PR Newswire | Jan 21, 2021 04:30PM EST

01/21 15:30 CST

BancFirst Corporation Reports Fourth Quarter Earnings OKLAHOMA CITY, Jan. 21, 2021

OKLAHOMA CITY, Jan. 21, 2021 /PRNewswire/ -- BancFirst Corporation (NASDAQ GS:BANF) reported net income of $35.4 million, or $1.06 diluted earnings per share, for the fourth quarter of 2020 compared to net income of $35.5 million, or $1.07 diluted earnings per share, for the fourth quarter of 2019. Net income for the twelve months ended December 31, 2020 was $99.6 million, or $3.00 diluted earnings per share, compared to $134.9 million, or $4.05 diluted earnings per share, for the year ended December 31, 2019. The results for 2020 were negatively impacted by a higher provision for credit losses. Net income for the year ended December 31, 2020 includes the entire year of net income of Pegasus Bank in Dallas, Texas, which was acquired on August 15, 2019, and the income and expenses associated with the purchase of assets and assumption of liabilities on March 5, 2020, from The Citizens State Bank of Okemah. The results for the prior year include Pegasus Bank acquisition related expenses of approximately $3.1 million.

The provision for credit losses for the fourth quarter of 2020 was $5.0 million compared to $1.4 million a year ago and $57.7 million through the first three quarters of 2020. BancFirst Corporation Executive Chairman David Rainbolt commented, "Our provision for credit losses was substantially reduced from previous quarters due to improvements in projected outcomes for the economic effects of the pandemic. The rollout of the vaccine and extension of the Cares Act stimulus, combined with improved energy prices and jobs data, justify a cessation to the outsized provisions seen in prior quarters."

The Company's net interest income for the fourth quarter of 2020 increased to $79.5 million compared to $73.9 million for the fourth quarter of 2019. Net interest income increased for the fourth quarter of 2020 due to loan growth, PPP fee income of approximately $8.0 million and the decrease in interest rates paid on deposits. The net interest margin for the quarter was 3.54% compared to 3.78% a year ago. The Company had net charge-offs for the quarter of 0.30% of average loans, compared to net charge-offs of 0.06% of average loans for the fourth quarter of 2019. Noninterest income for the quarter totaled $35.4 million, compared to $35.5 million last year. Noninterest expense for the quarter totaled $65.6 million compared to $66.3 million last year. Overall noninterest expense decreased during the fourth quarter of 2020 compared to the fourth quarter of 2019 primarily due to $2.3 million of amortization of new market tax credits in 2019. However, deposit insurance, net expense from other real estate owned, net occupancy and depreciation increased during the fourth quarter of 2020 compared to 2019. The Company's effective tax rate was 20.3% compared to 15.0% for the fourth quarter of 2019. The effective tax rate for the fourth quarter of 2019 was lower due to the purchase of tax credits during the quarter.

At December 31, 2020, the Company's total assets were $9.2 billion, an increase of $646.6 million from December 31, 2019. Securities of $555.2 million were up $63.6 million from December 31, 2019. Loans totaled $6.4 billion, an increase of $775.1 million from December 31, 2019. Deposits totaled $8.1 billion, an increase of $581.1 million from the December 31, 2019 total. The increase in assets, loans and deposits were primarily related to the Paycheck Protection Program (PPP) and other government stimulus. At December 31, 2020, the balance of the Paycheck Protection Program loans was $652.7 million. The Company's total stockholders' equity was $1.1 billion, an increase of $62.9 million over December 31, 2019. Off-balance sheet sweep accounts were $2.7 billion at December 31, 2020 compared to $2.0 billion at December 31, 2019.

Nonaccrual loans represented 0.58% of total loans at December 31, 2020, up from 0.32% at year-end 2019, but down from 1.24% at September 30, 2020. Non-performing assets represented 0.90% of total assets at December 31, 2020, up from 0.63% at December 31, 2019 as a result of loan migration from non-accrual loans to other real estate owned (OREO) during the fourth quarter of 2020. The allowance to total loans was 1.42% at December 31, 2020, up from 0.96% at year-end 2019. The allowance to nonaccrual loans was approximately 243% at December 31, 2020, compared to 302% at year-end 2019, and 129% at September 30, 2020.

BancFirst Corporation CEO David Harlow commented, "In a very challenging year the Company was able to report earnings of $3.00 per diluted share while substantially building loan loss reserves, increasing our dividend for the 27th consecutive year and growing total stockholders' equity and tangible book value per share. The outlook for 2021 is certainly better today than we would have projected at the outset of the pandemic; however, many consumers and certain sectors of the economy continue to struggle and the ultimate outcome for many businesses when the stimulus subsides is far from certain."

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 107 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)

2020 2020 2020 2020 2019

4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr

Condensed IncomeStatements:

Net interest income $ 79,535 $ 75,852 $ 77,208 $ 74,073 $ 73,939

Provision for 4,992 18,740 19,333 19,583 1,412credit losses

Non-interestincome:

Trust revenue 2,976 3,131 3,368 3,655 3,682

Service charges on 19,796 19,078 16,760 18,804 19,938deposits

Securities 156 - (595) 50 (9)transactions

Income from sales of 1,852 1,873 1,561 781 1,089loans

Insurance 5,680 5,197 4,443 5,676 5,076commissions

Cash management 3,135 3,701 4,255 4,320 4,258

Other 1,825 1,595 2,290 1,859 1,490

Total noninterest 35,420 34,575 32,082 35,145 35,524income

Non-interestexpense:

Salaries and 40,750 41,995 42,226 39,756 40,375employee benefits

Occupancy expense, 4,533 4,503 3,839 3,546 3,738net

Depreciation 3,779 3,795 3,544 3,491 3,355

Amortization of 915 968 968 964 1,007intangible assets

Data processing 1,763 1,669 1,629 1,692 1,634services

Net expense fromother real estate 420 196 (12) (2,135) (424)owned

Marketing and 1,671 1,485 1,485 2,355 2,327business promotion

Deposit insurance 857 723 365 136 147

Other 10,923 10,749 10,607 11,580 14,137

Total noninterest 65,611 66,083 64,651 61,385 66,296expense

Income before 44,352 25,604 25,306 28,250 41,755income taxes

Income tax expense 8,994 4,714 4,576 5,642 6,248

Net income $ 35,358 $ 20,890 $ 20,730 $ 22,608 $ 35,507

Per Common ShareData:

Net income-basic $ 1.08 $ 0.64 $ 0.64 $ 0.69 $ 1.09

Net income-diluted 1.06 0.63 0.63 0.68 1.07

Cash dividends 0.34 0.34 0.32 0.32 0.32declared

Common shares 32,719,852 32,679,191 32,662,691 32,646,691 32,694,268outstanding

Average commonshares outstanding -

Basic 32,690,296 32,668,789 32,651,262 32,679,587 32,673,438

Diluted 33,275,550 33,168,938 33,075,493 33,287,359 33,366,848

Performance Ratios:

Return on average 1.45 % 0.86 % 0.88 % 1.07 % 1.66 %assets

Return on average 13.25 7.89 7.99 8.87 13.76stockholders' equity

Net interest margin 3.54 3.40 3.54 3.82 3.78

Efficiency ratio 57.08 59.84 59.16 56.20 60.56

BancFirst Corporation

Summary Financial Information

(Dollars in thousands, except per share and share data - Unaudited)

Twelve months ended

December 31,

2020 2019

Condensed Income Statements:

Net interest income $ 306,668 $ 281,921

Provision for credit losses 62,648 8,287

Non-interest income:

Trust revenue 13,130 13,599

Service charges on deposits 74,438 76,581

Securities transactions (389) 812

Income from sales of loans 6,067 3,619

Insurance commissions 20,996 20,296

Cash management 15,411 16,866

Other 7,569 5,456

Total noninterest income 137,222 137,229

Non-interest expense:

Salaries and employee benefits 164,727 153,024

Occupancy expense, net 16,421 12,704

Depreciation 14,609 12,623

Amortization of intangible assets 3,815 3,366

Data processing services 6,753 5,843

Net expense from other real estate owned (1,531) (785)

Marketing and business promotion 6,996 8,554

Deposit insurance 2,081 1,143

Other 43,859 44,829

Total noninterest expense 257,730 241,301

Income before income taxes 123,512 169,562

Income tax expense 23,926 34,683

Net income $ 99,586 $ 134,879

Per Common Share Data:

Net income-basic $ 3.05 $ 4.13

Net income-diluted 3.00 4.05

Cash dividends declared 1.32 1.24

Common shares outstanding 32,719,852 32,694,268

Average common shares outstanding -

Basic 32,672,522 32,639,396

Diluted 33,210,952 33,329,844

Performance Ratios:

Return on average assets 1.06 % 1.69 %

Return on average stockholders' equity 9.52 14.04

Net interest margin 3.57 3.85

Efficiency ratio 58.06 57.57

BancFirst Corporation

Summary Financial Information

(Dollars in thousands, except per share and share data - Unaudited)

2020 2020 2020 2020 2019

4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr

Balance Sheet Data:

Total assets $ 9,212,357 $ 9,618,868 $ 9,612,453 $ 8,669,096 $ 8,565,758

Interest-bearing 1,336,394 1,609,462 1,583,116 1,356,826 1,646,238deposits with banks

Debt securities 555,196 596,941 608,031 591,987 491,626

Total loans 6,448,225 6,660,694 6,696,856 6,006,065 5,673,144

Allowance for credit (91,366) (106,126) (89,500) (70,080) (54,238)losses

Deposits 8,064,704 8,495,891 8,486,671 7,573,200 7,483,635

Stockholders' equity 1,067,885 1,043,752 1,034,199 1,023,380 1,004,989

Book value per 32.64 31.94 31.66 31.35 30.74common share

Tangible book valueper common share 27.47 26.74 26.43 26.09 25.50(non-GAAP)(1)

Balance SheetRatios:

Average loans to 77.02 % 78.55 % 79.78 % 77.75 % 75.83 %deposits

Average earningassets to total 91.82 91.99 92.23 91.51 91.50assets

Averagestockholders' equity 10.91 10.90 10.96 12.02 12.04to average assets

Asset Quality Data:

Past due loans $ 4,802 $ 6,412 $ 5,382 $ 10,065 $ 11,834

Nonaccrual loans (5) 37,545 82,385 49,477 45,181 17,965

Restructured loans 7,784 2,837 3,213 3,158 18,010

Total nonperformingand restructured 50,131 91,634 58,072 58,404 47,809loans

Other real estateowned and 32,480 4,939 4,948 6,001 6,073repossessed assets

Total nonperformingand restructured 82,611 96,573 63,020 64,405 53,882assets

Nonaccrual loans to 0.58 % 1.24 % 0.74 % 0.75 % 0.32 %total loans

Nonaccrual loans tototal Non-PPP loans 0.65 1.41 0.84 0.75 0.32(non-GAAP)(3)

Nonperforming andrestructured loans 0.78 1.38 0.87 0.97 0.84to total loans

Nonperforming andrestructured loans 0.86 1.57 0.99 0.97 0.84to total Non-PPPloans (non-GAAP)(3)

Nonperforming andrestructured assets 0.90 1.00 0.66 0.74 0.63to total assets

Allowance for creditlosses to total 1.42 1.59 1.34 1.17 0.96loans

Allowance for creditlosses to total 1.58 1.82 1.52 1.17 0.96Non-PPP loans(non-GAAP)(3)

Allowance for creditlosses to nonaccrual 243.35 128.82 180.89 155.11 301.91loans

Allowance for creditlosses to 182.26 115.81 154.12 119.99 113.45nonperforming andrestructured loans

Net charge-offs to 0.30 0.03 0.00 0.02 0.06average loans

Reconciliation ofTangible Book ValuePer Common Share(non-GAAP)(2):

Stockholders' equity $ 1,067,885 $ 1,043,752 $ 1,034,199 $ 1,023,380 $ 1,004,989

Less goodwill 149,922 149,922 149,922 149,923 148,604

Less intangible 18,999 19,914 20,882 21,850 22,608assets, net

Tangiblestockholders' equity $ 898,964 $ 873,916 $ 863,395 $ 851,607 $ 833,777(non-GAAP)

Common shares 32,719,852 32,679,191 32,662,691 32,646,691 32,694,268outstanding

Tangible book valueper common share $ 27.47 $ 26.74 $ 26.43 $ 26.09 $ 25.50(non-GAAP)

(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 lessgoodwill and intangible assets, net, divided by common shares outstanding. Thisamount is a non-GAAP financial measure but has been included as it isconsidered to be a critical metric with which to analyze and evaluate thefinancial condition and capital strength of the Company. This measure shouldnot be considered a substitute for operating results determined in accordancewith GAAP.

Reconciliation ofNon-PPP loan ratios(non-GAAP)(4):

Total loans $ 6,448,225 $ 6,660,694 $ 6,696,856 $ 6,006,065 $ 5,673,144

Less PPP loans 652,693 831,703 825,093 - -

Total Non-PPP loans $ 5,795,532 $ 5,828,991 $ 5,871,763 $ 6,006,065 $ 5,673,144(non-GAAP)

Nonaccrual loans (5) 37,545 82,385 49,477 45,181 17,965

Nonaccrual loans tototal Non-PPP loans 0.65 % 1.41 % 0.84 % 0.75 % 0.32 %(non-GAAP)

Total nonperformingand restructured 50,131 91,634 58,072 58,404 47,809loans

Nonperforming andrestructured loans 0.86 % 1.57 % 0.99 % 0.97 % 0.84 %to total Non-PPPloans (non-GAAP)

Allowance for credit (91,366) (106,126) (89,500) (70,080) (54,238)losses

Allowance for creditlosses to total 1.58 % 1.82 % 1.52 % 1.17 % 0.96 %Non-PPP loans(non-GAAP)

(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 bytotal loans less Paycheck Protection Program (PPP) loans. Nonperforming andrestructured loans to total Non-PPP loans is nonperforming and restructuredloans, divided by total loans less PPP loans. Allowance to total Non-PPP loansis allowance for credit losses, divided by total loans less PPP loans. Theseamounts are non-GAAP financial measures but have been included as they areconsidered critical metrics with which to analyze and evaluate the financialcondition and capital strength of the Company. These measures should not beconsidered substitutes for operating results determined in accordance withGAAP.

(5) Government Agencies guarantee approximately $7.8 million of nonaccrualloans at December 31, 2020.

BancFirst Corporation

Consolidated Average Balance Sheets

And Interest Margin Analysis

Taxable Equivalent Basis

(Dollars in thousands - Unaudited)

Three Months Ended Twelve Months Ended

December 31, 2020 December 31, 2020

Interest Average Interest Average

Average Income/ Yield/ Average Income/ Yield/

Balance Expense Rate Balance Expense Rate

ASSETS

Earning assets:

Loans $ 6,599,933 $ 79,815 4.80 % $ 6,432,455 $ 312,195 4.84 %

Securities - taxable 558,046 1,926 1.37 556,931 8,591 1.54

Securities - tax exempt 30,131 131 1.73 28,969 616 2.12

Interest bearing deposits with 1,719,900 463 0.11 1,562,383 6,049 0.39banks and FFS

Total earning assets 8,908,010 82,335 3.67 8,580,738 327,451 3.81

Nonearning assets:

Cash and due from banks 252,082 220,995

Interest receivable and other 638,173 611,966assets

Allowance for credit losses (97,046) (76,501)

Total nonearning assets 793,209 756,460

Total assets $ 9,701,219 $ 9,337,198

LIABILITIES AND STOCKHOLDERS' EQUITY

Interest bearing liabilities:

Transaction deposits $ 711,266 $ 131 0.07 % $ 744,632 $ 940 0.13 %

Savings deposits 3,404,226 903 0.11 3,273,903 9,385 0.29

Time deposits 684,992 1,434 0.83 695,637 8,147 1.17

Short-term borrowings 1,075 - 0.07 2,745 8 0.30

Long-term borrowings - - - 1,107 - -

Junior subordinated debentures 26,804 492 7.29 26,804 1,966 7.31

Total interest bearing 4,828,363 2,960 0.24 4,744,828 20,446 0.43liabilities

Interest free funds:

Noninterest bearing deposits 3,768,493 3,503,187

Interest payable and other 45,673 46,048liabilities

Stockholders' equity 1,058,690 1,043,135

Total interest free funds 4,872,856 4,592,370

Total liabilities and $ 9,701,219 $ 9,337,198stockholders' equity

Net interest income $ 79,375 $ 307,005

Net interest spread 3.43 % 3.38 %

Effect of interest free funds 0.11 % 0.19 %

Net interest margin 3.54 % 3.57 %

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SOURCE BancFirst