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BancFirst Corporation Reports Third Quarter Earnings

OKLAHOMA CITY, Oct. 17, 2019 /PRNewswire/ -- BancFirst Corporation (NASDAQ GS:BANF) reported net income of $33.4 million, or $1.00 diluted earnings per share, for the third quarter of 2019 compared to net income of $32.9 million, or $0.98 diluted earnings per share, for the third quarter of 2018. Net income for the nine months ended September 30, 2019 was $99.4 million, or $2.98 per share, compared to $93.1 million, or $2.78 per share, for the nine months ended September 30, 2018. On August 15, 2019 the Company completed the acquisition of Pegasus Bank in Dallas, Texas. As a result, the third quarter of 2019 included one-time acquisition related expenses of approximately $3.1 million, which reduced diluted earnings per share by approximately 7 cents for the quarter and the year. On January 11, 2018 the Company completed the acquisitions of two Oklahoma banking corporations. Consequently, the first nine months of 2018 included one-time acquisition related expenses of approximately $2.6 million, which reduced diluted earnings per share by approximately 6 cents.

The Company's net interest income for the third quarter of 2019 increased to $72.3 million compared to $65.7 million for the third quarter of 2018. The net interest margin for the quarter was 3.89% compared to 3.68% a year ago. The increase in margin was primarily due to the higher average federal funds rate in the third quarter of 2019 when compared to the same period in 2018. The provision for loan losses for the third quarter of 2019 was $2.8 million compared to $747,000 a year ago. The increase in provision was primarily due to downgrades of a few commercial loans. Net charge-offs for the full year of 2019 were 0.05% of average loans compared to 0.04% of average loans in 2018. Net charge-offs for the third quarter of 2019 were 0.04% of average loans compared to 0.02% of average loans in 2018. Noninterest income for the quarter totaled $35.6 million, compared to $32.8 million last year. The increase in noninterest income was primarily due to growth in debit card usage fees and sweep fees. Noninterest expense for the quarter totaled $62.2 million compared to $55.8 million last year. The increase in noninterest expense was primarily due to salary increases in 2019 and acquisition related expenses.

At September 30, 2019, the Company's total assets were $8.4 billion, an increase of $814.6 million from December 31, 2018. Securities of $555.6 million were down $216.6 million from December 31, 2018. Loans totaled $5.6 billion, an increase of $638.7 million from December 31, 2018. Deposits totaled $7.3 billion, an increase of $725.2 million from the December 31, 2018 total. The Company's total stockholders' equity was $979.8 million, an increase of $77.0 million over December 31, 2018.

On August 15, 2019, BancFirst Corporation acquired Pegasus Bank ("Pegasus"), for an aggregate cash purchase price of $123.5 million. Pegasus is a Texas state-chartered bank with three banking locations in Dallas, Texas. Upon acquisition, Pegasus had approximately $651.1 million in total assets, $389.9 million in loans, and $603.9 million in deposits. The Bank will continue to operate as "Pegasus Bank" under a separate Texas state-charter and remain an independent subsidiary of BancFirst Corporation. BancFirst Corporation intends to provide an appropriate amount of capital to increase Pegasus Bank's ability to approve larger loans and allow Pegasus to continue to grow their assets.

Asset quality remained strong during the third quarter of 2019. Nonperforming and restructured assets represented 0.67% of total assets at September 30, 2019, virtually unchanged from the prior year. The allowance to total loans was 0.99% down slightly from 1.03% at year-end 2018. The allowance to nonperforming and restructured loans was 114.06% compared to 136.29% at year-end 2018.

BancFirst Corporation CEO David Harlow commented, "The Company reported strong results in the third quarter. Asset quality remained solid and our margin was stable despite the two 25 bps Fed Funds decreases during the quarter. We are pleased to have closed the previously announced Pegasus acquisition during the quarter and look forward to the growth opportunities the Dallas market provides the Company going forward."

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 58 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)



2019


2019


2019


2018


2018



3rd Qtr


2nd Qtr


1st Qtr


4th Qtr


3rd Qtr


Condensed Income Statements:











Net interest income

$ 72,287


$ 68,792


$ 66,903


$ 66,888


$ 65,673


Provision for loan losses

2,758


2,433


1,684


1,516


747


Non-interest income:











Trust revenue

3,490


3,250


3,177


3,023


3,281


Service charges on deposits

19,866


19,114


17,663


18,554


18,103


Securities transactions

--


821


--


10


(64)


Income from sales of loans

964


868


698


649


800


Insurance commissions

5,535


4,420


5,265


4,593


5,207


Cash management

4,430


4,402


3,776


3,338


3,383


Other

1,342


1,202


1,422


1,684


2,091


Total noninterest income

35,627


34,077


32,001


31,851


32,801













Non-interest expense:











Salaries and employee benefits

40,354


36,124


36,171


35,530


35,051


Occupancy expense, net

3,386


2,953


2,627


3,307


3,386


Depreciation

3,268


3,015


2,985


2,965


2,733


Amortization of intangible assets

842


758


759


777


740


Data processing services

1,467


1,262


1,480


1,140


1,418


Net expense from other real estate owned

26


97


(484)


130


64


Marketing and business promotion

2,047


1,919


2,261


2,030


1,997


Deposit insurance

(81)


544


533


571


597


Other

10,882


9,936


9,874


9,716


9,823


Total noninterest expense

62,191


56,608


56,206


56,166


55,809


Income before income taxes

42,965


43,828


41,014


41,057


41,918


Income tax expense

9,597


9,661


9,177


8,332


9,035


Net income

$ 33,368


$ 34,167


$ 31,837


$ 32,725


$ 32,883


Per Common Share Data:











Net income-basic

$ 1.02


$ 1.04


$ 0.98


$ 1.00


$ 1.01


Net income-diluted

1.00


1.02


0.96


0.98


0.98


Cash dividends declared

0.32


0.30


0.30


0.30


0.30


Common shares outstanding

32,644,018


32,639,588


32,617,788


32,603,926


32,749,690


Average common shares outstanding -











Basic

32,641,902


32,629,146


32,612,399


32,721,626


32,742,480


Diluted

33,327,213


33,317,193


33,292,852


33,423,458


33,504,143


Performance Ratios:











Return on average assets

1.65

%

1.78

%

1.69

%

1.70

%

1.71

%

Return on average equity

13.80


14.54


14.08


14.48


14.86


Net interest margin

3.89


3.89


3.85


3.77


3.68


Efficiency ratio

57.63


55.03


56.83


56.88


56.67

















BancFirst Corporation

Summary Financial Information

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



Nine months ended
September 30,



2019


2018


Condensed Income Statements:





Net interest income

$ 207,982


$ 193,588


Provision for loan losses

6,875


2,286


Non-interest income:





Trust revenue

9,917


9,806


Service charges on deposits

56,643


52,293


Securities transactions

821


37


Income from sales of loans

2,530


2,253


Insurance commissions

15,220


14,333


Cash management

12,608


9,785


Other

3,966


4,841


Total noninterest income

101,705


93,348







Non-interest expense:





Salaries and employee benefits

112,649


104,017


Occupancy expense, net

8,966


10,184


Depreciation

9,268


7,572


Amortization of intangible assets

2,359


2,232


Data processing services

4,209


3,816


Net expense from other real estate owned

(361)


109


Marketing and business promotion

6,227


5,998


Deposit insurance

996


1,856


Other

30,692


30,171


Total noninterest expense

175,005


165,955


Income before income taxes

127,807


118,695


Income tax expense

28,435


25,606


Net income

$ 99,372


$ 93,089


Per Common Share Data:





Net income-basic

$ 3.04


$ 2.85


Net income-diluted

2.98


2.78


Cash dividends declared

0.92


0.72


Common shares outstanding

32,644,018


32,749,690


Average common shares outstanding -





Basic

32,627,924


32,678,310


Diluted

33,314,298


33,430,761


Performance Ratios:





Return on average assets

1.71

%

1.64

%

Return on average stockholders' equity

14.14


14.62


Net interest margin

3.88


3.68


Efficiency ratio

56.51


57.84






BancFirst Corporation

Summary Financial Information

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





2019


2019


2019


2018


2018



3rd Qtr


2nd Qtr


1st Qtr


4th Qtr


3rd Qtr


Balance Sheet Data:






















Total assets

$ 8,388,816


$ 7,642,021


$ 7,709,000


$ 7,574,258


$ 7,602,438


Interest-bearing deposits with banks

1,476,340


1,518,998


1,291,447


1,195,824


1,607,157


Debt securities

555,575


425,154


724,872


772,132


477,080


Total loans

5,622,897


5,105,302


5,050,221


4,984,150


4,952,267


Allowance for loan losses

(55,928)


(55,108)


(52,915)


(51,389)


(51,875)


Deposits

7,330,677


6,613,613


6,706,386


6,605,495


6,643,131


Stockholders' equity

979,752


956,380


927,927


902,789


884,801


Book value per common share

30.01


29.30


28.45


27.69


27.02


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

24.77


26.40


25.52


24.74


24.06


Balance Sheet Ratios:











Average loans to deposits

77.68

%

76.07

%

75.34

%

74.24

%

74.50

%

Average earning assets to total assets

92.23


92.43


92.42


92.48


92.87


Average stockholders' equity to average assets

11.96


12.25


12.01


11.76


11.51


Asset Quality Data:











Past due loans

$ 11,214


$ 2,663


$ 2,170


$ 1,916


$ 4,073


Nonaccrual loans

20,316


17,998


21,594


22,603


26,880


Restructured loans

17,504


16,486


14,552


13,188


13,557


Total nonperforming and restructured loans

49,034


37,147


38,316


37,707


44,510


Other real estate owned and repossessed assets

7,056


7,004


6,433


6,873


7,072


Total nonperforming and restructured assets

56,090


44,151


44,749


44,580


51,582


Nonperforming and restructured loans to total loans

0.87

%

0.73

%

0.76

%

0.76

%

0.90

%

Nonperforming and restructured assets to total assets

0.67


0.58


0.58


0.59


0.68


Allowance to total loans

0.99


1.08


1.05


1.03


1.05


Allowance to nonperforming and restructured loans

114.06


148.35


138.10


136.29


116.55


Net charge-offs to average loans

0.04


0.01


0.00


0.04


0.02













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












Stockholders' equity

$ 979,752


$ 956,380


$ 927,927


$ 902,789


$ 884,801


Less goodwill

147,013


79,749


79,749


79,749


79,733


Less intangible assets, net

24,025


14,936


15,701


16,470


17,257


Tangible stockholders' equity (non-GAAP)

$ 808,714


$ 861,695


$ 832,477


$ 806,570


$ 787,811


Common shares outstanding

32,644,018


32,639,588


32,617,788


32,603,926


32,749,690


Tangible book value per common share (non-GAAP)

$ 24.77


$ 26.40


$ 25.52


$ 24.74


$ 24.06













(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.





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, 2019


September 30, 2019





Interest


Average




Interest


Average



Average


Income/


Yield/


Average


Income/


Yield/



Balance


Expense


Rate


Balance


Expense


Rate


ASSETS













Earning assets:














Loans

$ 5,376,278


$ 75,446


5.57

%

$ 5,158,737


$ 215,462


5.58

%

Securities – taxable

427,152


2,361


2.19


613,365


10,551


2.30


Securities – tax exempt

17,399


130


2.96


19,687


439


2.98


Interest bearing deposits with banks

1,577,446


8,705


2.19


1,397,739


24,590


2.35


Total earning assets

7,398,275


86,642


4.65


7,189,528


251,042


4.67















Nonearning assets:













Cash and due from banks

178,862






178,826






Interest receivable and other assets

500,067






469,615






Allowance for loan losses

(56,056)






(53,814)






Total nonearning assets

622,873






594,627






Total assets

$ 8,021,148






$ 7,784,155



















LIABILITIES AND STOCKHOLDERS' EQUITY

Interest bearing liabilities:













Transaction deposits

$ 737,162


$ 646


0.35

%

$ 743,158


$ 1,967


0.35

%

Savings deposits

2,835,855


10,127


1.42


2,700,393


30,852


1.53


Time deposits

690,867


2,871


1.65


688,056


8,164


1.59


Short-term borrowings

1,063


7


2.72


1,650


29


2.31


Junior subordinated debentures

26,804


491


7.27


26,804


1,474


7.35


Total interest bearing liabilities

4,291,751


14,142


1.31


4,160,061


42,486


1.37















Interest free funds:













Noninterest bearing deposits

2,720,830






2,643,189






Interest payable and other liabilities

49,262






41,138






Stockholders' equity

959,305






939,767






Total interest free funds

3,729,397






3,624,094






Total liabilities and stockholders' equity

$ 8,021,148






$ 7,784,155






Net interest income



$ 72,500






$ 208,556




Net interest spread





3.34

%





3.30

%

Effect of interest free funds





0.55

%





0.58

%

Net interest margin





3.89

%





3.88

%








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