common Share Data:




















 Net income-basic

$

1.08



$

0.64



$

0.64



$

0.69



$

1.09


 Net income-diluted


1.06




0.63




0.63




0.68




1.07


 Cash dividends declared


0.34




0.34




0.32




0.32




0.32


 Common shares outstanding


32,719,852




32,679,191




32,662,691




32,646,691




32,694,268


 Average common shares outstanding -




















   Basic


32,690,296




32,668,789




32,651,262




32,679,587




32,673,438


   Diluted


33,275,550




33,168,938




33,075,493




33,287,359




33,366,848


 Performance Ratios:




















 Return on average assets


1.45

%



0.86

%



0.88

%



1.07

%



1.66

%

 Return on average stockholders' equity


13.25




7.89




...

7.99




8.87




13.76


Net interest margin


3.54




3.40




3.54




3.82




3.78


Efficiency ratio


57.08




59.84




59.16




56.20




60.56






















BancFirst Corporation

Summary Financial Information

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



Twelve months ended



December 31,



2020



2019


Condensed Income Statements:








Net interest income

$

306,668



$

281,921


Provision for credit losses


62,648




8,287


Non-interest income:








Trust revenue


13,130




13,599


Service charges on deposits


74,438




76,581


Securities transactions


(389)




812


Income from sales of loans


6,067




3,619


Insurance commissions


20,996




20,296


Cash management


15,411




16,866


Other


7,569




5,456


Total noninterest income


137,222




137,229










Non-interest expense:








Salaries and employee benefits


164,727




153,024


Occupancy expense, net


16,421




12,704


Depreciation


14,609




12,623


Amortization of intangible assets


3,815




3,366


Data processing services


6,753




5,843


Net expense from other real estate owned


(1,531)




(785)


Marketing and business promotion


6,996




8,554


Deposit insurance


2,081




1,143


Other


43,859




44,829


Total noninterest expense


257,730




241,301


Income before income taxes


123,512




169,562


Income tax expense


23,926




34,683


Net income

$

99,586



$

134,879


Per Common Share Data:








Net income-basic

$

3.05



$

4.13


Net income-diluted


3.00




4.05


Cash dividends declared


1.32




1.24


Common shares outstanding


32,719,852




32,694,268


Average common shares outstanding -








Basic


32,672,522




32,639,396


Diluted


33,210,952




33,329,844


Performance Ratios:








Return on average assets


1.06

%



1.69

%

Return on average stockholders' equity


9.52




14.04


Net interest margin


3.57




3.85


Efficiency ratio


58.06




57.57


BancFirst Corporation


Summary Financial Information


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























2020



2020



2020



2020



2019



4th Qtr



3rd Qtr



2nd Qtr



1st Qtr



4th Qtr


Balance Sheet Data:








































Total assets

$

9,212,357



$

9,618,868



$

9,612,453



$

8,669,096



$

8,565,758


Interest-bearing deposits with banks


1,336,394




1,609,462




1,583,116




1,356,826




1,646,238


Debt securities


555,196




596,941




608,031




591,987




491,626


Total loans


6,448,225




6,660,694




6,696,856




6,006,065




5,673,144


Allowance for credit losses


(91,366)




(106,126)




(89,500)




(70,080)




(54,238)


Deposits


8,064,704




8,495,891




8,486,671




7,573,200




7,483,635


Stockholders' equity


1,067,885




1,043,752




1,034,199




1,023,380




1,004,989


Book value per common share


32.64




31.94




31.66




31.35




30.74


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


27.47




26.74




26.43




26.09




25.50


Balance Sheet Ratios:




















Average loans to deposits


77.02

%



78.55

%



79.78

%



77.75

%



75.83

%

Average earning assets to total assets


91.82




91.99




92.23




91.51




91.50


Average stockholders' equity to average assets


10.91




10.90




10.96




12.02




12.04


Asset Quality Data:




















Past due loans

$

4,802



$

6,412



$

5,382



$

10,065



$

11,834


Nonaccrual loans (5)


37,545




82,385




49,477




45,181




17,965


Restructured loans


7,784




2,837




3,213




3,158




18,010


Total nonperforming and restructured loans


50,131




91,634




58,072




58,404




47,809


Other real estate owned and repossessed assets


32,480




4,939




4,948




6,001




6,073


Total nonperforming and restructured assets


82,611




96,573




63,020




64,405




53,882


Nonaccrual loans to total loans


0.58

%



1.24

%



0.74

%



0.75

%



0.32

%

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


0.65




1.41




0.84




0.75




0.32


Nonperforming and restructured loans to total loans


0.78




1.38




0.87




0.97




0.84


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


0.86




1.57




0.99




0.97




0.84


Nonperforming and restructured assets to total assets


0.90




1.00




0.66




0.74




0.63


Allowance for credit losses to total loans


1.42




1.59




1.34




1.17




0.96


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


1.58




1.82




1.52




1.17




0.96


Allowance for credit losses to nonaccrual loans


243.35




128.82




180.89




155.11




301.91


Allowance for credit losses to nonperforming and restructured loans


182.26




115.81




154.12




119.99




113.45


Net charge-offs to average loans


0.30




0.03




0.00




0.02




0.06






















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








































Stockholders' equity

$

1,067,885



$

1,043,752



$

1,034,199



$

1,023,380



$

1,004,989


Less goodwill


149,922




149,922




149,922




149,923




148,604


Less intangible assets, net


18,999




19,914




20,882




21,850




22,608


Tangible stockholders' equity (non-GAAP)

$

898,964



$

873,916



$

863,395



$

851,607



$

833,777


Common shares outstanding


32,719,852




32,679,191




32,662,691




32,646,691




32,694,268


Tangible book value per common share (non-GAAP)

$

27.47



$

26.74



$

26.43



$

26.09



$

25.50






















(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

$

6,448,225



$

6,660,694



$

6,696,856



$

6,006,065



$

5,673,144


Less PPP loans


652,693




831,703




825,093








Total Non-PPP loans (non-GAAP)

$

5,795,532



$

5,828,991



$

5,871,763



$

6,006,065



$

5,673,144






















Nonaccrual loans (5)


37,545




82,385




49,477




45,181




17,965


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


0.65

%



1.41

%



0.84

%



0.75

%



0.32

%

Total nonperforming and restructured loans


50,131




91,634




58,072




58,404




47,809


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


0.86

%



1.57

%



0.99

%



0.97

%



0.84

%

Allowance for credit losses


(91,366)




(106,126)




(89,500)




(70,080)




(54,238)


Allowance for credit losses to total Non-PPP loans (non-GAAP)


1.58

%



1.82

%



1.52

%



1.17

%



0.96

%





















(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 guarantee approximately $7.8 million of nonaccrual loans at December 31, 2020.


BancFirst Corporation

Consolidated Average Balance Sheets

And Interest Margin Analysis

Taxable Equivalent Basis

(Dollars in thousands - Unaudited)



Three Months Ended



Twelve Months Ended




December 31, 2020



December 31, 2020








Interest



Average







Interest



Average




Average



Income/



Yield/



Average



Income/



Yield/




Balance



Expense



Rate



Balance



Expense



Rate



ASSETS

























Earning assets:

























Loans

$

6,599,933



$

79,815




4.80


%

$

6,432,455



$

312,195



4.84


%

Securities – taxable


558,046




1,926



1.37




556,931




8,591



1.54



Securities – tax exempt


30,131



131



1.73




28,969



616



2.12



Interest bearing deposits with banks and FFS


1,719,900



463



0.11




1,562,383




6,049



0.39



Total earning assets


8,908,010




82,335



3.67




8,580,738




327,451



3.81




























Nonearning assets:

























Cash and due from banks


252,082












220,995











Interest receivable and other assets


638,173












611,966











Allowance for credit losses


(97,046)












(76,501)











Total nonearning assets


793,209












756,460











Total assets

$

9,701,219











$

9,337,198




































LIABILITIES AND STOCKHOLDERS' EQUITY

Interest bearing liabilities:

























Transaction deposits

$

711,266



$

131



0.07


%

$

744,632



$

940



0.13


%

Savings deposits


3,404,226



903



0.11




3,273,903




9,385



0.29



Time deposits


684,992




1,434



0.83




695,637




8,147



1.17



Short-term borrowings


1,075



-



0.07




2,745



8




0.30



Long-term borrowings

-



-



-




1,107



-



-



Junior subordinated debentures


26,804



492



7.29




26,804




1,966



7.31



Total interest bearing liabilities


4,828,363




2,960



0.24




4,744,828




20,446



0.43




























Interest free funds:

























Noninterest bearing deposits


3,768,493












3,503,187











Interest payable and other liabilities


45,673












46,048











Stockholders' equity


1,058,690












1,043,135











Total interest free funds


4,872,856












4,592,370











Total liabilities and stockholders' equity

$

9,701,219











$

9,337,198











Net interest income





$

79,375











$

307,005







Net interest spread









3.43


%









3.38


%

Effect of interest free funds










0.11


%










0.19


%

Net interest margin










3.54


%









3.57


%

Cision
Cision

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SOURCE BancFirst