BancFirst Corporation Reports Third Quarter Earnings

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October 19, 2018 2:43 PM EDT

OKLAHOMA CITY, Oct. 19, 2018 /PRNewswire/ -- BancFirst Corporation (NASDAQ GS: BANF) reported net income of $32.9 million, or $0.98 diluted earnings per share, for the third quarter of 2018 compared to net income of $21.7 million, or $0.67 diluted earnings per share, for the third quarter of 2017.   Net income for the nine months ended September 30, 2018 was $93.1 million, or $2.78 diluted earnings per share, compared to $66.9 million, or $2.06 diluted earnings per share, for the nine months ended September 30, 2017. 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.  Net income for the nine months ended September 30, 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 third quarter of 2018 increased to $65.7 million compared to $57.2 million for the third quarter of 2017. The net interest margin for the quarter was 3.68% compared to 3.46% 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 third quarter of 2018 was $747,000 compared to $3.3 million a year ago.  Net charge-offs for the third quarter of 2017 and 2018 were both 0.02% of average loans.  Noninterest income for the quarter totaled $32.8 million, compared to $29.2 million last year. The increase in noninterest income was primarily due to the growth in debit card usage fees, insurance commissions and cash management revenue. Noninterest expense for the quarter totaled $55.8 million compared to $50.6 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 third quarter of 2018 was 21.6% compared to 19.8% for the first quarter of 2018 and 33.3% for the third quarter of 2017. The effective tax rate for the first quarter of 2018 included the effects of stock option exercises during the quarter. The decrease in the effective tax rate compared to the third 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 third quarter of 2018. 

At September 30, 2018, the Company's total assets were $7.6 billion, an increase of $349.3 million from December 31, 2017. The increase in total assets was primarily related to the acquisitions during the first quarter. Securities of $477.1 million were up slightly from December 31, 2017. Loans totaled $5.0 billion, a slight decrease from June 30, 2018. Loan growth for the nine months ended September 30, 2018 was primarily from acquired loans. Deposits totaled $6.6 billion, an increase of $228.1 million from the December 31, 2017 total, which was primarily related to the acquisitions. The Company's total stockholders' equity was $884.8 million, an increase of $109.2 million over December 31, 2017.

Asset quality remained strong during the third quarter of 2018.  Nonperforming and restructured assets were 0.68% of total assets at September 30, 2018 compared to 0.61% at December 31, 2017. The allowance to total loans was 1.05% compared to 1.09% at year-end 2017. The allowance to nonperforming and restructured loans was 116.5% 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, "Rising rates, a lower corporate income tax rate and a stable Oklahoma economy again contributed to significant year over year improvement; non-interest income growth is noteworthy while asset quality remains strong, combining for solid third quarter results."

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

2017

2017

3rd Qtr 

2nd Qtr 

1st Qtr 

4th Qtr 

3rd Qtr 

 Condensed Income Statements: 

 Net interest income 

$               65,673

$               64,880

$               63,035

$               58,699

$               57,233

 Provision for loan losses 

747

1,225

314

3,323

3,276

 Non-interest income:

Trust revenue

3,281

3,396

3,129

3,073

3,083

Service charges on deposits

18,103

17,537

16,653

16,693

16,633

Securities transactions

(64)

115

(14)

4,412

(22)

Income from sales of loans

800

802

651

741

732

Insurance commissions

5,207

3,927

5,199

3,917

4,603

Cash management

3,383

3,381

3,021

2,798

2,804

Other

2,091

1,279

1,471

1,199

1,336

Total noninterest income 

32,801

30,437

30,110

32,833

29,169

 Non-interest expense:

Salaries and employee benefits

35,051

34,776

34,190

31,477

31,471

Occupancy expense, net

3,386

3,396

3,402

3,327

3,298

Depreciation

2,733

2,429

2,410

2,298

2,493

Amortization of intangible assets

740

759

733

547

547

Data processing services

1,418

1,195

1,203

1,252

1,110

Net expense from other real estate owned

64

19

26

101

68

Marketing and business promotion

1,997

1,649

2,352

1,825

1,790

Deposit insurance

597

640

619

578

553

Other

9,823

9,393

10,955

9,846

9,270

Total noninterest expense 

55,809

54,256

55,890

51,251

50,600

 Income before income taxes 

41,918

39,836

36,941

36,958

32,526

 Income tax expense 

9,035

9,250

7,321

17,461

10,816

 Net income 

$               32,883

$               30,586

$               29,620

$               19,497

$               21,710

 Per Common Share Data: 

 Net income-basic 

$                   1.01

$                   0.93

$                   0.91

$                   0.61

$                   0.68

 Net income-diluted 

0.98

0.91

0.89

0.59

0.67

 Cash dividends declared

0.30

0.21

0.21

0.21

0.21

 Common shares outstanding 

32,749,690

32,731,215

32,707,166

31,894,563

31,863,063

 Average common shares outstanding -

   Basic

32,742,480

32,716,350

32,574,251

31,876,784

31,838,392

   Diluted

33,504,143

33,458,858

33,317,744

32,652,265

32,592,277

 Performance Ratios: 

 Return on average assets

1.71

%

1.62

%

1.60

%

1.07

%

1.22

%

 Return on average equity

14.86

14.41

14.60

9.97

11.34

 Net interest margin 

3.68

3.70

3.66

3.48

3.46

 Efficiency ratio 

56.67

56.92

60.00

55.99

58.56

 

BancFirst Corporation

Summary Financial Information

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

Nine months ended

September 30,

2018

2017

 Condensed Income Statements: 

 Net interest income 

$             193,588

$             168,440

 Provision for loan losses 

2,286

5,189

 Non-interest income:

Trust revenue

9,806

8,929

Service charges on deposits

52,293

48,859

Securities transactions

37

(352)

Income from sales of loans

2,253

2,180

Insurance commissions

14,333

12,894

Cash management

9,785

8,357

Other

4,841

4,370

Total noninterest income 

93,348

85,237

 Non-interest expense:

Salaries and employee benefits

104,017

93,672

Occupancy expense, net

10,184

9,264

Depreciation

7,572

7,305

Amortization of intangible assets

2,232

1,641

Data processing services

3,816

3,402

Net expense from other real estate owned

109

320

Marketing and business promotion

5,998

5,564

Deposit insurance

1,856

1,683

Other

30,171

26,290

Total noninterest expense 

165,955

149,141

 Income before income taxes 

118,695

99,347

 Income tax expense 

25,606

32,405

 Net income 

$               93,089

$               66,942

 Per Common Share Data: 

 Net income-basic 

$                   2.85

$                   2.11

 Net income-diluted 

2.78

2.06

 Cash dividends declared

0.72

0.59

 Common shares outstanding 

32,749,690

31,863,063

 Average common shares outstanding -

   Basic

32,678,310

31,792,270

   Diluted

33,430,761

32,534,219

 Performance Ratios: 

 Return on average assets

1.64

%

1.26

%

 Return on average stockholders' equity

14.62

12.06

 Net interest margin 

3.68

3.42

 Efficiency ratio 

57.84

58.79

 

BancFirst Corporation

Summary Financial Information

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

2018

2018

2018

2017

2017

3rd Qtr

2nd Qtr

1st Qtr 

4th Qtr 

3rd Qtr 

 Balance Sheet Data:

 Total assets

$  7,602,438

$  7,622,963

$  7,615,642

$  7,253,156

$  7,132,168

 Interest-bearing deposits with banks

1,607,157

1,579,577

1,590,240

1,541,771

1,530,928

 Securities

477,080

462,871

493,101

469,995

450,009

 Total loans

4,952,267

5,017,071

4,990,681

4,728,168

4,658,525

 Allowance for loan losses

(51,875)

(52,200)

(51,550)

(51,666)

(51,255)

 Deposits

6,643,131

6,692,174

6,713,052

6,415,045

6,302,046

 Stockholders' equity

884,801

862,012

838,096

775,629

764,414

 Book value per common share

27.02

26.34

25.62

24.32

23.99

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

24.06

23.35

22.61

22.28

21.93

 Balance Sheet Ratios:

 Average loans to deposits

74.76

%

74.38

%

75.42

%

73.63

%

73.59

%

 Average earning assets to total assets

93.04

93.11

93.14

93.36

93.37

 Average stockholders' equity to average assets

11.23

11.23

10.95

10.78

10.74

Asset Quality Data:

 Past due loans

$         4,073

$         2,916

$         3,900

$         2,893

$         2,122

 Nonaccrual loans

26,880

29,936

31,849

31,943

27,665

 Restructured loans

13,557

14,527

12,945

4,720

3,603

 Total nonperforming and restructured loans

44,510

47,379

48,694

39,556

33,390

 Other real estate owned and repossessed assets

7,072

3,847

3,676

4,424

4,099

 Total nonperforming and restructured assets

51,582

51,226

52,370

43,980

37,489

 Nonperforming and restructured loans to total loans

0.90

%

0.94

%

0.98

%

0.84

%

0.72

%

 Nonperforming and restructured assets to total assets

0.68

0.67

0.69

0.61

0.53

 Allowance to total loans

1.05

1.04

1.03

1.09

1.10

 Allowance to nonperforming and restructured loans

116.55

110.18

105.87

130.62

153.50

 Net charge-offs to average loans

0.02

0.01

0.01

0.06

0.02

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

Stockholders' equity

$     884,801

$     862,012

$     838,096

$     775,629

$     764,414

Less goodwill

79,733

79,733

79,796

54,042

54,042

Less intangible assets, net

17,257

18,012

18,782

11,082

11,645

Tangible stockholders' equity (non-GAAP)

$     787,811

$     764,267

$     739,518

$     710,505

$     698,727

Common shares outstanding

32,749,690

32,731,215

32,707,166

31,894,563

31,863,063

 Tangible book value per common share (non-GAAP)

$         24.06

$         23.35

$         22.61

$          22.28

$          21.93

(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, 2018

September 30, 2018

Interest

Average

Interest

Average

Average

Income/

Yield/

Average

Income/

Yield/

Balance

Expense

Rate

Balance

Expense

Rate

ASSETS

Earning assets:

  Loans

$           4,973,580

$           66,852

5.33

%

$        4,975,621

$         195,657

5.26

%

  Securities – taxable

432,935

2,246

2.06

437,379

6,100

1.86

  Securities – tax exempt

23,469

184

3.10

26,969

606

3.00

  Interest bearing deposits with banks

1,657,460

8,254

1.98

1,609,596

21,560

1.79

     Total earning assets

7,087,444

77,536

4.34

7,049,565

223,923

4.25

Nonearning assets:

  Cash and due from banks

182,449

184,170

  Interest receivable and other assets

414,096

395,607

  Allowance for loan losses

(52,293)

(52,190)

     Total nonearning assets

544,252

527,587

     Total assets

$            7,631,696

$        7,577,152

LIABILITIES AND STOCKHOLDERS' EQUITY

Interest bearing liabilities:

  Transaction deposits                      

$           775,122

$               744

0.38

%

$           801,750

$             1,740

0.29

%

  Savings deposits

2,553,401

8,010

1.24

2,502,746

20,305

1.08

  Time deposits

736,060

2,417

1.30

756,041

6,105

1.08

  Short-term borrowings

8,960

42

1.85

6,332

85

1.79

  Junior subordinated debentures

31,959

547

6.80

31,959

1,626

6.80

     Total interest bearing liabilities

4,105,502

11,760

1.14

4,098,828

29,861

0.97

Interest free funds:

  Noninterest bearing deposits

2,610,935

2,594,714

  Interest payable and other liabilities

37,051

32,518

  Stockholders' equity

878,208

851,092

     Total interest free  funds

3,526,194

3,478,324

     Total liabilities and stockholders' equity

$            7,631,696

$        7,577,152

Net interest income

$           65,776

$         194,062

Net interest spread

3.20

%

3.28

%

Effect of interest free funds

0.48

%

0.40

%

Net interest margin

3.68

%

3.68

%

 

Cision View original content:http://www.prnewswire.com/news-releases/bancfirst-corporation-reports-third-quarter-earnings-300733848.html

SOURCE BancFirst


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