PR Newswire | Oct 15, 2020 04:15PM EDT

10/15 15:15 CDT

BancFirst Corporation Reports Third Quarter Earnings OKLAHOMA CITY, Oct. 15, 2020

OKLAHOMA CITY, Oct. 15, 2020 /PRNewswire/ -- BancFirst Corporation (NASDAQ GS:BANF) reported net income of $20.9 million, or $0.63 diluted earnings per share, for the third quarter of 2020 compared to net income of $33.4 million, or $1.00 diluted earnings per share, for the third quarter of 2019. The results for the third quarter and first nine months of 2020 were negatively impacted by a higher provision for credit losses. Net income for the nine months ended September 30, 2020 was $64.2 million, or $1.94 per share, compared to $99.4 million, or $2.98 per share, for the nine months ended September 30, 2019. Net income for the third quarter and first nine months of 2020 also includes the 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 provision for credit losses for the third quarter of 2020 was $18.7 million compared to $2.8 million a year ago. BancFirst Corporation Executive Chairman David Rainbolt commented, "Our provision for credit losses remained consistent with previous quarters as little clarity or improvement was projected for the economic effects of the pandemic. It reflects an extension, for yet another quarter, of our assumption on the timing of the end of the pandemic and the government's stimulus response to it. We believe this view continues to be aligned with that expressed by the Federal Reserve Board indicating a lack of economic certainty. Absent an improvement in this assessment, we would expect provisions in future quarters to continue to be elevated from historical levels."

The Company's net interest income for the third quarter of 2020 increased to $75.9 million compared to $72.3 million for the third quarter of 2019. The net interest margin for the quarter was 3.40% compared to 3.89% a year ago. The Company had net charge-offs for the quarter of 0.03% of average loans, compared to net charge-offs of 0.04% of average loans for the third quarter of 2019. Noninterest income for the quarter totaled $34.6 million, compared to $35.6 million last year. The decrease in noninterest income is primarily due to a decrease in deposit charges resulting from lower economic activity. Noninterest expense for the quarter totaled $66.1 million compared to $62.2 million last year. The increase in noninterest expense was primarily due to salary increases in 2020 related to annual merit increases and the acquisition of Pegasus bank in August 2019. The Company's effective tax rate was 18.4% compared to 22.3% for the third quarter of 2019.

At September 30, 2020, the Company's total assets were $9.6 billion, an increase of $1.1 billion from December 31, 2019. Debt securities of $597.0 million were up $105.3 million from December 31, 2019. Loans totaled $6.7 billion, an increase of $987.6 million from December 31, 2019. Deposits totaled $8.5 billion, an increase of $1.0 billion 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 September 30, 2020, the balance of the Paycheck Protection Program loans was $831.7 million. The Company's total stockholders' equity was $1.0 billion, an increase of $38.8 million over December 31, 2019.

Nonaccrual loans represent 1.24% of total loans at September 30, 2020, up from 0.32% at year-end 2019. The allowance to total loans was 1.59% up from 0.96% at year-end 2019. The allowance to nonaccrual loans was approximately 129% compared to 302% at year-end 2019.

BancFirst Corporation CEO David Harlow commented, "Pre-tax, pre-provision earnings for the quarter and first nine months of the year were $44.3 million and $136.8 million respectively compared to $45.7 million and $134.7 million for the same periods last year. Government stimulus and changes in consumer and business spending patterns have combined to increase deposits $1 billion since year-end. Economic activity and the rate of unemployment in our region have improved from levels experienced in the early months of the pandemic; however, loan demand continues to be soft and year to date loan growth absent PPP has been modest."

BancFirst Corporation (the Company) is an Oklahoma based financial services holding company. The Company operates two subsidiary banks, BancFirst, is Oklahoma's largest 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)

2020 2020 2020 2019 2019

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

Condensed IncomeStatements:

Net interest income $ 75,852 $ 77,208 $ 74,073 $ 73,939 $ 72,287

Provision for 18,740 19,333 19,583 1,412 2,758credit losses

Non-interestincome:

Trust revenue 3,131 3,368 3,655 3,682 3,490

Service charges on 19,078 16,760 18,804 19,938 19,866deposits

Securities - (595) 50 (9) -transactions

Income from sales of 1,873 1,561 781 1,089 964loans

Insurance 5,197 4,443 5,676 5,076 5,535commissions

Cash management 3,701 4,255 4,320 4,258 4,430

Other 1,595 2,290 1,859 1,490 1,342

Total noninterest 34,575 32,082 35,145 35,524 35,627income

Non-interestexpense:

Salaries and 41,995 42,226 39,756 40,375 40,354employee benefits

Occupancy expense, 4,503 3,839 3,546 3,738 3,386net

Depreciation 3,795 3,544 3,491 3,355 3,268

Amortization of 968 968 964 1,007 842intangible assets

Data processing 1,669 1,629 1,692 1,634 1,467services

Net expense fromother real estate 196 (12) (2,135) (424) 26owned

Marketing and 1,485 1,485 2,355 2,327 2,047business promotion

Deposit insurance 723 365 136 147 (81)

Other 10,749 10,607 11,580 14,137 10,882

Total noninterest 66,083 64,651 61,385 66,296 62,191expense

Income before 25,604 25,306 28,250 41,755 42,965income taxes

Income tax expense 4,714 4,576 5,642 6,248 9,597

Net income $ 20,890 $ 20,730 $ 22,608 $ 35,507 $ 33,368

Per Common ShareData:

Net income-basic $ 0.64 $ 0.64 $ 0.69 $ 1.09 $ 1.02

Net income-diluted 0.63 0.63 0.68 1.07 1.00

Cash dividends 0.34 0.32 0.32 0.32 0.32declared

Common shares 32,679,191 32,662,691 32,646,691 32,694,268 32,644,018outstanding

Average commonshares outstanding -

Basic 32,668,789 32,651,262 32,679,587 32,673,438 32,641,902

Diluted 33,168,938 33,075,493 33,287,359 33,366,848 33,327,213

Performance Ratios:

Return on average 0.86 % 0.88 % 1.07 % 1.66 % 1.65 %assets

Return on average 7.89 7.99 8.87 13.76 13.80stockholders' equity

Net interest margin 3.40 3.54 3.82 3.78 3.89

Efficiency ratio 59.84 59.16 56.20 60.56 57.63

BancFirst Corporation

Summary Financial Information

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

Nine months ended

September 30,

2020 2019

Condensed Income Statements:

Net interest income $ 227,133 $ 207,982

Provision for credit losses 57,656 6,875

Non-interest income:

Trust revenue 10,154 9,917

Service charges on deposits 54,642 56,643

Securities transactions (545) 821

Income from sales of loans 4,215 2,530

Insurance commissions 15,316 15,220

Cash management 12,276 12,608

Other 5,744 3,966

Total noninterest income 101,802 101,705

Non-interest expense:

Salaries and employee benefits 123,977 112,649

Occupancy expense, net 11,888 8,966

Depreciation 10,830 9,268

Amortization of intangible assets 2,900 2,359

Data processing services 4,990 4,209

Net expense from other real estate owned (1,951) (361)

Marketing and business promotion 5,325 6,227

Deposit insurance 1,224 996

Other 32,936 30,692

Total noninterest expense 192,119 175,005

Income before income taxes 79,160 127,807

Income tax expense 14,932 28,435

Net income $ 64,228 $ 99,372

Per Common Share Data:

Net income-basic $ 1.97 $ 3.04

Net income-diluted 1.94 2.98

Cash dividends declared 0.98 0.92

Common shares outstanding 32,679,191 32,644,018

Average common shares outstanding -

Basic 32,666,554 32,627,924

Diluted 33,190,294 33,314,298

Performance Ratios:

Return on average assets 0.93 % 1.71 %

Return on average stockholders' equity 8.24 14.14

Net interest margin 3.58 3.88

Efficiency ratio 58.41 56.51

BancFirst Corporation

Summary Financial Information

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

2020 2020 2020 2019 2019

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

Balance SheetData:

Total assets $ 9,618,728 $ 9,612,453 $ 8,669,096 $ 8,565,758 $ 8,388,816

Interest-bearingdeposits with 1,609,462 1,583,116 1,356,826 1,646,238 1,476,340banks

Debt securities 596,941 608,031 591,987 491,626 555,575

Total loans 6,660,694 6,696,856 6,006,065 5,673,144 5,622,897

Allowance for (106,126) (89,500) (70,080) (54,238) (55,928)credit losses

Deposits 8,495,751 8,486,671 7,573,200 7,483,635 7,330,677

Stockholders' 1,043,752 1,034,199 1,023,380 1,004,989 979,752equity

Book value per 31.94 31.66 31.35 30.74 30.01common share

Tangible bookvalue per common 26.74 26.43 26.09 25.50 24.77share (non-GAAP)(1)

Balance SheetRatios:

Average loans to 78.55 % 79.78 % 77.75 % 75.83 % 76.97 %deposits

Average earningassets to total 91.99 92.23 91.51 91.50 92.23assets

Averagestockholders' 10.90 10.96 12.02 12.04 11.96equity to averageassets

Asset QualityData:

Past due loans $ 6,412 $ 5,382 $ 10,065 $ 11,834 $ 11,215

Nonaccrual loans 82,385 49,477 45,181 17,965 19,995(5)

Restructured 7,032 3,213 3,158 18,010 17,504loans

Totalnonperforming and 95,829 58,072 58,404 47,809 48,714restructuredloans

Other realestate owned and 4,939 4,948 6,001 6,073 7,055repossessedassets

Totalnonperforming and 100,768 63,020 64,405 53,882 55,769restructuredassets

Nonaccrual loans 1.24 % 0.74 % 0.75 % 0.32 % 0.36 %to total loans

Nonaccrual loansto total Non-PPP 1.41 0.84 0.75 0.32 0.36loans (non-GAAP)(3)

Nonperformingand restructured 1.44 0.87 0.97 0.84 0.87loans to totalloans

Nonperformingand restructuredloans to total 1.64 0.99 0.97 0.84 0.87Non-PPP loans(non-GAAP)(3)

Nonperformingand restructured 1.05 0.66 0.74 0.63 0.66assets to totalassets

Allowance to 1.59 1.34 1.17 0.96 0.99total loans

Allowance tototal Non-PPP 1.82 1.52 1.17 0.96 0.99loans (non-GAAP)(3)

Allowance to 128.82 180.89 155.11 301.91 279.72nonaccrual loans

Allowance tononperforming and 110.74 154.12 119.99 113.45 114.81restructuredloans

Net charge-offs 0.03 0.00 0.02 0.06 0.04to average loans

Reconciliation of Tangible Book Value Per Common Share (non-GAAP)(2):

Stockholders' $ 1,043,752 $ 1,034,199 $ 1,023,380 $ 1,004,989 $ 979,752equity

Less goodwill 149,922 149,922 149,923 148,604 147,013

Less intangible 19,914 20,882 21,850 22,608 24,025assets, net

Tangiblestockholders' $ 873,916 $ 863,395 $ 851,607 $ 833,777 $ 808,714equity (non-GAAP)

Common shares 32,679,191 32,662,691 32,646,691 32,694,268 32,644,018outstanding

Tangible bookvalue per common $ 26.74 $ 26.43 $ 26.09 $ 25.50 $ 24.77share (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 of Non-PPP loan ratios (non-GAAP)(4):

Total loans $ 6,660,694 $ 6,696,856 $ 6,006,065 $ 5,673,144 $ 5,622,897

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

Total Non-PPP $ 5,828,991 $ 5,871,763 $ 6,006,065 $ 5,673,144 $ 5,622,897loans (non-GAAP)

Nonaccrual loans 82,385 49,477 45,181 17,965 19,995(5)

Nonaccrual loansto total Non-PPP 1.41 % 0.84 % 0.75 % 0.32 % 0.36 %loans (non-GAAP)

Totalnonperforming and 95,829 58,072 58,404 47,809 48,714restructuredloans

Nonperforming andrestructuredloans to total 1.64 % 0.99 % 0.97 % 0.84 % 0.87 %Non-PPP loans(non-GAAP)

Allowance for (106,126) (89,500) (70,080) (54,238) (55,928)credit losses

Allowance tototal Non-PPP 1.82 % 1.52 % 1.17 % 0.96 % 0.99 %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 guarantees approximately $8.4 million of nonaccrualloans.

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, 2020 September 30, 2020

Interest Average Interest Average

Average Income/ Yield/ Average Income/ Yield/

Balance Expense Rate Balance Expense Rate

ASSETS

Earning assets:

Loans $ 6,671,344 $ 76,744 4.56 % $ 6,376,221 $ 232,380 4.85 %

Securities - taxable 591,933 2,032 1.36 556,557 6,665 1.60

Securities - tax exempt 33,785 166 1.95 28,579 485 2.26

Interest bearing deposits 1,567,437 422 0.11 1,509,493 5,586 0.49with banks

Total earning assets 8,864,499 79,364 3.55 8,470,850 245,116 3.85

Nonearning assets:

Cash and due from banks 241,160 210,558

Interest receivable and 619,570 603,167other assets

Allowance for credit losses (88,823) (69,603)

Total nonearning assets 771,907 744,122

Total assets $ 9,636,406 $ 9,214,972

LIABILITIES AND STOCKHOLDERS' EQUITY

Interest bearing liabilities:

Transaction $ 678,447 $ 125 0.07 % $ 755,835 $ 809 0.14 %deposits

Savings deposits 3,393,158 890 0.10 3,230,145 8,482 0.35

Time deposits 699,074 1,839 1.04 699,211 6,713 1.28

Short-term borrowings 3,117 - 0.05 3,306 8 0.33

Long-term borrowings 2,119 - - 1,478 - -

Junior subordinated 26,804 491 7.27 26,804 1,474 7.33debentures

Total interest bearing 4,802,719 3,345 0.28 4,716,779 17,486 0.49liabilities

Interest free funds:

Noninterest bearing deposits 3,722,973 3,414,106

Interest payable and other 60,574 46,175liabilities

Stockholders' equity 1,050,140 1,037,912

Total interest free 4,833,687 4,498,193funds

Total liabilities $ 9,636,406 $ 9,214,972 and stockholders'equity

Net interest income $ 76,019 $ 227,630

Net interest spread 3.27 % 3.36 %

Effect of interest free funds 0.13 % 0.22 %

Net interest margin 3.40 % 3.58 %

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SOURCE BancFirst