BancFirst Corporation Reports Second Quarter Earnings

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July 19, 2018 4:30 PM EDT

OKLAHOMA CITY, July 19, 2018 /PRNewswire/ -- BancFirst Corporation (NASDAQ GS: BANF) reported net income of $30.6 million, or $0.91 diluted earnings per share, for the second quarter of 2018 compared to net income of $23.2 million, or $0.71 diluted earnings per share, for the second quarter of 2017.   Net income for the six months ended June 30, 2018 was $60.2 million, or $1.80 per share, compared to $45.2 million, or $1.39 per share, for the first half of 2017.  On January 11, 2018 the Company completed the acquisitions of two Oklahoma banking corporations. Consequently, the first half of 2018 included one-time acquisition related expenses of approximately $2.1 million, which reduced diluted earnings per share by approximately 5 cents in the first quarter.  Net income for the first half of 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 second quarter of 2018 increased to $64.9 million compared to $56.4 million for the second quarter of 2017. The net interest margin for the quarter was 3.70% compared to 3.43% 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 second quarter of 2018 was $1.2 million compared to $1.8 million a year ago.  Net charge-offs for the quarter were 0.01% of average loans, compared to 0.02% for the second quarter of 2017.  Noninterest income for the quarter totaled $30.4 million, compared to $28.0 million last year. Noninterest expense for the quarter totaled $54.3 million compared to $49.0 million last year. The increase in noninterest expense was due to salary increases in 2018 and the two acquisitions. The Company's effective tax rate was 23.2% compared to 19.8% for the first quarter of 2018 and 31.1% for the second quarter of 2017. The effective tax rate for the first quarter included the effects of stock option exercises during the quarter. The decrease in the effective tax rate compared to the second 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 quarter. 

At June 30, 2018, the Company's total assets were $7.6 billion, an increase of $369.8 million from December 31, 2017. The increase in total assets was primarily related to the acquisitions during the first quarter. Securities of $462.9 million were down slightly from December 31, 2017. Loans totaled $5.0 billion, a modest increase from March 31, 2018. Loan growth for the 6 months ended June 30, 2018 was primarily from acquired loans. Deposits totaled $6.7 billion, an increase of $277.1 million from the December 31, 2017 total, which was primarily related to the acquisitions. The Company's total stockholders' equity was $862.0 million, an increase of $86.4 million over December 31, 2017.

Asset quality remained strong during the second quarter of 2018.  Nonperforming and restructured assets were 0.67% of total assets at June 30, 2018 compared to 0.61% at December 31, 2017. The allowance to total loans was 1.04% compared to 1.09% at year-end 2017. The allowance to nonperforming and restructured loans was 110.2% 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.

BancFirst Corporation CEO David Harlow commented, "While continuing to successfully assimilate our most recent acquisitions, financial momentum continued in the second quarter; again driven by increasing rates, reduced corporate income taxes and a stable Oklahoma economy. The result was both a solid second quarter and first half of 2018."

BancFirst Corporation 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

2017

2017

2017

2nd Qtr 

1st Qtr 

4th Qtr 

3rd Qtr 

2nd Qtr 

 Condensed Income Statements: 

 Net interest income 

$              64,880

$              63,035

$              58,699

$              57,233

$              56,439

 Provision for loan losses 

1,225

314

3,323

3,276

1,841

 Non-interest income:

Trust revenue

3,396

3,129

3,073

3,083

2,894

Service charges on deposits

17,537

16,653

16,693

16,633

16,448

Securities transactions

115

(14)

4,412

(22)

(330)

Income from sales of loans

802

651

741

732

816

Insurance commissions

3,927

5,199

3,917

4,603

3,728

Cash management

3,381

3,021

2,798

2,804

2,799

Other

1,279

1,471

1,199

1,336

1,628

Total noninterest income 

30,437

30,110

32,833

29,169

27,983

 Non-interest expense:

Salaries and employee benefits

34,776

34,190

31,477

31,471

31,547

Occupancy expense, net

3,396

3,402

3,327

3,298

2,992

Depreciation

2,429

2,410

2,298

2,493

2,392

Amortization of intangible assets

759

733

547

547

547

Data processing services

1,195

1,203

1,252

1,110

1,097

Net expense from other real estate owned

19

26

101

68

202

Marketing and business promotion

1,649

2,352

1,825

1,790

1,559

Deposit insurance

640

619

578

553

542

Other

9,393

10,955

9,846

9,270

8,075

Total noninterest expense 

54,256

55,890

51,251

50,600

48,953

 Income before income taxes 

39,836

36,941

36,958

32,526

33,628

 Income tax expense 

9,250

7,321

17,461

10,816

10,446

 Net income 

$              30,586

$              29,620

$              19,497

$              21,710

$              23,182

 Per Common Share Data: 

 Net income-basic 

$                  0.93

$                  0.91

$                  0.61

$                  0.68

$                  0.73

 Net income-diluted 

0.91

0.89

0.59

0.67

0.71

 Cash dividends declared

0.21

0.21

0.21

0.21

0.19

 Common shares outstanding 

32,731,215

32,707,166

31,894,563

31,863,063

31,818,438

 Average common shares outstanding -

   Basic

32,716,350

32,574,251

31,876,784

31,838,392

31,807,610

   Diluted

33,458,858

33,317,744

32,652,265

32,592,277

32,523,376

 Performance Ratios: 

 Return on average assets

1.62

%

1.60

%

1.07

%

1.22

%

1.31

%

 Return on average equity

14.41

14.60

9.97

11.34

12.52

 Net interest margin 

3.70

3.66

3.48

3.46

3.43

 Efficiency ratio 

56.92

60.00

55.99

58.56

57.99

 

BancFirst Corporation

Summary Financial Information

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

Six months ended

June 30,

2018

2017

 Condensed Income Statements: 

 Net interest income 

$            127,915

$            111,207

 Provision for loan losses 

1,539

1,913

 Non-interest income:

Trust revenue

6,525

5,846

Service charges on deposits

34,190

32,226

Securities transactions

101

(330)

Income from sales of loans

1,453

1,448

Insurance commissions

9,126

8,291

Cash management

6,402

5,553

Other

2,750

3,034

Total noninterest income 

60,547

56,068

 Non-interest expense:

Salaries and employee benefits

68,966

62,201

Occupancy expense, net

6,798

5,966

Depreciation

4,839

4,812

Amortization of intangible assets

1,492

1,094

Data processing services

2,398

2,292

Net expense from other real estate owned

45

252

Marketing and business promotion

4,001

3,774

Deposit insurance

1,259

1,130

Other

20,348

17,020

Total noninterest expense 

110,146

98,541

 Income before income taxes 

76,777

66,821

 Income tax expense 

16,571

21,589

 Net income 

$              60,206

$              45,232

 Per Common Share Data: 

 Net income-basic 

$                  1.84

$                  1.43

 Net income-diluted 

1.80

1.39

 Cash dividends declared

0.42

0.38

 Common shares outstanding 

32,731,215

31,818,438

 Average common shares outstanding -

   Basic

32,645,693

31,768,828

   Diluted

33,390,263

32,499,990

 Performance Ratios: 

 Return on average assets

1.61

%

1.29

%

 Return on average stockholders' equity

14.50

12.44

 Net interest margin 

3.68

3.41

 Efficiency ratio 

58.44

58.91

 

BancFirst Corporation

Summary Financial Information

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

2018

2018

2017

2017

2017

2nd Qtr

1st Qtr 

4th Qtr 

3rd Qtr 

2nd Qtr

 Balance Sheet Data:

 Total assets

$  7,622,963

$  7,615,642

$  7,253,156

$  7,132,168

$  7,046,589

 Interest-bearing deposits with banks

1,579,577

1,590,240

1,541,771

1,530,928

1,533,147

 Securities

462,871

493,101

469,995

450,009

451,402

 Total loans

5,017,071

4,990,681

4,728,168

4,658,525

4,587,454

 Allowance for loan losses

(52,200)

(51,550)

(51,666)

(51,255)

(49,005)

 Deposits

6,692,174

6,713,052

6,415,045

6,302,046

6,235,682

 Stockholders' equity

862,012

838,096

775,629

764,414

748,462

 Book value per common share

26.34

25.62

24.32

23.99

23.53

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

23.35

22.61

22.28

21.93

21.44

 Balance Sheet Ratios:

 Average loans to deposits

74.38

%

75.42

%

73.63

%

73.59

%

71.47

%

 Average earning assets to total assets

93.11

93.14

93.36

93.37

93.44

 Average stockholders' equity to average assets

11.23

10.95

10.78

10.74

10.46

Asset Quality Data:

 Past due loans

$        2,916

$        3,900

$        2,893

$        2,122

$       2,217

 Nonaccrual loans

29,936

31,849

31,943

27,665

19,607

 Restructured loans

14,527

12,945

4,720

3,603

3,561

 Total nonperforming and restructured loans

47,379

48,694

39,556

33,390

25,385

 Other real estate owned and repossessed assets

3,847

3,676

4,424

4,099

4,211

 Total nonperforming and restructured assets

51,226

52,370

43,980

37,489

29,596

 Nonperforming and restructured loans to total loans

0.94

%

0.98

%

0.84

%

0.72

%

0.55

%

 Nonperforming and restructured assets to total assets

0.67

0.69

0.61

0.53

0.42

 Allowance to total loans

1.04

1.03

1.09

1.10

1.07

 Allowance to nonperforming and restructured loans

110.18

105.87

130.62

153.50

193.05

 Net charge-offs to average loans

0.01

0.01

0.06

0.02

0.02

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

Stockholders' equity

$     862,012

$     838,096

$     775,629

$     764,414

$        748,462

Less goodwill

79,733

79,796

54,042

54,042

54,042

Less intangible assets, net

18,012

18,782

11,082

11,645

12,203

Tangible stockholders' equity (non-GAAP)

$     764,267

$     739,518

$     710,505

$     698,727

$        682,217

Common shares outstanding

32,731,215

32,707,166

31,894,563

31,863,063

31,818,438

 Tangible book value per common share (non-GAAP)

$         23.35

$         22.61

$          22.28

$          21.93

$            21.44

(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

Six Months Ended

June 30, 2018

June 30, 2018

Interest

Average

Interest

Average

Average

Income/

Yield/

Average

Income/

Yield/

Balance

Expense

Rate

Balance

Expense

Rate

ASSETS

Earning assets:

Loans

$          4,959,604

$          65,750

5.32

%

$      4,976,658

$        128,805

5.22

%

  Securities – taxable

440,420

1,956

1.78

439,638

3,854

1.77

  Securities – tax exempt

28,060

206

2.94

28,748

422

2.96

  Interest bearing deposits with banks

1,633,030

7,420

1.82

1,585,267

13,306

1.69

     Total earning assets

7,061,114

75,332

4.28

7,030,311

146,387

4.20

Nonearning assets:

  Cash and due from banks

184,547

185,045

  Interest receivable and other assets

389,845

386,210

  Allowance for loan losses

(51,802)

(52,138)

     Total nonearning assets

522,590

519,117

     Total assets

$            7,583,704

$        7,549,428

LIABILITIES AND STOCKHOLDERS' EQUITY

Interest bearing liabilities:

  Transaction deposits                      

$          820,681

$               602

0.29

%

$           815,284

$               996

0.25

%

  Savings deposits

2,502,282

7,189

1.15

2,476,998

12,295

1.00

  Time deposits

754,710

1,919

1.02

766,197

3,688

0.97

  Short-term borrowings

2,030

8

1.55

4,996

43

1.74

  Junior subordinated debentures

31,959

544

6.83

31,959

1,079

6.81

     Total interest bearing liabilities

4,111,662

10,262

1.00

4,095,434

18,101

0.89

Interest free funds:

  Noninterest bearing deposits

2,590,698

2,586,470

  Interest payable and other liabilities

29,752

30,215

  Stockholders' equity

851,592

837,309

     Total interest free  funds

3,472,042

3,453,994

     Total liabilities and stockholders' equity

$            7,583,704

$        7,549,428

Net interest income

$           65,070

$         128,286

Net interest spread

3.28

%

3.31

%

Effect of interest free funds

0.42

%

0.37

%

Net interest margin

3.70

%

3.68

%

 

Cision View original content:http://www.prnewswire.com/news-releases/bancfirst-corporation-reports-second-quarter-earnings-300683833.html

SOURCE BancFirst


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