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BancFirst Corporation Reports Third Quarter Earnings

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  • BANF

OKLAHOMA CITY, Oct. 21, 2021 /PRNewswire/ -- BancFirst Corporation (NASDAQ GS: BANF) reported net income of $38.8 million, or $1.16 diluted earnings per share, for the third quarter of 2021 compared to net income of $20.9 million, or $0.63 diluted earnings per share, for the third quarter of 2020. The Company recorded a provision for credit losses of $1.5 million for the three months ended September 30, 2021 compared to a provision for credit losses of $18.7 million for the three months ended September 30, 2020. Net income for the nine months ended September 30, 2021 was $129.5 million, or $3.88 diluted earnings per share, compared to $64.2 million, or $1.94 diluted earnings per share, for the nine months ended September 30, 2020. The Company recorded a net benefit from reversal of provisions for credit losses of $8.5 million for the nine months ended September 30, 2021 compared to a provision for credit losses of $57.7 million for the nine months ended September 30, 2020.

BancFirst Corporation Executive Chairman David Rainbolt commented, "Recently, COVID cases have begun to decline in Oklahoma, but continue to impact some businesses. As a result, our revised quarterly economic scenario supports a stable reserve. Consequently, the provision was very slight this quarter. We would anticipate the economic effects of the pandemic to wane more rapidly over the next quarter which would imply a lower reserve going forward."

The Company's net interest income for the third quarter of 2021 increased to $80.2 million compared to $75.9 million for the third quarter of 2020, as a result of an increase of $6.1 million in fee income from Paycheck Protection Program (PPP) loan forgiveness. The net interest margin for the quarter was 3.09% compared to 3.40% a year ago. Noninterest income for the quarter totaled $39.8 million, compared to $34.6 million last year. The increase in noninterest income was attributable to $2.9 million in rental income from other real estate property, a $2.1 million increase in income from debit card interchange fees and a $1.5 million increase in insurance commissions. Noninterest expense for the quarter increased to $70.2 million compared to $66.1 million last year, because of the increase in approximately $2.0 million related to other real estate property operating costs and $1.0 million in net occupancy and depreciation primarily from the Company's new corporate headquarters. The Company's effective tax rate was 19.7% compared to 18.4% for the third quarter of 2020.

At September 30, 2021, the Company's total assets were $11.3 billion, an increase of $2.1 billion from December 31, 2020. Loans totaled $6.0 billion, a decrease of $410.3 million from December 31, 2020 stemming from a net decrease of approximately $451.5 million in PPP loans and approximately $21 million of loans that were sold with the Company's Hugo, Oklahoma branch, which were partially offset by approximately $149 million of acquired loans from the First National Bank and Trust Company of Vinita, Oklahoma. Deposits totaled $10.0 billion, an increase of $1.9 billion from December 31, 2020. The increase in assets and deposits was predominantly related to PPP and other government stimulus payments. At September 30, 2021, the balance of PPP loans was $201.2 million. The Company's total stockholders' equity was $1.1 billion, an increase of $79.0 million over December 31, 2020. Off-balance sheet sweep accounts totaled $2.7 billion at September 30, 2021 compared to $2.8 billion at December 31, 2020.

Nonaccrual loans represent 0.44% of total loans at September 30, 2021, down from 0.58% at year-end 2020. Net charge-offs for the quarter were 0.01% of average loans, compared to 0.03% in the third quarter of 2020. The allowance for credit losses to total loans was 1.43% at September 30, 2021 compared to 1.42% at year-end 2020, and the allowance for credit losses to nonaccrual loans was 324.96% compared to 243.35% at year-end 2020. At September 30, 2021, the Company's nonaccrual loans decreased $10.9 million from year-end 2020, as a result of the resolution of several loans, which was offset by $7.2 million of nonaccrual loans acquired from The First National Bank and Trust Company of Vinita, Oklahoma. At September 30, 2021, the Company's other real estate owned (OREO) increased $6.8 million from December 31, 2020, and included approximately $4.0 million from the repossession of one commercial real estate property, $2.4 million from the decommissioning of the Company's previous headquarters, and approximately $600,000 acquired from The First National Bank and Trust Company of Vinita, Oklahoma.

BancFirst Corporation CEO David Harlow commented, "Fees related to ongoing PPP loan forgiveness and a year-to-date negative provision have allowed for outsized EPS through the first nine months of the year. For the remainder of this year and into 2022, our challenge will be to grow loans and stabilize our margin while continuing to build upon and expand our non-interest and fee based revenues."

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 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)




2021


2021


2021


2020


2020



3rd Qtr


2nd Qtr


1st Qtr


4th Qtr


3rd Qtr

Condensed Income Statements:











Net interest income


$ 80,190


$ 82,363


$ 77,206


$ 79,535


$ 75,852

Provision for (benefit from) credit losses


1,483


(9,949)



4,992


18,740

Non-interest income:











Trust revenue


3,210


3,264


3,102


2,976


3,131

Service charges on deposits


21,706


20,524


19,100


19,796


19,078

Securities transactions


150


172


95


156


Income from sales of loans


1,594


2,133


2,010


1,852


1,873

Insurance commissions


6,666


5,015


5,989


5,680


5,197

Cash management


3,127


3,068


3,003


3,135


3,701

Other


3,333


10,442


6,636


1,825


1,595

Total noninterest income


39,786


44,618


39,935


35,420


34,575












Non-interest expense:











Salaries and employee benefits


42,267


41,992


39,577


40,750


41,995

Occupancy expense, net


5,086


4,528


4,348


4,533


4,503

Depreciation


4,207


4,133


3,877


3,779


3,795

Amortization of intangible assets


755


809


793


915


968

Data processing services


1,734


1,660


1,678


1,763


1,669

Net expense from other real estate owned


1,810


3,357


1,510


420


196

Marketing and business promotion


1,796


1,648


1,879


1,671


1,485

Deposit insurance


846


766


876


857


723

Other


11,713


15,130


10,425


10,923


10,749

Total noninterest expense


70,214


74,023


64,963


65,611


66,083

Income before income taxes


48,279


62,907


52,178


44,352


25,604

Income tax expense


9,529


14,715


9,658


8,994


4,714

Net income


$ 38,750


$ 48,192


$ 42,520


$ 35,358


$ 20,890

Per Common Share Data:











Net income-basic


$ 1.18


$ 1.47


$ 1.30


$ 1.08


$ 0.64

Net income-diluted


1.16


1.45


1.27


1.06


0.63

Cash dividends declared


0.36


0.34


0.34


0.34


0.34

Common shares outstanding


32,572,217


32,784,513


32,771,013


32,719,852


32,679,191

Average common shares outstanding -











Basic


32,744,104


32,779,227


32,756,852


32,690,296


32,668,789

Diluted


33,267,955


33,405,923


33,408,116


33,275,550


33,168,938

Performance Ratios:











Return on average assets


1.37%


1.79%


1.69%


1.45%


0.86%

Return on average stockholders' equity


13.42


17.42


15.90


13.25


7.89

Net interest margin


3.09


3.32


3.36


3.55


3.40

Efficiency ratio


58.52


58.29


55.46


57.08


59.84












BancFirstCorporation

Summary Financial Information

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








Nine months ended

September 30,



2021


2020

Condensed Income Statements:





Net interest income


$ 239,759


$ 227,133

(Benefit from) provision for credit losses


(8,466)


57,656

Non-interest income:





Trust revenue


9,576


10,154

Service charges on deposits


61,330


54,642

Securities transactions


417


(545)

Income from sales of loans


5,737


4,215

Insurance commissions


17,670


15,316

Cash management


9,198


12,276

Other


20,411


5,744

Total noninterest income


124,339


101,802






Non-interest expense:





Salaries and employee benefits


123,836


123,977

Occupancy expense, net


13,962


11,888

Depreciation


12,217


10,830

Amortization of intangible assets


2,357


2,900

Data processing services


5,072


4,990

Net income (expense) from other real estate owned


6,677


(1,951)

Marketing and business promotion


5,323


5,325

Deposit insurance


2,488


1,224

Other


37,268


32,936

Total noninterest expense


209,200


192,119

Income before income taxes


163,364


79,160

Income tax expense


33,902


14,932

Net income


$ 129,462


$ 64,228

Per Common Share Data:





Net income-basic


$ 3.95


$ 1.97

Net income-diluted


3.88


1.94

Cash dividends declared


1.04


0.98

Common shares outstanding


32,572,217


32,679,191

Average common shares outstanding -





Basic


32,760,015


32,666,554

Diluted


33,358,837


33,190,294

Performance Ratios:





Return on average assets


1.61%


0.93%

Return on average stockholders' equity


15.54


8.24

Net interest margin


3.25


3.58

Efficiency ratio


57.46


58.41

BancFirstCorporation

Summary Financial Information

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














2021


2021


2021


2020


2020



3rd Qtr


2nd Qtr


1st Qtr


4th Qtr


3rd Qtr

Balance Sheet Data:






















Total assets


$ 11,302,771


$ 11,015,287


$ 10,549,305


$ 9,212,357


$ 9,618,868

Interest-bearing deposits with banks


3,836,809


3,373,099


2,788,316


1,336,394


1,609,462

Debt securities


529,484


563,771


520,543


555,196


596,941

Total loans


6,037,886


6,207,262


6,380,108


6,448,225


6,660,694

Allowance for credit losses


(86,463)


(83,963)


(90,860)


(91,366)


(106,126)

Deposits


9,992,044


9,728,389


9,371,940


8,064,704


8,495,891

Stockholders' equity


1,146,874


1,131,591


1,094,671


1,067,885


1,043,752

Book value per common share


35.21


34.52


33.40


32.64


31.94

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


30.04


29.35


28.27


27.47


26.74

Balance Sheet Ratios:











Average loans to deposits


61.56%


65.36%


70.84%


77.02%


78.55%

Average earning assets to total assets


92.13


92.01


91.54


91.82


91.99

Average stockholders' equity to average assets


10.22


10.25


10.64


10.91


10.90

Asset Quality Data:











Past due loans


$ 5,186


$ 4,386


$ 5,282


$ 4,802


$ 6,412

Nonaccrual loans (5)


26,607


29,802


35,326


37,545


82,385

Restructured loans


7,073


7,485


7,801


7,784


2,837

Total nonperforming and restructured loans


38,866


41,673


48,409


50,131


91,634

Other real estate owned and repossessed assets


39,060


40,183


30,320


32,480


4,939

Total nonperforming and restructured assets


77,926


81,856


78,729


82,611


96,573

Nonaccrual loans to total loans


0.44%


0.48%


0.55%


0.58%


1.24%

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


0.46


0.51


0.62


0.65


1.41

Nonperforming and restructured loans to total loans


0.64


0.67


0.76


0.78


1.38

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


0.67


0.71


0.85


0.86


1.57

Nonperforming and restructured assets to total assets


0.69


0.74


0.75


0.90


1.00

Allowance to total loans


1.43


1.35


1.42


1.42


1.59

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


1.48


1.44


1.60


1.58


1.82

Allowance to nonaccrual loans


324.96


281.73


257.20


243.35


128.82

Allowance to nonperforming and restructured loans


222.46


201.48


187.69


182.26


115.81

Net charge-offs to average loans


0.01


0.06


0.01


0.30


0.03












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





















Stockholders' equity


$ 1,146,874


$ 1,131,591


$ 1,094,671


$ 1,067,885


$ 1,043,752

Less goodwill


149,922


149,922


149,922


149,922


149,922

Less intangible assets, net


18,325


19,283


18,206


18,999


19,914

Tangible stockholders' equity (non-GAAP)


$ 978,627


$ 962,386


$ 926,543


$ 898,964


$ 873,916

Common shares outstanding


32,572,217


32,784,513


32,771,013


32,719,852


32,679,191

Tangible book value per common share (non-GAAP)


$ 30.04


$ 29.35


$ 28.27


$ 27.47


$ 26.74












(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


$ 6,037,886


$ 6,207,262


$ 6,380,108


$ 6,448,225


$ 6,660,694

Less PPP loans


201,208


368,620


713,714


652,693


831,703

Total Non-PPP loans (non-GAAP)


$ 5,836,678


$ 5,838,642


$ 5,666,394


$ 5,795,532


$ 5,828,991












Nonaccrual loans (5)


26,607


29,802


35,326


37,545


82,385

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


0.46%


0.51%


0.62%


0.65%


1.41%

Total nonperforming and restructured loans


38,866


41,673


48,409


50,131


91,634

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


0.67%


0.71%


0.85%


0.86%


1.57%

Allowance for credit losses


(86,463)


(83,963)


(90,860)


(91,366)


(106,126)

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


1.48%


1.44%


1.60%


1.58%


1.82%












(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 $3.1 million of nonaccrual loans at September 30, 2021.

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, 2021


September 30, 2021






Interest


Average




Interest


Average




Average


Income/


Yield/


Average


Income/


Yield/




Balance


Expense


Rate


Balance


Expense


Rate


ASSETS


Earning assets:














Loans


$ 6,103,533


$ 80,370


5.22

%

$ 6,267,176


$ 240,733


5.14

%

Debt securities – taxable


536,690


1,484


1.10


531,109


4,779


1.20


Debt securities – tax exempt


6,336


45


2.83


13,530


222


2.20


Interest bearing deposits with banks and FFS


3,682,313


1,441


0.16


3,064,852


2,861


0.12


Total earning assets


10,328,872


83,340


3.20


9,876,667


248,595


3.37
















Nonearning assets:














Cash and due from banks


269,153






270,724






Interest receivable and other assets


696,567






688,223






Allowance for credit losses


(83,969)






(89,116)






Total nonearning assets


881,751






869,831






Total assets


$ 11,210,623






$ 10,746,498




















LIABILITIES AND STOCKHOLDERS' EQUITY

Interest bearing liabilities:














Transaction deposits


$ 881,043


$ 161


0.07

%

$ 835,363


$ 465


0.07

%

Savings deposits


3,825,687


989


0.10


3,675,121


3,034


0.11


Time deposits


659,490


838


0.50


658,306


2,814


0.57


Short-term borrowings


2,713



0.10


2,595


1


0.07


Subordinated debt


85,964


1,031


4.76


46,957


2,100


5.98


Total interest bearing liabilities


5,454,897


3,019


0.22


5,218,342


8,414


0.22
















Interest free funds:














Noninterest bearing deposits


4,547,944






4,363,925






Interest payable and other liabilities


61,794






50,469






Stockholders' equity


1,145,988






1,113,762






Total interest free funds


5,755,726






5,528,156






Total liabilities and stockholders' equity


$ 11,210,623






$ 10,746,498






Net interest income




$ 80,321






$ 240,181




Net interest spread






2.98

%





3.15

%

Effect of interest free funds






0.11

%





0.10

%

Net interest margin






3.09

%





3.25

%

Cision
Cision

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SOURCE BancFirst