BancFirst Corporation Reports Third Quarter Earnings
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 | % | |||||||||
SOURCE BancFirst
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