BancFirst Corporation Reports Third Quarter Earnings

Rhea-AI Summary

BancFirst Corporation (NASDAQ: BANF) reported a significant net income of $38.8 million for Q3 2021, up from $20.9 million in Q3 2020, translating to $1.16 diluted EPS. For the nine months ending September 30, 2021, net income reached $129.5 million, a substantial rise compared to $64.2 million in the same period last year. The provision for credit losses decreased to $1.5 million from $18.7 million year-on-year. Total assets grew to $11.3 billion, with deposits increasing by $1.9 billion. The company expects a positive economic outlook as COVID impacts diminish.

Positive

• Net income increased to $38.8 million in Q3 2021 from $20.9 million in Q3 2020.
• Diluted EPS rose to $1.16 for Q3 2021, compared to $0.63 in the same quarter last year.
• Total assets increased by $2.1 billion, reaching $11.3 billion since December 31, 2020.
• Deposits saw a $1.9 billion rise, totaling $10.0 billion.
• Provision for credit losses significantly reduced to $1.5 million from $18.7 million year-over-year.

Negative

• Loans decreased by $410.3 million from December 31, 2020, primarily due to a $451.5 million reduction in PPP loans.

OKLAHOMA CITY, Oct. 21, 2021 /PRNewswire/ -- BancFirst Corporation (NASDAQ GS: BANF) reported net income of $38.8 million, or $1.16 diluted earnings per share, for the third quarter of 2021 compared to net income of $20.9 million, or $0.63 diluted earnings per share, for the third quarter of 2020. The Company recorded a provision for credit losses of $1.5 million for the three months ended September 30, 2021 compared to a provision for credit losses of $18.7 million for the three months ended September 30, 2020. Net income for the nine months ended September 30, 2021 was $129.5 million, or $3.88 diluted earnings per share, compared to $64.2 million, or $1.94 diluted earnings per share, for the nine months ended September 30, 2020. The Company recorded a net benefit from reversal of provisions for credit losses of $8.5 million for the nine months ended September 30, 2021 compared to a provision for credit losses of $57.7 million for the nine months ended September 30, 2020.

BancFirst Corporation Executive Chairman David Rainbolt commented, "Recently, COVID cases have begun to decline in Oklahoma, but continue to impact some businesses. As a result, our revised quarterly economic scenario supports a stable reserve. Consequently, the provision was very slight this quarter.  We would anticipate the economic effects of the pandemic to wane more rapidly over the next quarter which would imply a lower reserve going forward."

The Company's net interest income for the third quarter of 2021 increased to $80.2 million compared to $75.9 million for the third quarter of 2020, as a result of an increase of $6.1 million in fee income from Paycheck Protection Program (PPP) loan forgiveness. The net interest margin for the quarter was 3.09% compared to 3.40% a year ago. Noninterest income for the quarter totaled $39.8 million, compared to $34.6 million last year. The increase in noninterest income was attributable to $2.9 million in rental income from other real estate property, a $2.1 million increase in income from debit card interchange fees and a $1.5 million increase in insurance commissions. Noninterest expense for the quarter increased to $70.2 million compared to $66.1 million last year, because of the increase in approximately $2.0 million related to other real estate property operating costs and $1.0 million in net occupancy and depreciation primarily from the Company's new corporate headquarters. The Company's effective tax rate was 19.7% compared to 18.4% for the third quarter of 2020.  

At September 30, 2021, the Company's total assets were $11.3 billion, an increase of $2.1 billion from December 31, 2020. Loans totaled $6.0 billion, a decrease of $410.3 million from December 31, 2020 stemming from a net decrease of approximately $451.5 million in PPP loans and approximately $21 million of loans that were sold with the Company's Hugo, Oklahoma branch, which were partially offset by approximately $149 million of acquired loans from the First National Bank and Trust Company of Vinita, Oklahoma. Deposits totaled $10.0 billion, an increase of $1.9 billion from December 31, 2020. The increase in assets and deposits was predominantly related to PPP and other government stimulus payments. At September 30, 2021, the balance of PPP loans was $201.2 million. The Company's total stockholders' equity was $1.1 billion, an increase of $79.0 million over December 31, 2020. Off-balance sheet sweep accounts totaled $2.7 billion at September 30, 2021 compared to $2.8 billion at December 31, 2020.

Nonaccrual loans represent 0.44% of total loans at September 30, 2021, down from 0.58% at year-end 2020. Net charge-offs for the quarter were 0.01% of average loans, compared to 0.03% in the third quarter of 2020. The allowance for credit losses to total loans was 1.43% at September 30, 2021 compared to 1.42% at year-end 2020, and the allowance for credit losses to nonaccrual loans was 324.96% compared to 243.35% at year-end 2020. At September 30, 2021, the Company's nonaccrual loans decreased $10.9 million from year-end 2020, as a result of the resolution of several loans, which was offset by $7.2 million of nonaccrual loans acquired from The First National Bank and Trust Company of Vinita, Oklahoma. At September 30, 2021, the Company's other real estate owned (OREO) increased $6.8 million from December 31, 2020, and included approximately $4.0 million from the repossession of one commercial real estate property, $2.4 million from the decommissioning of the Company's previous headquarters, and approximately $600,000 acquired from The First National Bank and Trust Company of Vinita, Oklahoma.

BancFirst Corporation CEO David Harlow commented, "Fees related to ongoing PPP loan forgiveness and a year-to-date negative provision have allowed for outsized EPS through the first nine months of the year.  For the remainder of this year and into 2022, our challenge will be to grow loans and stabilize our margin while continuing to build upon and expand our non-interest and fee based revenues."

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 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 Corporation
Summary Financial Information
(Dollars in thousands, except per share and share data - Unaudited)
		2021		2021		2021		2020		2020
		3rd Qtr		2nd Qtr		1st Qtr		4th Qtr		3rd Qtr
Condensed Income Statements:
Net interest income		$                    80,190		$                    82,363		$                    77,206		$                    79,535		$                    75,852
Provision for (benefit from) credit losses		1,483		(9,949)		—		4,992		18,740
Non-interest income:
Trust revenue		3,210		3,264		3,102		2,976		3,131
Service charges on deposits		21,706		20,524		19,100		19,796		19,078
Securities transactions		150		172		95		156		—
Income from sales of loans		1,594		2,133		2,010		1,852		1,873
Insurance commissions		6,666		5,015		5,989		5,680		5,197
Cash management		3,127		3,068		3,003		3,135		3,701
Other		3,333		10,442		6,636		1,825		1,595
Total noninterest income		39,786		44,618		39,935		35,420		34,575
Non-interest expense:
Salaries and employee benefits		42,267		41,992		39,577		40,750		41,995
Occupancy expense, net		5,086		4,528		4,348		4,533		4,503
Depreciation		4,207		4,133		3,877		3,779		3,795
Amortization of intangible assets		755		809		793		915		968
Data processing services		1,734		1,660		1,678		1,763		1,669
Net expense from other real estate owned		1,810		3,357		1,510		420		196
Marketing and business promotion		1,796		1,648		1,879		1,671		1,485
Deposit insurance		846		766		876		857		723
Other		11,713		15,130		10,425		10,923		10,749
Total noninterest expense		70,214		74,023		64,963		65,611		66,083
Income before income taxes		48,279		62,907		52,178		44,352		25,604
Income tax expense		9,529		14,715		9,658		8,994		4,714
Net income		$                    38,750		$                    48,192		$                    42,520		$                    35,358		$                    20,890
Per Common Share Data:
Net income-basic		$                        1.18		$                        1.47		$                        1.30		$                        1.08		$                        0.64
Net income-diluted		1.16		1.45		1.27		1.06		0.63
Cash dividends declared		0.36		0.34		0.34		0.34		0.34
Common shares outstanding		32,572,217		32,784,513		32,771,013		32,719,852		32,679,191
Average common shares outstanding -
Basic		32,744,104		32,779,227		32,756,852		32,690,296		32,668,789
Diluted		33,267,955		33,405,923		33,408,116		33,275,550		33,168,938
Performance Ratios:
Return on average assets		1.37%		1.79%		1.69%		1.45%		0.86%
Return on average stockholders' equity		13.42		17.42		15.90		13.25		7.89
Net interest margin		3.09		3.32		3.36		3.55		3.40
Efficiency ratio		58.52		58.29		55.46		57.08		59.84

 

 

BancFirstCorporation
Summary Financial Information
(Dollars in thousands, except per share and share data - Unaudited)
		Nine months ended
		September 30,
		2021		2020
Condensed Income Statements:
Net interest income		$                  239,759		$                  227,133
(Benefit from) provision for credit losses		(8,466)		57,656
Non-interest income:
Trust revenue		9,576		10,154
Service charges on deposits		61,330		54,642
Securities transactions		417		(545)
Income from sales of loans		5,737		4,215
Insurance commissions		17,670		15,316
Cash management		9,198		12,276
Other		20,411		5,744
Total noninterest income		124,339		101,802
Non-interest expense:
Salaries and employee benefits		123,836		123,977
Occupancy expense, net		13,962		11,888
Depreciation		12,217		10,830
Amortization of intangible assets		2,357		2,900
Data processing services		5,072		4,990
Net income (expense) from other real estate owned		6,677		(1,951)
Marketing and business promotion		5,323		5,325
Deposit insurance		2,488		1,224
Other		37,268		32,936
Total noninterest expense		209,200		192,119
Income before income taxes		163,364		79,160
Income tax expense		33,902		14,932
Net income		$                  129,462		$                    64,228
Per Common Share Data:
Net income-basic		$                        3.95		$                        1.97
Net income-diluted		3.88		1.94
Cash dividends declared		1.04		0.98
Common shares outstanding		32,572,217		32,679,191
Average common shares outstanding -
Basic		32,760,015		32,666,554
Diluted		33,358,837		33,190,294
Performance Ratios:
Return on average assets		1.61%		0.93%
Return on average stockholders' equity		15.54		8.24
Net interest margin		3.25		3.58
Efficiency ratio		57.46		58.41

 

 

BancFirstCorporation
Summary Financial Information
(Dollars in thousands, except per share and share data - Unaudited)
		2021		2021		2021		2020		2020
		3rd Qtr		2nd Qtr		1st Qtr		4th Qtr		3rd Qtr
Balance Sheet Data:
Total assets		$ 11,302,771		$ 11,015,287		$ 10,549,305		$ 9,212,357		$ 9,618,868
Interest-bearing deposits with banks		3,836,809		3,373,099		2,788,316		1,336,394		1,609,462
Debt securities		529,484		563,771		520,543		555,196		596,941
Total loans		6,037,886		6,207,262		6,380,108		6,448,225		6,660,694
Allowance for credit losses		(86,463)		(83,963)		(90,860)		(91,366)		(106,126)
Deposits		9,992,044		9,728,389		9,371,940		8,064,704		8,495,891
Stockholders' equity		1,146,874		1,131,591		1,094,671		1,067,885		1,043,752
Book value per common share		35.21		34.52		33.40		32.64		31.94
Tangible book value per common share (non-GAAP)(1)		30.04		29.35		28.27		27.47		26.74
Balance Sheet Ratios:
Average loans to deposits		61.56%		65.36%		70.84%		77.02%		78.55%
Average earning assets to total assets		92.13		92.01		91.54		91.82		91.99
Average stockholders' equity to average assets		10.22		10.25		10.64		10.91		10.90
Asset Quality Data:
Past due loans		$          5,186		$          4,386		$          5,282		$        4,802		$        6,412
Nonaccrual loans (5)		26,607		29,802		35,326		37,545		82,385
Restructured loans		7,073		7,485		7,801		7,784		2,837
Total nonperforming and restructured loans		38,866		41,673		48,409		50,131		91,634
Other real estate owned and repossessed assets		39,060		40,183		30,320		32,480		4,939
Total nonperforming and restructured assets		77,926		81,856		78,729		82,611		96,573
Nonaccrual loans to total loans		0.44%		0.48%		0.55%		0.58%		1.24%
Nonaccrual loans to total Non-PPP loans (non-GAAP)(3)		0.46		0.51		0.62		0.65		1.41
Nonperforming and restructured loans to total loans		0.64		0.67		0.76		0.78		1.38
Nonperforming and restructured loans to total Non-PPP loans (non-GAAP)(3)		0.67		0.71		0.85		0.86		1.57
Nonperforming and restructured assets to total assets		0.69		0.74		0.75		0.90		1.00
Allowance to total loans		1.43		1.35		1.42		1.42		1.59
Allowance to total Non-PPP loans (non-GAAP)(3)		1.48		1.44		1.60		1.58		1.82
Allowance to nonaccrual loans		324.96		281.73		257.20		243.35		128.82
Allowance to nonperforming and restructured loans		222.46		201.48		187.69		182.26		115.81
Net charge-offs to average loans		0.01		0.06		0.01		0.30		0.03
Reconciliation of Tangible Book Value Per Common Share (non-GAAP)(2):
Stockholders' equity		$   1,146,874		$   1,131,591		$   1,094,671		$ 1,067,885		$ 1,043,752
Less goodwill		149,922		149,922		149,922		149,922		149,922
Less intangible assets, net		18,325		19,283		18,206		18,999		19,914
Tangible stockholders' equity (non-GAAP)		$      978,627		$      962,386		$      926,543		$    898,964		$    873,916
Common shares outstanding		32,572,217		32,784,513		32,771,013		32,719,852		32,679,191
Tangible book value per common share (non-GAAP)		$          30.04		$          29.35		$          28.27		$        27.47		$        26.74
(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		$   6,037,886		$   6,207,262		$   6,380,108		$ 6,448,225		$ 6,660,694
Less PPP loans		201,208		368,620		713,714		652,693		831,703
Total Non-PPP loans (non-GAAP)		$   5,836,678		$   5,838,642		$   5,666,394		$ 5,795,532		$ 5,828,991
Nonaccrual loans (5)		26,607		29,802		35,326		37,545		82,385
Nonaccrual loans to total Non-PPP loans (non-GAAP)		0.46%		0.51%		0.62%		0.65%		1.41%
Total nonperforming and restructured loans		38,866		41,673		48,409		50,131		91,634
Nonperforming and restructured loans to total Non-PPP loans (non-GAAP)		0.67%		0.71%		0.85%		0.86%		1.57%
Allowance for credit losses		(86,463)		(83,963)		(90,860)		(91,366)		(106,126)
Allowance to total Non-PPP loans (non-GAAP)		1.48%		1.44%		1.60%		1.58%		1.82%
(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 $3.1 million of nonaccrual loans at September 30, 2021.

 

 

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, 2021						September 30, 2021
				Interest		Average				Interest		Average
		Average		Income/		Yield/		Average		Income/		Yield/
		Balance		Expense		Rate		Balance		Expense		Rate
ASSETS
Earning assets:
Loans		$        6,103,533		$             80,370		5.22	%	$        6,267,176		$           240,733		5.14	%
Debt securities – taxable		536,690		1,484		1.10		531,109		4,779		1.20
Debt securities – tax exempt		6,336		45		2.83		13,530		222		2.20
Interest bearing deposits with banks and FFS		3,682,313		1,441		0.16		3,064,852		2,861		0.12
Total earning assets		10,328,872		83,340		3.20		9,876,667		248,595		3.37
Nonearning assets:
Cash and due from banks		269,153						270,724
Interest receivable and other assets		696,567						688,223
Allowance for credit losses		(83,969)						(89,116)
Total nonearning assets		881,751						869,831
Total assets		$      11,210,623						$      10,746,498
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest bearing liabilities:
Transaction deposits		$           881,043		$                  161		0.07	%	$           835,363		$                  465		0.07	%
Savings deposits		3,825,687		989		0.10		3,675,121		3,034		0.11
Time deposits		659,490		838		0.50		658,306		2,814		0.57
Short-term borrowings		2,713		—		0.10		2,595		1		0.07
Subordinated debt		85,964		1,031		4.76		46,957		2,100		5.98
Total interest bearing liabilities		5,454,897		3,019		0.22		5,218,342		8,414		0.22
Interest free funds:
Noninterest bearing deposits		4,547,944						4,363,925
Interest payable and other liabilities		61,794						50,469
Stockholders' equity		1,145,988						1,113,762
Total interest free  funds		5,755,726						5,528,156
Total liabilities and stockholders' equity		$      11,210,623						$      10,746,498
Net interest income				$             80,321						$           240,181
Net interest spread						2.98	%					3.15	%
Effect of interest free funds						0.11	%					0.10	%
Net interest margin						3.09	%					3.25	%

 

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SOURCE BancFirst

FAQ

What were BancFirst's earnings results for Q3 2021?

BancFirst reported a net income of $38.8 million and diluted earnings per share of $1.16 for Q3 2021.

How did BancFirst's net income change in 2021?

The net income for the nine months ending September 30, 2021, was $129.5 million, up from $64.2 million for the same period in 2020.

What is the provision for credit losses reported by BancFirst?

BancFirst recorded a provision for credit losses of $1.5 million for Q3 2021, a significant decrease from $18.7 million in Q3 2020.

How much did BancFirst's total assets grow?

BancFirst's total assets increased by $2.1 billion to $11.3 billion since December 31, 2020.

What challenges does BancFirst anticipate in the near future?

BancFirst aims to grow loans and stabilize its margin while expanding non-interest and fee-based revenues.