BancFirst Corporation Reports Second Quarter Earnings

Rhea-AI Summary

BancFirst Corporation (BANF) reported net income of $48.2 million for Q2 2021, a significant rise from $20.7 million in Q2 2020, resulting in $1.45 diluted earnings per share. For the first half of 2021, net income reached $90.7 million, compared to $43.3 million a year earlier. The company benefited from a $9.9 million reversal of credit loss provisions. Total assets rose to $11.0 billion, while deposits grew to $9.7 billion. The outlook for loan growth and non-interest income remains cautious due to the economic recovery uncertainties.

Positive

• Net income increased by 133% year-over-year for Q2 2021.
• Reversal of credit loss provisions by $9.9 million reflects improved financial health.
• Total assets increased by $1.8 billion since December 2020.

Negative

• Loan totals decreased by $241 million since December 2020, indicating a decline in lending activity.
• Net interest margin decreased to 3.32%, down from 3.54% a year ago.

OKLAHOMA CITY, July 15, 2021 /PRNewswire/ -- BancFirst Corporation (NASDAQ GS: BANF) reported net income of $48.2 million, or $1.45 diluted earnings per share, for the second quarter of 2021 compared to net income of $20.7 million, or $0.63 diluted earnings per share, for the second quarter of 2020. Net income for the six months ended June 30, 2021 was $90.7 million, or $2.72 per share, compared to $43.3 million, or $1.31 per share, for the first half of 2020. The Company recorded a net benefit from reversal of provisions for credit losses of $9.9 million for both the second quarter and first half of 2021 compared to a provision for credit losses of $19.3 million for the second quarter of 2020 and $38.9 million for the first half of 2020. Also included in noninterest income and noninterest expense were a purchase gain and acquisition related expenses from the purchase and assumption transaction with The First National Bank and Trust Company of Vinita, Oklahoma, which resulted in a net benefit of approximately $2.0 million.

BancFirst Corporation Executive Chairman David Rainbolt commented, "There has been a 180 degree change in the perception of our economic direction from the second quarter of last year. The massive provisions in 2020 precipitated by the unknown consequences of the pandemic have given way to a stimulus driven economic turnaround both nationally and in Oklahoma. Although some caution remains regarding the sustainability of the recovery and possible effects of virus variants, we would anticipate more modest reserve reversals in the next quarter or two."

The Company's net interest income for the second quarter of 2021 increased to $82.4 million compared to $77.2 million for the second quarter of 2020, due primarily to $11.9 million in fee income from Paycheck Protection Program (PPP) loan forgiveness. The net interest margin for the quarter was 3.32% compared to 3.54% a year ago. Noninterest income for the quarter totaled $44.6 million, compared to $32.1 million last year. The increase in noninterest income was due to the aforementioned purchase gain for The First National Bank and Trust Company of Vinita, Oklahoma, $2.2 million in rental income from other real estate property, and a $2.7 million increase in income from debate card interchange fees. Noninterest expense for the quarter increased to $74.0 million compared to $64.7 million last year, due to approximately $3.4 million related to other real estate property management costs, the aforementioned acquisition related expenses, and $1.3 million in net occupancy and depreciation from the Company's new corporate headquarters. The Company's effective tax rate was 23.4% compared to 18.1% for the second quarter of 2020.  

At June 30, 2021, the Company's total assets were $11.0 billion, an increase of $1.8 billion from December 31, 2020. Loans totaled $6.2 billion, a decrease of $241.0 million from December 31, 2020 due primarily to a net decrease of approximately $284 million in PPP loans and approximately $21 million of loans that were sold with the Company's Hugo, Oklahoma branch. Deposits totaled $9.7 billion, an increase of $1.7 billion from December 31, 2020. The increase in assets and deposits was primarily related to PPP and other government stimulus payments. At June 30, 2021, the balance of PPP loans was $368.6 million. The Company's total stockholders' equity was $1.1 billion, an increase of $63.7 million over December 31, 2020. Off-balance sheet sweep accounts totaled $2.6 billion at June 30, 2021 compared to $2.8 billion at December 31, 2020.

Nonaccrual loans represent 0.48% of total loans at June 30, 2021, down from 0.58% at year-end 2020. Net charge-offs for the quarter were 0.06% of average loans, compared to none in the second quarter of 2020. The allowance for credit losses to total loans was 1.35% at June 30, 2021 compared to 1.42% at year-end 2020, and the allowance for credit losses to nonaccrual loans was 281.73% compared to 243.35% at year-end 2020. At June 30, 2021, the Company's nonaccrual loans decreased $7.7 million from year-end 2020, due to resolutions of several loans, which was slightly offset by $7.3 million of nonaccrual loans acquired from The First National Bank and Trust Company of Vinita, Oklahoma. At June 30, 2021, the Company's other real estate owned (OREO) increased $8.0 million from December 31, 2020, and included approximately $4.0 million due to the repossession of one commercial real estate property, $2.4 million from the decommissioning of the Company's previous headquarters, and $2.5 million acquired from The First National Bank and Trust Company of Vinita, Oklahoma.

On June 17, 2021, the Company completed a private placement, under Regulation D of the Securities Act of 1933, of $60 million aggregate principal amount of 3.50% Fixed-to-Floating Rate Subordinated Notes due 2036 (the "Subordinated Notes") to various institutional accredited investors. The Subordinated Notes have been structured to qualify as Tier 2 capital under bank regulatory guidelines. The net proceeds to the Company from the sale of the Subordinated Notes was approximately $59.15 million after deducting commissions and offering expenses.  The Company expects to use the proceeds from the sale of the Subordinated Notes for general corporate purposes.

On May 20, 2021, the Company completed the purchase and assumption transaction with The First National Bank and Trust Company of Vinita, Oklahoma to purchase certain of its assets and assume its deposits and certain other obligations. The First National Bank and Trust Company of Vinita had banking locations in Vinita and Grove, Oklahoma. These banking locations became branches of BancFirst. The Company purchased approximately $284 million in total assets, $195 million in loans, and $256 million in deposits.

BancFirst Corporation CEO David Harlow commented, "The story for the quarter and for the first six months of the year is the reversal of loan loss reserve compared to significant provisions in the first half of 2020 in addition to the continued realization of PPP loan fees as a result of ongoing PPP loan forgiveness. Our margin (absent non-recurring PPP loan fees) continues to be under pressure as government stimulus driven deposit growth has far outstripped loan growth. Our challenge for the remainder of 2021 and into 2022 will be to sustain the trajectory of non-interest income growth while generating loan growth in the emerging post-pandemic economy."

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 106 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)
		2021				2021				2020				2020				2020
		2nd Qtr				1st Qtr				4th Qtr				3rd Qtr				2nd Qtr
Condensed Income Statements:
Net interest income		$	82,363			$	77,206			$	79,535			$	75,852			$	77,208
(Benefit from) provision for credit losses			(9,949)				—				4,992				18,740				19,333
Non-interest income:
Trust revenue			3,264				3,102				2,976				3,131				3,368
Service charges on deposits			20,524				19,100				19,796				19,078				16,760
Securities transactions			172				95				156				—				(595)
Income from sales of loans			2,133				2,010				1,852				1,873				1,561
Insurance commissions			5,015				5,989				5,680				5,197				4,443
Cash management			3,068				3,003				3,135				3,701				4,255
Other			10,442				6,636				1,825				1,595				2,290
Total noninterest income			44,618				39,935				35,420				34,575				32,082
Non-interest expense:
Salaries and employee benefits			41,992				39,577				40,750				41,995				42,226
Occupancy expense, net			4,528				4,348				4,533				4,503				3,839
Depreciation			4,133				3,877				3,779				3,795				3,544
Amortization of intangible assets			809				793				915				968				968
Data processing services			1,660				1,678				1,763				1,669				1,629
Net expense from other real estate owned			3,357				1,510				420				196				(12)
Marketing and business promotion			1,648				1,879				1,671				1,485				1,485
Deposit insurance			766				876				857				723				365
Other			15,130				10,425				10,923				10,749				10,607
Total noninterest expense			74,023				64,963				65,611				66,083				64,651
Income before income taxes			62,907				52,178				44,352				25,604				25,306
Income tax expense			14,715				9,658				8,994				4,714				4,576
Net income		$	48,192			$	42,520			$	35,358			$	20,890			$	20,730
Per Common Share Data:
Net income-basic		$	1.47			$	1.30			$	1.08			$	0.64			$	0.64
Net income-diluted			1.45				1.27				1.06				0.63				0.63
Cash dividends declared			0.34				0.34				0.34				0.34				0.32
Common shares outstanding			32,784,513				32,771,013				32,719,852				32,679,191				32,662,691
Average common shares outstanding -
Basic			32,779,227				32,756,852				32,690,296				32,668,789				32,651,262
Diluted			33,405,923				33,408,116				33,275,550				33,168,938				33,075,493
Performance Ratios:
Return on average assets			1.79	%			1.69	%			1.45	%			0.86	%			0.88	%
Return on average stockholders' equity			17.42				15.90				13.25				7.89				7.99
Net interest margin			3.32				3.36				3.54				3.40				3.54
Efficiency ratio			58.29				55.46				57.08				59.84				59.16

 

BancFirst Corporation Summary Financial Information (Dollars in thousands, except per share and share data - Unaudited)
		Six months ended
		June 30,
		2021				2020
Condensed Income Statements:
Net interest income		$	159,569			$	151,281
(Benefit from) provision for credit losses			(9,949)				38,916
Non-interest income:
Trust revenue			6,366				7,023
Service charges on deposits			39,624				35,564
Securities transactions			267				(545)
Income from sales of loans			4,143				2,342
Insurance commissions			11,004				10,119
Cash management			6,071				8,575
Other			17,078				4,149
Total noninterest income			84,553				67,227
Non-interest expense:
Salaries and employee benefits			81,569				81,982
Occupancy expense, net			8,876				7,385
Depreciation			8,010				7,035
Amortization of intangible assets			1,602				1,932
Data processing services			3,338				3,321
Net expense from other real estate owned			4,867				(2,147)
Marketing and business promotion			3,527				3,840
Deposit insurance			1,642				501
Other			25,555				22,187
Total noninterest expense			138,986				126,036
Income before income taxes			115,085				53,556
Income tax expense			24,373				10,218
Net income		$	90,712			$	43,338
Per Common Share Data:
Net income-basic		$	2.77			$	1.33
Net income-diluted			2.72				1.31
Cash dividends declared			0.68				0.64
Common shares outstanding			32,784,513				32,662,691
Average common shares outstanding -
Basic			32,768,102				32,665,425
Diluted			33,407,693				33,197,391
Performance Ratios:
Return on average assets			1.74	%			0.97	%
Return on average stockholders' equity			16.67				8.42
Net interest margin			3.34				3.68
Efficiency ratio			56.93				57.68

 

	BancFirst Corporation
	Summary Financial Information
	(Dollars in thousands, except per share and share data - Unaudited)
			2021				2021				2020				2020				2020
			2nd Qtr				1st Qtr				4th Qtr				3rd Qtr				2nd Qtr
	Balance Sheet Data:
	Total assets		$	11,015,287			$	10,549,305			$	9,212,357			$	9,618,868			$	9,612,453
	Interest-bearing deposits with banks			4,475,941				2,788,316				1,336,394				1,609,462				1,583,116
	Debt securities			563,771				520,543				555,196				596,941				608,031
	Total loans			6,207,262				6,380,108				6,448,225				6,660,694				6,696,856
	Allowance for credit losses			(83,963)				(90,860)				(91,366)				(106,126)				(89,500)
	Deposits			9,728,389				9,371,940				8,064,704				8,495,891				8,486,671
	Stockholders' equity			1,131,591				1,094,671				1,067,885				1,043,752				1,034,199
	Book value per common share			34.52				33.40				32.64				31.94				31.66
	Tangible book value per common share (non-GAAP)(1)			29.35				28.27				27.47				26.74				26.43
	Balance Sheet Ratios:
	Average loans to deposits			65.36	%			70.84	%			77.02	%			78.55	%			79.78	%
	Average earning assets to total assets			92.01				91.54				91.82				91.99				92.23
	Average stockholders' equity to average assets			10.25				10.64				10.91				10.90				10.96
	Asset Quality Data:
	Past due loans		$	4,386			$	5,282			$	4,802			$	6,412			$	5,382
	Nonaccrual loans (5)			29,802				35,326				37,545				82,385				49,477
	Restructured loans			7,485				7,801				7,784				2,837				3,213
	Total nonperforming and restructured loans			41,673				48,409				50,131				91,634				58,072
	Other real estate owned and repossessed assets			40,183				30,320				32,480				4,939				4,948
	Total nonperforming and restructured assets			81,856				78,729				82,611				96,573				63,020
	Nonaccrual loans to total loans			0.48	%			0.55	%			0.58	%			1.24	%			0.74	%
	Nonaccrual loans to total Non-PPP loans (non-GAAP)(3)			0.51				0.62				0.65				1.41				0.84
	Nonperforming and restructured loans to total loans			0.67				0.76				0.78				1.38				0.87
	Nonperforming and restructured loans to total Non-PPP loans (non-GAAP)(3)			0.71				0.85				0.86				1.57				0.99
	Nonperforming and restructured assets to total assets			0.74				0.75				0.90				1.00				0.66
	Allowance for credit losses to total loans			1.35				1.42				1.42				1.59				1.34
	Allowance for credit losses to total Non-PPP loans (non-GAAP)(3)			1.44				1.60				1.58				1.82				1.52
	Allowance for credit losses to nonaccrual loans			281.73				257.20				243.35				128.82				180.89
	Allowance for credit losses to nonperforming and restructured loans			201.48				187.69				182.26				115.81				154.12
	Net charge-offs to average loans			0.06				0.01				0.30				0.03				0.00
	Reconciliation of Tangible Book Value Per Common Share (non-GAAP)(2):
	Stockholders' equity		$	1,131,591			$	1,094,671			$	1,067,885			$	1,043,752			$	1,034,199
	Less goodwill			149,922				149,922				149,922				149,922				149,922
	Less intangible assets, net			19,283				18,206				18,999				19,914				20,882
	Tangible stockholders' equity (non-GAAP)		$	962,386			$	926,543			$	898,964			$	873,916			$	863,395
	Common shares outstanding			32,784,513				32,771,013				32,719,852				32,679,191				32,662,691
	Tangible book value per common share (non-GAAP)		$	29.35			$	28.27			$	27.47			$	26.74			$	26.43
	(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		$	6,207,262			$	6,380,108			$	6,448,225			$	6,660,694			$	6,696,856
	Less PPP loans			368,620				713,714				652,693				831,703				825,093
	Total Non-PPP loans (non-GAAP)		$	5,838,642			$	5,666,394			$	5,795,532			$	5,828,991			$	5,871,763
	Nonaccrual loans (5)			29,802				35,326				37,545				82,385				49,477
	Nonaccrual loans to total Non-PPP loans (non-GAAP)			0.51	%			0.62	%			0.65	%			1.41	%			0.84	%
	Total nonperforming and restructured loans			41,673				48,409				50,131				91,634				58,072
	Nonperforming and restructured loans to total Non-PPP loans (non-GAAP)			0.71	%			0.85	%			0.86	%			1.57	%			0.99	%
	Allowance for credit losses			(83,963)				(90,860)				(91,366)				(106,126)				(89,500)
	Allowance for credit losses to total Non-PPP loans (non-GAAP)			1.44	%			1.60	%			1.58	%			1.82	%			1.52	%
	(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 $3.5 million of nonaccrual loans at June 30, 2021.

 

BancFirst Corporation Consolidated Average Balance Sheets And Interest Margin Analysis Taxable Equivalent Basis (Dollars in thousands - Unaudited)
		Three Months Ended												Six Months Ended
		June 30, 2021												June 30, 2021
						Interest				Average								Interest				Average
		Average				Income/				Yield/				Average				Income/				Yield/
		Balance				Expense				Rate				Balance				Expense				Rate
ASSETS
Earning assets:
Loans		$	6,300,418			$	82,598				5.26		%	$	6,350,354			$	160,363			5.09			%
Securities – taxable			534,774				1,602				1.20				528,272				3,295			1.26
Securities – tax exempt			15,058			88				2.35					17,187			177				2.08
Interest bearing deposits with banks and FFS			3,111,009			825					0.11				2,751,005				1,420				0.10
Total earning assets			9,961,259				85,113			3.43					9,646,818				165,255			3.45
Nonearning assets:
Cash and due from banks			274,168												271,523
Interest receivable and other assets			684,089												683,978
Allowance for credit losses			(92,899)												(91,731)
Total nonearning assets			865,358												863,770
Total assets		$	10,826,617											$	10,510,588
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest bearing liabilities:
Transaction deposits		$	856,800			$	156			0.07			%	$	812,145			$	304			0.08			%
Savings deposits			3,692,119				939				0.10				3,598,589				2,045			0.11
Time deposits			657,473				908			0.55					657,704				1,976			0.61
Short-term borrowings			2,145				—			0.06					2,534			1					0.05
Junior subordinated debentures			27,454			578				8.44					27,131				1,069			7.94
Total interest bearing liabilities			5,235,991				2,581				0.20				5,098,103				5,395			0.21
Interest free funds:
Noninterest bearing deposits			4,432,892												4,270,391
Interest payable and other liabilities			47,868												44,713
Stockholders' equity			1,109,866												1,097,381
Total interest free  funds			5,590,626												5,412,485
Total liabilities and stockholders' equity		$	10,826,617											$	10,510,588
Net interest income						$	82,532											$	159,860
Net interest spread										3.23			%									3.24			%
Effect of interest free funds											0.09		%										0.10		%
Net interest margin											3.32		%									3.34			%

 

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SOURCE BancFirst

FAQ

What were BancFirst Corporation's earnings for the second quarter of 2021?

BancFirst Corporation reported a net income of $48.2 million, or $1.45 diluted earnings per share for Q2 2021.

How did BancFirst's net income for the first half of 2021 compare to the previous year?

For the first half of 2021, BancFirst's net income was $90.7 million, up from $43.3 million in the first half of 2020.

What were the total assets of BancFirst Corporation as of June 30, 2021?

As of June 30, 2021, BancFirst Corporation's total assets amounted to $11.0 billion.

What challenges does BancFirst face moving forward?

BancFirst faces challenges in sustaining non-interest income growth and generating loan growth in the emerging post-pandemic economy.