BancFirst Corporation Reports Third Quarter Earnings

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October 17, 2019 4:30 PM EDT

OKLAHOMA CITY, Oct. 17, 2019 /PRNewswire/ -- BancFirst Corporation (NASDAQ GS: BANF) reported net income of $33.4 million, or $1.00 diluted earnings per share, for the third quarter of 2019 compared to net income of $32.9 million, or $0.98 diluted earnings per share, for the third quarter of 2018. Net income for the nine months ended September 30, 2019 was $99.4 million, or $2.98 per share, compared to $93.1 million, or $2.78 per share, for the nine months ended September 30, 2018. On August 15, 2019 the Company completed the acquisition of Pegasus Bank in Dallas, Texas. As a result, the third quarter of 2019 included one-time acquisition related expenses of approximately $3.1 million, which reduced diluted earnings per share by approximately 7 cents for the quarter and the year. 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.

The Company's net interest income for the third quarter of 2019 increased to $72.3 million compared to $65.7 million for the third quarter of 2018. The net interest margin for the quarter was 3.89% compared to 3.68% a year ago. The increase in margin was primarily due to the higher average federal funds rate in the third quarter of 2019 when compared to the same period in 2018. The provision for loan losses for the third quarter of 2019 was $2.8 million compared to $747,000 a year ago. The increase in provision was primarily due to downgrades of a few commercial loans. Net charge-offs for the full year of 2019 were 0.05% of average loans compared to 0.04% of average loans in 2018. Net charge-offs for the third quarter of 2019 were 0.04% of average loans compared to 0.02% of average loans in 2018. Noninterest income for the quarter totaled $35.6 million, compared to $32.8 million last year. The increase in noninterest income was primarily due to growth in debit card usage fees and sweep fees. Noninterest expense for the quarter totaled $62.2 million compared to $55.8 million last year. The increase in noninterest expense was primarily due to salary increases in 2019 and acquisition related expenses.

At September 30, 2019, the Company's total assets were $8.4 billion, an increase of $814.6 million from December 31, 2018. Securities of $555.6 million were down $216.6 million from December 31, 2018. Loans totaled $5.6 billion, an increase of $638.7 million from December 31, 2018. Deposits totaled $7.3 billion, an increase of $725.2 million from the December 31, 2018 total. The Company's total stockholders' equity was $979.8 million, an increase of $77.0 million over December 31, 2018.

On August 15, 2019, BancFirst Corporation acquired Pegasus Bank ("Pegasus"), for an aggregate cash purchase price of $123.5 million. Pegasus is a Texas state-chartered bank with three banking locations in Dallas, Texas. Upon acquisition, Pegasus had approximately $651.1 million in total assets, $389.9 million in loans, and $603.9 million in deposits. The Bank will continue to operate as "Pegasus Bank" under a separate Texas state-charter and remain an independent subsidiary of BancFirst Corporation. BancFirst Corporation intends to provide an appropriate amount of capital to increase Pegasus Bank's ability to approve larger loans and allow Pegasus to continue to grow their assets.

Asset quality remained strong during the third quarter of 2019. Nonperforming and restructured assets represented 0.67% of total assets at September 30, 2019, virtually unchanged from the prior year. The allowance to total loans was 0.99% down slightly from 1.03% at year-end 2018. The allowance to nonperforming and restructured loans was 114.06% compared to 136.29% at year-end 2018.

BancFirst Corporation CEO David Harlow commented, "The Company reported strong results in the third quarter. Asset quality remained solid and our margin was stable despite the two 25 bps Fed Funds decreases during the quarter. We are pleased to have closed the previously announced Pegasus acquisition during the quarter and look forward to the growth opportunities the Dallas market provides the Company going forward."

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 108 banking locations serving 58 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)

2019

2019

2019

2018

2018

3rd Qtr

2nd Qtr

1st Qtr

4th Qtr

3rd Qtr

Condensed Income Statements:

Net interest income

$ 72,287

$ 68,792

$ 66,903

$ 66,888

$ 65,673

Provision for loan losses

2,758

2,433

1,684

1,516

747

Non-interest income:

Trust revenue

3,490

3,250

3,177

3,023

3,281

Service charges on deposits

19,866

19,114

17,663

18,554

18,103

Securities transactions

--

821

--

10

(64)

Income from sales of loans

964

868

698

649

800

Insurance commissions

5,535

4,420

5,265

4,593

5,207

Cash management

4,430

4,402

3,776

3,338

3,383

Other

1,342

1,202

1,422

1,684

2,091

Total noninterest income

35,627

34,077

32,001

31,851

32,801

Non-interest expense:

Salaries and employee benefits

40,354

36,124

36,171

35,530

35,051

Occupancy expense, net

3,386

2,953

2,627

3,307

3,386

Depreciation

3,268

3,015

2,985

2,965

2,733

Amortization of intangible assets

842

758

759

777

740

Data processing services

1,467

1,262

1,480

1,140

1,418

Net expense from other real estate owned

26

97

(484)

130

64

Marketing and business promotion

2,047

1,919

2,261

2,030

1,997

Deposit insurance

(81)

544

533

571

597

Other

10,882

9,936

9,874

9,716

9,823

Total noninterest expense

62,191

56,608

56,206

56,166

55,809

Income before income taxes

42,965

43,828

41,014

41,057

41,918

Income tax expense

9,597

9,661

9,177

8,332

9,035

Net income

$ 33,368

$ 34,167

$ 31,837

$ 32,725

$ 32,883

Per Common Share Data:

Net income-basic

$ 1.02

$ 1.04

$ 0.98

$ 1.00

$ 1.01

Net income-diluted

1.00

1.02

0.96

0.98

0.98

Cash dividends declared

0.32

0.30

0.30

0.30

0.30

Common shares outstanding

32,644,018

32,639,588

32,617,788

32,603,926

32,749,690

Average common shares outstanding -

Basic

32,641,902

32,629,146

32,612,399

32,721,626

32,742,480

Diluted

33,327,213

33,317,193

33,292,852

33,423,458

33,504,143

Performance Ratios:

Return on average assets

1.65

%

1.78

%

1.69

%

1.70

%

1.71

%

Return on average equity

13.80

14.54

14.08

14.48

14.86

Net interest margin

3.89

3.89

3.85

3.77

3.68

Efficiency ratio

57.63

55.03

56.83

56.88

56.67

BancFirst Corporation

Summary Financial Information

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

Nine months endedSeptember 30,

2019

2018

Condensed Income Statements:

Net interest income

$ 207,982

$ 193,588

Provision for loan losses

6,875

2,286

Non-interest income:

Trust revenue

9,917

9,806

Service charges on deposits

56,643

52,293

Securities transactions

821

37

Income from sales of loans

2,530

2,253

Insurance commissions

15,220

14,333

Cash management

12,608

9,785

Other

3,966

4,841

Total noninterest income

101,705

93,348

Non-interest expense:

Salaries and employee benefits

112,649

104,017

Occupancy expense, net

8,966

10,184

Depreciation

9,268

7,572

Amortization of intangible assets

2,359

2,232

Data processing services

4,209

3,816

Net expense from other real estate owned

(361)

109

Marketing and business promotion

6,227

5,998

Deposit insurance

996

1,856

Other

30,692

30,171

Total noninterest expense

175,005

165,955

Income before income taxes

127,807

118,695

Income tax expense

28,435

25,606

Net income

$ 99,372

$ 93,089

Per Common Share Data:

Net income-basic

$ 3.04

$ 2.85

Net income-diluted

2.98

2.78

Cash dividends declared

0.92

0.72

Common shares outstanding

32,644,018

32,749,690

Average common shares outstanding -

Basic

32,627,924

32,678,310

Diluted

33,314,298

33,430,761

Performance Ratios:

Return on average assets

1.71

%

1.64

%

Return on average stockholders' equity

14.14

14.62

Net interest margin

3.88

3.68

Efficiency ratio

56.51

57.84

BancFirst Corporation

Summary Financial Information

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

2019

2019

2019

2018

2018

3rd Qtr

2nd Qtr

1st Qtr

4th Qtr

3rd Qtr

Balance Sheet Data:

Total assets

$ 8,388,816

$ 7,642,021

$ 7,709,000

$ 7,574,258

$ 7,602,438

Interest-bearing deposits with banks

1,476,340

1,518,998

1,291,447

1,195,824

1,607,157

Debt securities

555,575

425,154

724,872

772,132

477,080

Total loans

5,622,897

5,105,302

5,050,221

4,984,150

4,952,267

Allowance for loan losses

(55,928)

(55,108)

(52,915)

(51,389)

(51,875)

Deposits

7,330,677

6,613,613

6,706,386

6,605,495

6,643,131

Stockholders' equity

979,752

956,380

927,927

902,789

884,801

Book value per common share

30.01

29.30

28.45

27.69

27.02

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

24.77

26.40

25.52

24.74

24.06

Balance Sheet Ratios:

Average loans to deposits

77.68

%

76.07

%

75.34

%

74.24

%

74.50

%

Average earning assets to total assets

92.23

92.43

92.42

92.48

92.87

Average stockholders' equity to average assets

11.96

12.25

12.01

11.76

11.51

Asset Quality Data:

Past due loans

$ 11,214

$ 2,663

$ 2,170

$ 1,916

$ 4,073

Nonaccrual loans

20,316

17,998

21,594

22,603

26,880

Restructured loans

17,504

16,486

14,552

13,188

13,557

Total nonperforming and restructured loans

49,034

37,147

38,316

37,707

44,510

Other real estate owned and repossessed assets

7,056

7,004

6,433

6,873

7,072

Total nonperforming and restructured assets

56,090

44,151

44,749

44,580

51,582

Nonperforming and restructured loans to total loans

0.87

%

0.73

%

0.76

%

0.76

%

0.90

%

Nonperforming and restructured assets to total assets

0.67

0.58

0.58

0.59

0.68

Allowance to total loans

0.99

1.08

1.05

1.03

1.05

Allowance to nonperforming and restructured loans

114.06

148.35

138.10

136.29

116.55

Net charge-offs to average loans

0.04

0.01

0.00

0.04

0.02

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

Stockholders' equity

$ 979,752

$ 956,380

$ 927,927

$ 902,789

$ 884,801

Less goodwill

147,013

79,749

79,749

79,749

79,733

Less intangible assets, net

24,025

14,936

15,701

16,470

17,257

Tangible stockholders' equity (non-GAAP)

$ 808,714

$ 861,695

$ 832,477

$ 806,570

$ 787,811

Common shares outstanding

32,644,018

32,639,588

32,617,788

32,603,926

32,749,690

Tangible book value per common share (non-GAAP)

$ 24.77

$ 26.40

$ 25.52

$ 24.74

$ 24.06

(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, 2019

September 30, 2019

Interest

Average

Interest

Average

Average

Income/

Yield/

Average

Income/

Yield/

Balance

Expense

Rate

Balance

Expense

Rate

ASSETS

Earning assets:

Loans

$ 5,376,278

$ 75,446

5.57

%

$ 5,158,737

$ 215,462

5.58

%

Securities – taxable

427,152

2,361

2.19

613,365

10,551

2.30

Securities – tax exempt

17,399

130

2.96

19,687

439

2.98

Interest bearing deposits with banks

1,577,446

8,705

2.19

1,397,739

24,590

2.35

Total earning assets

7,398,275

86,642

4.65

7,189,528

251,042

4.67

Nonearning assets:

Cash and due from banks

178,862

178,826

Interest receivable and other assets

500,067

469,615

Allowance for loan losses

(56,056)

(53,814)

Total nonearning assets

622,873

594,627

Total assets

$ 8,021,148

$ 7,784,155

LIABILITIES AND STOCKHOLDERS' EQUITY

Interest bearing liabilities:

Transaction deposits

$ 737,162

$ 646

0.35

%

$ 743,158

$ 1,967

0.35

%

Savings deposits

2,835,855

10,127

1.42

2,700,393

30,852

1.53

Time deposits

690,867

2,871

1.65

688,056

8,164

1.59

Short-term borrowings

1,063

7

2.72

1,650

29

2.31

Junior subordinated debentures

26,804

491

7.27

26,804

1,474

7.35

Total interest bearing liabilities

4,291,751

14,142

1.31

4,160,061

42,486

1.37

Interest free funds:

Noninterest bearing deposits

2,720,830

2,643,189

Interest payable and other liabilities

49,262

41,138

Stockholders' equity

959,305

939,767

Total interest free funds

3,729,397

3,624,094

Total liabilities and stockholders' equity

$ 8,021,148

$ 7,784,155

Net interest income

$ 72,500

$ 208,556

Net interest spread

3.34

%

3.30

%

Effect of interest free funds

0.55

%

0.58

%

Net interest margin

3.89

%

3.88

%

Cision View original content:http://www.prnewswire.com/news-releases/bancfirst-corporation-reports-third-quarter-earnings-300940898.html

SOURCE BancFirst


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