BancFirst Corporation Reports Second Quarter Earnings

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Jul 21, 2016, 04:15 ET

OKLAHOMA CITY, July 21, 2016 /PRNewswire/ -- BancFirst Corporation (NASDAQ GS:BANF) reported net income of $17.5 million, or $1.10 diluted earnings per share, for the second quarter of 2016 compared to net income of $16.6 million, or $1.05 earnings per share, for the first quarter of 2016, and net income of $18.6 million, or $1.17 earnings per share, for the second quarter of 2015. The second quarter of 2015 included a gain from the sale of an equity investment by the Company's wholly-owned subsidiary, Council Oak Partners, LLC, of approximately $5.3 million. Net income for the six months ended June 30, 2016 was $34.1 million, or $2.15 per share, compared to $34.8 million, or $2.20 per share, for the first half of 2015.

The Company's net interest income for the second quarter of 2016 increased to $50.9 million compared to $46.2 million for the second quarter of 2015. The net interest margin for the quarter was 3.28% compared to 3.07% a year ago. Internal loan growth, acquired loans from our October 2015 acquisition and the increase in Fed Fund rate of 25 basis points during the 4th quarter of 2015 contributed to the higher net interest income and margin in 2016. The provision for loan losses for the second quarter of 2016 increased to $2.8 million compared to $1.3 million a year ago. The increase in the provision was largely due to a small number of commercial loan downgrades. Net charge-offs for the quarter were 0.02% of average loans, compared to 0.01% for the second quarter of 2015. Noninterest income for the quarter totaled $26.1 million, compared to $28.7 million last year, which included the aforementioned investment gain. Noninterest expense for the quarter totaled $47.7 million compared to $45.4 million last year, as a result of salary increases from raises and our acquisition in the fourth quarter of 2015. The Company's effective tax rate was 33.7% compared to 34.3% for the second quarter of 2015.

At June 30, 2016, the Company's total assets were $6.7 billion, largely unchanged from December 31, 2015. Securities decreased $133.7 million to a total of $419.2 million. Loans totaled $4.3 billion, up slightly from December 31, 2015. Deposits totaled $5.9 billion, virtually unchanged from the December 31, 2015 total. The Company's total stockholders' equity was $676.8 million, an increase of $21.3 million, or 3.3%, over December 31, 2015.

David Rainbolt, CEO of BancFirst Corporation, stated "I would characterize our earnings as acceptable at this juncture. Our people have worked hard on all fronts to improve our efficiency even in a low interest environment."

Asset quality remained solid during the second quarter of 2016. Nonperforming and restructured assets were 0.59% of total assets at June 30, 2016 compared to 0.83% at December 31, 2015. The decrease in nonperforming and restructured assets was largely due to one relationship that was removed from a troubled debt restructuring status due to sustained improvement in financial condition, performance, and the commercially reasonable nature of its structure. Sales of other real estate owned also contributed to the decrease in nonperforming assets. The allowance to total loans was 1.07% compared to 0.98% at year-end 2015. The allowance to nonperforming and restructured loans was 134.1% compared to 88.5% at year-end 2015.

BancFirst Corporation is an Oklahoma based financial services holding company. The Company's principal subsidiary bank, BancFirst, is Oklahoma's largest state-chartered bank with 100 banking locations serving 53 communities across Oklahoma. More information can be found at www.bancfirst.com.

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)

	2016		2016		2015		2015		2015
	2nd Qtr		1st Qtr		4th Qtr		3rd Qtr		2nd Qtr
Condensed Income Statements:
Net interest income	$ 50,868		$ 49,976		$ 50,075		$ 46,876		$ 46,215
Provision for loan losses	2,804		4,103		3,646		1,424		1,271
Non-interest income:
Trust revenue	2,602		2,465		2,254		2,295		2,200
Service charges on deposits	15,485		14,710		15,077		14,910		14,312
Securities transactions	(65)		100		2,148		-		5,392
Income from sales of loans	695		562		434		545		549
Insurance commissions	3,255		4,135		3,176		4,427		3,120
Cash management	2,732		2,318		1,899		1,906		1,886
Other	1,353		1,327		1,485		1,241		1,256
Total noninterest income	26,057		25,617		26,473		25,324		28,715

Non-interest expense:
Salaries and employee benefits	30,008		29,357		28,938		28,746		27,886
Occupancy expense, net	3,071		2,827		2,926		3,051		2,700
Depreciation	2,567		2,530		2,565		2,488		2,449
Amortization of intangible assets	580		581		602		444		445
Data processing services	1,174		1,215		1,151		1,132		1,179
Net expense (income) from other real estate owned	35		(1,141)		143		51		(184)
Marketing and business promotion	1,624		1,855		2,266		1,640		1,401
Deposit insurance	855		839		876		820		836
Other	7,806		8,228		9,544		7,980		8,717
Total noninterest expense	47,720		46,291		49,011		46,352		45,429
Income before income taxes	26,401		25,199		23,891		24,424		28,230
Income tax expense	8,908		8,620		8,163		8,794		9,677
Net income	$ 17,493		$ 16,579		$ 15,728		$ 15,630		$ 18,553
Per Common Share Data:
Net income-basic	$ 1.12		$ 1.07		$ 1.00		$ 1.01		$ 1.19
Net income-diluted	1.10		1.05		0.99		0.98		1.17
Cash dividends declared	0.36		0.36		0.36		0.36		0.34
Common shares outstanding	15,560,271		15,527,804		15,597,446		15,591,530		15,562,298
Average common shares outstanding -
Basic	15,549,811		15,534,416		15,609,599		15,581,593		15,536,325
Diluted	15,842,485		15,816,371		15,923,924		15,906,124		15,864,924
Performance Ratios:
Return on average assets	1.04	%	1.00	%	0.94	%	0.97	%	1.14	%
Return on average equity	10.42		10.05		9.51		9.64		11.79
Net interest margin	3.28		3.25		3.23		3.12		3.07
Efficiency ratio	62.03		61.24		64.03		64.20		60.63

BancFirst Corporation
Summary Financial Information
(Dollars in thousands, except per share and share data - Unaudited)

	Six months ended June 30,
	2016		2015
Condensed Income Statements:
Net interest income	$ 100,844		$ 91,841
Provision for loan losses	6,907		2,605
Non-interest income:
Trust revenue	5,067		4,542
Service charges on deposits	30,195		27,664
Securities transactions	35		7,121
Income from sales of loans	1,257		989
Insurance commissions	7,390		7,188
Cash management	5,050		3,705
Other	2,680		2,802
Total noninterest income	51,674		54,011

Non-interest expense:
Salaries and employee benefits	59,365		55,399
Occupancy expense, net	5,898		5,535
Depreciation	5,097		4,913
Amortization of intangible assets	1,161		889
Data processing services	2,389		2,296
Net (income) expense from other real estate owned	(1,106)		130
Marketing and business promotion	3,479		3,080
Deposit insurance	1,694		1,662
Other	16,034		16,448
Total noninterest expense	94,011		90,352
Income before income taxes	51,600		52,895
Income tax expense	17,528		18,083
Net income	$ 34,072		$ 34,812
Per Common Share Data:
Net income-basic	$ 2.19		$ 2.24
Net income-diluted	2.15		2.20
Cash dividends declared	0.72		0.68
Common shares outstanding	15,560,271		15,562,298
Average common shares outstanding -
Basic	15,542,114		15,521,916
Diluted	15,830,677		15,852,532
Performance Ratios:
Return on average assets	1.02	%	1.08	%
Return on average stockholders' equity	10.23		11.23
Net interest margin	3.27		3.07
Efficiency ratio	61.64		61.95

BancFirst Corporation
Summary Financial Information
(Dollars in thousands, except per share and share data - Unaudited)

	2016		2016		2015		2015		2015
	2nd Qtr		1st Qtr		4th Qtr		3rd Qtr		2nd Qtr
Balance Sheet Data:

Total assets	$ 6,683,376		$ 6,740,938		$ 6,692,829		$ 6,406,096		$ 6,498,898
Interest-bearing deposits with banks	1,373,923		1,498,356		1,394,813		1,491,873		1,638,038
Securities	419,238		497,986		552,949		507,858		537,319
Total loans	4,337,063		4,282,738		4,245,773		3,972,075		3,871,919
Allowance for loan losses	(46,566)		(44,571)		(41,666)		(40,970)		(42,621)
Deposits	5,943,982		6,010,872		5,973,358		5,698,591		5,808,221
Stockholders' equity	676,830		662,661		655,510		646,061		634,244
Book value per common share	43.50		42.68		42.03		41.44		40.76
Tangible book value per common share	39.09		38.22		37.56		37.99		37.27
Balance Sheet Ratios:
Average loans to deposits	71.74	%	71.28	%	69.62	%	67.88	%	65.95	%
Average earning assets to total assets	93.05		92.88		92.84		93.15		93.11
Average stockholders' equity to average assets	10.02		9.92		9.84		10.02		9.67
Asset Quality Data:
Past due loans	$ 2,695		$ 1,099		$ 1,841		$ 2,061		$ 1,311
Nonaccrual loans	30,063		31,040		30,096		30,321		32,177
Restructured loans	1,974		533		15,143		15,386		15,702
Total nonperforming and restructured loans	34,733		32,672		47,080		47,768		49,190
Other real estate owned and repossessed assets	4,469		4,245		8,214		7,863		7,521
Total nonperforming and restructured assets	39,202		36,917		55,294		55,631		56,711
Nonperforming and restructured loans to total loans	0.80	%	0.76	%	1.11	%	1.21	%	1.27	%
Nonperforming and restructured assets to total assets	0.59		0.55		0.83		0.87		0.87
Allowance to total loans	1.07		1.04		0.98		1.03		1.10
Allowance to nonperforming and restructured loans	134.07		136.42		88.50		85.77		86.65
Net charge-offs to average loans	0.02		0.03		0.07		0.08		0.01

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, 2016				June 30, 2016
		Interest	Average			Interest	Average
	Average	Income/	Yield/		Average	Income/	Yield/
	Balance	Expense	Rate		Balance	Expense	Rate
ASSETS
Earning assets:
Loans	$ 4,296,172	$ 51,216	4.78	%	$ 4,269,528	$ 101,545	4.77	%
Securities – taxable	457,021	1,344	1.18		474,263	2,671	1.13
Securities – tax exempt	41,015	372	3.64		41,776	765	3.67
Interest bearing deposits with banks	1,459,623	1,852	0.51		1,439,562	3,654	0.51
Total earning assets	6,253,831	54,784	3.51		6,225,129	108,635	3.50

Nonearning assets:
Cash and due from banks	176,042				177,749
Interest receivable and other assets	335,869				336,356
Allowance for loan losses	(44,520)				(43,058)
Total nonearning assets	467,391				471,047
Total assets	$ 6,721,222				$ 6,696,176

LIABILITIES AND
STOCKHOLDERS' EQUITY
Interest bearing liabilities:
Transaction deposits	$ 787,174	$ 207	0.11	%	$ 789,647	$ 408	0.10	%
Savings deposits	2,088,482	1,691	0.32		2,083,643	3,382	0.33
Time deposits	708,242	1,194	0.68		715,017	2,382	0.67
Short-term borrowings	1,876	2	0.37		1,494	3	0.37
Junior subordinated debentures	31,959	523	6.56		31,959	1,045	6.56
Total interest bearing liabilities	3,617,733	3,617	0.40		3,621,760	7,220	0.40

Interest free funds:
Noninterest bearing deposits	2,404,535				2,382,159
Interest payable and other liabilities	25,399				24,512
Stockholders' equity	673,555				667,745
Total interest free funds	3,103,489				3,074,416
Total liabilities and stockholders' equity	$ 6,721,222				$ 6,696,176
Net interest income		$ 51,167				$ 101,415
Net interest spread			3.11	%			3.10	%
Effect of interest free funds			0.17	%			0.17	%
Net interest margin			3.28	%			3.27	%