BancFirst Corporation Reports Second Quarter Earnings

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July 16, 2020 4:30 PM EDT

OKLAHOMA CITY, July 16, 2020 /PRNewswire/ -- BancFirst Corporation (NASDAQ GS: BANF) reported net income of $20.7 million, or $0.63 diluted earnings per share, for the second quarter of 2020 compared to net income of $34.2 million, or $1.02 diluted earnings per share, for the second quarter of 2019. The results for the second quarter of 2020 were negatively impacted by a higher provision for loan losses. The second quarter of 2020 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. Net income for the six months ended June 30, 2020 was $43.3 million, or $1.31 per share, compared to $66.0 million, or $1.98 per share, for the first half of 2019.

The provision for loan losses for the second quarter of 2020 was $19.3 million compared to $2.4 million a year ago. BancFirst Corporation Executive Chairman David Rainbolt commented, "Our provision for loan losses remained consistent with the previous quarter as the economic effects of the pandemic continued.  It reflects an extension of our modestly optimistic assumption on the timing of the end of the pandemic and the government's stimulus response to it.  We believe this view is aligned with those expressed by the Federal Reserve Board indicating a lack of economic clarity. Absent an improvement in this assessment, we would expect provisions in future quarters to continue to be elevated."

The Company's net interest income for the second quarter of 2020 increased to $77.2 million compared to $69.0 million for the second quarter of 2019. The net interest margin for the quarter was 3.54% compared to 3.89% a year ago.  The Company had net recoveries for the quarter of less than 0.01% of average loans, compared to net charge-offs of less than 0.01% of average loans for the second quarter of 2019.  Noninterest income for the quarter totaled $32.1 million, compared to $34.1 million last year. The decrease in noninterest income is primarily due to a decrease in interchange and deposit charges resulting from lower economic activity. Noninterest expense for the quarter totaled $64.7 million compared to $56.6 million last year. The increase in noninterest expense was primarily due to salary increases in 2020 related to annual merit increases, acquisition of Pegasus bank and pandemic related salary expenses. The Company's effective tax rate was 18.1% compared to 22.0% for the second quarter of 2019.  

At June 30, 2020, the Company's total assets were $9.6 billion, an increase of $1.1 billion from December 31, 2019. Debt securities of $608.0 million were up $116.4 million from December 31, 2019. Loans totaled $6.7 billion, an increase of $1.0 billion 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. At June 30, 2020, the balance of the Paycheck Protection Program loans was $851.3 million.  The Company's total stockholders' equity was $1.0 billion, an increase of $29.2 million over December 31, 2019.

Nonaccrual loans represent 0.74% of total loans at June 30, 2020, up from 0.32% at year-end 2019. The increase in nonaccrual loans was due to further downgrades of energy loans. The allowance to total loans was 1.33% up from 0.96% at year-end 2019. The allowance to nonaccrual loans was approximately 181% compared to 302% at year-end 2019.

BancFirst Corporation CEO David Harlow commented, "The Company has performed admirably in the face of low energy prices, the pandemic, and the Federal Reserve's zero interest-rate policy.  Pre-tax, pre-provision earnings for the quarter and first half of the year were $44.6 million and $92.5 million respectively compared to $46.3 million and $89.0 million for the same periods last year.  PPP loan funding, government stimulus checks, a later income tax filing date, and cash conservation by customers combined to cause deposits to increase $914 million or 12% when compared to the end of the first quarter.  Economic activity and the rate of unemployment in our region have improved slightly from levels experienced earlier in the quarter following the shuttering of the economy, although loan demand 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 CorporationSummary Financial Information(Dollars in thousands, except per share and share data - Unaudited)

2020

2020

2019

2019

2019

2nd Qtr

1st Qtr

4th Qtr

3rd Qtr

2nd Qtr

 Condensed Income Statements:

 Net interest income

$

77,208

$

74,073

$

73,939

$

72,287

$

68,792

 Provision for loan losses

19,333

19,583

1,412

2,758

2,433

 Non-interest income:

Trust revenue

3,368

3,655

3,682

3,490

3,250

Service charges on deposits

16,760

18,804

19,938

19,866

19,114

Securities transactions

(595)

50

(9)

—

821

Income from sales of loans

1,561

781

1,089

964

868

Insurance commissions

4,443

5,676

5,076

5,535

4,420

Cash management

4,255

4,320

4,258

4,430

4,402

Other

2,290

1,859

1,490

1,342

1,202

Total noninterest income

32,082

35,145

35,524

35,627

34,077

 Non-interest expense:

Salaries and employee benefits

42,226

39,756

40,375

40,354

36,124

Occupancy expense, net

3,839

3,546

3,738

3,386

2,953

Depreciation

3,544

3,491

3,355

3,268

3,015

Amortization of intangible assets

968

964

1,007

842

758

Data processing services

1,629

1,692

1,634

1,467

1,262

Net expense from other real estate owned

(12)

(2,135)

(424)

26

97

Marketing and business promotion

1,485

2,355

2,327

2,047

1,919

Deposit insurance

365

136

147

(81)

544

Other

10,607

11,580

14,137

10,882

9,936

   Total noninterest expense

64,651

61,385

66,296

62,191

56,608

 Income before income taxes

25,306

28,250

41,755

42,965

43,828

 Income tax expense

4,576

5,642

6,248

9,597

9,661

 Net income

$

20,730

$

22,608

$

35,507

$

33,368

$

34,167

 Per Common Share Data:

 Net income-basic

$

0.64

$

0.69

$

1.09

$

1.02

$

1.04

 Net income-diluted

0.63

0.68

1.07

1.00

1.02

 Cash dividends declared

0.32

0.32

0.32

0.32

0.30

 Common shares outstanding

32,662,691

32,646,691

32,694,268

32,644,018

32,639,588

 Average common shares outstanding -

   Basic

32,651,262

32,679,587

32,673,438

32,641,902

32,629,146

   Diluted

33,075,493

33,287,359

33,366,848

33,327,213

33,317,193

 Performance Ratios:

 Return on average assets

0.87

%

1.07

%

1.66

%

1.65

%

1.78

%

 Return on average stockholders' equity

7.99

8.87

13.76

13.80

14.54

 Net interest margin

3.54

3.82

3.78

3.89

3.89

 Efficiency ratio

59.16

56.20

60.56

57.63

55.03

 

BancFirst CorporationSummary Financial Information(Dollars in thousands, except per share and share data - Unaudited)

Six months ended

June 30,

2020

2019

 Condensed Income Statements:

 Net interest income

$

151,281

$

135,695

 Provision for loan losses

38,916

4,117

 Non-interest income:

Trust revenue

7,023

6,427

Service charges on deposits

35,564

36,777

Securities transactions

(545)

821

Income from sales of loans

2,342

1,566

Insurance commissions

10,119

9,685

Cash management

8,575

8,178

Other

4,149

2,624

Total noninterest income

67,227

66,078

 Non-interest expense:

Salaries and employee benefits

81,982

72,295

Occupancy expense, net

7,385

5,580

Depreciation

7,035

6,000

Amortization of intangible assets

1,932

1,517

Data processing services

3,321

2,742

Net expense from other real estate owned

(2,147)

(387)

Marketing and business promotion

3,840

4,180

Deposit insurance

501

1,077

Other

22,187

19,810

Total noninterest expense

126,036

112,814

 Income before income taxes

53,556

84,842

 Income tax expense

10,218

18,838

 Net income

$

43,338

$

66,004

 Per Common Share Data:

 Net income-basic

$

1.33

$

2.02

 Net income-diluted

1.31

1.98

 Cash dividends declared

0.64

0.60

 Common shares outstanding

32,662,691

32,639,588

 Average common shares outstanding -

   Basic

32,665,425

32,620,819

   Diluted

33,197,391

33,306,429

 Performance Ratios:

 Return on average assets

0.96

%

1.74

%

 Return on average stockholders' equity

8.42

14.31

 Net interest margin

3.67

3.87

 Efficiency ratio

57.68

55.91

 

BancFirst CorporationSummary Financial Information(Dollars in thousands, except per share and share data - Unaudited)

2020

2020

2019

2019

2019

2nd Qtr

1st Qtr

4th Qtr

3rd Qtr

2nd Qtr

 Balance Sheet Data:

 Total assets

$  9,638,657

$  8,669,096

$  8,565,758

$  8,388,816

$  7,642,021

 Interest-bearing deposits with banks

1,583,116

1,356,826

1,646,238

1,476,340

1,518,998

 Debt securities

608,031

591,987

491,626

555,575

425,154

 Total loans

6,723,060

6,006,065

5,673,144

5,622,897

5,105,302

 Allowance for loan losses

(89,500)

(70,080)

(54,238)

(55,928)

(55,108)

 Deposits

8,486,671

7,573,200

7,483,635

7,330,677

6,613,613

 Stockholders' equity

1,034,199

1,023,380

1,004,989

979,752

956,380

 Book value per common share

31.66

31.35

30.74

30.01

29.30

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

26.43

26.09

25.50

24.77

26.40

 Balance Sheet Ratios:

 Average loans to deposits

79.90

%

77.75

%

75.83

%

76.97

%

76.07

%

 Average earning assets to total assets

92.24

91.51

91.50

92.23

92.43

 Average stockholders' equity to average assets

10.95

12.02

12.04

11.96

12.25

Asset Quality Data:

 Past due loans

$       5,382

$       10,065

$       11,834

$       11,215

$         2,663

 Nonaccrual loans (5)

49,477

45,181

17,965

19,995

17,998

 Restructured loans

3,213

3,158

18,010

17,504

16,486

 Total nonperforming and restructured loans

58,072

58,404

47,809

48,714

37,147

 Other real estate owned and repossessed assets

4,948

6,001

6,073

7,055

7,004

 Total nonperforming and restructured assets

63,020

64,405

53,882

55,769

44,151

 Nonaccrual loans to total loans

0.74

%

0.75

%

0.32

%

0.36

%

0.35

%

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

0.84

0.75

0.32

0.36

0.35

 Nonperforming and restructured loans to total loans

0.86

0.97

0.84

0.87

0.73

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

0.99

0.97

0.84

0.87

0.73

 Nonperforming and restructured assets to total assets

0.65

0.74

0.63

0.66

0.58

 Allowance to total loans

1.33

1.17

0.96

0.99

1.08

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

1.52

1.17

0.96

0.99

1.08

 Allowance to nonaccrual loans

180.89

155.11

301.91

279.72

306.20

 Allowance to nonperforming and restructured loans

154.12

119.99

113.45

114.81

148.35

 Net charge-offs to average loans

0.00

0.02

0.06

0.04

0.01

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

Stockholders' equity

$  1,034,199

$  1,023,380

$  1,004,989

$     979,752

$     956,380

Less goodwill

149,922

149,923

148,604

147,013

79,749

Less intangible assets, net

20,882

21,850

22,608

24,025

14,936

Tangible stockholders' equity (non-GAAP)

$     863,395

$     851,607

$     833,777

$     808,714

$     861,695

Common shares outstanding

32,662,691

32,646,691

32,694,268

32,644,018

32,639,588

Tangible book value per common share (non-GAAP)

$         26.43

$         26.09

$         25.50

$         24.77

$         26.40

(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

$  6,723,060

$  6,006,065

$    5,673,144

$    5,622,897

$     5,105,302

Less PPP loans

851,297

-

-

-

-

Total Non-PPP loans (non-GAAP)

$  5,871,763

$  6,006,065

$    5,673,144

$    5,622,897

$     5,105,302

Nonaccrual loans (5)

49,477

45,181

17,965

19,995

17,998

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

0.84

%

0.75

%

0.32

%

0.36

%

0.35

%

Total nonperforming and restructured loans

58,072

58,404

47,809

48,714

37,147

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

0.99

%

0.97

%

0.84

%

0.87

%

0.73

%

Allowance for loan losses

(89,500)

(70,080)

(54,238)

(55,928)

(55,108)

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

1.52

%

1.17

%

0.96

%

0.99

%

1.08

%

(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 loan 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)     The Small Business Administration (SBA) guarantees approximately $7.7 million of nonaccrual loans.

 

BancFirst CorporationConsolidated Average Balance SheetsAnd Interest Margin AnalysisTaxable Equivalent Basis(Dollars in thousands - Unaudited)

Three Months Ended

Six Months Ended

June 30, 2020

June 30, 2020

Interest

Average

Interest

Average

Average

Income/

Yield/

Average

Income/

Yield/

Balance

Expense

Rate

Balance

Expense

Rate

ASSETS

Earning assets:

  Loans

$           6,693,681

$           78,978

4.73

%

$        6,232,091

$         155,636

5.01

%

  Securities – taxable

570,456

1,948

1.37

538,674

4,534

1.69

  Securities – tax exempt

34,421

321

3.74

25,947

444

3.44

  Interest bearing deposits with banks

1,466,634

395

0.11

1,480,203

5,164

0.70

     Total earning assets

8,765,192

81,642

3.74

8,276,915

165,778

4.02

Nonearning assets:

  Cash and due from banks

198,495

195,088

  Interest receivable and other assets

607,549

594,876

  Allowance for loan losses

(68,259)

(59,887)

     Total nonearning assets

737,785

730,077

     Total assets

$            9,502,977

$        9,006,992

LIABILITIES AND STOCKHOLDERS' EQUITY

Interest bearing liabilities:

  Transaction deposits                      

$           774,083

$               169

0.09

%

$           794,955

$             684

0.17

%

  Savings deposits

3,275,394

1,343

0.16

3,147,744

7,592

0.48

  Time deposits

700,740

2,238

1.28

699,280

4,874

1.40

  Short-term borrowings

4,354

1

0.05

3,401

8

0.46

  Long-term borrowings

2,308

-

-

1,154

-

-

  Junior subordinated debentures

26,804

492

7.37

26,804

983

7.35

     Total interest bearing liabilities

4,783,683

4,243

0.36

4,673,338

14,141

0.61

Interest free funds:

  Noninterest bearing deposits

3,627,609

3,257,976

  Interest payable and other liabilities

51,016

43,947

  Stockholders' equity

1,040,669

1,031,731

     Total interest free  funds

4,719,294

4,333,654

     Total liabilities

       and stockholders' equity

$            9,502,977

$        9,006,992

Net interest income

$           77,399

$         151,637

Net interest spread

3.38

%

3.41

%

Effect of interest free funds

0.16

%

0.26

%

Net interest margin

3.54

%

3.67

%

 

Cision View original content:http://www.prnewswire.com/news-releases/bancfirst-corporation-reports-second-quarter-earnings-301095086.html

SOURCE BancFirst


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