PR Newswire | Jan 20, 2022 04:15PM EST

01/20 15:15 CST

BANCFIRST CORPORATION REPORTS FOURTH QUARTER EARNINGS OKLAHOMA CITY, Jan. 20, 2022

OKLAHOMA CITY, Jan. 20, 2022 /PRNewswire/ -- BancFirst Corporation (NASDAQ GS: BANF) reported net income of $38.2 million, or $1.15 diluted earnings per share, for the fourth quarter of 2021 compared to net income of $35.4 million, or $1.06 diluted earnings per share, for the fourth quarter of 2020. The Company recorded a net benefit from reversal of provisions for credit losses of $224,000 for the three months ended December 31, 2021 compared to a provision for credit losses of $5.0 million for the three months ended December 31, 2020. Net income for the year ended December 31, 2021 was $167.6 million, or $5.03 diluted earnings per share, compared to $99.6 million, or $3.00 diluted earnings per share, for 2020. The Company recorded a net benefit from reversal of provisions for credit losses of $8.7 million for 2021 compared to a provision for credit losses of $62.6 million for the prior year.

BancFirst Corporation Executive Chairman David Rainbolt commented, "I have never seen back to back years with more financial noise than 2020 and 2021. Pandemic provisions and reversals thereof, the government's fiscal stimulus, and Federal Reserve rate reductions affected both our balance sheet and income statement in dramatic ways. The net effect is that we find ourselves with an extremely liquid balance sheet and with overnight rates still close to zero. It will be interesting to see what the consequences are as the US economy reverts to the mean."

The Company's net interest income for the fourth quarter of 2021 decreased to $75.9 million compared to $79.5 million for the fourth quarter of 2020, largely as a result of a decrease of $3.3 million in fee income from the Paycheck Protection Program (PPP). The net interest margin for the quarter was 2.87% compared to 3.55% a year ago. Noninterest income for the quarter totaled $45.7 million, compared to $35.4 million last year. The increase in noninterest income was mostly attributable to $3.3 million of income resulting from the application of equity method accounting related to an equity interest received in the process of a loan collection, $2.8 million in rental income from other real estate property, and a $1.8 million increase in income from debit card interchange fees. Noninterest expense for the quarter increased to $76.8 million compared to $65.6 million last year because of the increase in salaries and employee benefits of approximately $2.1 million, $2.3 million of other real estate property operating costs, $2.1 million amortization of investment in tax credits purchased in the fourth quarter, $1.1 million incentive to customers that participated in the year-end sweep program and approximately $1.0 million in depreciation largely from the Company's new corporate headquarters. The Company's effective tax rate was 15.3% compared to 20.3% for the fourth quarter of 2020. The lower effective tax rate was due to the recognition of the aforementioned $2.6 million in tax credits.

At December 31, 2021, the Company's total assets were $9.4 billion, an increase of $193.3 million from December 31, 2020. Loans totaled $6.2 billion, a decrease of $254.0 million from year-end 2020 due to payoffs of approximately $572.3 million in PPP loans, which were partially offset by approximately $126 million of acquired loans from the First National Bank and Trust Company of Vinita, Oklahoma. Absent PPP loans and acquired loans, the Company's loans increased $213.1 million or 3.7% in 2021. Deposits totaled $8.1 billion, an increase of $27.2 million from December 31, 2020. The increase in assets and deposits was predominantly related to government stimulus payments. At December 31, 2021, the remaining balance of PPP loans was $80.4 million. The Company's total stockholders' equity was $1.2 billion, an increase of $103.8 million over December 31, 2020. Off-balance sheet sweep accounts totaled $5.1 billion at December 31, 2021 compared to $2.8 billion at December 31, 2020.

Nonaccrual loans represented 0.34% of total loans at December 31, 2021, down from 0.58% at year-end 2020. Net charge-offs for the quarter were negligible, compared to 0.30% in the fourth quarter of 2020. The allowance for credit losses to total loans was 1.36% at December 31, 2021 compared to 1.42% at year-end 2020, and the allowance for credit losses to nonaccrual loans was 401.76% compared to 243.35% at year-end 2020. At December 31, 2021, the Company's nonaccrual loans were $20.9 million compared to $37.5 million at year-end 2020. At December 31, 2021, the Company's other real estate owned (OREO) increased $7.3 million from December 31, 2020.

BancFirst Corporation CEO David Harlow commented, "2021 was a record earnings year for the Company buoyed by one-time PPP fees and a negative loan loss provision as a result of a more benign credit environment than envisioned at the beginning of the year. 2022's outlook includes an improved margin as a result of expected fed tightening; however, the Company is well positioned for whatever the future holds with our strong asset quality, liquidity and capital base."

On October 29, 2021, BancFirst Corporation entered into an agreement to acquire Worthington National Bank ("Worthington"). Worthington is a national bank chartered by the Office of the Comptroller of the Currency (OCC) with one location in Arlington, Texas, one location in Colleyville, Texas and two Fort Worth, Texas locations. As of September 30, 2021, Worthington had approximately $462.6 million in total assets, $269.0 million in loans and $421.5 million in deposits. The acquisition is expected to be completed during the first quarter of 2022. Upon acquisition, Worthington will continue to operate as "Worthington National Bank" under a separate OCC charter and remain a separate subsidiary of BancFirst Corporation governed by its existing board of directors. BancFirst Corporation intends to provide an appropriate amount of capital or other support to increase Worthington's ability to approve larger loans and allow Worthington to continue to grow their assets.

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 2021 2020

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

Condensed Income Statements:

Net interest income $ 75,898 $ 80,190 $ 82,363 $ 77,206 $ 79,535

(Benefit from) provision for credit losses (224) 1,483 (9,949) - 4,992

Non-interest income:

Trust revenue 3,336 3,210 3,264 3,102 2,976

Service charges on deposits 22,095 21,706 20,524 19,100 19,796

Securities transactions 630 150 172 95 156

Income from sales of loans 1,545 1,594 2,133 2,010 1,852

Insurance commissions 6,075 6,666 5,015 5,989 5,680

Cash management 3,115 3,127 3,068 3,003 3,135

Other 8,897 3,333 10,442 6,636 1,825

Total noninterest income 45,693 39,786 44,618 39,935 35,420

Non-interest expense:

Salaries and employee benefits 42,887 42,267 41,992 39,577 40,750

Occupancy expense, net 4,521 5,086 4,528 4,348 4,533

Depreciation 4,708 4,207 4,133 3,877 3,779

Amortization of intangible assets 759 755 809 793 915

Data processing services 1,663 1,734 1,660 1,678 1,763

Net expense from other real estate owned 2,412 1,810 3,357 1,510 420

Marketing and business promotion 2,080 1,796 1,648 1,879 1,671

Deposit insurance 968 846 766 876 857

Other 16,783 11,713 15,130 10,425 10,923

Total noninterest expense 76,781 70,214 74,023 64,963 65,611

Income before income taxes 45,034 48,279 62,907 52,178 44,352

Income tax expense 6,866 9,529 14,715 9,658 8,994

Net income $ 38,168 $ 38,750 $ 48,192 $ 42,520 $ 35,358

Per Common Share Data:

Net income-basic $ 1.17 $ 1.18 $ 1.47 $ 1.30 $ 1.08

Net income-diluted 1.15 1.16 1.45 1.27 1.06

Cash dividends declared 0.36 0.36 0.34 0.34 0.34

Common shares outstanding 32,603,118 32,572,217 32,784,513 32,771,013 32,719,852

Average common shares outstanding -

Basic 32,585,784 32,744,104 32,779,227 32,756,852 32,690,296

Diluted 33,180,680 33,267,955 33,405,923 33,408,116 33,275,550

Performance Ratios:

Return on average assets 1.33% 1.37% 1.79% 1.69% 1.45%

Return on average stockholders' equity 13.02 13.42 17.42 15.90 13.25

Net interest margin 2.87 3.09 3.32 3.36 3.55

Efficiency ratio 63.15 58.52 58.29 55.46 57.08

BancFirstCorporation

Summary Financial Information

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

Twelve months ended

December 31,

2021 2020

Condensed Income Statements:

Net interest income $ 315,657 $ 306,668

(Benefit from) provision for credit losses (8,690) 62,648

Non-interest income:

Trust revenue 12,912 13,130

Service charges on deposits 83,425 74,438

Securities transactions 1,047 (389)

Income from sales of loans 7,282 6,067

Insurance commissions 23,745 20,996

Cash management 12,313 15,411

Other 29,308 7,569

Total noninterest income 170,032 137,222

Non-interest expense:

Salaries and employee benefits 166,723 164,727

Occupancy expense, net 18,483 16,421

Depreciation 16,925 14,609

Amortization of intangible assets 3,116 3,815

Data processing services 6,735 6,753

Net expense (income) from other real estate owned 9,089 (1,531)

Marketing and business promotion 7,403 6,996

Deposit insurance 3,456 2,081

Other 54,051 43,859

Total noninterest expense 285,981 257,730

Income before income taxes 208,398 123,512

Income tax expense 40,768 23,926

Net income $ 167,630 $ 99,586

Per Common Share Data:

Net income-basic $ 5.12 $ 3.05

Net income-diluted 5.03 3.00

Cash dividends declared 1.40 1.32

Common shares outstanding 32,603,118 32,719,852

Average common shares outstanding -

Basic 32,716,099 32,672,522

Diluted 33,314,146 33,210,952

Performance Ratios:

Return on average assets 1.54% 1.06%

Return on average stockholders' equity 14.88 9.52

Net interest margin 3.15 3.57

Efficiency ratio 58.88 58.06

BancFirstCorporation

Summary Financial Information

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

2021 2021 2021 2021 2020

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

Balance Sheet Data:

Total assets $ 9,405,612 $ 11,302,771 $ 11,015,287 $ 10,549,305 $ 9,212,357

Interest-bearing deposits with banks 1,821,203 3,836,809 3,373,099 2,788,316 1,336,394

Debt securities 534,500 529,484 563,771 520,543 555,196

Total loans 6,194,218 6,037,886 6,207,262 6,380,108 6,448,225

Allowance for credit losses (83,936) (86,463) (83,963) (90,860) (91,366)

Deposits 8,091,914 9,992,044 9,728,389 9,371,940 8,064,704

Stockholders' equity 1,171,734 1,146,874 1,131,591 1,094,671 1,067,885

Book value per common share 35.94 35.21 34.52 33.40 32.64

Tangible book value per common share (non-GAAP)(1) 30.80 30.04 29.35 28.27 27.47

Balance Sheet Ratios:

Average loans to deposits 60.16% 61.56% 65.36% 70.84% 77.02%

Average earning assets to total assets 92.13 92.13 92.01 91.54 91.82

Average stockholders' equity to average assets 10.19 10.22 10.25 10.64 10.91

Asset Quality Data:

Past due loans $ 4,964 $ 5,186 $ 4,386 $ 5,282 $ 4,802

Nonaccrual loans (5) 20,892 26,607 29,802 35,326 37,545

Restructured loans 3,665 7,073 7,485 7,801 7,784

Total nonperforming and restructured loans 29,521 38,866 41,673 48,409 50,131

Other real estate owned and repossessed assets 39,553 39,060 40,183 30,320 32,480

Total nonperforming and restructured assets 69,074 77,926 81,856 78,729 82,611

Nonaccrual loans to total loans 0.34% 0.44% 0.48% 0.55% 0.58%

Nonaccrual loans to total Non-PPP loans (non-GAAP)(3) 0.34 0.46 0.51 0.62 0.65

Nonperforming and restructured loans to total loans 0.48 0.64 0.67 0.76 0.78

Nonperforming and restructured loans to total Non-PPP loans (non-GAAP)(3) 0.48 0.67 0.71 0.85 0.86

Nonperforming and restructured assets to total assets 0.73 0.69 0.74 0.75 0.90

Allowance to total loans 1.36 1.43 1.35 1.42 1.42

Allowance to total Non-PPP loans (non-GAAP)(3) 1.37 1.48 1.44 1.60 1.58

Allowance to nonaccrual loans 401.76 324.96 281.73 257.20 243.35

Allowance to nonperforming and restructured loans 284.33 222.46 201.48 187.69 182.26

Net charge-offs to average loans 0.03 0.01 0.06 0.01 0.30

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

Stockholders' equity $ 1,171,734 $ 1,146,874 $ 1,131,591 $ 1,094,671 $ 1,067,885

Less goodwill 149,922 149,922 149,922 149,922 149,922

Less intangible assets, net 17,566 18,325 19,283 18,206 18,999

Tangible stockholders' equity (non-GAAP) $ 1,004,246 $ 978,627 $ 962,386 $ 926,543 $ 898,964

Common shares outstanding 32,603,118 32,572,217 32,784,513 32,771,013 32,719,852

Tangible book value per common share (non-GAAP) $ 30.80 $ 30.04 $ 29.35 $ 28.27 $ 27.47

(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 anon-GAAP financial measure but has been included as it is considered to be acritical metric with which to analyze and evaluate the financial condition andcapitalstrength of the Company. This measure should not be considered a substitute foroperating results determined in accordance with GAAP.

Reconciliation of Non-PPP loan ratios (non-GAAP)(4):

Total loans $ 6,194,218 $ 6,037,886 $ 6,207,262 $ 6,380,108 $ 6,448,225

Less PPP loans 80,412 201,208 368,620 713,714 652,693

Total Non-PPP loans (non-GAAP) $ 6,113,806 $ 5,836,678 $ 5,838,642 $ 5,666,394 $ 5,795,532

Nonaccrual loans (5) 20,892 26,607 29,802 35,326 37,545

Nonaccrual loans to total Non-PPP loans (non-GAAP) 0.34% 0.46% 0.51% 0.62% 0.65%

Total nonperforming and restructured loans 29,521 38,866 41,673 48,409 50,131

Nonperforming and restructured loans to total Non-PPP loans (non-GAAP) 0.48% 0.67% 0.71% 0.85% 0.86%

Allowance for credit losses (83,936) (86,463) (83,963) (90,860) (91,366)

Allowance to total Non-PPP loans (non-GAAP) 1.37% 1.48% 1.44% 1.60% 1.58%

(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 loansisallowance for credit losses, divided by total loans less PPP loans. Theseamounts are non-GAAP financial measures but have been included as they areconsideredcritical metrics with which to analyze and evaluate the financial condition andcapital strength of the Company. These measures should not be consideredsubstitutes foroperating results determined in accordance with GAAP.

(5) Government Agencies guarantee approximately $2.5 million of nonaccrualloans at December 31, 2021.





BancFirst Corporation

Consolidated Average Balance Sheets

And Interest Margin Analysis

Taxable Equivalent Basis

(Dollars in thousands - Unaudited)



Three Months Ended Twleve Months Ended

December 31, 2021 December 31, 2021

Interest Average Interest Average

Average Income/ Yield/ Average Income/ Yield/

Balance Expense Rate Balance Expense Rate

ASSETS

Earning assets:

Loans $ 6,080,771 $ 75,884 4.95 % $ 6,220,192 $ 316,618 5.09 %

Debt securities - taxable 559,070 1,548 1.10 538,157 6,327 1.18

Debt securities - tax exempt 4,967 36 2.89 11,372 258 2.27

Interest bearing deposits with banks and FFS 3,872,577 1,505 0.15 3,268,443 4,366 0.13

Total earning assets 10,517,385 78,973 2.98 10,038,164 327,569 3.26

Nonearning assets:

Cash and due from banks 271,834 271,004

Interest receivable and other assets 711,908 694,191

Allowance for credit losses (84,802) (88,028)

Total nonearning assets 898,940 877,167

Total assets $ 11,416,325 $ 10,915,331

LIABILITIES AND STOCKHOLDERS' EQUITY

Interest bearing liabilities:

Transaction deposits $ 887,619 $ 169 0.08 % $ 848,535 $ 634 0.07 %

Savings deposits 3,920,225 1,021 0.10 3,736,901 4,055 0.11

Time deposits 644,401 729 0.45 654,801 3,543 0.54

Short-term borrowings 2,649 1 0.11 2,608 2 0.08

Subordinated debt 85,978 1,030 4.75 56,793 3,130 5.51

Total interest bearing liabilities 5,540,872 2,950 0.21 5,299,638 11,364 0.21

Interest free funds:

Noninterest bearing deposits 4,655,240 4,437,352

Interest payable and other liabilities 56,818 52,069

Stockholders' equity 1,163,395 1,126,272

Total interest free funds 5,875,453 5,615,693

Total liabilities and stockholders' equity $ 11,416,325 $ 10,915,331

Net interest income $ 76,023 $ 316,205

Net interest spread 2.77 % 3.05 %

Effect of interest free funds 0.10 % 0.10 %

Net interest margin 2.87 % 3.15 %

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SOURCE BancFirst