BANCFIRST CORPORATION REPORTS FOURTH QUARTER EARNINGS

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BancFirst Corporation (NASDAQ GS:BANF) reported record net income of $57.1 million, or $1.70 diluted EPS, for Q4 2022, up from $38.2 million, or $1.15 diluted EPS, in Q4 2021. For the full year, net income reached $193.1 million, or $5.77 diluted EPS, compared to $167.6 million, or $5.03 diluted EPS, in 2021. The company's net interest income increased to $110.4 million, driven by rising interest rates and loan growth, with a net interest margin of 3.83%. Noninterest income rose to $48.2 million, while total assets grew to $12.4 billion. Despite rising expenses, asset quality remained strong with a decline in nonaccrual loans.

Positive

• Record net income of $57.1 million for Q4 2022, a 49.5% increase year-over-year.
• Full-year net income increased to $193.1 million, representing a 15.2% growth.
• Net interest income rose to $110.4 million, significantly benefiting from loan growth and interest rate hikes.
• Noninterest income increased due to higher sweep fees, totaling $48.2 million for the quarter.
• Total assets grew to $12.4 billion, a $3 billion increase from the previous year.
• Strong asset quality with nonaccrual loans declining to 0.22% of total loans.

Negative

• Provision for credit losses increased to $3.8 million compared to a benefit of $224,000 in Q4 2021.
• Total noninterest expense increased to $84.6 million, reflecting higher costs from acquisitions and salary increases.
• Anticipation of a mild economic downturn in Oklahoma and Texas, potentially affecting future performance.

OKLAHOMA CITY, Jan. 19, 2023 /PRNewswire/ -- BancFirst Corporation (NASDAQ GS:BANF) reported net income of $57.1 million, or $1.70 diluted earnings per share, for the fourth quarter of 2022 compared to net income of $38.2 million, or $1.15 diluted earnings per share, for the fourth quarter of 2021. Net income for the year ended December 31, 2022 was $193.1 million, or $5.77 diluted earnings per share, compared to $167.6 million, or $5.03 diluted earnings per share, for the year ended December 31, 2021.

The Company's net interest income for the fourth quarter of 2022 increased to $110.4 million from $75.9 million for the quarter ended December 31, 2021. Rising short-term interest rates and loan growth drove the increase. The net interest margin for the quarter was 3.83% compared to 2.87% a year ago. The margin for the fourth quarter of 2021 included $4.7 million in PPP fees.  

For the fourth quarter of 2022, the Company recorded a provision for credit losses of $3.8 million compared to a net benefit from reversal of provisions for credit losses of $224,000 for the quarter ended December 31, 2021. The Company believes there is a modest probability of a mild to moderate economic downturn in Oklahoma and Texas and therefore considers the current CECL reserve as a percentage of loans is appropriate.

Noninterest income for the quarter totaled $48.2 million up from $45.7 million last year. The increase in noninterest income in 2022 was mostly attributable to $4.0 million in sweep fees earned as yields have increased on the underlying mutual funds. Noninterest income for the fourth quarter included $3.8 million of income from an equity interest received from a debt previously contracted compared to $3.3 million of income from the same source in the fourth quarter of 2021. Total noninterest expense for the current quarter was $84.6 million, up from $76.8 million for the fourth quarter last year. The current quarter increase included a write down on other real estate owned of $3.7 million, additional expense from the Worthington acquisition, and salary increases. In addition, the fourth quarter of 2022 included $500,000 of amortization from investment in tax credits compared to $2.1 million of amortization from investment in tax credits for the fourth quarter of 2021.

The Company's effective tax rate was 18.55% compared to 15.25% for the fourth quarter of 2021. The effective tax rates for both quarters were lower due to the recognition of the aforementioned tax credits.

At December 31, 2022, the Company's total assets were $12.4 billion compared to $9.4 billion at December 31, 2021. Deposits totaled $11.0 billion, an increase of $2.9 billion from December 31, 2021. The growth in assets was driven by customer deposits that remained in the bank that had been swept into off-balance sheet money market accounts at year-end 2021. Off-balance sheet sweep accounts totaled $3.7 billion at December 31, 2022 compared to $5.1 billion at December 31, 2021. Loans totaled $6.9 billion compared to $6.2 billion at December 31, 2021. Loan growth during 2022, net of acquired loans and PPP loan runoffs, was $578 million, or 9%. Stockholders' equity was $1.3 billion, an increase of $79.1 million over December 31, 2021.

Asset quality remained strong as nonaccrual loans declined to $15.3 million, representing 0.22% of total loans at December 31, 2022 compared to 0.34% at year-end 2021. The allowance for credit losses to total loans was 1.33% at December 31, 2022, down slightly from 1.36% at the end of 2021. Net charge-offs for the quarter were 0.01% of average loans, compared to 0.03% of average loans for the fourth quarter of 2021.

BancFirst Corporation CEO David Harlow commented, "Beginning with our first quarter acquisition of Worthington and followed by strong organic loan growth and margin expansion during the balance of the year, the Company reported record earnings in 2022. Our deposit franchise has held up well with total deposits essentially flat since rates began increasing in March. We believe the Federal Reserve will ultimately be successful in its goal to slow the economy and reduce inflation; however, our outlook for 2023 anticipates a more mild contraction for our region of the country when compared to the U.S. as a whole."

BancFirst Corporation (the Company) is an Oklahoma based financial services holding company. The Company operates three subsidiary banks, BancFirst, an Oklahoma state-chartered bank with 107 banking locations serving 59 communities across Oklahoma, Pegasus Bank, with three banking locations in Dallas, Texas and Worthington Bank with one location in Arlington, Texas, one location in Colleyville, Texas and two Fort Worth, Texas locations. 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)
		2022 4th Qtr		2022 3rd Qtr		2022 2nd Qtr		2022 1st Qtr		2021 4th Qtr
Condensed Income Statements:
Net interest income		$                   110,352		$                   100,947		$                    86,867		$                    75,507		$                    75,898
Provision for (benefit from) credit losses		3,776		2,863		501		2,936		(224)
Noninterest income:
Trust revenue		4,065		4,125		3,949		3,506		3,336
Service charges on deposits		21,603		22,161		21,618		21,375		22,095
Securities transactions		1,116		966		-		(3,915)		630
Income from sales of loans		657		969		1,256		1,666		1,545
Insurance commissions		6,656		7,498		5,302		7,427		6,075
Cash management		6,124		5,624		4,447		3,131		3,115
Other		7,947		7,988		6,026		10,460		8,897
Total noninterest income		48,168		49,331		42,598		43,650		45,693
Noninterest expense:
Salaries and employee benefits		48,019		47,741		45,284		43,932		42,887
Occupancy expense, net		5,259		4,930		4,734		4,403		4,521
Depreciation		4,566		4,612		4,647		4,775		4,708
Amortization of intangible assets		880		880		857		831		759
Data processing services		1,928		1,876		1,975		1,805		1,663
Net (income) expense from other real estate owned		6,235		2,392		(510)		1,794		2,412
Marketing and business promotion		2,465		1,945		1,591		2,073		2,080
Deposit insurance		1,209		1,202		1,196		1,128		968
Other		14,044		13,500		13,943		11,771		16,783
Total noninterest expense		84,605		79,078		73,717		72,512		76,781
Income before income taxes		70,139		68,337		55,247		43,709		45,034
Income tax expense		13,013		12,985		10,540		7,794		6,866
Net income		$                    57,126		$                    55,352		$                    44,707		$                    35,915		$                    38,168
Per Common Share Data:
Net income-basic		$                        1.74		$                        1.69		$                        1.36		$                        1.10		$                        1.17
Net income-diluted		1.70		1.65		1.34		1.08		1.15
Cash dividends declared		0.40		0.40		0.36		0.36		0.36
Common shares outstanding		32,875,560		32,856,387		32,781,198		32,725,587		32,603,118
Average common shares outstanding -
Basic		32,868,087		32,825,931		32,749,752		32,666,916		32,585,784
Diluted		33,503,937		33,536,558		33,418,482		33,315,333		33,180,680
Performance Ratios:
Return on average assets		1.82 %		1.75 %		1.42 %		1.22 %		1.33 %
Return on average stockholders' equity		18.62		18.13		15.14		12.33		13.02
Net interest margin		3.83		3.48		3.05		2.78		2.87
Efficiency ratio		53.37		52.62		56.94		60.85		63.15

 

BancFirst Corporation
Summary Financial Information
(Dollars in thousands, except per share and share data - Unaudited)
		Twelve months ended
		December 31,
		2022		2021
Condensed Income Statements:
Net interest income		$              373,673		$                   315,657
Provision for (benefit from) credit losses		10,076		(8,690)
Noninterest income:
Trust revenue		15,645		12,912
Service charges on deposits		86,757		83,425
Securities transactions		(1,833)		1,047
Income from sales of loans		4,548		7,282
Insurance commissions		26,883		23,745
Cash management		19,326		12,313
Other		32,421		29,308
Total noninterest income		183,747		170,032
Noninterest expense:
Salaries and employee benefits		184,976		166,723
Occupancy expense, net		19,326		18,483
Depreciation		18,600		16,925
Amortization of intangible assets		3,448		3,116
Data processing services		7,584		6,735
Net expense from other real estate owned		9,911		9,089
Marketing and business promotion		8,074		7,403
Deposit insurance		4,735		3,456
Other		53,258		54,051
Total noninterest expense		309,912		285,981
Income before income taxes		237,432		208,398
Income tax expense		44,332		40,768
Net income		$              193,100		$              167,630
Per Common Share Data:
Net income-basic		$                     5.89		$                        5.12
Net income-diluted		5.77		5.03
Cash dividends declared		1.52		1.40
Common shares outstanding		32,875,560		32,603,118
Average common shares outstanding -
Basic		32,778,355		32,716,099
Diluted		33,439,496		33,314,146
Performance Ratios:
Return on average assets		1.56 %		1.54 %
Return on average stockholders' equity		16.11		14.88
Net interest margin		3.29		3.15
Efficiency ratio		55.60		58.88

 

BancFirst Corporation
Summary Financial Information
(Dollars in thousands, except per share and share data - Unaudited)
		2022		2022		2022		2022		2021
		4th Qtr		3rd Qtr		2nd Qtr		1st Qtr		4th Qtr
Balance Sheet Data:
Total assets		$   12,387,863		$   12,452,378		$   12,530,073		$   12,624,431		$     9,405,612
Interest-bearing deposits with banks		2,909,861		3,106,279		3,590,311		3,816,532		1,821,203
Debt securities		1,540,604		1,521,645		1,205,894		1,211,668		534,500
Total loans		6,949,795		6,832,595		6,620,643		6,504,477		6,194,218
Allowance for credit losses		(92,728)		(89,871)		(86,935)		(87,239)		(83,936)
Deposits		10,974,228		11,058,940		11,142,688		11,250,971		8,091,914
Stockholders' equity		1,250,836		1,195,149		1,185,695		1,167,802		1,171,734
Book value per common share		38.05		36.37		36.17		35.68		35.94
Tangible book value per common share (non-GAAP)(1)		31.90		30.20		29.90		29.51		30.80
Balance Sheet Ratios:
Average loans to deposits		62.25 %		59.62 %		58.66 %		59.72 %		60.16 %
Average earning assets to total assets		92.14		91.58		90.89		91.92		92.13
Average stockholders' equity to average assets		9.80		9.63		9.40		9.86		10.19
Asset Quality Data:
Past due loans		$           7,085		$           3,167		$           4,771		$           6,360		$           4,964
Nonaccrual loans (5)		15,299		11,962		13,712		17,453		20,892
Restructured loans		2,234		2,249		2,174		2,345		3,665
Total nonperforming and restructured loans		24,618		17,378		20,657		26,158		29,521
Other real estate owned and repossessed assets		36,936		39,419		39,209		39,729		39,553
Total nonperforming and restructured assets		61,554		56,797		59,866		65,887		69,074
Nonaccrual loans to total loans		0.22 %		0.18 %		0.21 %		0.27 %		0.34 %
Nonaccrual loans to total Non-PPP loans (non-GAAP)(3)		0.22		0.18		0.21		0.27		0.34
Nonperforming and restructured loans to total loans		0.35		0.25		0.31		0.40		0.48
Nonperforming and restructured loans to total Non-PPP loans (non-GAAP)(3)		0.35		0.25		0.31		0.40		0.48
Nonperforming and restructured assets to total assets		0.50		0.46		0.48		0.52		0.73
Allowance to total loans		1.33		1.32		1.31		1.34		1.36
Allowance to total Non-PPP loans (non-GAAP)(3)		1.33		1.32		1.31		1.35		1.37
Allowance to nonaccrual loans		606.10		751.32		634.01		499.83		401.76
Allowance to nonperforming and restructured loans		376.67		517.17		420.84		333.51		284.33
Net charge-offs to average loans		0.01		0.00		0.01		0.00		0.03
Reconciliation of Tangible Book Value Per Common Share (non-GAAP)(2):
Stockholders' equity		$     1,250,836		$     1,195,149		$     1,185,695		$     1,167,802		$     1,171,734
Less goodwill		182,055		182,055		183,639		176,563		149,922
Less intangible assets, net		19,983		20,863		21,743		25,456		17,566
Tangible stockholders' equity (non-GAAP)		$     1,048,798		$       992,231		$       980,313		$       965,783		$     1,004,246
Common shares outstanding		32,875,560		32,856,387		32,781,198		32,725,587		32,603,118
Tangible book value per common share (non-GAAP)		$           31.90		$           30.20		$           29.90		$           29.51		$           30.80
(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		$     6,949,795		$     6,832,595		$     6,620,643		$     6,504,477		$     6,194,218
Less PPP loans		1,131		1,140		3,206		30,605		80,412
Total Non-PPP loans (non-GAAP)		$     6,948,664		$     6,831,455		$     6,617,437		$     6,473,872		$     6,113,806
Nonaccrual loans (5)		15,299		11,962		13,712		17,453		20,892
Nonaccrual loans to total Non-PPP loans (non-GAAP)		0.22 %		0.18 %		0.21 %		0.27 %		0.34 %
Total nonperforming and restructured loans		24,618		17,378		20,657		26,158		29,521
Nonperforming and restructured loans to total Non-PPP loans (non-GAAP)		0.35 %		0.25 %		0.31 %		0.40 %		0.48 %
Allowance for credit losses		(92,728)		(89,871)		(86,935)		(87,239)		(83,936)
Allowance to total Non-PPP loans (non-GAAP)		1.33 %		1.32 %		1.31 %		1.35 %		1.37 %
(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 $4.7 million of nonaccrual loans at December 31, 2022.

 

BancFirst Corporation Consolidated Average Balance Sheets And Interest Margin Analysis Taxable Equivalent Basis (Dollars in thousands - Unaudited)
		Three Months Ended						Twleve Months Ended
		December 31, 2022						December 31, 2022
				Interest		Average				Interest		Average
		Average		Income/		Yield/		Average		Income/		Yield/
		Balance		Expense		Rate		Balance		Expense		Rate
ASSETS
Earning assets:
Loans		$          6,861,657		$              97,667		5.65	%	$          6,611,617		$             336,739		5.09	%
Debt securities – taxable		1,526,241		8,740		2.27		1,295,762		24,456		1.89
Debt securities – tax exempt		3,530		29		3.29		3,877		118		3.03
Interest bearing deposits with banks and FFS		3,057,092		29,449		3.82		3,450,093		58,931		1.71
Total earning assets		11,448,520		135,885		4.71		11,361,349		420,244		3.70
Nonearning assets:
Cash and due from banks		227,292						260,028
Interest receivable and other assets		840,115						865,744
Allowance for credit losses		(90,599)						(87,567)
Total nonearning assets		976,808						1,038,205
Total assets		$        12,425,328						$        12,399,554
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest bearing liabilities:
Transaction deposits		$             953,143		$                1,203		0.50	%	$             957,719		$                2,049		0.21	%
Savings deposits		4,306,704		21,278		1.96		4,280,052		35,598		0.83
Time deposits		689,953		1,918		1.10		672,179		4,318		0.64
Short-term borrowings		1,162		11		3.81		4,333		60		1.39
Subordinated debt		86,033		1,031		4.75		86,013		4,122		4.79
Total interest bearing liabilities		6,036,995		25,441		1.67		6,000,296		46,147		0.77
Interest free funds:
Noninterest bearing deposits		5,073,241						5,097,813
Interest payable and other liabilities		97,914						102,691
Stockholders' equity		1,217,178						1,198,754
Total interest free  funds		6,388,333						6,399,258
Total liabilities and stockholders' equity		$        12,425,328						$        12,399,554
Net interest income				$             110,444						$             374,097
Net interest spread						3.04	%					2.93	%
Effect of interest free funds						0.79	%					0.36	%
Net interest margin						3.83	%					3.29	%

 

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SOURCE BancFirst

FAQ

What were BancFirst's earnings results for Q4 2022?

BancFirst reported net income of $57.1 million, or $1.70 diluted EPS, for Q4 2022.

How did BancFirst perform in 2022 compared to 2021?

In 2022, BancFirst's net income was $193.1 million, up from $167.6 million in 2021.

What is BancFirst's outlook for 2023?

BancFirst anticipates a mild economic contraction for its region compared to the broader U.S.

What drove the increase in BancFirst's net interest income?

The increase in net interest income was driven by rising short-term interest rates and loan growth.

How did asset quality change for BancFirst in Q4 2022?

BancFirst's nonaccrual loans declined to $15.3 million, representing 0.22% of total loans.