BancFirst Corporation Reports First Quarter Earnings

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April 21, 2020 4:30 PM EDT

OKLAHOMA CITY, April 21, 2020 /PRNewswire/ -- BancFirst Corporation (NASDAQ GS: BANF) reported net income of $22.6 million, or $0.68 diluted earnings per share, for the first quarter of 2020 compared to net income of $31.8 million, or $0.96 diluted earnings per share, for the first quarter of 2019. The results for the first quarter of 2020 were negatively impacted primarily by a higher provision for loan losses. The first quarter of 2020 includes the net income of Pegasus Bank in Dallas, Texas, which was acquired on August 15, 2019.

The provision for loan losses for the first quarter of 2020 was $19.6 million compared to $1.7 million a year ago. BancFirst Corporation Executive Chairman David Rainbolt commented, "Even though it was optional, we have elected to go ahead and adopt CECL for our loan loss reserve methodology.  It is naïve to think that our region will not experience a residual economic effect from the combination of both the COVID-19 pandemic and low energy prices. The forward-looking view afforded by CECL lets us factor in our expectations about that future economy and its effect on loan losses. Our provision this quarter is based on a modestly optimistic assumption on the timing of an end to the pandemic, as well as the magnitude of the government's stimulus response to it. To the extent the amount of time the economy remains shuttered is more extended than our current base projection, we will see a continuation of higher than normal provision in future periods."

The Company's net interest income for the first quarter of 2020 increased to $74.1 million compared to $66.9 million for the first quarter of 2019. The net interest margin for the quarter was 3.82% compared to 3.85% a year ago.  Net charge-offs for the quarter were less than 0.02% of average loans, compared to less than 0.01% of average loans for the first quarter of 2019.  Noninterest income for the quarter totaled $35.1 million, compared to $32.0 million last year. Noninterest expense for the quarter totaled $61.4 million compared to $56.2 million last year. The increase in noninterest expense was due to salary increases in 2020 and acquisition related expenses related to the purchase of assets from The Citizens State Bank of Okemah, Oklahoma, which were partially offset by a $2.2 million gain on a sale of property carried in other real estate owned. The Company's effective tax rate was 20.0% compared to 22.4% for the first quarter of 2019.  

At March 31, 2020, the Company's total assets were $8.7 billion, an increase of $103.3 million from December 31, 2019. Debt securities of $592.0 million were up $100.4 million from December 31, 2019. Loans totaled $6.0 billion, an increase of $332.9 million from December 31, 2019. Deposits totaled $7.6 billion, an increase of $89.6 million from the December 31, 2019 total. The Company's total stockholders' equity was $1.0 billion, an increase of $18.4 million over December 31, 2019.

Nonaccrual loans represent 0.75% of total loans at March 31, 2020, up from 0.32% at year-end 2019. The increase in nonaccrual loans was primarily due to downgrades of a few energy loans. The allowance to total loans was 1.17% up from 0.96% at year-end 2019. The allowance to nonaccrual loans was 155.11% compared to 301.91% at year-end 2019.

BancFirst Corporation CEO David Harlow commented, "During the month of March and into April as the impact of COVID-19 on the overall economy became more evident, the Company acted on several fronts.  Specifically, we began the identification of all loan customers impacted by COVID-19 that resulted in a modification of loan terms and coded those loans in accordance with interagency guidelines. Importantly, we created a task force that has worked 24/7 to facilitate the Paycheck Protection Program through the Small Business Administration. Through that program that began on April 3 and ended on April 16 we approved 5,268 loans totaling approximately $829 million.

"Although strictly limiting lobby traffic and precisely following CDC guidance, we are fulfilling the duty of being designated as critical infrastructure by the Department of Homeland Security. Additionally, we have implemented an enhanced paid leave program for all employees, added incentive pay for all hourly employees in retail locations, and initiated a childcare stipend for hourly employees at work with school age children at home."

On March 5, 2020, BancFirst Corporation purchased assets and assumed liabilities of The Citizens State Bank, Okemah, Oklahoma. The Company purchased $47.9 million in assets and $23.5 million in loans and assumed $47.9 million in deposits.

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 109 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

2019

2019

2019

2019

1st Qtr   

4th Qtr 

3rd Qtr 

2nd Qtr 

1st Qtr 

 Condensed Income Statements: 

 Net interest income 

$         74,073

$         73,939

$         72,287

$         68,792

$         66,903

 Provision for loan losses 

19,583

1,412

2,758

2,433

1,684

 Non-interest income:

Trust revenue

3,655

3,682

3,490

3,250

3,177

Service charges on deposits

18,804

19,938

19,866

19,114

17,663

Securities transactions

50

(9)

--

821

--

Income from sales of loans

781

1,089

964

868

698

Insurance commissions

5,676

5,076

5,535

4,420

5,265

Cash management

4,320

4,258

4,430

4,402

3,776

Other

1,859

1,490

1,342

1,202

1,422

Total noninterest income 

35,145

35,524

35,627

34,077

32,001

 Non-interest expense:

Salaries and employee benefits

39,756

40,375

40,354

36,124

36,171

Occupancy expense, net

3,546

3,738

3,386

2,953

2,627

Depreciation

3,491

3,355

3,268

3,015

2,985

Amortization of intangible assets

964

1,007

842

758

759

Data processing services

1,692

1,634

1,467

1,262

1,480

Net expense from other real estate owned

(2,135)

(424)

26

97

(484)

Marketing and business promotion

2,355

2,327

2,047

1,919

2,261

Deposit insurance

136

147

(81)

544

533

Other

11,580

14,137

10,882

9,936

9,874

Total noninterest expense 

61,385

66,296

62,191

56,608

56,206

 Income before income taxes 

28,250

41,755

42,965

43,828

41,014

 Income tax expense 

5,642

6,248

9,597

9,661

9,177

 Net income 

$          22,608

$         35,507

$         33,368

$          34,167

$          31,837

 Per Common Share Data: 

 Net income-basic 

$                0.69

$              1.09

$              1.02

$              1.04

$              0.98

 Net income-diluted 

0.68

1.07

1.00

1.02

0.96

 Cash dividends declared

0.32

0.32

0.32

0.30

0.30

 Common shares outstanding 

32,646,691

32,694,268

32,644,018

32,639,588

32,617,788

 Average common shares outstanding -

   Basic

32,679,587

32,673,438

32,641,902

32,629,146

32,612,399

   Diluted

33,287,359

33,366,848

33,327,213

33,317,193

33,292,852

 Performance Ratios: 

 Return on average assets

1.07

%

1.66

%

1.65

%

1.78

%

1.69

%

 Return on average equity

8.87

13.76

13.80

14.54

14.08

 Net interest margin 

3.82

3.78

3.89

3.89

3.85

 Efficiency ratio 

56.20

60.56

57.63

55.03

56.83

 

BancFirst Corporation

Summary Financial Information

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

2020

2019

2019

2019

2019

1st Qtr

4th Qtr

3rd Qtr

2nd Qtr

1st Qtr 

 Balance Sheet Data:

 Total assets

$  8,669,096

$  8,565,758

$  8,388,816

$  7,642,021

$  7,709,000

 Interest-bearing deposits with banks

1,356,826

1,646,238

1,476,340

1,518,998

1,291,447

 Debt securities

591,987

491,626

555,575

425,154

724,872

 Total loans

6,006,065

5,673,144

5,622,897

5,105,302

5,050,221

 Allowance for loan losses

(70,080)

(54,238)

(55,928)

(55,108)

(52,915)

 Deposits

7,573,200

7,483,635

7,330,677

6,613,613

6,706,386

 Stockholders' equity

1,023,380

1,004,989

979,752

956,380

927,927

 Book value per common share

31.35

30.74

30.01

29.30

28.45

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

26.09

25.50

24.77

26.40

25.52

 Balance Sheet Ratios:

 Average loans to deposits

77.75

%

75.83

%

76.97

%

76.07

%

75.34

%

 Average earning assets to total assets

91.51

91.50

92.23

92.43

92.42

 Average stockholders' equity to average assets

12.02

12.04

11.96

12.25

12.01

Asset Quality Data:

 Past due loans

$       10,065

$       11,834

$       11,215

$         2,663

$         2,170

 Nonaccrual loans

45,181

17,965

19,995

17,998

21,594

 Restructured loans

3,158

18,010

17,504

16,486

14,552

 Total nonperforming and restructured loans

58,404

47,809

48,714

37,147

38,316

 Other real estate owned and repossessed assets

6,001

6,073

7,055

7,004

6,433

 Total nonperforming and restructured assets

64,405

53,882

55,769

44,151

44,749

 Nonaccrual loans to total loans

0.75

%

0.32

%

0.36

%

0.35

%

0.43

%

 Nonperforming and restructured loans to total loans

0.97

0.84

0.87

0.73

0.76

 Nonperforming and restructured assets to total assets

0.74

0.63

0.66

0.58

0.58

 Allowance to total loans

1.17

0.96

0.99

1.08

1.05

 Allowance to nonaccrual loans

155.11

301.91

279.72

306.20

245.05

 Allowance to nonperforming and restructured loans

119.99

113.45

114.81

148.35

138.10

 Net charge-offs to average loans

0.02

0.06

0.04

0.01

0.00

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

Stockholders' equity

$  1,023,380

$  1,004,989

$     979,752

$     956,380

$     927,927

Less goodwill

149,923

148,604

147,013

79,749

79,749

Less intangible assets, net

21,850

22,608

24,025

14,936

15,701

Tangible stockholders' equity (non-GAAP)

$     851,607

$     833,777

$     808,714

$     861,695

$     832,477

Common shares outstanding

32,646,691

32,694,268

32,644,018

32,639,588

32,617,788

 Tangible book value per common share (non-GAAP)

$         26.09

$         25.50

$         24.77

$         26.40

$         25.52

(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

March 31, 2020

Average

Income/

 Yield/

Balance

Expense

 Rate

ASSETS

Earning assets:

  Loans

$        5,770,502

$           76,658

5.33

%

  Securities – taxable

506,893

2,577

2.04

  Securities – tax exempt

17,474

136

3.12

  Interest bearing deposits with banks

1,493,771

4,769

1.28

     Total earning assets

7,788,640

84,140

4.33

Nonearning assets:

  Cash and due from banks

191,682

  Interest receivable and other assets

582,200

  Allowance for loan losses

(51,515)

     Total nonearning assets

722,367

     Total assets

$        8,511,007

LIABILITIES AND

  STOCKHOLDERS' EQUITY

Interest-bearing liabilities:

  Transaction deposits                          

$           815,827

$                 515

0.25

%

  Savings deposits

3,020,093

6,249

0.83

  Time deposits

697,821

2,636

1.51

  Short-term borrowings

2,448

7

1.18

  Junior subordinated debentures

26,804

491

7.35

     Total interest-bearing liabilities

4,562,993

9,898

0.87

Interest-free funds:

  Noninterest bearing deposits

2,888,342

  Interest payable and other liabilities

36,879

  Stockholders' equity

1,022,793

     Total interest free-funds

3,948,014

     Total liabilities

and stockholders' equity

$        8,511,007

Net interest income

$           74,242

Net interest spread

3.46

%

Effect of interest free funds

0.36

%

Net interest margin

3.82

%

 

Cision View original content:http://www.prnewswire.com/news-releases/bancfirst-corporation-reports-first-quarter-earnings-301044662.html

SOURCE BancFirst


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