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 March 31, 2022


☐	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 April 29, 2022 there were 32,731,685 shares of the registrant’s Common Stock outstanding.

BancFirst Corporation

Quarterly Report on Form 10-Q

March 31, 2022

Table of Contents


Item	PART I – Financial Information	Page
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	29
3.	Quantitative and Qualitative Disclosure About Market Risk	37
4.	Controls and Procedures	37

	PART II – Other Information
1.	Legal Proceedings	38
1A.	Risk Factors	38
2.	Unregistered Sales of Equity Securities	38
3.	Defaults Upon Senior Securities	38
4.	Mine Safety Disclosures	38
5.	Other Information	38
6.	Exhibits	39
Signatures		41

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

BANCFIRST CORPORATION

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)


	March 31,			December 31,
	2022			2021
	(unaudited)			(see Note 1)
ASSETS
Cash and due from banks	$	274,872		$	228,819
Interest-bearing deposits with banks		3,816,532			1,821,203
Federal funds sold		3,489			800
Debt securities held for investment (fair value: $2,917 and $2,978, respectively)		2,917			2,977
Debt securities available for sale at fair value		1,208,751			531,523
Loans held for sale		10,137			24,776
Loans held for investment (net of unearned interest)		6,494,340			6,169,442
Allowance for credit losses		(87,239	)		(83,936	)
Loans, net of allowance for credit losses		6,407,101			6,085,506
Premises and equipment, net		283,843			269,047
Other real estate owned		39,617			39,475
Intangible assets, net		25,456			17,566
Goodwill		176,563			149,922
Accrued interest receivable and other assets		375,153			233,998
Total assets	$	12,624,431		$	9,405,612

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing	$	5,216,266		$	3,775,387
Interest-bearing		6,034,705			4,316,527
Total deposits		11,250,971			8,091,914
Short-term borrowings		3,300			—
Accrued interest payable and other liabilities		116,357			55,977
Subordinated debt		86,001			85,987
Total liabilities		11,456,629			8,233,878

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: 32,725,587 and 32,603,118, respectively		32,726			32,603
Capital surplus		163,392			159,914
Retained earnings		1,001,200			977,067
Accumulated other comprehensive (loss) income, net of tax of $9,166 and $(684), respectively		(29,516	)		2,150
Total stockholders' equity		1,167,802			1,171,734
Total liabilities and stockholders' equity	$	12,624,431		$	9,405,612

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
	March 31,
	2022			2021
INTEREST INCOME
Loans, including fees	$	72,954		$	77,662
Debt securities:
Taxable		3,781			1,693
Tax-exempt		26			70
Federal funds sold		1			—
Interest-bearing deposits with banks		1,757			595
Total interest income		78,519			80,020
INTEREST EXPENSE
Deposits		1,981			2,322
Short-term borrowings		1			1
Subordinated debt		1,030			491
Total interest expense		3,012			2,814
Net interest income		75,507			77,206
Provision for credit losses		2,936			—
Net interest income after provision for credit losses		72,571			77,206
NONINTEREST INCOME
Trust revenue		3,506			3,102
Service charges on deposits		21,375			19,100
Securities transactions (includes accumulated other comprehensive loss reclassifications of $1,536 and $0, respectively)		(3,915	)		95
Income from sales of loans		1,666			2,010
Insurance commissions		7,427			5,989
Cash management		3,131			3,003
Gain on sale of other assets		45			2,639
Other		10,415			3,997
Total noninterest income		43,650			39,935
NONINTEREST EXPENSE
Salaries and employee benefits		43,932			39,577
Occupancy, net		4,403			4,348
Depreciation		4,775			3,877
Amortization of intangible assets		831			793
Data processing services		1,805			1,678
Net expense from other real estate owned		1,794			1,510
Marketing and business promotion		2,073			1,879
Deposit insurance		1,128			876
Other		11,771			10,425
Total noninterest expense		72,512			64,963
Income before taxes		43,709			52,178
Income tax expense		7,794			9,658
Net income	$	35,915		$	42,520
NET INCOME PER COMMON SHARE
Basic	$	1.10		$	1.30
Diluted	$	1.08		$	1.27
OTHER COMPREHENSIVE (LOSS) GAIN
Unrealized losses on debt securities, net of tax of $10,219 and $336, respectively		(32,833	)		(1,006	)
Reclassification adjustment for losses included in net income, net of tax of $(369) and $0, respectively		1,167			—
Other comprehensive loss, net of tax of $9,850 and $336, respectively		(31,666	)		(1,006	)
Comprehensive income	$	4,249		$	41,514

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
	March 31,
	2022			2021
COMMON STOCK
Issued at beginning of period	$	32,603		$	32,720
Shares issued for stock options		123			51
Issued at end of period	$	32,726		$	32,771
CAPITAL SURPLUS
Balance at beginning of period	$	159,914		$	156,574
Common stock issued for stock options		3,020			1,258
Net cash settlement of options		—			(958	)
Stock-based compensation arrangements		458			576
Balance at end of period	$	163,392		$	157,450
RETAINED EARNINGS
Balance at beginning of period	$	977,067		$	871,161
Net income		35,915			42,520
Dividends on common stock ($0.36 and $0.34 per share, respectively)		(11,782	)		(11,134	)
Net cash settlement of options		—			(4,521	)
Balance at end of period	$	1,001,200		$	898,026
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized (losses)/gains on securities:
Balance at beginning of period	$	2,150		$	7,430
Net change		(31,666	)		(1,006	)
Balance at end of period	$	(29,516	)	$	6,424
Total stockholders’ equity	$	1,167,802		$	1,094,671

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

BANCFIRST CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOW

(Unaudited)

(Dollars in thousands)


	Three Months Ended
	March 31,
	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	35,915		$	42,520
Adjustments to reconcile to net cash provided by operating activities:
Provision for credit losses		2,936			—
Depreciation and amortization		5,606			4,670
Net amortization of securities premiums and discounts		1,921			369
Realized securities losses/(gains)		3,915			(95	)
Gain on sales of loans		(1,666	)		(2,010	)
Cash receipts from the sale of loans originated for sale		83,749			114,517
Cash disbursements for loans originated for sale		(67,444	)		(98,043	)
Deferred income tax benefit		(968	)		(738	)
Gain on sale of other assets		(771	)		(2,584	)
Increase/(decrease) in interest receivable		(4,714	)		235
Increase/(decrease) in interest payable		485			(329	)
Amortization of stock-based compensation arrangements		458			576
Excess tax benefit from stock-based compensation arrangements		(1,024	)		(1,551	)
Other, net		5,209			11,504
Net cash provided by operating activities		63,607			69,041
INVESTING ACTIVITIES
Net cash received from acquisitions, net of cash paid		121,099			—
Net cash paid from sale of assets and liabilities, net of cash received		—			(13,733	)
Net increase in federal funds sold		(76	)		—
Purchases of available for sale debt securities		(966,818	)		(210,662	)
Proceeds from maturities, calls and paydowns of held for investment debt securities		61			7
Proceeds from maturities, calls and paydowns of available for sale debt securities		19,689			243,597
Proceeds from sales of available for sale securities		222,473			—
Purchase of equity securities		(144	)		(171	)
Proceeds from paydowns and sales of equity securities		697			194
Net change in loans		(67,669	)		32,053
Net payments on derivative asset contracts		(70,694	)		(671	)
Purchases of premises, equipment and computer software		(6,896	)		(7,718	)
Purchase of tax credits		(770	)		(1,262	)
Other, net		3,078			2,858
Net cash (used in) provided by investing activities		(745,970	)		44,492
FINANCING ACTIVITIES
Net change in deposits		2,729,040			1,344,608
Net change in short-term borrowings		3,300			2,650
Issuance of common stock in connection with stock options, net		3,143			1,309
Net cash settlement of options		—			(5,479	)
Cash dividends paid		(11,738	)		(11,125	)
Net cash provided by financing activities		2,723,745			1,331,963
Net increase in cash, due from banks and interest-bearing deposits		2,041,382			1,445,496
Cash, due from banks and interest-bearing deposits at the beginning of the period		2,050,022			1,616,912
Cash, due from banks and interest-bearing deposits at the end of the period	$	4,091,404		$	3,062,408
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest	$	2,503