BancFirst Corporation Reports Third Quarter Earnings

OKLAHOMA CITY, Oct. 19, 2018 /PRNewswire/ -- BancFirst Corporation (NASDAQ GS: BANF) reported net income of $32.9 million, or $0.98 diluted earnings per share, for the third quarter of 2018 compared to net income of $21.7 million, or $0.67 diluted earnings per share, for the third quarter of 2017.   Net income for the nine months ended September 30, 2018 was $93.1 million, or $2.78 diluted earnings per share, compared to $66.9 million, or $2.06 diluted earnings per share, for the nine months ended September 30, 2017. On January 11, 2018 the Company completed the acquisitions of two Oklahoma banking corporations. Consequently, the first nine months of 2018 included one-time acquisition related expenses of approximately $2.6 million, which reduced diluted earnings per share by approximately 6 cents.  Net income for the nine months ended September 30, 2017 included the effects of favorable resolutions of two problem loans which resulted in principal recovery of $894,000 and unaccrued interest income of $2.3 million

The Company's net interest income for the third quarter of 2018 increased to $65.7 million compared to $57.2 million for the third quarter of 2017. The net interest margin for the quarter was 3.68% compared to 3.46% a year ago. The increase in margin was primarily due to the increase in the federal funds rate throughout 2017 and 2018 and the two acquisitions in the first quarter of 2018. The provision for loan losses for the third quarter of 2018 was $747,000 compared to $3.3 million a year ago.  Net charge-offs for the third quarter of 2017 and 2018 were both 0.02% of average loans.  Noninterest income for the quarter totaled $32.8 million, compared to $29.2 million last year. The increase in noninterest income was primarily due to the growth in debit card usage fees, insurance commissions and cash management revenue. Noninterest expense for the quarter totaled $55.8 million compared to $50.6 million last year. The increase in noninterest expense was primarily due to salary increases in 2018 and the two acquisitions. The Company's effective tax rate for the third quarter of 2018 was 21.6% compared to 19.8% for the first quarter of 2018 and 33.3% for the third quarter of 2017. The effective tax rate for the first quarter of 2018 included the effects of stock option exercises during the quarter. The decrease in the effective tax rate compared to the third quarter of 2017 was due to the change in tax rates from the Tax Cuts and Jobs Act and exercising of stock options during the third quarter of 2018. 

At September 30, 2018, the Company's total assets were $7.6 billion, an increase of $349.3 million from December 31, 2017. The increase in total assets was primarily related to the acquisitions during the first quarter. Securities of $477.1 million were up slightly from December 31, 2017. Loans totaled $5.0 billion, a slight decrease from June 30, 2018. Loan growth for the nine months ended September 30, 2018 was primarily from acquired loans. Deposits totaled $6.6 billion, an increase of $228.1 million from the December 31, 2017 total, which was primarily related to the acquisitions. The Company's total stockholders' equity was $884.8 million, an increase of $109.2 million over December 31, 2017.

Asset quality remained strong during the third quarter of 2018.  Nonperforming and restructured assets were 0.68% of total assets at September 30, 2018 compared to 0.61% at December 31, 2017. The allowance to total loans was 1.05% compared to 1.09% at year-end 2017. The allowance to nonperforming and restructured loans was 116.5% compared to 130.6% at year-end 2017.

On January 11, 2018, the Company completed the previously announced acquisitions of two Oklahoma banking corporations. First Wagoner Corporation and its subsidiary bank, First Bank & Trust Company, and First Chandler Corp. and its subsidiary bank, First Bank of Chandler, had combined total assets of approximately $378 million. The Company exchanged a combination of cash and stock for these transactions.

On August 31, 2018 the Company's wholly-owned subsidiary, BFTower, LLC, completed the purchase of Cotter Ranch Tower in Oklahoma City for $21.0 million. The Tower consists of an aggregate of 507,000 square feet, has 36 floors and is the second tallest building in Oklahoma City. The Company plans to move its headquarters to this location as soon as renovations are complete.

BancFirst Corporation CEO David Harlow commented, "Rising rates, a lower corporate income tax rate and a stable Oklahoma economy again contributed to significant year over year improvement; non-interest income growth is noteworthy while asset quality remains strong, combining for solid third quarter results."

BancFirst Corporation (the Company) is an Oklahoma based financial services holding company.  The Company's principal subsidiary bank, BancFirst, is Oklahoma's largest state-chartered bank with 107 banking locations serving 58 communities across Oklahoma. 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)





2018


2018


2018


2017


2017



3rd Qtr 


2nd Qtr 


1st Qtr 


4th Qtr 


3rd Qtr 


 Condensed Income Statements: 











 Net interest income 

$               65,673


$               64,880


$               63,035


$               58,699


$               57,233


 Provision for loan losses 

747


1,225


314


3,323


3,276


 Non-interest income:











Trust revenue

3,281


3,396


3,129


3,073


3,083


Service charges on deposits

18,103


17,537


16,653


16,693


16,633


Securities transactions

(64)


115


(14)


4,412


(22)


Income from sales of loans

800


802


651


741


732


Insurance commissions

5,207


3,927


5,199


3,917


4,603


Cash management

3,383


3,381


3,021


2,798


2,804


Other

2,091


1,279


1,471


1,199


1,336


Total noninterest income 

32,801


30,437


30,110


32,833


29,169













 Non-interest expense:











Salaries and employee benefits

35,051


34,776


34,190


31,477


31,471


Occupancy expense, net

3,386


3,396


3,402


3,327


3,298


Depreciation

2,733


2,429


2,410


2,298


2,493


Amortization of intangible assets

740


759


733


547


547


Data processing services

1,418


1,195


1,203


1,252


1,110


Net expense from other real estate owned

64


19


26


101


68


Marketing and business promotion

1,997


1,649


2,352


1,825


1,790


Deposit insurance

597


640


619


578


553


Other

9,823


9,393


10,955


9,846


9,270


Total noninterest expense 

55,809


54,256


55,890


51,251


50,600


 Income before income taxes 

41,918


39,836


36,941


36,958


32,526


 Income tax expense 

9,035


9,250


7,321


17,461


10,816


 Net income 

$               32,883


$               30,586


$               29,620


$               19,497


$               21,710


 Per Common Share Data: 











 Net income-basic 

$                   1.01


$                   0.93


$                   0.91


$                   0.61


$                   0.68


 Net income-diluted 

0.98


0.91


0.89


0.59


0.67


 Cash dividends declared

0.30


0.21


0.21


0.21


0.21


 Common shares outstanding 

32,749,690


32,731,215


32,707,166


31,894,563


31,863,063


 Average common shares outstanding -











   Basic

32,742,480


32,716,350


32,574,251


31,876,784


31,838,392


   Diluted

33,504,143


33,458,858


33,317,744


32,652,265


32,592,277


 Performance Ratios: 











 Return on average assets

1.71

%

1.62

%

1.60

%

1.07

%

1.22

%

 Return on average equity

14.86


14.41


14.60


9.97


11.34


 Net interest margin 

3.68


3.70


3.66


3.48


3.46


 Efficiency ratio 

56.67


56.92


60.00


55.99


58.56













 

BancFirst Corporation

Summary Financial Information

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



Nine months ended

September 30,



2018


2017


 Condensed Income Statements: 





 Net interest income 

$             193,588


$             168,440


 Provision for loan losses 

2,286


5,189


 Non-interest income:





Trust revenue

9,806


8,929


Service charges on deposits

52,293


48,859


Securities transactions

37


(352)


Income from sales of loans

2,253


2,180


Insurance commissions

14,333


12,894


Cash management

9,785


8,357


Other

4,841


4,370


Total noninterest income 

93,348


85,237







 Non-interest expense:





Salaries and employee benefits

104,017


93,672


Occupancy expense, net

10,184


9,264


Depreciation

7,572


7,305


Amortization of intangible assets

2,232


1,641


Data processing services

3,816


3,402


Net expense from other real estate owned

109


320


Marketing and business promotion

5,998


5,564


Deposit insurance

1,856


1,683


Other

30,171


26,290


Total noninterest expense 

165,955


149,141


 Income before income taxes 

118,695


99,347


 Income tax expense 

25,606


32,405


 Net income 

$               93,089


$               66,942


 Per Common Share Data: 





 Net income-basic 

$                   2.85


$                   2.11


 Net income-diluted 

2.78


2.06


 Cash dividends declared

0.72


0.59


 Common shares outstanding 

32,749,690


31,863,063


 Average common shares outstanding -





   Basic

32,678,310


31,792,270


   Diluted

33,430,761


32,534,219


 Performance Ratios: 





 Return on average assets

1.64

%

1.26

%

 Return on average stockholders' equity

14.62


12.06


 Net interest margin 

3.68


3.42


 Efficiency ratio 

57.84


58.79


 

BancFirst Corporation

Summary Financial Information

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





2018


2018


2018


2017


2017



3rd Qtr


2nd Qtr


1st Qtr 


4th Qtr 


3rd Qtr 


 Balance Sheet Data:






















 Total assets

$  7,602,438


$  7,622,963


$  7,615,642


$  7,253,156


$  7,132,168


 Interest-bearing deposits with banks

1,607,157


1,579,577


1,590,240


1,541,771


1,530,928


 Securities

477,080


462,871


493,101


469,995


450,009


 Total loans

4,952,267


5,017,071


4,990,681


4,728,168


4,658,525


 Allowance for loan losses

(51,875)


(52,200)


(51,550)


(51,666)


(51,255)


 Deposits

6,643,131


6,692,174


6,713,052


6,415,045


6,302,046


 Stockholders' equity

884,801


862,012


838,096


775,629


764,414


 Book value per common share

27.02


26.34


25.62


24.32


23.99


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

24.06


23.35


22.61


22.28


21.93


 Balance Sheet Ratios:











 Average loans to deposits

74.76

%

74.38

%

75.42

%

73.63

%

73.59

%

 Average earning assets to total assets

93.04


93.11


93.14


93.36


93.37


 Average stockholders' equity to average assets

11.23


11.23


10.95


10.78


10.74


Asset Quality Data:











 Past due loans

$         4,073


$         2,916


$         3,900


$         2,893


$         2,122


 Nonaccrual loans

26,880


29,936


31,849


31,943


27,665


 Restructured loans

13,557


14,527


12,945


4,720


3,603


 Total nonperforming and restructured loans

44,510


47,379


48,694


39,556


33,390


 Other real estate owned and repossessed assets

7,072


3,847


3,676


4,424


4,099


 Total nonperforming and restructured assets

51,582


51,226


52,370


43,980


37,489


 Nonperforming and restructured loans to total loans

0.90

%

0.94

%

0.98

%

0.84

%

0.72

%

 Nonperforming and restructured assets to total assets

0.68


0.67


0.69


0.61


0.53


 Allowance to total loans

1.05


1.04


1.03


1.09


1.10


 Allowance to nonperforming and restructured loans

116.55


110.18


105.87


130.62


153.50


 Net charge-offs to average loans

0.02


0.01


0.01


0.06


0.02













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












Stockholders' equity

$     884,801


$     862,012


$     838,096


$     775,629


$     764,414


Less goodwill

79,733


79,733


79,796


54,042


54,042


Less intangible assets, net

17,257


18,012


18,782


11,082


11,645


Tangible stockholders' equity (non-GAAP)

$     787,811


$     764,267


$     739,518


$     710,505


$     698,727


Common shares outstanding

32,749,690


32,731,215


32,707,166


31,894,563


31,863,063


 Tangible book value per common share (non-GAAP)

$         24.06


$         23.35


$         22.61


$          22.28


$          21.93















(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.

 

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, 2018


September 30, 2018





Interest


Average




Interest


Average



Average


Income/


Yield/


Average


Income/


Yield/



Balance


Expense


Rate


Balance


Expense


Rate


ASSETS













Earning assets:













  Loans

$           4,973,580


$           66,852


5.33

%

$        4,975,621


$         195,657


5.26

%

  Securities – taxable

432,935


2,246


2.06


437,379


6,100


1.86


  Securities – tax exempt

23,469


184


3.10


26,969


606


3.00


  Interest bearing deposits with banks

1,657,460


8,254


1.98


1,609,596


21,560


1.79


     Total earning assets

7,087,444


77,536


4.34


7,049,565


223,923


4.25















Nonearning assets:













  Cash and due from banks

182,449






184,170






  Interest receivable and other assets

414,096






395,607






  Allowance for loan losses

(52,293)






(52,190)






     Total nonearning assets

544,252






527,587






     Total assets

$            7,631,696






$        7,577,152



















LIABILITIES AND STOCKHOLDERS' EQUITY

Interest bearing liabilities:













  Transaction deposits                      

$           775,122


$               744


0.38

%

$           801,750


$             1,740


0.29

%

  Savings deposits

2,553,401


8,010


1.24


2,502,746


20,305


1.08


  Time deposits

736,060


2,417


1.30


756,041


6,105


1.08


  Short-term borrowings

8,960


42


1.85


6,332


85


1.79


  Junior subordinated debentures

31,959


547


6.80


31,959


1,626


6.80


     Total interest bearing liabilities

4,105,502


11,760


1.14


4,098,828


29,861


0.97















Interest free funds:













  Noninterest bearing deposits

2,610,935






2,594,714






  Interest payable and other liabilities

37,051






32,518






  Stockholders' equity

878,208






851,092






     Total interest free  funds

3,526,194






3,478,324






     Total liabilities and stockholders' equity

$            7,631,696






$        7,577,152






Net interest income



$           65,776






$         194,062




Net interest spread





3.20

%





3.28

%

Effect of interest free funds





0.48

%





0.40

%

Net interest margin





3.68

%





3.68

%















 

Cision View original content:http://www.prnewswire.com/news-releases/bancfirst-corporation-reports-third-quarter-earnings-300733848.html

SOURCE BancFirst

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