BANCFIRST CORPORATION REPORTS SECOND QUARTER EARNINGS

Rhea-AI Summary

BancFirst (NASDAQ GS: BANF) reported Q2 2024 earnings with net income of $50.6 million, or $1.51 per diluted share, compared to $55.0 million, or $1.64 per diluted share, in Q2 2023. Net interest income increased to $109.9 million from $105.9 million year-over-year, driven by loan volume growth. The company's total assets reached $12.7 billion, up $365.3 million from December 31, 2023. Loans grew by $394.7 million to $8.1 billion, while deposits increased by $315.5 million to $11.0 billion. Nonaccrual loans rose to 0.55% of total loans, up from 0.32% at year-end 2023. The allowance for credit losses to total loans was 1.24%, slightly down from 1.26% at the end of 2023.

Positive

• Net interest income increased to $109.9 million from $105.9 million year-over-year
• Total assets grew by $365.3 million to $12.7 billion
• Loans increased by $394.7 million to $8.1 billion
• Deposits rose by $315.5 million to $11.0 billion
• Sweep accounts increased by $153.9 million to $4.5 billion

Negative

• Net income decreased to $50.6 million from $55.0 million year-over-year
• Earnings per diluted share dropped to $1.51 from $1.64 year-over-year
• Net interest margin decreased to 3.76% from 3.87% year-over-year
• Noninterest income declined to $43.9 million from $48.0 million year-over-year
• Nonaccrual loans increased to 0.55% of total loans from 0.32% at year-end 2023

Insights

Financial Analyst

The recent earnings report from BancFirst Corporation shows a mixed bag of financial metrics that investors should closely scrutinize. The net income for Q2 2024 was $50.6 million, down from $55.0 million the previous year, representing a decline in profitability. However, net interest income increased to $109.9 million from $105.9 million, primarily driven by loan volume growth. This increase in net interest income is a positive sign, although it was partially offset by changes in deposit mix.

Notably, the provision for credit losses increased to $3.4 million from $2.8 million. While this isn't alarming, it does indicate heightened caution regarding potential loan defaults. Noninterest income saw a decline, primarily due to a reduction in interchange fees, which is a trend worth monitoring as it impacts revenue diversity.

The net interest margin fell to 3.76% from 3.87%, which might be a concern for long-term profitability. Noninterest expense increased to $85.3 million, mainly driven by higher salaries and benefits, which could pressure margins if revenue growth doesn't keep pace.

Overall, the increase in loans and deposits by $394.7 million and $315.5 million respectively, along with a stable allowance for credit losses relative to total loans, are positive signs. However, the rise in nonaccrual loans to $44.0 million from $26 million at year-end 2023 is a red flag that needs observation.

Market Research Analyst

The earnings report reveals some strategic shifts that could influence BancFirst's market positioning. The shift in deposit mix towards interest-bearing accounts indicates customers' preference for higher-yielding options amid prevailing economic conditions. This could have implications for the bank's cost of funds and overall profitability.

The report also notes that total deposits have returned to pre-March 2023 banking crisis levels. This recovery is encouraging, pointing towards regained customer confidence. However, the changing deposit mix will require strategic adjustments in managing interest rate risk and liquidity.

The CEO's comments on the outlook for Federal Reserve rate cuts and economic uncertainty underscore the external pressures facing the bank. Potential rate cuts could ease some funding pressures but could also compress margins further. Investors should keep an eye on macroeconomic indicators such as inflation and unemployment, which will impact the Federal Reserve's decisions and, consequently, the bank's earnings potential.

OKLAHOMA CITY, July 18, 2024 /PRNewswire/ -- BancFirst Corporation (NASDAQ GS: BANF) reported net income of $50.6 million, or $1.51 per diluted share, for the second quarter of 2024 compared to net income of $55.0 million, or $1.64 per diluted share, for the second quarter of 2023.

The Company's net interest income for the second quarter of 2024 increased to $109.9 million from $105.9 million for the same period in 2023. Loan volume was the primary driver of the change in net interest income, but was partially offset by the impact of the shifting mix between interest-bearing and noninterest bearing-deposits. Net interest margin for the three-month period ended June 30 was 3.76% in 2024 compared to 3.87% in 2023. The Company recorded a provision for credit losses of $3.4 million in the second quarter of 2024 compared to $2.8 million for the same period in 2023.

Noninterest income for the quarter totaled $43.9 million compared to $48.0 million last year. The decrease in noninterest income was primarily due to an approximate $5.7 million reduction of interchange fees related to the impact of the Durbin Amendment. Trust revenue, treasury income, sweep fees and insurance commissions each increased when compared to second quarter last year.

Noninterest expense for the quarter increased to $85.3 million compared to $81.1 million in the same quarter last year. The increase in noninterest expense was primarily related to growth in salaries and employee benefits of $2.1 million.

The Company's effective tax rate for the period was 22.3% compared to 21.4% for the second quarter of 2023.

At June 30, 2024, the Company's total assets were $12.7 billion, an increase of $365.3 million from December 31, 2023. Loans grew $394.7 million from December 31, 2023, totaling $8.1 billion at June 30, 2024. Deposits totaled $11.0 billion, an increase of $315.5 million from year-end 2023. Sweep accounts totaled $4.5 billion at June 30, 2024, up $153.9 million from December 31, 2023. The Company's total stockholders' equity was $1.5 billion, an increase of $78.6 million over December 31, 2023.

Nonaccrual loans totaled $44.0 million, representing 0.55% of total loans at June 30, 2024 compared to 0.32% at year-end 2023. The allowance for credit losses to total loans was 1.24% at June 30, 2024 compared to 1.26% at the end of 2023. Net charge-offs were $1.0 million for the quarter compared to $664,000 for the second quarter of 2023.

BancFirst Corporation CEO David Harlow commented, "Strong loan growth led the way to another good quarter for the Company. Total deposits returned to pre-March 2023 banking crisis levels, although the mix has changed materially as noninterest-bearing deposits have migrated to higher yielding account options. Recent inflation and unemployment data has provided more support for Federal Reserve rate cuts prior to year-end. However, the ultimate outlook on credit remains uncertain in our view and, accordingly, the Company's allowance for credit losses as a percentage of total loans remained relatively unchanged from the first quarter."

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 104 banking locations serving 59 communities across Oklahoma, Pegasus Bank, a Texas state-chartered bank with three banking locations in the Dallas Metroplex area and Worthington Bank, a Texas state-chartered bank with three locations in the Fort Worth Metroplex area, one location in Arlington Texas and one location in Denton Texas. 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)
		2024		2024		2023		2023		2023
		2nd Qtr		1st Qtr		4th Qtr		3rd Qtr		2nd Qtr
Condensed Income Statements:
Net interest income		$                 109,896		$                 106,104		$                 105,066		$                 104,308		$                 105,926
Provision for credit losses		3,358		4,015		-		2,312		2,824
Noninterest income:
Trust revenue		5,490		5,088		5,106		4,866		4,590
Service charges on deposits		17,280		16,428		16,841		17,027		22,268
Securities transactions		317		(267)		(1,364)		(361)		110
Sales of loans		733		491		512		734		757
Insurance commissions		6,668		9,455		7,220		8,429		6,225
Cash management		9,149		8,651		7,878		8,177		7,927
Other		4,307		5,054		8,964		5,577		6,097
Total noninterest income		43,944		44,900		45,157		44,449		47,974
Noninterest expense:
Salaries and employee benefits		51,928		51,528		50,731		50,200		49,803
Occupancy expense, net		5,233		5,206		5,439		5,487		5,118
Depreciation		4,504		4,556		4,560		4,685		4,769
Amortization of intangible assets		887		886		887		885		880
Data processing services		2,696		2,616		2,224		1,820		2,217
Net expense from other real estate owned		1,656		2,202		7,870		2,720		2,889
Marketing and business promotion		2,246		2,256		2,653		2,034		1,900
Deposit insurance		1,614		1,438		1,332		1,419		1,463
Other		14,552		12,091		14,120		11,965		12,071
Total noninterest expense		85,316		82,779		89,816		81,215		81,110
Income before income taxes		65,166		64,210		60,407		65,230		69,966
Income tax expense		14,525		13,876		11,473		14,242		14,956
Net income		$                   50,641		$                   50,334		$                   48,934		$                   50,988		$                   55,010
Per Common Share Data:
Net income-basic		$                      1.53		$                      1.53		$                      1.48		$                      1.55		$                      1.67
Net income-diluted		1.51		1.50		1.46		1.52		1.64
Cash dividends declared		0.43		0.43		0.43		0.43		0.40
Common shares outstanding		33,022,124		32,966,678		32,933,018		32,921,393		32,939,256
Average common shares outstanding -
Basic		33,001,180		32,947,983		32,926,326		32,937,149		32,920,497
Diluted		33,525,061		33,513,412		33,483,691		33,539,389		33,467,254
Performance Ratios:
Return on average assets		1.61 %		1.63 %		1.58 %		1.68 %		1.85 %
Return on average stockholders' equity		13.72		13.96		13.98		14.93		16.59
Net interest margin		3.76		3.70		3.67		3.73		3.87
Efficiency ratio		55.46		54.82		59.79		54.60		52.70

 

BancFirst Corporation
Summary Financial Information
(Dollars in thousands, except per share and share data - Unaudited)
		Six months ended
		June 30,
		2024		2023
Condensed Income Statements:
Net interest income		$                216,000		$                215,082
Provision for credit losses		7,373		5,146
Noninterest income:
Trust revenue		10,578		8,812
Service charges on deposits		33,708		43,499
Securities transactions		50		(103)
Sales of loans		1,224		1,361
Insurance commissions		16,123		14,966
Cash management		17,800		14,661
Other		9,361		12,606
Total noninterest income		88,844		95,802
Noninterest expense:
Salaries and employee benefits		103,456		99,055
Occupancy expense, net		10,439		10,101
Depreciation		9,060		9,412
Amortization of intangible assets		1,773		1,760
Data processing services		5,312		4,324
Net expense from other real estate owned		3,858		5,348
Marketing and business promotion		4,502		4,427
Deposit insurance		3,052		3,076
Other		26,643		23,924
Total noninterest expense		168,095		161,427
Income before income taxes		129,376		144,311
Income tax expense		28,401		31,768
Net income		$                100,975		$                112,543
Per Common Share Data:
Net income-basic		$                      3.06		$                      3.42
Net income-diluted		3.01		3.36
Cash dividends declared		0.86		0.80
Common shares outstanding		33,022,124		32,939,256
Average common shares outstanding -
Basic		32,974,582		32,906,753
Diluted		33,520,247		33,465,931
Performance Ratios:
Return on average assets		1.62 %		1.87 %
Return on average stockholders' equity		13.84		17.43
Net interest margin		3.73		3.88
Efficiency ratio		55.14		51.93

 

BancFirst Corporation
Summary Financial Information
(Dollars in thousands, except per share and share data - Unaudited)
		2024		2024		2023		2023		2023
		2nd Qtr		1st Qtr		4th Qtr		3rd Qtr		2nd Qtr
Balance Sheet Data:
Total assets		$ 12,737,318		$ 12,602,425		$ 12,372,042		$ 12,114,602		$ 12,020,265
Interest-bearing deposits with banks		2,299,019		2,341,604		2,172,001		2,134,081		2,188,004
Debt securities		1,441,365		1,534,651		1,555,095		1,525,448		1,570,620
Total loans		8,054,856		7,787,857		7,660,134		7,476,474		7,307,475
Allowance for credit losses		(99,626)		(97,267)		(96,800)		(97,776)		(96,920)
Noninterest-bearing demand deposits		3,815,818		3,849,807		3,982,226		4,170,550		4,285,620
Money market and interest-bearing checking deposits		4,930,853		4,901,081		4,699,865		4,453,892		4,365,202
Savings deposits		1,084,266		1,076,181		1,056,404		1,062,041		1,084,050
Time deposits		1,184,665		1,082,552		961,627		847,688		740,308
Total deposits		11,015,602		10,909,621		10,700,122		10,534,171		10,475,180
Stockholders' equity		1,512,492		1,469,312		1,433,891		1,370,584		1,340,791
Book value per common share		45.80		44.57		43.54		41.63		40.70
Tangible book value per common share (non-GAAP)(1)		39.83		38.56		37.50		35.56		34.62
Balance Sheet Ratios:
Average loans to deposits		72.25 %		71.97 %		70.52 %		70.61 %		69.85 %
Average earning assets to total assets		92.77		92.67		92.42		92.39		92.23
Average stockholders' equity to average assets		11.71		11.65		11.30		11.28		11.17
Asset Quality Data:
Past due loans		$          4,280		$          6,332		$          9,542		$        12,575		$          8,799
Nonaccrual loans (3)		44,021		41,996		24,573		16,676		18,047
Other real estate owned and repossessed assets		38,497		35,116		34,200		42,782		41,612
Nonaccrual loans to total loans		0.55 %		0.54 %		0.32 %		0.22 %		0.25 %
Allowance to total loans		1.24		1.25		1.26		1.31		1.33
Allowance to nonaccrual loans		226.32		231.61		393.92		586.34		537.05
Net charge-offs to average loans		0.01		0.05		0.02		0.02		0.01
Reconciliation of Tangible Book Value Per Common Share (non-GAAP)(2):
Stockholders' equity		$   1,512,492		$   1,469,312		$   1,433,891		$   1,370,584		$   1,340,791
Less goodwill		182,263		182,263		182,263		182,263		182,055
Less intangible assets, net		14,931		15,818		16,704		17,591		18,223
Tangible stockholders' equity (non-GAAP)		$   1,315,298		$   1,271,231		$   1,234,924		$   1,170,730		$   1,140,513
Common shares outstanding		33,022,124		32,966,678		32,933,018		32,921,393		32,939,256
Tangible book value per common share (non-GAAP)		$          39.83		$          38.56		$          37.50		$          35.56		$          34.62

(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.
(3) Government Agencies guarantee approximately $8.5 million of nonaccrual loans at June 30, 2024.

 

	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, 2024							June 30, 2024
			Interest		Average					Interest		Average
	Average		Income/		Yield/			Average		Income/		Yield/
	Balance		Expense		Rate			Balance		Expense		Rate
ASSETS
Earning assets:
Loans	$              7,912,469		$                 137,846		6.99	%		$       7,821,611		$      270,095		6.93	%
Securities – taxable	1,488,850		8,932		2.41			1,523,328		18,113		2.38
Securities – tax exempt	2,408		23		3.79			2,525		48		3.77
Interest bearing deposits with banks and FFS	2,322,951		31,805		5.49			2,267,869		62,121		5.49
Total earning assets	11,726,678		178,606		6.11			11,615,333		350,377		6.05
Nonearning assets:
Cash and due from banks	203,664							202,982
Interest receivable and other assets	808,283							806,429
Allowance for credit losses	(97,935)							(97,498)
Total nonearning assets	914,012							911,913
Total assets	$            12,640,690							$     12,527,246
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest bearing liabilities:
Money market and interest-bearing checking deposits	$              4,920,793		$                   45,296		3.69	%		$       4,867,783		$        89,513		3.69	%
Savings deposits	1,076,338		9,222		3.44			1,066,532		18,225		3.43
Time deposits	1,134,460		12,961		4.58			1,080,750		24,154		4.48
Short-term borrowings	4,593		59		5.14			6,306		155		4.92
Subordinated debt	86,120		1,031		4.80			86,113		2,061		4.80
Total interest bearing liabilities	7,222,304		68,569		3.81			7,107,484		134,108		3.78
Interest free funds:
Noninterest bearing deposits	3,819,196							3,831,283
Interest payable and other liabilities	119,175							125,536
Stockholders' equity	1,480,015							1,462,943
Total interest free  funds	5,418,386							5,419,762
Total liabilities and stockholders' equity	$            12,640,690							$     12,527,246
Net interest income			$                 110,037							$      216,269
Net interest spread					2.30	%						2.27	%
Effect of interest free funds					1.46	%						1.46	%
Net interest margin					3.76	%						3.73	%

 

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SOURCE BancFirst

FAQ

What was BancFirst 's (BANF) net income for Q2 2024?

BancFirst reported a net income of $50.6 million, or $1.51 per diluted share, for the second quarter of 2024.

How did BANF's Q2 2024 earnings compare to Q2 2023?

BANF's Q2 2024 net income of $50.6 million was lower compared to $55.0 million in Q2 2023. Earnings per diluted share decreased from $1.64 to $1.51.

What was the total loan growth for BANF in the first half of 2024?

BANF's loans grew by $394.7 million from December 31, 2023, totaling $8.1 billion at June 30, 2024.

How did BANF's deposits change in the first half of 2024?

BANF's deposits increased by $315.5 million from year-end 2023, totaling $11.0 billion at June 30, 2024.

What was BANF's allowance for credit losses as of June 30, 2024?

BANF's allowance for credit losses to total loans was 1.24% as of June 30, 2024, compared to 1.26% at the end of 2023.