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BancFirst Corporation Reports Fourth Quarter Earnings

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January 17, 2019 4:30 PM EST

OKLAHOMA CITY, Jan. 17, 2019 /PRNewswire/ -- BancFirst Corporation (NASDAQ GS: BANF) reported net income of $32.7 million, or $0.98 diluted earnings per share, for the fourth quarter of 2018 compared to net income of $19.5 million, or $0.59 diluted earnings per share, for the fourth quarter of 2017. Net income for the fourth quarter of 2017 included a write down on deferred tax assets of $4.3 million due to the signing of the Tax Cuts and Jobs Act, which reduced the corporate tax rate beginning in 2018. Net income for the year ended December 31, 2018 was $125.8 million, or $3.76 diluted earnings per share, compared to $86.4 million, or $2.65 diluted earnings per share, for the year ended December 31, 2017. On January 11, 2018 the Company completed the acquisitions of two Oklahoma banking corporations. Consequently, 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 year ended December 31, 2017 included the effects of favorable resolutions of three problem loans which resulted in principal recovery of $894,000 and unaccrued interest income of $2.7 million and also included a gain of $2.7 million, net of income tax and fees, from the sale of an investment by Council Oak Investment Corporation, a wholly-owned subsidiary of BancFirst.

The Company's net interest income for the fourth quarter of 2018 increased to $68.9 million compared to $58.7 million for the fourth quarter of 2017. The net interest margin for the quarter was 3.77% compared to 3.48% 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 fourth quarter of 2018 was $1.5 million compared to $3.3 million a year ago.  Net charge-offs decreased slightly to 0.04% of average loans for the fourth quarter of 2018 compared to 0.06% for the fourth quarter of 2017. Noninterest income for the quarter totaled $31.9 million, compared to $32.8 million last year. The decrease in noninterest income was due to the investment gain in 2017 described above, offset by growth in debit card usage fees, insurance commissions and cash management revenue in 2018. Noninterest expense for the quarter totaled $56.2 million compared to $51.3 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 fourth quarter of 2018 was 20.3% compared to 47.2% for the fourth quarter of 2017. The decrease in the effective tax rate compared to the fourth quarter of 2017 was due to the change in tax rates from the Tax Cuts and Jobs Act and a write down on deferred tax assets described above. 

At December 31, 2018, the Company's total assets were $7.6 billion, an increase of $321.1 million from December 31, 2017. The increase in total assets was primarily related to the acquisitions during the first quarter of 2018. Securities were $772.1 million, an increase of $307.8 million from December 31, 2017. The increase in securities was primarily related to a purchase of short term treasury securities towards the end of the year with approximate maturities of six months. Loans totaled $5.0 billion, an increase of $256.0 million over December 31, 2017, deposits totaled $6.6 billion, an increase of $190.5 million over the December 31, 2017 total, both increases were primarily related to the acquisitions. The Company's total stockholders' equity was $902.8 million, an increase of $127.2 million over December 31, 2017.

Asset quality remained strong during the fourth quarter of 2018. Nonperforming and restructured assets were 0.59% of total assets at December 31, 2018 compared to 0.61% at December 31, 2017. The allowance to total loans was 1.03% compared to 1.09% at year-end 2017. The allowance to nonperforming and restructured loans was 136.3% 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, "Fueled by margin expansion as a result of rising interest rates, a reduced corporate income tax rate as a result of the Tax Cuts and Jobs Act and a stable Oklahoma economy, 2018 was a record earnings year for our company."

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

2018

2017

4th Qtr 

3rd Qtr 

2nd Qtr 

1st Qtr 

4th Qtr 

 Condensed Income Statements: 

 Net interest income 

$               68,888

$               65,673

$               64,880

$               63,035

$               58,699

 Provision for loan losses 

1,516

747

1,225

314

3,323

 Non-interest income:

Trust revenue

3,023

3,281

3,396

3,129

3,073

Service charges on deposits

18,554

18,103

17,537

16,653

16,693

Securities transactions

10

(64)

115

(14)

4,412

Income from sales of loans

649

800

802

651

741

Insurance commissions

4,593

5,207

3,927

5,199

3,917

Cash management

3,338

3,383

3,381

3,021

2,798

Other

1,684

2,091

1,279

1,471

1,199

Total noninterest income 

31,851

32,801

30,437

30,110

32,833

 Non-interest expense:

Salaries and employee benefits

35,530

35,051

34,776

34,190

31,477

Occupancy expense, net

3,307

3,386

3,396

3,402

3,327

Depreciation

2,965

2,733

2,429

2,410

2,298

Amortization of intangible assets

777

740

759

733

547

Data processing services

1,140

1,418

1,195

1,203

1,252

Net expense from other real estate owned

130

64

19

26

101

Marketing and business promotion

2,030

1,997

1,649

2,352

1,825

Deposit insurance

571

597

640

619

578

Other

9,716

9,823

9,393

10,955

9,846

Total noninterest expense 

56,166

55,809

54,256

55,890

51,251

 Income before income taxes 

41,057

41,918

39,836

36,941

36,958

 Income tax expense 

8,332

9,035

9,250

7,321

17,461

 Net income 

$               32,725

$               32,883

$               30,586

$               29,620

$               19,497

 Per Common Share Data: 

 Net income-basic 

$                   1.00

$                   1.01

$                   0.93

$                   0.91

$                   0.61

 Net income-diluted 

0.98

0.98

0.91

0.89

0.59

 Cash dividends declared

0.30

0.30

0.21

0.21

0.21

 Common shares outstanding 

32,603,926

32,749,690

32,731,215

32,707,166

31,894,563

 Average common shares outstanding -

   Basic

32,721,626

32,742,480

32,716,350

32,574,251

31,876,784

   Diluted

33,423,458

33,504,143

33,458,858

33,317,744

32,652,265

 Performance Ratios: 

 Return on average assets

1.70

%

1.71

%

1.62

%

1.60

%

1.07

%

 Return on average equity

14.48

14.86

14.41

14.60

9.97

 Net interest margin 

3.77

3.68

3.70

3.66

3.48

 Efficiency ratio 

56.88

56.67

56.92

60.00

55.99

 

BancFirst Corporation

Summary Financial Information

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

Twelve months ended

December 31,

2018

2017*

 Condensed Income Statements: 

 Net interest income 

$             260,476

$             227,139

 Provision for loan losses 

3,802

8,512

 Non-interest income:

Trust revenue

12,829

12,002

Service charges on deposits

70,847

65,552

Securities transactions

47

4,060

Income from sales of loans

2,902

2,921

Insurance commissions

18,926

16,811

Cash management

13,123

11,155

Other

6,525

5,569

Total noninterest income 

125,199

118,070

 Non-interest expense:

Salaries and employee benefits

139,547

125,149

Occupancy expense, net

13,491

12,591

Depreciation

10,537

9,603

Amortization of intangible assets

3,009

2,188

Data processing services

4,956

4,654

Net expense from other real estate owned

239

421

Marketing and business promotion

8,028

7,389

Deposit insurance

2,427

2,261

Other

39,887

36,136

Total noninterest expense 

222,121

200,392

 Income before income taxes 

159,752

136,305

 Income tax expense 

33,938

49,866

 Net income 

$             125,814

$               86,439

 Per Common Share Data: 

 Net income-basic 

$                   3.85

$                   2.72

 Net income-diluted 

3.76

2.65

 Cash dividends declared

1.02

0.80

 Common shares outstanding 

32,603,926

31,894,563

 Average common shares outstanding -

   Basic

32,689,228

31,813,572

   Diluted

33,430,714

32,568,105

 Performance Ratios: 

 Return on average assets

1.66

%

1.22

%

 Return on average stockholders' equity

14.59

11.52

 Net interest margin 

3.70

3.44

 Efficiency ratio 

57.59

58.05

 

BancFirst Corporation

Summary Financial Information

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

2018

2018

2018

2018

2017

4th Qtr

3rd Qtr

2nd Qtr

1st Qtr 

4th Qtr 

 Balance Sheet Data:

 Total assets

$  7,574,258

$  7,602,438

$  7,622,963

$  7,615,642

$  7,253,156

 Interest-bearing deposits with banks

1,195,824

1,607,157

1,579,577

1,590,240

1,541,771

 Securities

772,132

477,080

462,871

493,101

464,291

 Total loans

4,984,150

4,952,267

5,017,071

4,990,681

4,728,168

 Allowance for loan losses

(51,389)

(51,875)

(52,200)

(51,550)

(51,666)

 Deposits

6,605,495

6,643,131

6,692,174

6,713,052

6,415,045

 Stockholders' equity

902,789

884,801

862,012

838,096

775,629

 Book value per common share

27.69

27.02

26.34

25.62

24.32

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

24.74

24.06

23.35

22.61

22.28

 Balance Sheet Ratios:

 Average loans to deposits

74.24

%

74.76

%

74.38

%

75.42

%

73.63

%

 Average earning assets to total assets

92.48

93.04

93.11

93.14

93.36

 Average stockholders' equity to average assets

11.76

11.23

11.23

10.95

10.78

Asset Quality Data:

 Past due loans

$         1,916

$         4,073

$         2,916

$         3,900

$         2,893

 Nonaccrual loans

22,603

26,880

29,936

31,849

31,943

 Restructured loans

13,188

13,557

14,527

12,945

4,720

 Total nonperforming and restructured loans

37,707

44,510

47,379

48,694

39,556

 Other real estate owned and repossessed assets

6,873

7,072

3,847

3,676

4,424

 Total nonperforming and restructured assets

44,580

51,582

51,226

52,370

43,980

 Nonperforming and restructured loans to total loans

0.76

%

0.90

%

0.94

%

0.98

%

0.84

%

 Nonperforming and restructured assets to total assets

0.59

0.68

0.67

0.69

0.61

 Allowance to total loans

1.03

1.05

1.04

1.03

1.09

 Allowance to nonperforming and restructured loans

136.29

116.55

110.18

105.87

130.62

 Net charge-offs to average loans

0.04

0.02

0.01

0.01

0.06

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

Stockholders' equity

$     902,789

$     884,801

$     862,012

$     838,096

$     775,629

Less goodwill

79,749

79,733

79,733

79,796

54,042

Less intangible assets, net

16,470

17,257

18,012

18,782

11,082

Tangible stockholders' equity (non-GAAP)

$     806,570

$     787,811

$     764,267

$     739,518

$     710,505

Common shares outstanding

32,603,926

32,749,690

32,731,215

32,707,166

31,894,563

 Tangible book value per common share (non-GAAP)

$         24.74

$         24.06

$         23.35

$         22.61

$          22.28

(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

Twelve Months Ended

December 31, 2018

December 31, 2018

Interest

Average

Interest

Average

Average

Income/

Yield/

Average

Income/

Yield/

Balance

Expense

Rate

Balance

Expense

Rate

ASSETS

Earning assets:

  Loans

$           4,941,280

$           67,920

5.45

%

$        4,966,965

$         263,577

5.31

%

  Securities – taxable

480,590

2,708

2.24

448,271

8,808

1.96

  Securities – tax exempt

21,843

165

2.99

25,677

771

3.00

  Interest bearing deposits with banks

1,607,352

9,134

2.25

1,609,030

30,694

1.91

     Total earning assets

7,051,065

79,927

4.50

7,049,943

303,850

4.31

Nonearning assets:

  Cash and due from banks

188,972

185,380

  Interest receivable and other assets

435,767

405,730

  Allowance for loan losses

(51,781)

(52,087)

     Total nonearning assets

572,958

539,023

     Total assets

$            7,624,023

$        7,588,966

LIABILITIES AND STOCKHOLDERS' EQUITY

Interest bearing liabilities:

  Transaction deposits                      

$           757,463

$               721

0.38

%

$           790,587

$             2,461

0.31

%

  Savings deposits

2,544,400

9,157

1.43

2,513,244

29,462

1.17

  Time deposits

716,953

2,434

1.35

746,189

8,539

1.14

  Short-term borrowings

1,677

10

2.31

5,159

95

1.84

  Junior subordinated debentures

31,118

545

6.94

31,747

2,171

6.84

     Total interest bearing liabilities

4,051,611

12,867

1.26

4,086,926

42,728

1.05

Interest free funds:

  Noninterest bearing deposits

2,636,631

2,605,280

  Interest payable and other liabilities

39,185

34,198

  Stockholders' equity

896,596

862,562

     Total interest free  funds

3,572,412

3,502,040

     Total liabilities

       and stockholders' equity

$            7,624,023

$        7,588,966

Net interest income

$           67,060

$         261,122

Net interest spread

3.24

%

3.26

%

Effect of interest free funds

0.53

%

0.44

%

Net interest margin

3.77

%

3.70

%

 

Cision View original content:http://www.prnewswire.com/news-releases/bancfirst-corporation-reports-fourth-quarter-earnings-300780374.html

SOURCE BancFirst


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