BancFirst Corporation Reports Fourth Quarter Earnings

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BancFirst Corporation (NASDAQ: BANF) reported a net income of $35.4 million for Q4 2020, a slight decrease from $35.5 million in Q4 2019. Annual net income fell to $99.6 million, down from $134.9 million in 2019, primarily due to higher provisions for credit losses. Notably, net interest income rose to $79.5 million, driven by loan growth and PPP fee income. Total assets reached $9.2 billion, with loans increasing to $6.4 billion and deposits to $8.1 billion. CEO David Harlow expressed a cautiously optimistic outlook for 2021 amidst ongoing economic challenges.

Positive

• Net interest income increased to $79.5 million in Q4 2020 from $73.9 million in Q4 2019.
• Total stockholders' equity rose to $1.1 billion, a $62.9 million increase from 2019.
• BancFirst increased its dividend for the 27th consecutive year.

Negative

• Annual net income declined to $99.6 million in 2020 from $134.9 million in 2019.
• Provision for credit losses increased to $5.0 million in Q4 2020 from $1.4 million in Q4 2019.
• Nonaccrual loans rose to 0.58% of total loans at year-end 2020, up from 0.32% in 2019.

OKLAHOMA CITY, Jan. 21, 2021 /PRNewswire/ -- BancFirst Corporation (NASDAQ GS:BANF) reported net income of $35.4 million, or $1.06 diluted earnings per share, for the fourth quarter of 2020 compared to net income of $35.5 million, or $1.07 diluted earnings per share, for the fourth quarter of 2019.  Net income for the twelve months ended December 31, 2020 was $99.6 million, or $3.00 diluted earnings per share, compared to $134.9 million, or $4.05 diluted earnings per share, for the year ended December 31, 2019. The results for 2020 were negatively impacted by a higher provision for credit losses. Net income for the year ended December 31, 2020 includes the entire year of 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. The results for the prior year include Pegasus Bank acquisition related expenses of approximately $3.1 million.

The provision for credit losses for the fourth quarter of 2020 was $5.0 million compared to $1.4 million a year ago and $57.7 million through the first three quarters of 2020. BancFirst Corporation Executive Chairman David Rainbolt commented, "Our provision for credit losses was substantially reduced from previous quarters due to improvements in projected outcomes for the economic effects of the pandemic. The rollout of the vaccine and extension of the Cares Act stimulus, combined with improved energy prices and jobs data, justify a cessation to the outsized provisions seen in prior quarters."

The Company's net interest income for the fourth quarter of 2020 increased to $79.5 million compared to $73.9 million for the fourth quarter of 2019. Net interest income increased for the fourth quarter of 2020 due to loan growth, PPP fee income of approximately $8.0 million and the decrease in interest rates paid on deposits. The net interest margin for the quarter was 3.54% compared to 3.78% a year ago. The Company had net charge-offs for the quarter of 0.30% of average loans, compared to net charge-offs of 0.06% of average loans for the fourth quarter of 2019. Noninterest income for the quarter totaled $35.4 million, compared to $35.5 million last year. Noninterest expense for the quarter totaled $65.6 million compared to $66.3 million last year. Overall noninterest expense decreased during the fourth quarter of 2020 compared to the fourth quarter of 2019 primarily due to $2.3 million of amortization of new market tax credits in 2019. However, deposit insurance, net expense from other real estate owned, net occupancy and depreciation increased during the fourth quarter of 2020 compared to 2019. The Company's effective tax rate was 20.3% compared to 15.0% for the fourth quarter of 2019.  The effective tax rate for the fourth quarter of 2019 was lower due to the purchase of tax credits during the quarter.

At December 31, 2020, the Company's total assets were $9.2 billion, an increase of $646.6 million from December 31, 2019. Securities of $555.2 million were up $63.6 million from December 31, 2019. Loans totaled $6.4 billion, an increase of $775.1 million from December 31, 2019. Deposits totaled $8.1 billion, an increase of $581.1 million from the December 31, 2019 total. The increase in assets, loans and deposits were primarily related to the Paycheck Protection Program (PPP) and other government stimulus. At December 31, 2020, the balance of the Paycheck Protection Program loans was $652.7 million. The Company's total stockholders' equity was $1.1 billion, an increase of $62.9 million over December 31, 2019. Off-balance sheet sweep accounts were $2.7 billion at December 31, 2020 compared to $2.0 billion at December 31, 2019.

Nonaccrual loans represented 0.58% of total loans at December 31, 2020, up from 0.32% at year-end 2019, but down from 1.24% at September 30, 2020. Non-performing assets represented 0.90% of total assets at December 31, 2020, up from 0.63% at December 31, 2019 as a result of loan migration from non-accrual loans to other real estate owned (OREO) during the fourth quarter of 2020. The allowance to total loans was 1.42% at December 31, 2020, up from 0.96% at year-end 2019. The allowance to nonaccrual loans was approximately 243% at December 31, 2020, compared to 302% at year-end 2019, and 129% at September 30, 2020.

BancFirst Corporation CEO David Harlow commented, "In a very challenging year the Company was able to report earnings of $3.00 per diluted share while substantially building loan loss reserves, increasing our dividend for the 27th consecutive year and growing total stockholders' equity and tangible book value per share.  The outlook for 2021 is certainly better today than we would have projected at the outset of the pandemic; however, many consumers and certain sectors of the economy continue to struggle and the ultimate outcome for many businesses when the stimulus subsides is far from certain."

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 107 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				2020				2020				2020				2019
	4th Qtr				3rd Qtr				2nd Qtr				1st Qtr				4th Qtr
Condensed Income Statements:
Net interest income	$	79,535			$	75,852			$	77,208			$	74,073			$	73,939
Provision for credit losses		4,992				18,740				19,333				19,583				1,412
Non-interest income:
Trust revenue		2,976				3,131				3,368				3,655				3,682
Service charges on deposits		19,796				19,078				16,760				18,804				19,938
Securities transactions		156				—				(595)				50				(9)
Income from sales of loans		1,852				1,873				1,561				781				1,089
Insurance commissions		5,680				5,197				4,443				5,676				5,076
Cash management		3,135				3,701				4,255				4,320				4,258
Other		1,825				1,595				2,290				1,859				1,490
Total noninterest income		35,420				34,575				32,082				35,145				35,524
Non-interest expense:
Salaries and employee benefits		40,750				41,995				42,226				39,756				40,375
Occupancy expense, net		4,533				4,503				3,839				3,546				3,738
Depreciation		3,779				3,795				3,544				3,491				3,355
Amortization of intangible assets		915				968				968				964				1,007
Data processing services		1,763				1,669				1,629				1,692				1,634
Net expense from other real estate owned		420				196				(12)				(2,135)				(424)
Marketing and business promotion		1,671				1,485				1,485				2,355				2,327
Deposit insurance		857				723				365				136				147
Other		10,923				10,749				10,607				11,580				14,137
Total noninterest expense		65,611				66,083				64,651				61,385				66,296
Income before income taxes		44,352				25,604				25,306				28,250				41,755
Income tax expense		8,994				4,714				4,576				5,642				6,248
Net income	$	35,358			$	20,890			$	20,730			$	22,608			$	35,507
Per Common Share Data:
Net income-basic	$	1.08			$	0.64			$	0.64			$	0.69			$	1.09
Net income-diluted		1.06				0.63				0.63				0.68				1.07
Cash dividends declared		0.34				0.34				0.32				0.32				0.32
Common shares outstanding		32,719,852				32,679,191				32,662,691				32,646,691				32,694,268
Average common shares outstanding -
Basic		32,690,296				32,668,789				32,651,262				32,679,587				32,673,438
Diluted		33,275,550				33,168,938				33,075,493				33,287,359				33,366,848
Performance Ratios:
Return on average assets		1.45	%			0.86	%			0.88	%			1.07	%			1.66	%
Return on average stockholders' equity		13.25				7.89				7.99				8.87				13.76
Net interest margin		3.54				3.40				3.54				3.82				3.78
Efficiency ratio		57.08				59.84				59.16				56.20				60.56

 

BancFirst Corporation
Summary Financial Information
(Dollars in thousands, except per share and share data - Unaudited)
	Twelve months ended
	December 31,
	2020				2019
Condensed Income Statements:
Net interest income	$	306,668			$	281,921
Provision for credit losses		62,648				8,287
Non-interest income:
Trust revenue		13,130				13,599
Service charges on deposits		74,438				76,581
Securities transactions		(389)				812
Income from sales of loans		6,067				3,619
Insurance commissions		20,996				20,296
Cash management		15,411				16,866
Other		7,569				5,456
Total noninterest income		137,222				137,229
Non-interest expense:
Salaries and employee benefits		164,727				153,024
Occupancy expense, net		16,421				12,704
Depreciation		14,609				12,623
Amortization of intangible assets		3,815				3,366
Data processing services		6,753				5,843
Net expense from other real estate owned		(1,531)				(785)
Marketing and business promotion		6,996				8,554
Deposit insurance		2,081				1,143
Other		43,859				44,829
Total noninterest expense		257,730				241,301
Income before income taxes		123,512				169,562
Income tax expense		23,926				34,683
Net income	$	99,586			$	134,879
Per Common Share Data:
Net income-basic	$	3.05			$	4.13
Net income-diluted		3.00				4.05
Cash dividends declared		1.32				1.24
Common shares outstanding		32,719,852				32,694,268
Average common shares outstanding -
Basic		32,672,522				32,639,396
Diluted		33,210,952				33,329,844
Performance Ratios:
Return on average assets		1.06	%			1.69	%
Return on average stockholders' equity		9.52				14.04
Net interest margin		3.57				3.85
Efficiency ratio		58.06				57.57

 

BancFirst Corporation
Summary Financial Information
(Dollars in thousands, except per share and share data - Unaudited)
	2020				2020				2020				2020				2019
	4th Qtr				3rd Qtr				2nd Qtr				1st Qtr				4th Qtr
Balance Sheet Data:
Total assets	$	9,212,357			$	9,618,868			$	9,612,453			$	8,669,096			$	8,565,758
Interest-bearing deposits with banks		1,336,394				1,609,462				1,583,116				1,356,826				1,646,238
Debt securities		555,196				596,941				608,031				591,987				491,626
Total loans		6,448,225				6,660,694				6,696,856				6,006,065				5,673,144
Allowance for credit losses		(91,366)				(106,126)				(89,500)				(70,080)				(54,238)
Deposits		8,064,704				8,495,891				8,486,671				7,573,200				7,483,635
Stockholders' equity		1,067,885				1,043,752				1,034,199				1,023,380				1,004,989
Book value per common share		32.64				31.94				31.66				31.35				30.74
Tangible book value per common share (non-GAAP)(1)		27.47				26.74				26.43				26.09				25.50
Balance Sheet Ratios:
Average loans to deposits		77.02	%			78.55	%			79.78	%			77.75	%			75.83	%
Average earning assets to total assets		91.82				91.99				92.23				91.51				91.50
Average stockholders' equity to average assets		10.91				10.90				10.96				12.02				12.04
Asset Quality Data:
Past due loans	$	4,802			$	6,412			$	5,382			$	10,065			$	11,834
Nonaccrual loans (5)		37,545				82,385				49,477				45,181				17,965
Restructured loans		7,784				2,837				3,213				3,158				18,010
Total nonperforming and restructured loans		50,131				91,634				58,072				58,404				47,809
Other real estate owned and repossessed assets		32,480				4,939				4,948				6,001				6,073
Total nonperforming and restructured assets		82,611				96,573				63,020				64,405				53,882
Nonaccrual loans to total loans		0.58	%			1.24	%			0.74	%			0.75	%			0.32	%
Nonaccrual loans to total Non-PPP loans (non-GAAP)(3)		0.65				1.41				0.84				0.75				0.32
Nonperforming and restructured loans to total loans		0.78				1.38				0.87				0.97				0.84
Nonperforming and restructured loans to total Non-PPP loans (non-GAAP)(3)		0.86				1.57				0.99				0.97				0.84
Nonperforming and restructured assets to total assets		0.90				1.00				0.66				0.74				0.63
Allowance for credit losses to total loans		1.42				1.59				1.34				1.17				0.96
Allowance for credit losses to total Non-PPP loans (non-GAAP)(3)		1.58				1.82				1.52				1.17				0.96
Allowance for credit losses to nonaccrual loans		243.35				128.82				180.89				155.11				301.91
Allowance for credit losses to nonperforming and restructured loans		182.26				115.81				154.12				119.99				113.45
Net charge-offs to average loans		0.30				0.03				0.00				0.02				0.06
Reconciliation of Tangible Book Value Per Common Share (non-GAAP)(2):
Stockholders' equity	$	1,067,885			$	1,043,752			$	1,034,199			$	1,023,380			$	1,004,989
Less goodwill		149,922				149,922				149,922				149,923				148,604
Less intangible assets, net		18,999				19,914				20,882				21,850				22,608
Tangible stockholders' equity (non-GAAP)	$	898,964			$	873,916			$	863,395			$	851,607			$	833,777
Common shares outstanding		32,719,852				32,679,191				32,662,691				32,646,691				32,694,268
Tangible book value per common share (non-GAAP)	$	27.47			$	26.74			$	26.43			$	26.09			$	25.50
(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	$	6,448,225			$	6,660,694			$	6,696,856			$	6,006,065			$	5,673,144
Less PPP loans		652,693				831,703				825,093				—				—
Total Non-PPP loans (non-GAAP)	$	5,795,532			$	5,828,991			$	5,871,763			$	6,006,065			$	5,673,144
Nonaccrual loans (5)		37,545				82,385				49,477				45,181				17,965
Nonaccrual loans to total Non-PPP loans (non-GAAP)		0.65	%			1.41	%			0.84	%			0.75	%			0.32	%
Total nonperforming and restructured loans		50,131				91,634				58,072				58,404				47,809
Nonperforming and restructured loans to total Non-PPP loans (non-GAAP)		0.86	%			1.57	%			0.99	%			0.97	%			0.84	%
Allowance for credit losses		(91,366)				(106,126)				(89,500)				(70,080)				(54,238)
Allowance for credit losses to total Non-PPP loans (non-GAAP)		1.58	%			1.82	%			1.52	%			1.17	%			0.96	%
(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 $7.8 million of nonaccrual loans at December 31, 2020.

 

BancFirst Corporation
Consolidated Average Balance Sheets
And Interest Margin Analysis
Taxable Equivalent Basis
(Dollars in thousands - Unaudited)
	Three Months Ended												Twelve Months Ended
	December 31, 2020												December 31, 2020
					Interest				Average								Interest				Average
	Average				Income/				Yield/				Average				Income/				Yield/
	Balance				Expense				Rate				Balance				Expense				Rate
ASSETS
Earning assets:
Loans	$	6,599,933			$	79,815				4.80		%	$	6,432,455			$	312,195			4.84			%
Securities – taxable		558,046				1,926			1.37					556,931				8,591			1.54
Securities – tax exempt		30,131			131				1.73					28,969			616				2.12
Interest bearing deposits with banks and FFS		1,719,900			463				0.11					1,562,383				6,049			0.39
Total earning assets		8,908,010				82,335			3.67					8,580,738				327,451			3.81
Nonearning assets:
Cash and due from banks		252,082												220,995
Interest receivable and other assets		638,173												611,966
Allowance for credit losses		(97,046)												(76,501)
Total nonearning assets		793,209												756,460
Total assets	$	9,701,219											$	9,337,198
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest bearing liabilities:
Transaction deposits	$	711,266			$	131			0.07			%	$	744,632			$	940			0.13			%
Savings deposits		3,404,226			903				0.11					3,273,903				9,385			0.29
Time deposits		684,992				1,434			0.83					695,637				8,147			1.17
Short-term borrowings		1,075			-				0.07					2,745			8					0.30
Long-term borrowings	-				-				-					1,107			-				-
Junior subordinated debentures		26,804			492				7.29					26,804				1,966			7.31
Total interest bearing liabilities		4,828,363				2,960			0.24					4,744,828				20,446			0.43
Interest free funds:
Noninterest bearing deposits		3,768,493												3,503,187
Interest payable and other liabilities		45,673												46,048
Stockholders' equity		1,058,690												1,043,135
Total interest free  funds		4,872,856												4,592,370
Total liabilities and stockholders' equity	$	9,701,219											$	9,337,198
Net interest income					$	79,375											$	307,005
Net interest spread									3.43			%									3.38			%
Effect of interest free funds										0.11		%										0.19		%
Net interest margin										3.54		%									3.57			%

 

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SOURCE BancFirst

FAQ

What were BancFirst Corporation's earnings for Q4 2020?

BancFirst Corporation reported earnings of $35.4 million for Q4 2020, or $1.06 diluted earnings per share.

How did BancFirst's 2020 annual net income compare to 2019?

The annual net income for BancFirst in 2020 was $99.6 million, down from $134.9 million in 2019.

What factors contributed to BancFirst's increased net interest income?

The increase in net interest income to $79.5 million was due to loan growth and PPP fee income.

What is the outlook for BancFirst Corporation in 2021?

The outlook for 2021 is cautiously optimistic, despite ongoing economic challenges according to CEO David Harlow.