BANCFIRST CORPORATION REPORTS FOURTH QUARTER EARNINGS

Published

OKLAHOMA CITY, Jan. 18, 2024 /PRNewswire/ -- BancFirst Corporation (NASDAQ GS:BANF) reported net income of $48.9 million, or $1.46 diluted earnings per share, for the fourth quarter of 2023 compared to net income of $57.1 million, or $1.70 diluted earnings per share, for the fourth quarter of 2022. Net income for the year ended December 31, 2023 was $212.5 million, or $6.34 diluted earnings per share, compared to $193.1 million, or $5.77 diluted earnings per share, for the year ended December 31, 2022.

The Company's net interest income for the fourth quarter of 2023 decreased to $105.1 million compared to $110.4 million for the quarter ended December 31, 2022. This decrease resulted from an increase in both the volume and rate of interest bearing deposits. The net interest margin for the quarter was 3.67% compared to 3.83% a year ago. For the fourth quarter of 2023, the Company did not record recognize a provision for credit losses. In the fourth quarter of 2022, the Company recorded a provision for credit loss of $3.8 million due largely to loan growth.

Noninterest income for the quarter totaled $45.2 million, compared to $48.2 million last year. The decrease in noninterest income was primarily due to a reduction of interchange fees of approximately $5.3 million related to the impact of the Durbin amendment. Trust revenue, sweep fees and insurance commissions were all up modestly.

Noninterest expense for the quarter increased to $89.8 million compared to $84.6 million last year. The increase was primarily related to growth in salaries and employee benefits of $2.7 million. In addition, the quarter included a write down on other real estate owned of $5.2 million compared to $3.7 million during the fourth quarter of 2022.

The Company's effective tax rate for the period was 18.99% compared to 18.55% for the fourth quarter of 2022. During the first quarter of 2023, the Company adopted ASU 2023-02 which increased income tax expense.

At December 31, 2023, the Company's total assets were $12.4 billion, virtually unchanged from December 31, 2022. Loans totaled $7.7 billion, an increase of $710.3 million from December 31, 2022. Liquidity remained strong with cash of $2.4 billion and an average loan to deposit ratio of 70.5% for the quarter ended December 31, 2023. Deposits totaled $10.7 billion, compared to $11.0 billion at December 31, 2022. Sweep accounts totaled $4.3 billion at December 31, 2023 up $612.8 million from the prior year. The Company continues to fund itself with community based deposits and does not use brokered or reciprocal deposits. The Company's total stockholders' equity was $1.4 billion, an increase of $183.1 million from December 31, 2022.

Asset quality remained strong with nonaccrual loans of $24.6 million, representing 0.32% of total loans at December 31, 2023. Nonaccrual loans were $15.3 million or 0.22% of total loans at December 31, 2022. The allowance for credit losses to total loans stood at 1.26% at December 31, 2023 compared to 1.33% at December 31, 2022. Net charge-offs were $3.4 million for the year or 0.05% of average loans, compared to $1.4 million or 0.02% of average loans for the year ended December 31, 2022.

BancFirst Corporation CEO David Harlow commented, "The Company reported record earnings in 2023 at $6.34 diluted earnings per share as we successfully managed through the Federal Reserve's continued tightening with the Fed Funds rate reaching its highest level in 22 years in July. The ensuing shift in deposit mix out of non-interest bearing accounts into interest bearing accounts put pressure on the net interest margin as the year progressed which we were able to mitigate somewhat with strong loan growth throughout the year. Absent the impact of the Durbin Amendment on interchange, all major non-interest income categories showed good growth during the year. The Company's earnings will be less in 2024 with a full year of Durbin, ongoing margin pressure anticipated as a result of continued competition for deposits, and increased regulatory compliance costs as a result of crossing the $10 billion asset threshold. Our current outlook on the economy is less pessimistic than a year ago as reflected in our modestly lower CECL reserve percentage at December 31, 2023, when compared to a year ago."

BancFirst Corporation (the Company) is an Oklahoma based financial services holding company. The Company operates three subsidiary banks, BancFirst, an Oklahoma state-chartered bank with 106 banking locations serving 59 communities across Oklahoma, Pegasus Bank, with 3 banking locations in the Dallas Metroplex area and Worthington Bank with 3 locations in the Fort Worth Metroplex area, 1 location in Arlington Texas and 1 location in Denton Texas. 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)

2023

2023

2023

2023

2022

4th Qtr  

3rd Qtr  

2nd Qtr  

1st Qtr  

4th Qtr  

 Condensed Income Statements:  

 Net interest income  

$    105,066

$    104,308

$    105,926

$    109,156

$    110,352

Provision for credit losses  

-

2,312

2,824

2,322

3,776

 Noninterest income:

Trust revenue

5,106

4,866

4,590

4,222

4,065

Service charges on deposits

16,841

17,027

22,268

21,231

21,603

Securities transactions

(1,364)

(361)

110

(213)

1,116

Income from sales of loans

512

734

757

604

657

Insurance commissions

7,220

8,429

6,225

8,741

6,656

Cash management

7,878

8,177

7,927

6,734

6,124

Other

8,964

5,577

6,097

6,509

7,947

Total noninterest income  

45,157

44,449

47,974

47,828

48,168

 Noninterest expense:

Salaries and employee benefits

50,731

50,200

49,803

49,252

48,019

Occupancy expense, net

5,439

5,487

5,118

4,983

5,259

Depreciation

4,560

4,685

4,769

4,643

4,566

Amortization of intangible assets

887

885

880

880

880

Data processing services

2,224

1,820

2,217

2,107

1,928

Net expense from other real estate owned

7,870

2,720

2,889

2,459

6,235

Marketing and business promotion

2,653

2,034

1,900

2,527

2,465

Deposit insurance

1,332

1,419

1,463

1,613

1,209

Other

14,120

11,965

12,071

11,853

14,044

   Total noninterest expense  

89,816

81,215

81,110

80,317

84,605

 Income before income taxes  

60,407

65,230

69,966

74,345

70,139

 Income tax expense  

11,473

14,242

14,956

16,812

13,013

 Net income  

$      48,934

$      50,988

$      55,010

$      57,533

$      57,126

 Per Common Share Data:  

 Net income-basic  

$          1.48

$          1.55

$          1.67

$          1.75

$          1.74

 Net income-diluted  

1.46

1.52

1.64

1.72

1.70

 Cash dividends declared

0.43

0.43

0.40

0.40

0.40

 Common shares outstanding  

32,933,018

32,921,393

32,939,256

32,899,493

32,875,560

 Average common shares outstanding - 

   Basic 

32,926,326

32,937,149

32,920,497

32,892,857

32,868,087

   Diluted 

33,483,691

33,539,389

33,467,254

33,462,379

33,503,937

 Performance Ratios:  

 Return on average assets

1.58 %

1.68 %

1.85 %

1.90 %

1.82 %

 Return on average stockholders' equity

13.98

14.93

16.59

18.31

18.62

 Net interest margin  

3.67

3.73

3.87

3.89

3.83

 Efficiency ratio  

59.79

54.60

52.70

51.16

53.37

 

BancFirst Corporation

Summary Financial Information

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

Twelve months ended

December 31,

2023

2022

 Condensed Income Statements:  

 Net interest income  

$    424,456

$    373,673

 Provision for credit losses  

7,458

10,076

 Noninterest income:

Trust revenue

18,784

15,645

Service charges on deposits

77,367

86,757

Securities transactions

(1,828)

(1,833)

Income from sales of loans

2,607

4,548

Insurance commissions

30,615

26,883

Cash management

30,716

19,326

Other

27,147

32,421

Total noninterest income  

185,408

183,747

 Noninterest expense:

Salaries and employee benefits

199,986

184,976

Occupancy expense, net

21,027

19,326

Depreciation

18,657

18,600

Amortization of intangible assets

3,532

3,448

Data processing services

8,368

7,584

Net expense from other real estate owned

15,938

9,911

Marketing and business promotion

9,114

8,074

Deposit insurance

5,827

4,735

Other

50,009

53,258

Total noninterest expense  

332,458

309,912

 Income before income taxes  

269,948

237,432

 Income tax expense  

57,483

44,332

 Net income  

$    212,465

$    193,100

 Per Common Share Data:  

 Net income-basic  

$          6.45

$          5.89

 Net income-diluted  

6.34

5.77

 Cash dividends declared

1.66

1.52

 Common shares outstanding  

32,933,018

32,875,560

 Average common shares outstanding - 

   Basic 

32,919,348

32,778,355

   Diluted 

33,494,487

33,439,496

 Performance Ratios:  

 Return on average assets

1.75 %

1.56 %

 Return on average stockholders' equity

15.89

16.11

 Net interest margin  

3.79

3.29

 Efficiency ratio  

54.51

55.60

 

BancFirst Corporation

Summary Financial Information

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

2023

2023

2023

2023

2022

4th Qtr

3rd Qtr

2nd Qtr

1st Qtr  

4th Qtr

Balance Sheet Data:

Total assets 

$ 12,372,042

$ 12,114,602

$ 12,020,265

$ 12,332,105

$ 12,387,863

Interest-bearing deposits with banks

2,172,001

2,134,081

2,188,004

2,623,565

2,909,861

Debt securities 

1,555,095

1,525,448

1,570,620

1,618,233

1,540,604

Total loans 

7,660,134

7,476,474

7,307,475

7,124,831

6,949,795

Allowance for credit losses 

(96,800)

(97,776)

(96,920)

(94,760)

(92,728)

Deposits 

10,700,122

10,534,171

10,475,180

10,610,103

10,974,228

Stockholders' equity 

1,433,891

1,370,584

1,340,791

1,310,882

1,250,836

Book value per common share 

43.54

41.63

40.70

39.85

38.05

Tangible book value per common share (non-GAAP)(1) 

37.50

35.56

34.62

33.73

31.90

Balance Sheet Ratios: 

Average loans to deposits 

70.52 %

70.61 %

69.85 %

64.54 %

62.25 %

Average earning assets to total assets 

92.42

92.39

92.23

92.52

92.14

Average stockholders' equity to average assets 

11.30

11.28

11.17

10.36

9.80

Asset Quality Data:

Past due loans

$          9,542

$        12,575

$          8,799

$          7,258

$          7,085

Nonaccrual loans (3)

24,573

16,676

18,047

17,649

15,299

Other real estate owned and repossessed assets

34,200

42,782

41,612

38,874

36,936

Nonaccrual loans to total loans

0.32 %

0.22 %

0.25 %

0.25 %

0.22 %

Allowance to total loans

1.26

1.31

1.33

1.33

1.33

Allowance to nonaccrual loans

393.92

586.34

537.05

536.93

606.10

Net charge-offs to average loans

0.02

0.02

0.01

0.00

0.01

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

Stockholders' equity 

$   1,433,891

$   1,370,584

$   1,340,791

$   1,310,882

$   1,250,836

Less goodwill

182,263

182,263

182,055

182,055

182,055

Less intangible assets, net

16,704

17,591

18,223

19,103

19,983

Tangible stockholders' equity (non-GAAP)

$   1,234,924

$   1,170,730

$   1,140,513

$   1,109,724

$   1,048,798

Common shares outstanding

32,933,018

32,921,393

32,939,256

32,899,493

32,875,560

Tangible book value per common share (non-GAAP) 

$          37.50

$          35.56

$          34.62

$          33.73

$          31.90

(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. 

(3) Government Agencies guarantee approximately $6.7 million of nonaccrual loans at December 31, 2023.

 

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, 2023

December 31, 2023

Interest

Average

Interest

Average

Average

Income/

Yield/

Average

Income/

Yield/

Balance

Expense

Rate

Balance

Expense

Rate

ASSETS

Earning assets:

  Loans

$  7,532,162

$126,757

6.68

%

$  7,292,871

$467,951

6.42

%

  Debt securities – taxable

1,534,062

9,179

2.37

1,565,697

36,838

2.35

  Debt securities – tax exempt

3,635

26

2.84

3,339

91

2.71

  Interest bearing deposits with banks and FFS

2,286,826

31,607

5.48

2,343,182

119,486

5.10

     Total earning assets

11,356,685

167,569

5.85

11,205,089

624,366

5.57

Nonearning assets:

  Cash and due from banks

201,800

204,394

  Interest receivable and other assets

827,456

814,419

  Allowance for credit losses

(97,757)

(96,154)

     Total nonearning assets

931,499

922,659

     Total assets

$12,288,184

$12,127,748

LIABILITIES AND STOCKHOLDERS' EQUITY

Interest bearing liabilities:

  Transaction deposits 

$     821,237

$    2,288

1.11

%

$     849,707

$    7,559

0.89

%

  Savings deposits

4,862,828

49,841

4.07

4,598,936

164,291

3.57

  Time deposits

916,518

9,170

3.97

797,179

23,196

2.91

  Short-term borrowings

3,786

51

5.30

6,432

312

4.84

  Subordinated debt

86,091

1,031

4.75

86,070

4,122

4.79

     Total interest bearing liabilities

6,690,460

62,381

3.70

6,338,324

199,480

3.15

Interest free funds:

  Noninterest bearing deposits

4,080,430

4,343,646

  Interest payable and other liabilities

128,809

108,438

  Stockholders' equity

1,388,485

1,337,340

     Total interest free  funds

5,597,724

5,789,424

     Total liabilities and stockholders' equity

$12,288,184

$12,127,748

Net interest income

$105,188

$424,886

Net interest spread

2.15

%

2.42

%

Effect of interest free funds

1.52

%

1.37

%

Net interest margin

3.67

%

3.79

%

 

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SOURCE BancFirst

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