BANCFIRST CORPORATION REPORTS THIRD QUARTER EARNINGS

Oklahoma City, Oct. 19, 2023 /PRNewswire/ — BancFirst Corporation (NASDAQ GS:BANF) reported net income of $51.0 million, or $1.52 diluted earnings per share, for the third quarter of 2023 compared to net income of $55.4 million, or $1.65 diluted earnings per share, for the third quarter of 2022. Net income for the nine months ended September 30, 2023 was $163.5 million, or $4.88 per share, compared to $136.0 million, or $4.07 per share, for the nine months ended September 30, 2022.

The Company’s net interest income for the third quarter of 2023 increased to $104.3 million compared to $100.9 million for the quarter ended September 30, 2022. Rising short-term interest rates and loan growth drove the increase. The net interest margin for the quarter was 3.73% compared to 3.87% in the second quarter and 3.48% a year ago. The decrease in margin from the second quarter was largely due to an increase in deposit rates and a shift in deposit mix from noninterest bearing to interest bearing deposits. For the third quarter of 2023, the Company recorded a provision for credit losses of $2.3 million for loan growth, compared to $2.9 million for the third quarter of 2022.

Noninterest income for the quarter totaled $44.4 million, compared to $49.3 million last year. The decrease in noninterest income was attributable to the reduction of interchange fees of approximately $5.4 million related to the impact of the Durbin amendment as the Company now exceeds $10 billion in total assets. In addition, noninterest income for the third quarter of 2022 included $3.2 million of income from an equity interest received from a prior loan settlement, which was sold during the second quarter of 2023.

Noninterest expense for the quarter increased to $81.2 million compared to $79.1 million last year. Higher noninterest expense was primarily related to an increase in salaries and employee benefits of $2.5 million.

The Company’s effective tax rate for the period was 21.8% compared to 19.0% for the third quarter of 2022. During the first quarter of 2023, the Company adopted ASU 2023-02 which increased income tax expense. Additionally, the lower effective tax rate in 2022 stemmed from the exercise of stock options during the quarter.

At September 30, 2023, the Company’s total assets were $12.1 billion, a decrease of $273.3 million from December 31, 2022. Loans totaled $7.5 billion, an increase of $526.7 million from December 31, 2022. Liquidity remained strong with cash at $2.3 billion and a quarterly average loan to deposit ratio of 70.6% at September 30, 2023 compared to 62.3% at year-end. Deposits totaled $10.5 billion, $440.1 million below December 31, 2022 as some large commercial deposits moved from demand accounts into the Company’s off balance sheet sweep product. Sweep accounts totaled $4.0 billion at September 30, 2023 up $285.3 million from December 31, 2022. The Company continues to fund itself with community based deposits and does not use brokered or reciprocal deposits. The Company’s total stockholders’ equity was $1.4 billion, an increase of $119.7 million above December 31, 2022.

Asset quality remained strong with nonaccrual loans of $16.7 million, representing 0.22% of total loans at both September 30, 2023 and December 31, 2022. The allowance for credit losses to total loans stood at 1.31% at September 30, 2023 virtually unchanged from 1.33% at December 31, 2022. Net charge-offs were 0.02% of average loans for the third quarter of 2023 compared to 0.00% for the third quarter of 2022.

BancFirst Corporation CEO David Harlow commented, “The Company reported a solid quarter at $1.52 diluted earnings per share despite the impact of the first full quarter of reduced interchange fees under the Durbin Amendment. Continuing headwinds in the coming months include deposit pricing pressure and increased overhead required to meet the regulatory requirements for a holding company with assets exceeding $10 billion. Regardless, our talented bankers combined with the Company’s fortress balance sheet and top-tier liquidity position us to compete favorably in the markets that we serve.”

BancFirst Corporation (the Company) is an Oklahoma based financial services holding company. The Company operates three subsidiary banks, BancFirst, an Oklahoma state-chartered bank with 106 banking locations serving 59 communities across Oklahoma, Pegasus Bank, with 3 banking locations in the Dallas Metroplex area and Worthington Bank with 3 locations in the Fort Worth Metroplex area, 1 location in Arlington Texas and 1 location in Denton Texas. 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)

2023

2023

2023

2022

2022

3rd Qtr 

2nd Qtr 

1st Qtr 

4th Qtr 

3rd Qtr 

 Condensed Income Statements: 

 Net interest income 

$                 104,308

$                 105,926

$                 109,156

$                 110,352

$                 100,947

Provision for credit losses 

2,312

2,824

2,322

3,776

2,863

 Noninterest income:

Trust revenue

4,866

4,590

4,222

4,065

4,125

Service charges on deposits

17,027

22,268

21,231

21,603

22,161

Securities transactions

(361)

110

(213)

1,116

966

Income from sales of loans

734

757

604

657

969

Insurance commissions

8,429

6,225

8,741

6,656

7,498

Cash management

8,177

7,927

6,734

6,124

5,624

Other

5,577

6,097

6,509

7,947

7,988

Total noninterest income 

44,449

47,974

47,828

48,168

49,331

 Noninterest expense:

Salaries and employee benefits

50,200

49,803

49,252

48,019

47,741

Occupancy expense, net

5,487

5,118

4,983

5,259

4,930

Depreciation

4,685

4,769

4,643

4,566

4,612

Amortization of intangible assets

885

880

880

880

880

Data processing services

1,820

2,217

2,107

1,928

1,876

Net expense from other real estate owned

2,720

2,889

2,459

6,235

2,392

Marketing and business promotion

2,034

1,900

2,527

2,465

1,945

Deposit insurance

1,419

1,463

1,613

1,209

1,202

Other

11,965

12,071

11,853

14,044

13,500

   Total noninterest expense 

81,215

81,110

80,317

84,605

79,078

 Income before income taxes 

65,230

69,966

74,345

70,139

68,337

 Income tax expense 

14,242

14,956

16,812

13,013

12,985

 Net income 

$                   50,988

$                   55,010

$                   57,533

$                   57,126

$                   55,352

 Per Common Share Data: 

 Net income-basic 

$                       1.55

$                       1.67

$                       1.75

$                       1.74

$                       1.69

 Net income-diluted 

1.52

1.64

1.72

1.70

1.65

 Cash dividends declared

0.43

0.40

0.40

0.40

0.40

 Common shares outstanding 

32,921,393

32,939,256

32,899,493

32,875,560

32,856,387

 Average common shares outstanding –

   Basic

32,937,149

32,920,497

32,892,857

32,868,087

32,825,931

   Diluted

33,539,389

33,467,254

33,462,379

33,503,937

33,536,558

 Performance Ratios: 

 Return on average assets

1.68 %

1.85 %

1.90 %

1.82 %

1.75 %

 Return on average stockholders’ equity

14.93

16.59

18.31

18.62

18.13

 Net interest margin 

3.73

3.87

3.89

3.83

3.48

 Efficiency ratio 

54.60

52.70

51.16

53.37

52.62

BancFirst Corporation

Summary Financial Information

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

Nine months ended

September 30,

2023

2022

 Condensed Income Statements: 

 Net interest income 

$                319,390

$                263,321

 Provision for credit losses 

7,458

6,300

 Noninterest income:

Trust revenue

13,678

11,580

Service charges on deposits

60,526

65,154

Securities transactions

(464)

(2,949)

Income from sales of loans

2,095

3,891

Insurance commissions

23,395

20,227

Cash management

22,838

13,202

Other

18,183

24,474

Total noninterest income 

140,251

135,579

 Noninterest expense:

Salaries and employee benefits

149,255

136,957

Occupancy expense, net

15,588

14,067

Depreciation

14,097

14,034

Amortization of intangible assets

2,645

2,568

Data processing services

6,144

5,656

Net expense from other real estate owned

8,068

3,676

Marketing and business promotion

6,461

5,609

Deposit insurance

4,495

3,526

Other

35,889

39,214

Total noninterest expense 

242,642

225,307

 Income before income taxes 

209,541

167,293

 Income tax expense 

46,010

31,319

 Net income 

$                163,531

$                135,974

 Per Common Share Data: 

 Net income-basic 

$                      4.97

$                      4.15

 Net income-diluted 

4.88

4.07

 Cash dividends declared

1.23

1.12

 Common shares outstanding 

32,921,393

32,856,387

 Average common shares outstanding –

   Basic

32,916,996

32,748,116

   Diluted

33,493,015

33,429,161

 Performance Ratios: 

 Return on average assets

1.81 %

1.47 %

 Return on average stockholders’ equity

16.56

15.24

 Net interest margin 

3.83

3.11

 Efficiency ratio 

52.79

56.48

BancFirst Corporation

Summary Financial Information

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

2023

2023

2023

2022

2022

3rd Qtr

2nd Qtr

1st Qtr 

4th Qtr

3rd Qtr

Balance Sheet Data:

Total assets

$  12,114,602

$  12,020,265

$  12,332,105

$  12,387,863

$  12,452,378

Interest-bearing deposits with banks

2,134,081

2,188,004

2,623,565

2,909,861

3,106,279

Debt securities

1,525,448

1,570,620

1,618,233

1,540,604

1,521,645

Total loans

7,476,474

7,307,475

7,124,831

6,949,795

6,832,595

Allowance for credit losses

(97,776)

(96,920)

(94,760)

(92,728)

(89,871)

Deposits

10,534,171

10,475,180

10,610,103

10,974,228

11,058,940

Stockholders’ equity

1,370,584

1,340,791

1,310,882

1,250,836

1,195,149

Book value per common share

41.63

40.70

39.85

38.05

36.37

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

35.56

34.62

33.73

31.90

30.20

Balance Sheet Ratios:

Average loans to deposits

70.61 %

69.85 %

64.54 %

62.25 %

59.62 %

Average earning assets to total assets

92.39

92.23

92.52

92.14

91.58

Average stockholders’ equity to average assets

11.28

11.17

10.36

9.80

9.63

Asset Quality Data:

Past due loans

$        12,575

$          8,799

$          7,258

$          7,085

$          3,167

Nonaccrual loans (3)

16,676

18,047

17,649

15,299

11,962

Other real estate owned and repossessed assets

42,782

41,612

38,874

36,936

39,419

Nonaccrual loans to total loans

0.22 %

0.25 %

0.25 %

0.22 %

0.18 %

Allowance to total loans

1.31

1.33

1.33

1.33

1.32

Allowance to nonaccrual loans

586.34

537.05

536.93

606.10

751.32

Net charge-offs to average loans

0.02

0.01

0.00

0.01

0.00

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

Stockholders’ equity

$   1,370,584

$   1,340,791

$   1,310,882

$   1,250,836

$   1,195,149

Less goodwill

182,263

182,055

182,055

182,055

182,055

Less intangible assets, net

17,591

18,223

19,103

19,983

20,863

Tangible stockholders’ equity (non-GAAP)

$   1,170,730

$   1,140,513

$   1,109,724

$   1,048,798

$      992,231

Common shares outstanding

32,921,393

32,939,256

32,899,493

32,875,560

32,856,387

Tangible book value per common share (non-GAAP)

$          35.56

$          34.62

$          33.73

$          31.90

$          30.20

(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.

(3) Government Agencies guarantee approximately $5.7 million of nonaccrual loans at September 30, 2023.

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, 2023

September 30, 2023

Interest

Average

Interest

Average

Average

Income/

Yield/

Average

Income/

Yield/

Balance

Expense

Rate

Balance

Expense

Rate

ASSETS

Earning assets:

  Loans

$        7,379,572

$           122,005

6.56

%

$        7,212,231

$           341,194

6.33

%

  Debt securities – taxable

1,552,590

9,260

2.37

1,576,358

27,659

2.35

  Debt securities – tax exempt

2,990

27

3.61

3,239

65

2.70

  Interest bearing deposits with banks and FFS

2,162,655

29,052

5.33

2,362,174

87,879

4.97

     Total earning assets

11,097,807

160,344

5.73

11,154,002

456,797

5.48

Nonearning assets:

  Cash and due from banks

197,702

205,269

  Interest receivable and other assets

813,824

810,025

  Allowance for credit losses

(97,591)

(95,614)

     Total nonearning assets

913,935

919,680

     Total assets

$       12,011,742

$       12,073,682

LIABILITIES AND STOCKHOLDERS’ EQUITY

Interest bearing liabilities:

  Transaction deposits

$           804,122

$               2,002

0.99

%

$           859,301

$               5,271

0.82

%

  Savings deposits

4,646,598

46,292

3.95

4,510,005

114,450

3.39

  Time deposits

816,779

6,544

3.18

756,962

14,026

2.48

  Short-term borrowings

4,937

49

3.94

7,324

261

4.76

  Subordinated debt

86,077

1,030

4.75

86,063

3,091

4.80

     Total interest bearing liabilities

6,358,513

55,917

3.49

6,219,655

137,099

2.95

Interest free funds:

  Noninterest bearing deposits

4,183,422

4,432,349

  Interest payable and other liabilities

114,867

101,574

  Stockholders’ equity

1,354,940

1,320,104

     Total interest free  funds

5,653,229

5,854,027

     Total liabilities and stockholders’ equity

$       12,011,742

$       12,073,682

Net interest income

$           104,427

$           319,698

Net interest spread

2.24

%

2.53

%

Effect of interest free funds

1.49

%

1.30

%

Net interest margin

3.73

%

3.83

%

SOURCE BancFirst


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