BANCFIRST CORPORATION REPORTS FOURTH QUARTER EARNINGS
OKLAHOMA CITY, Jan. 18, 2024 /PRNewswire/ -- BancFirst Corporation (NASDAQ GS:BANF) reported net income of $48.9 million, or $1.46 diluted earnings per share, for the fourth quarter of 2023 compared to net income of $57.1 million, or $1.70 diluted earnings per share, for the fourth quarter of 2022. Net income for the year ended December 31, 2023 was $212.5 million, or $6.34 diluted earnings per share, compared to $193.1 million, or $5.77 diluted earnings per share, for the year ended December 31, 2022.
The Company's net interest income for the fourth quarter of 2023 decreased to $105.1 million compared to $110.4 million for the quarter ended December 31, 2022. This decrease resulted from an increase in both the volume and rate of interest bearing deposits. The net interest margin for the quarter was 3.67% compared to 3.83% a year ago. For the fourth quarter of 2023, the Company did not record recognize a provision for credit losses. In the fourth quarter of 2022, the Company recorded a provision for credit loss of $3.8 million due largely to loan growth.
Noninterest income for the quarter totaled $45.2 million, compared to $48.2 million last year. The decrease in noninterest income was primarily due to a reduction of interchange fees of approximately $5.3 million related to the impact of the Durbin amendment. Trust revenue, sweep fees and insurance commissions were all up modestly.
Noninterest expense for the quarter increased to $89.8 million compared to $84.6 million last year. The increase was primarily related to growth in salaries and employee benefits of $2.7 million. In addition, the quarter included a write down on other real estate owned of $5.2 million compared to $3.7 million during the fourth quarter of 2022.
The Company's effective tax rate for the period was 18.99% compared to 18.55% for the fourth quarter of 2022. During the first quarter of 2023, the Company adopted ASU 2023-02 which increased income tax expense.
At December 31, 2023, the Company's total assets were $12.4 billion, virtually unchanged from December 31, 2022. Loans totaled $7.7 billion, an increase of $710.3 million from December 31, 2022. Liquidity remained strong with cash of $2.4 billion and an average loan to deposit ratio of 70.5% for the quarter ended December 31, 2023. Deposits totaled $10.7 billion, compared to $11.0 billion at December 31, 2022. Sweep accounts totaled $4.3 billion at December 31, 2023 up $612.8 million from the prior year. The Company continues to fund itself with community based deposits and does not use brokered or reciprocal deposits. The Company's total stockholders' equity was $1.4 billion, an increase of $183.1 million from December 31, 2022.
Asset quality remained strong with nonaccrual loans of $24.6 million, representing 0.32% of total loans at December 31, 2023. Nonaccrual loans were $15.3 million or 0.22% of total loans at December 31, 2022. The allowance for credit losses to total loans stood at 1.26% at December 31, 2023 compared to 1.33% at December 31, 2022. Net charge-offs were $3.4 million for the year or 0.05% of average loans, compared to $1.4 million or 0.02% of average loans for the year ended December 31, 2022.
BancFirst Corporation CEO David Harlow commented, "The Company reported record earnings in 2023 at $6.34 diluted earnings per share as we successfully managed through the Federal Reserve's continued tightening with the Fed Funds rate reaching its highest level in 22 years in July. The ensuing shift in deposit mix out of non-interest bearing accounts into interest bearing accounts put pressure on the net interest margin as the year progressed which we were able to mitigate somewhat with strong loan growth throughout the year. Absent the impact of the Durbin Amendment on interchange, all major non-interest income categories showed good growth during the year. The Company's earnings will be less in 2024 with a full year of Durbin, ongoing margin pressure anticipated as a result of continued competition for deposits, and increased regulatory compliance costs as a result of crossing the $10 billion asset threshold. Our current outlook on the economy is less pessimistic than a year ago as reflected in our modestly lower CECL reserve percentage at December 31, 2023, when compared to a year ago."
BancFirst Corporation (the Company) is an Oklahoma based financial services holding company. The Company operates three subsidiary banks, BancFirst, an Oklahoma state-chartered bank with 106 banking locations serving 59 communities across Oklahoma, Pegasus Bank, with 3 banking locations in the Dallas Metroplex area and Worthington Bank with 3 locations in the Fort Worth Metroplex area, 1 location in Arlington Texas and 1 location in Denton Texas. 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)
2023 2023 2023 2023 2022
4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr
Condensed Income Statements:
Net interest income $105,066 $104,308 $105,926 $109,156 $110,352
Provision for credit losses 2,312 2,824 2,322 3,776
Noninterest income:
Trust revenue 5,106 4,866 4,590 4,222 4,065
Service charges on deposits 16,841 17,027 22,268 21,231 21,603
Securities transactions (1,364) (361) 110 (213) 1,116
Income from sales of loans 512 734 757 604 657
Insurance commissions 7,220 8,429 6,225 8,741 6,656
Cash management 7,878 8,177 7,927 6,734 6,124
Other 8,964 5,577 6,097 6,509 7,947
Total noninterest income 45,157 44,449 47,974 47,828 48,168
Noninterest expense:
Salaries and employee benefits 50,731 50,200 49,803 49,252 48,019
Occupancy expense, net 5,439 5,487 5,118 4,983 5,259
Depreciation 4,560 4,685 4,769 4,643 4,566
Amortization of intangible assets 887 885 880 880 880
Data processing services 2,224 1,820 2,217 2,107 1,928
Net expense from other real estate owned 7,870 2,720 2,889 2,459 6,235
Marketing and business promotion 2,653 2,034 1,900 2,527 2,465
Deposit insurance 1,332 1,419 1,463 1,613 1,209
Other 14,120 11,965 12,071 11,853 14,044
Total noninterest expense 89,816 81,215 81,110 80,317 84,605
Income before income taxes 60,407 65,230 69,966 74,345 70,139
Income tax expense 11,473 14,242 14,956 16,812 13,013
Net income $48,934 $50,988 $55,010 $57,533 $57,126
Per Common Share Data:
Net income-basic $1.48 $1.55 $1.67 $1.75 $1.74
Net income-diluted 1.46 1.52 1.64 1.72 1.70
Cash dividends declared 0.43 0.43 0.40 0.40 0.40
Common shares outstanding 32,933,018 32,921,393 32,939,256 32,899,493 32,875,560
Average common shares outstanding -
Basic 32,926,326 32,937,149 32,920,497 32,892,857 32,868,087
Diluted 33,483,691 33,539,389 33,467,254 33,462,379 33,503,937
Performance Ratios:
Return on average assets 1.58 % 1.68 % 1.85 % 1.90 % 1.82 %
Return on average stockholders' equity 13.98 14.93 16.59 18.31 18.62
Net interest margin 3.67 3.73 3.87 3.89 3.83
Efficiency ratio 59.79 54.60 52.70 51.16 53.37
BancFirst Corporation
Summary Financial Information
(Dollars in thousands, except per share and share data - Unaudited)
Twelve months ended
December 31,
2023 2022
Condensed Income Statements:
Net interest income $424,456 $373,673
Provision for credit losses 7,458 10,076
Noninterest income:
Trust revenue 18,784 15,645
Service charges on deposits 77,367 86,757
Securities transactions (1,828) (1,833)
Income from sales of loans 2,607 4,548
Insurance commissions 30,615 26,883
Cash management 30,716 19,326
Other 27,147 32,421
Total noninterest income 185,408 183,747
Noninterest expense:
Salaries and employee benefits 199,986 184,976
Occupancy expense, net 21,027 19,326
Depreciation 18,657 18,600
Amortization of intangible assets 3,532 3,448
Data processing services 8,368 7,584
Net expense from other real estate owned 15,938 9,911
Marketing and business promotion 9,114 8,074
Deposit insurance 5,827 4,735
Other 50,009 53,258
Total noninterest expense 332,458 309,912
Income before income taxes 269,948 237,432
Income tax expense 57,483 44,332
Net income $212,465 $193,100
Per Common Share Data:
Net income-basic $6.45 $5.89
Net income-diluted 6.34 5.77
Cash dividends declared 1.66 1.52
Common shares outstanding 32,933,018 32,875,560
Average common shares outstanding -
Basic 32,919,348 32,778,355
Diluted 33,494,487 33,439,496
Performance Ratios:
Return on average assets 1.75 % 1.56 %
Return on average stockholders' equity 15.89 16.11
Net interest margin 3.79 3.29
Efficiency ratio 54.51 55.60
BancFirst Corporation
Summary Financial Information
(Dollars in thousands, except per share and share data - Unaudited)
2023 2023 2023 2023 2022
4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr
Balance Sheet Data:
Total assets $12,372,042 $12,114,602 $12,020,265 $12,332,105 $12,387,863
Interest-bearing deposits with banks 2,172,001 2,134,081 2,188,004 2,623,565 2,909,861
Debt securities 1,555,095 1,525,448 1,570,620 1,618,233 1,540,604
Total loans 7,660,134 7,476,474 7,307,475 7,124,831 6,949,795
Allowance for credit losses (96,800) (97,776) (96,920) (94,760) (92,728)
Deposits 10,700,122 10,534,171 10,475,180 10,610,103 10,974,228
Stockholders' equity 1,433,891 1,370,584 1,340,791 1,310,882 1,250,836
Book value per common share 43.54 41.63 40.70 39.85 38.05
Tangible book value per common share (non-GAAP)(1) 37.50 35.56 34.62 33.73 31.90
Balance Sheet Ratios:
Average loans to deposits 70.52 % 70.61 % 69.85 % 64.54 % 62.25 %
Average earning assets to total assets 92.42 92.39 92.23 92.52 92.14
Average stockholders' equity to average assets 11.30 11.28 11.17 10.36 9.80
Asset Quality Data:
Past due loans $9,542 $12,575 $8,799 $7,258 $7,085
Nonaccrual loans (3) 24,573 16,676 18,047 17,649 15,299
Other real estate owned and repossessed assets 34,200 42,782 41,612 38,874 36,936
Nonaccrual loans to total loans 0.32 % 0.22 % 0.25 % 0.25 % 0.22 %
Allowance to total loans 1.26 1.31 1.33 1.33 1.33
Allowance to nonaccrual loans 393.92 586.34 537.05 536.93 606.10
Net charge-offs to average loans 0.02 0.02 0.01 0.00 0.01
Reconciliation of Tangible Book Value Per Common Share (non-GAAP)(2):
Stockholders' equity $1,433,891 $1,370,584 $1,340,791 $1,310,882 $1,250,836
Less goodwill 182,263 182,263 182,055 182,055 182,055
Less intangible assets, net 16,704 17,591 18,223 19,103 19,983
Tangible stockholders' equity (non-GAAP) $1,234,924 $1,170,730 $1,140,513 $1,109,724 $1,048,798
Common shares outstanding 32,933,018 32,921,393 32,939,256 32,899,493 32,875,560
Tangible book value per common share (non-GAAP) $37.50 $35.56 $34.62 $33.73 $31.90
(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.
(3) Government Agencies guarantee approximately $6.7 million of nonaccrual loans at December 31, 2023.
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, 2023 December 31, 2023
Interest Average Interest Average
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
ASSETS
Earning assets:
Loans $7,532,162 $126,757 6.68 $7,292,871 $467,951 6.42
% %
Debt securities - taxable 1,534,062 9,179 2.37 1,565,697 36,838 2.35
Debt securities - tax exempt 3,635 26 2.84 3,339 91 2.71
Interest bearing deposits with banks and FFS 2,286,826 31,607 5.48 2,343,182 119,486 5.10
Total earning assets 11,356,685 167,569 5.85 11,205,089 624,366 5.57
Nonearning assets:
Cash and due from banks 201,800 204,394
Interest receivable and other assets 827,456 814,419
Allowance for credit losses (97,757) (96,154)
Total nonearning assets 931,499 922,659
Total assets $12,288,184 $12,127,748
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest bearing liabilities:
Transaction deposits $821,237 $2,288 1.11 $849,707 $7,559 0.89
% %
Savings deposits 4,862,828 49,841 4.07 4,598,936 164,291 3.57
Time deposits 916,518 9,170 3.97 797,179 23,196 2.91
Short-term borrowings 3,786 51 5.30 6,432 312 4.84
Subordinated debt 86,091 1,031 4.75 86,070 4,122 4.79
Total interest bearing liabilities 6,690,460 62,381 3.70 6,338,324 199,480 3.15
Interest free funds:
Noninterest bearing deposits 4,080,430 4,343,646
Interest payable and other liabilities 128,809 108,438
Stockholders' equity 1,388,485 1,337,340
Total interest free funds 5,597,724 5,789,424
Total liabilities and stockholders' equity $12,288,184 $12,127,748
Net interest income $105,188 $424,886
Net interest spread 2.15 2.42
% %
Effect of interest free funds 1.52 1.37
% %
Net interest margin 3.67 3.79
% %
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SOURCE BancFirst
