10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 0-14384

BancFirst Corporation

(Exact name of registrant as specified in charter)


Oklahoma		73-1221379
(State or other Jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)


100 N. Broadway Ave., Oklahoma City, Oklahoma		73102-8405
(Address of principal executive offices)		(Zip Code)

(405) 270-1086

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, $1.00 Par Value Per Share

BANF

NASDAQ Global Select Market System

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (sec. 232-405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 29, 2021 there were 32,572,217 shares of the registrant’s Common Stock outstanding.

BancFirst Corporation

Quarterly Report on Form 10-Q

September 30, 2021

Table of Contents


Item		Page
	PART I – Financial Information
1.	Financial Statements (Unaudited)	2
	Consolidated Balance Sheets	2
	Consolidated Statements of Comprehensive Income	3
	Consolidated Statements of Shareholders’ Equity	4
	Consolidated Statements of Cash Flow	5

	Notes to Consolidated Financial Statements	6
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
3.	Quantitative and Qualitative Disclosure About Market Risk	40
4.	Controls and Procedures	40

	PART II – Other Information
1.	Legal Proceedings	41
1A.	Risk Factors	41
2.	Unregistered Sales of Equity Securities	41
3.	Defaults Upon Senior Securities	41
4.	Mine Safety Disclosures	41
5.	Other Information	41
6.	Exhibits	42
Signatures		44

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

BANCFIRST CORPORATION

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)


	September 30,			December 31,
	2021			2020
	(unaudited)			(see Note 1)
ASSETS
Cash and due from banks	$	274,057		$	280,518
Interest-bearing deposits with banks		3,836,809			1,336,394
Debt securities held for investment (fair value: $2,984 and $2,984, respectively)		2,982			2,964
Debt securities available for sale at fair value		526,502			552,232
Loans held for sale		20,950			53,719
Loans held for investment (net of unearned interest)		6,016,936			6,394,506
Allowance for credit losses		(86,463	)		(91,366	)
Loans, net of allowance for credit losses		5,930,473			6,303,140
Premises and equipment, net		268,160			261,677
Other real estate owned		38,932			32,179
Intangible assets, net		18,325			18,999
Goodwill		149,922			149,922
Accrued interest receivable and other assets		235,659			220,613
Total assets	$	11,302,771		$	9,212,357

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing	$	4,594,324		$	3,790,900
Interest-bearing		5,397,720			4,273,804
Total deposits		9,992,044			8,064,704
Short-term borrowings		3,500			1,100
Accrued interest payable and other liabilities		74,380			51,864
Subordinated debt		85,973			26,804
Total liabilities		10,155,897			8,144,472

Stockholders' equity:
Senior preferred stock, $1.00 par; 10,000,000 shares authorized; none issued		—			—
Cumulative preferred stock, $5.00 par; 900,000 shares authorized; none issued		—			—
Common stock, $1.00 par, 40,000,000 shares authorized; shares issued and outstanding: 32,572,217 and 32,719,852, respectively		32,572			32,720
Capital surplus		158,877			156,574
Retained earnings		950,560			871,161
Accumulated other comprehensive income, net of income tax of $1,533 and $2,513, respectively		4,865			7,430
Total stockholders' equity		1,146,874			1,067,885
Total liabilities and stockholders' equity	$	11,302,771		$	9,212,357

The accompanying Notes are an integral part of these consolidated financial statements.

BANCFIRST CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(Dollars in thousands, except per share data)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2021			2020			2021			2020
INTEREST INCOME
Loans, including fees	$	80,249		$	76,612		$	240,358		$	231,985
Securities:
Taxable		1,484			2,032			4,779			6,665
Tax-exempt		35			131			175			383
Interest-bearing deposits with banks		1,441			422			2,861			5,586
Total interest income		83,209			79,197			248,173			244,619
INTEREST EXPENSE
Deposits		1,988			2,854			6,313			16,004
Short-term borrowings		—			—			1			8
Subordinated debt		1,031			491			2,100			1,474
Total interest expense		3,019			3,345			8,414			17,486
Net interest income		80,190			75,852			239,759			227,133
Provision for (benefit from) credit losses		1,483			18,740			(8,466	)		57,656
Net interest income after provision for/(benefit from) credit losses		78,707			57,112			248,225			169,477
NONINTEREST INCOME
Trust revenue		3,210			3,131			9,576			10,154
Service charges on deposits		21,706			19,078			61,330			54,642
Securities transactions (includes no accumulated other comprehensive income reclassifications)		150			—			417			(545	)
Income from sales of loans		1,594			1,873			5,737			4,215
Insurance commissions		6,666			5,197			17,670			15,316
Cash management		3,127			3,701			9,198			12,276
Gain on sale of other assets		34			(15	)		2,746			120
Other		3,299			1,610			17,665			5,624
Total noninterest income		39,786			34,575			124,339			101,802
NONINTEREST EXPENSE
Salaries and employee benefits		42,267			41,995			123,836			123,977
Occupancy, net		5,086			4,503			13,962			11,888
Depreciation		4,207			3,795			12,217			10,830
Amortization of intangible assets		755			968			2,357			2,900
Data processing services		1,734			1,669			5,072			4,990
Net loss/(income) from other real estate owned		1,810			196			6,677			(1,951	)
Marketing and business promotion		1,796			1,485			5,323			5,325
Deposit insurance		846			723			2,488			1,224
Other		11,713			10,749			37,268			32,936
Total noninterest expense		70,214			66,083			209,200			192,119
Income before taxes		48,279			25,604			163,364			79,160
Income tax expense		9,529			4,714			33,902			14,932
Net income	$	38,750		$	20,890		$	129,462		$	64,228
NET INCOME PER COMMON SHARE
Basic	$	1.18		$	0.64		$	3.95		$	1.97
Diluted	$	1.16		$	0.63		$	3.88		$	1.94
OTHER COMPREHENSIVE (LOSS) GAIN
Unrealized (losses)/gains on debt securities, net of tax of $172, $335, $980 and $(1,756) respectively		(552	)		(982	)		(2,565	)		5,254
Comprehensive income	$	38,198		$	19,908		$	126,897		$	69,482

The accompanying Notes are an integral part of these consolidated financial statements.

BANCFIRST CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(Dollars in thousands)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2021			2020			2021			2020
COMMON STOCK
Issued at beginning of period	$	32,785		$	32,663		$	32,720		$	32,694
Shares issued for stock options		—			16			65			44
Shares acquired and canceled		(213	)		—			(213	)		(59	)
Issued at end of period	$	32,572		$	32,679		$	32,572		$	32,679
CAPITAL SURPLUS
Balance at beginning of period	$	158,322		$	154,692		$	156,574		$	153,353
Common stock issued for stock options		—			306			1,657			813
Net cash settlement of options		—			—			(958	)		—
Stock-based compensation arrangements		555			433			1,604			1,265
Balance at end of period	$	158,877		$	155,431		$	158,877		$	155,431
RETAINED EARNINGS
Balance at beginning of period	$	935,067		$	837,154		$	871,161		$	815,488
Net income		38,750			20,890			129,462			64,228
Cumulative effect of change in accounting principle, net of tax of $925		—			—			—			2,270
Dividends on common stock ($0.36, $0.34, $1.04 and $0.98 per share, respectively)		(11,806	)		(11,110	)		(34,091	)		(32,013	)
Net cash settlement of options		—			—			(4,521	)		—
Common stock acquired and canceled		(11,451	)		—			(11,451	)		(3,039	)
Balance at end of period	$	950,560		$	846,934		$	950,560		$	846,934
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized (losses)/gains on securities:
Balance at beginning of period	$	5,417		$	9,690