BancFirst Corporation Reports First Quarter Earnings
OKLAHOMA CITY, April 21, 2020 /PRNewswire/ -- BancFirst Corporation (NASDAQ GS:BANF) reported net income of $22.6 million, or $0.68 diluted earnings per share, for the first quarter of 2020 compared to net income of $31.8 million, or $0.96 diluted earnings per share, for the first quarter of 2019. The results for the first quarter of 2020 were negatively impacted primarily by a higher provision for loan losses. The first quarter of 2020 includes the net income of Pegasus Bank in Dallas, Texas, which was acquired on August 15, 2019.
The provision for loan losses for the first quarter of 2020 was $19.6 million compared to $1.7 million a year ago. BancFirst Corporation Executive Chairman David Rainbolt commented, "Even though it was optional, we have elected to go ahead and adopt CECL for our loan loss reserve methodology. It is naïve to think that our region will not experience a residual economic effect from the combination of both the COVID-19 pandemic and low energy prices. The forward-looking view afforded by CECL lets us factor in our expectations about that future economy and its effect on loan losses. Our provision this quarter is based on a modestly optimistic assumption on the timing of an end to the pandemic, as well as the magnitude of the government's stimulus response to it. To the extent the amount of time the economy remains shuttered is more extended than our current base projection, we will see a continuation of higher than normal provision in future periods."
The Company's net interest income for the first quarter of 2020 increased to $74.1 million compared to $66.9 million for the first quarter of 2019. The net interest margin for the quarter was 3.82% compared to 3.85% a year ago. Net charge-offs for the quarter were less than 0.02% of average loans, compared to less than 0.01% of average loans for the first quarter of 2019. Noninterest income for the quarter totaled $35.1 million, compared to $32.0 million last year. Noninterest expense for the quarter totaled $61.4 million compared to $56.2 million last year. The increase in noninterest expense was due to salary increases in 2020 and acquisition related expenses related to the purchase of assets from The Citizens State Bank of Okemah, Oklahoma, which were partially offset by a $2.2 million gain on a sale of property carried in other real estate owned. The Company's effective tax rate was 20.0% compared to 22.4% for the first quarter of 2019.
At March 31, 2020, the Company's total assets were $8.7 billion, an increase of $103.3 million from December 31, 2019. Debt securities of $592.0 million were up $100.4 million from December 31, 2019. Loans totaled $6.0 billion, an increase of $332.9 million from December 31, 2019. Deposits totaled $7.6 billion, an increase of $89.6 million from the December 31, 2019 total. The Company's total stockholders' equity was $1.0 billion, an increase of $18.4 million over December 31, 2019.
Nonaccrual loans represent 0.75% of total loans at March 31, 2020, up from 0.32% at year-end 2019. The increase in nonaccrual loans was primarily due to downgrades of a few energy loans. The allowance to total loans was 1.17% up from 0.96% at year-end 2019. The allowance to nonaccrual loans was 155.11% compared to 301.91% at year-end 2019.
BancFirst Corporation CEO David Harlow commented, "During the month of March and into April as the impact of COVID-19 on the overall economy became more evident, the Company acted on several fronts. Specifically, we began the identification of all loan customers impacted by COVID-19 that resulted in a modification of loan terms and coded those loans in accordance with interagency guidelines. Importantly, we created a task force that has worked 24/7 to facilitate the Paycheck Protection Program through the Small Business Administration. Through that program that began on April 3 and ended on April 16 we approved 5,268 loans totaling approximately $829 million.
"Although strictly limiting lobby traffic and precisely following CDC guidance, we are fulfilling the duty of being designated as critical infrastructure by the Department of Homeland Security. Additionally, we have implemented an enhanced paid leave program for all employees, added incentive pay for all hourly employees in retail locations, and initiated a childcare stipend for hourly employees at work with school age children at home."
On March 5, 2020, BancFirst Corporation purchased assets and assumed liabilities of The Citizens State Bank, Okemah, Oklahoma. The Company purchased $47.9 million in assets and $23.5 million in loans and assumed $47.9 million in deposits.
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 109 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 | 2019 | 2019 | 2019 | 2019 | ||||||
1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | ||||||
Condensed Income Statements: | ||||||||||
Net interest income | $ 74,073 | $ 73,939 | $ 72,287 | $ 68,792 | $ 66,903 | |||||
Provision for loan losses | 19,583 | 1,412 | 2,758 | 2,433 | 1,684 | |||||
Non-interest income: | ||||||||||
Trust revenue | 3,655 | 3,682 | 3,490 | 3,250 | 3,177 | |||||
Service charges on deposits | 18,804 | 19,938 | 19,866 | 19,114 | 17,663 | |||||
Securities transactions | 50 | (9) | -- | 821 | -- | |||||
Income from sales of loans | 781 | 1,089 | 964 | 868 | 698 | |||||
Insurance commissions | 5,676 | 5,076 | 5,535 | 4,420 | 5,265 | |||||
Cash management | 4,320 | 4,258 | 4,430 | 4,402 | 3,776 | |||||
Other | 1,859 | 1,490 | 1,342 | 1,202 | 1,422 | |||||
Total noninterest income | 35,145 | 35,524 | 35,627 | 34,077 | 32,001 | |||||
Non-interest expense: | ||||||||||
Salaries and employee benefits | 39,756 | 40,375 | 40,354 | 36,124 | 36,171 | |||||
Occupancy expense, net | 3,546 | 3,738 | 3,386 | 2,953 | 2,627 | |||||
Depreciation | 3,491 | 3,355 | 3,268 | 3,015 | 2,985 | |||||
Amortization of intangible assets | 964 | 1,007 | 842 | 758 | 759 | |||||
Data processing services | 1,692 | 1,634 | 1,467 | 1,262 | 1,480 | |||||
Net expense from other real estate owned | (2,135) | (424) | 26 | 97 | (484) | |||||
Marketing and business promotion | 2,355 | 2,327 | 2,047 | 1,919 | 2,261 | |||||
Deposit insurance | 136 | 147 | (81) | 544 | 533 | |||||
Other | 11,580 | 14,137 | 10,882 | 9,936 | 9,874 | |||||
Total noninterest expense | 61,385 | 66,296 | 62,191 | 56,608 | 56,206 | |||||
Income before income taxes | 28,250 | 41,755 | 42,965 | 43,828 | 41,014 | |||||
Income tax expense | 5,642 | 6,248 | 9,597 | 9,661 | 9,177 | |||||
Net income | $ 22,608 | $ 35,507 | $ 33,368 | $ 34,167 | $ 31,837 | |||||
Per Common Share Data: | ||||||||||
Net income-basic | $ 0.69 | $ 1.09 | $ 1.02 | $ 1.04 | $ 0.98 | |||||
Net income-diluted | 0.68 | 1.07 | 1.00 | 1.02 | 0.96 | |||||
Cash dividends declared | 0.32 | 0.32 | 0.32 | 0.30 | 0.30 | |||||
Common shares outstanding | 32,646,691 | 32,694,268 | 32,644,018 | 32,639,588 | 32,617,788 | |||||
Average common shares outstanding - | ||||||||||
Basic | 32,679,587 | 32,673,438 | 32,641,902 | 32,629,146 | 32,612,399 | |||||
Diluted | 33,287,359 | 33,366,848 | 33,327,213 | 33,317,193 | 33,292,852 | |||||
Performance Ratios: | ||||||||||
Return on average assets | 1.07 | % | 1.66 | % | 1.65 | % | 1.78 | % | 1.69 | % |
Return on average equity | 8.87 | 13.76 | 13.80 | 14.54 | 14.08 | |||||
Net interest margin | 3.82 | 3.78 | 3.89 | 3.89 | 3.85 | |||||
Efficiency ratio | 56.20 | 60.56 | 57.63 | 55.03 | 56.83 | |||||
BancFirst Corporation Summary Financial Information (Dollars in thousands, except per share and share data - Unaudited) | ||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | ||||||
1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | ||||||
Balance Sheet Data: | ||||||||||
Total assets | $ 8,669,096 | $ 8,565,758 | $ 8,388,816 | $ 7,642,021 | $ 7,709,000 | |||||
Interest-bearing deposits with banks | 1,356,826 | 1,646,238 | 1,476,340 | 1,518,998 | 1,291,447 | |||||
Debt securities | 591,987 | 491,626 | 555,575 | 425,154 | 724,872 | |||||
Total loans | 6,006,065 | 5,673,144 | 5,622,897 | 5,105,302 | 5,050,221 | |||||
Allowance for loan losses | (70,080) | (54,238) | (55,928) | (55,108) | (52,915) | |||||
Deposits | 7,573,200 | 7,483,635 | 7,330,677 | 6,613,613 | 6,706,386 | |||||
Stockholders' equity | 1,023,380 | 1,004,989 | 979,752 | 956,380 | 927,927 | |||||
Book value per common share | 31.35 | 30.74 | 30.01 | 29.30 | 28.45 | |||||
Tangible book value per common share (non-GAAP)(1) | 26.09 | 25.50 | 24.77 | 26.40 | 25.52 | |||||
Balance Sheet Ratios: | ||||||||||
Average loans to deposits | 77.75 | % | 75.83 | % | 76.97 | % | 76.07 | % | 75.34 | % |
Average earning assets to total assets | 91.51 | 91.50 | 92.23 | 92.43 | 92.42 | |||||
Average stockholders' equity to average assets | 12.02 | 12.04 | 11.96 | 12.25 | 12.01 | |||||
Asset Quality Data: | ||||||||||
Past due loans | $ 10,065 | $ 11,834 | $ 11,215 | $ 2,663 | $ 2,170 | |||||
Nonaccrual loans | 45,181 | 17,965 | 19,995 | 17,998 | 21,594 | |||||
Restructured loans | 3,158 | 18,010 | 17,504 | 16,486 | 14,552 | |||||
Total nonperforming and restructured loans | 58,404 | 47,809 | 48,714 | 37,147 | 38,316 | |||||
Other real estate owned and repossessed assets | 6,001 | 6,073 | 7,055 | 7,004 | 6,433 | |||||
Total nonperforming and restructured assets | 64,405 | 53,882 | 55,769 | 44,151 | 44,749 | |||||
Nonaccrual loans to total loans | 0.75 | % | 0.32 | % | 0.36 | % | 0.35 | % | 0.43 | % |
Nonperforming and restructured loans to total loans | 0.97 | 0.84 | 0.87 | 0.73 | 0.76 | |||||
Nonperforming and restructured assets to total assets | 0.74 | 0.63 | 0.66 | 0.58 | 0.58 | |||||
Allowance to total loans | 1.17 | 0.96 | 0.99 | 1.08 | 1.05 | |||||
Allowance to nonaccrual loans | 155.11 | 301.91 | 279.72 | 306.20 | 245.05 | |||||
Allowance to nonperforming and restructured loans | 119.99 | 113.45 | 114.81 | 148.35 | 138.10 | |||||
Net charge-offs to average loans | 0.02 | 0.06 | 0.04 | 0.01 | 0.00 | |||||
Reconciliation of Tangible Book Value Per Common Share (non-GAAP)(2): | ||||||||||
Stockholders' equity | $ 1,023,380 | $ 1,004,989 | $ 979,752 | $ 956,380 | $ 927,927 | |||||
Less goodwill | 149,923 | 148,604 | 147,013 | 79,749 | 79,749 | |||||
Less intangible assets, net | 21,850 | 22,608 | 24,025 | 14,936 | 15,701 | |||||
Tangible stockholders' equity (non-GAAP) | $ 851,607 | $ 833,777 | $ 808,714 | $ 861,695 | $ 832,477 | |||||
Common shares outstanding | 32,646,691 | 32,694,268 | 32,644,018 | 32,639,588 | 32,617,788 | |||||
Tangible book value per common share (non-GAAP) | $ 26.09 | $ 25.50 | $ 24.77 | $ 26.40 | $ 25.52 | |||||
(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 | |||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||
March 31, 2020 | |||||||||||||||||||||||
Average | Income/ | Yield/ | |||||||||||||||||||||
Balance | Expense | Rate | |||||||||||||||||||||
ASSETS | |||||||||||||||||||||||
Earning assets: | |||||||||||||||||||||||
Loans | $ 5,770,502 | $ 76,658 | 5.33 | % | |||||||||||||||||||
Securities – taxable | 506,893 | 2,577 | 2.04 | ||||||||||||||||||||
Securities – tax exempt | 17,474 | 136 | 3.12 | ||||||||||||||||||||
Interest bearing deposits with banks | 1,493,771 | 4,769 | 1.28 | ||||||||||||||||||||
Total earning assets | 7,788,640 | 84,140 | 4.33 | ||||||||||||||||||||
Nonearning assets: | |||||||||||||||||||||||
Cash and due from banks | 191,682 | ||||||||||||||||||||||
Interest receivable and other assets | 582,200 | ||||||||||||||||||||||
Allowance for loan losses | (51,515) | ||||||||||||||||||||||
Total nonearning assets | 722,367 | ||||||||||||||||||||||
Total assets | $ 8,511,007 | ||||||||||||||||||||||
LIABILITIES AND | |||||||||||||||||||||||
STOCKHOLDERS' EQUITY | |||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||
Transaction deposits | $ 815,827 | $ 515 | 0.25 | % | |||||||||||||||||||
Savings deposits | 3,020,093 | 6,249 | 0.83 | ||||||||||||||||||||
Time deposits | 697,821 | 2,636 | 1.51 | ||||||||||||||||||||
Short-term borrowings | 2,448 | 7 | 1.18 | ||||||||||||||||||||
Junior subordinated debentures | 26,804 | 491 | 7.35 | ||||||||||||||||||||
Total interest-bearing liabilities | 4,562,993 | 9,898 | 0.87 | ||||||||||||||||||||
Interest-free funds: | |||||||||||||||||||||||
Noninterest bearing deposits | 2,888,342 | ||||||||||||||||||||||
Interest payable and other liabilities | 36,879 | ||||||||||||||||||||||
Stockholders' equity | 1,022,793 | ||||||||||||||||||||||
Total interest free-funds | 3,948,014 | ||||||||||||||||||||||
Total liabilities and stockholders' equity | $ 8,511,007 | ||||||||||||||||||||||
Net interest income | $ 74,242 | ||||||||||||||||||||||
Net interest spread | 3.46 | % | |||||||||||||||||||||
Effect of interest free funds | 0.36 | % | |||||||||||||||||||||
Net interest margin | 3.82 | % | |||||||||||||||||||||
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SOURCE BancFirst
