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, 2023


☐	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 28, 2023 there were 32,899,898 shares of the registrant’s Common Stock outstanding.

BancFirst Corporation

Quarterly Report on Form 10-Q

March 31, 2023

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	28
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		40

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

BANCFIRST CORPORATION

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)


	March 31,			December 31,
	2023			2022
	(unaudited)			(see Note 1)
ASSETS
Cash and due from banks	$	212,826		$	259,049
Interest-bearing deposits with banks		2,623,565			2,909,861
Federal funds sold		1,084			2,850
Debt securities held for investment (fair value: $2,321 and $2,383, respectively)		2,320			2,383
Debt securities available for sale at fair value		1,615,913			1,538,221
Loans held for sale		6,223			6,232
Loans held for investment (net of unearned interest)		7,118,608			6,943,563
Allowance for credit losses		(94,760	)		(92,728	)
Loans, net of allowance for credit losses		7,023,848			6,850,835
Premises and equipment, net		279,461			278,088
Other real estate owned		38,587			36,756
Intangible assets, net		19,103			19,983
Goodwill		182,055			182,055
Accrued interest receivable and other assets		327,120			301,550
Total assets	$	12,332,105		$	12,387,863

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing	$	4,540,363		$	4,944,730
Interest-bearing		6,069,740			6,029,498
Total deposits		10,610,103			10,974,228
Short-term borrowings		203,494			300
Accrued interest payable and other liabilities		121,568			76,455
Subordinated debt		86,058			86,044
Total liabilities		11,021,223			11,137,027

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: 32,899,493 and 32,875,560, respectively		32,900			32,876
Capital surplus		170,231			169,231
Retained earnings		1,164,665			1,120,292
Accumulated other comprehensive loss, net of tax benefit of $17,603 and $22,107, respectively		(56,914	)		(71,563	)
Total stockholders' equity		1,310,882			1,250,836
Total liabilities and stockholders' equity	$	12,332,105		$	12,387,863

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,
	2023			2022
INTEREST INCOME
Loans, including fees	$	104,396		$	72,954
Debt securities:
Taxable		8,991			3,781
Tax-exempt		7			26
Federal funds sold		32			1
Interest-bearing deposits with banks		32,020			1,757
Total interest income		145,446			78,519
INTEREST EXPENSE
Deposits		35,177			1,981
Short-term borrowings		83			1
Subordinated debt		1,030			1,030
Total interest expense		36,290			3,012
Net interest income		109,156			75,507
Provision for credit losses		2,322			2,936
Net interest income after provision for credit losses		106,834			72,571
NONINTEREST INCOME
Trust revenue		4,222			3,506
Service charges on deposits		21,231			21,375
Securities transactions (includes accumulated other comprehensive loss reclassifications of $0 and $1,536, respectively)		(213	)		(3,915	)
Income from sales of loans		604			1,666
Insurance commissions		8,741			7,427
Cash management		6,734			3,131
Gain on sale of other assets		479			45
Other		6,030			10,415
Total noninterest income		47,828			43,650
NONINTEREST EXPENSE
Salaries and employee benefits		49,252			43,932
Occupancy, net		4,983			4,403
Depreciation		4,643			4,775
Amortization of intangible assets		880			831
Data processing services		2,107			1,805
Net expense from other real estate owned		2,459			1,794
Marketing and business promotion		2,527			2,073
Deposit insurance		1,613			1,128
Other		11,853			11,771
Total noninterest expense		80,317			72,512
Income before taxes		74,345			43,709
Income tax expense		16,812			7,794
Net income	$	57,533		$	35,915
NET INCOME PER COMMON SHARE
Basic	$	1.75		$	1.10
Diluted	$	1.72		$	1.08
OTHER COMPREHENSIVE (LOSS)/GAIN
Unrealized income/(losses) on debt securities, net of tax (expense)/benefit of $(4,504) and $10,219, respectively		14,649			(32,833	)
Reclassification adjustment for losses included in net income, net of tax expense of $0 and $369, respectively		—			1,167
Other comprehensive income/(loss), net of tax (expense)/benefit of $(4,504) and $9,850, respectively		14,649			(31,666	)
Comprehensive income	$	72,182		$	4,249

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,
	2023			2022
COMMON STOCK
Issued at beginning of period	$	32,876		$	32,603
Shares issued for stock options		24			123
Issued at end of period	$	32,900		$	32,726
CAPITAL SURPLUS
Balance at beginning of period	$	169,231		$	159,914
Common stock issued for stock options		618			3,020
Stock-based compensation arrangements		382			458
Balance at end of period	$	170,231		$	163,392
RETAINED EARNINGS
Balance at beginning of period	$	1,120,292		$	977,067
Net income		57,533			35,915
Dividends on common stock ($0.40 and $0.36 per share, respectively)		(13,160	)		(11,782	)
Balance at end of period	$	1,164,665		$	1,001,200
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized (losses)/gains on securities:
Balance at beginning of period	$	(71,563	)	$	2,150
Net change		14,649			(31,666	)
Balance at end of period	$	(56,914	)	$	(29,516	)
Total stockholders’ equity	$	1,310,882		$	1,167,802

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,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	57,533		$	35,915
Adjustments to reconcile to net cash provided by operating activities:
Provision for credit losses		2,322			2,936
Depreciation and amortization		5,523			5,606
Net amortization of securities premiums and discounts		(273	)		1,921
Realized securities losses		213			3,915
Gain on sales of loans		(604	)		(1,666	)
Cash receipts from the sale of loans originated for sale		34,246			83,749
Cash disbursements for loans originated for sale		(33,634	)		(67,444	)
Deferred income tax benefit		(778	)		(968	)
Gain on sale of other assets		(578	)		(771	)
Increase in interest receivable		(1,390	)		(4,714	)
Increase in interest payable		2,264			485
Amortization of stock-based compensation arrangements		382			458
Excess tax benefit from stock-based compensation arrangements		(324	)		(1,024	)
Other, net		4,602			5,209
Net cash provided by operating activities		69,504			63,607
INVESTING ACTIVITIES
Net cash received from acquisitions, net of cash paid		—			121,099
Net decrease/(increase) in federal funds sold		1,766			(76	)
Purchases of available for sale debt securities		(91,312	)		(966,818	)
Proceeds from maturities, calls and paydowns of held for investment debt securities		170			61
Proceeds from maturities, calls and paydowns of available for sale debt securities		32,940			19,689
Proceeds from sales of available for sale securities		—			222,473
Purchase of equity securities		(195	)		(144	)
Proceeds from paydowns and sales of equity securities		485			697
Net change in loans		(176,739	)		(67,669	)
Net receipts/(payments) on derivative asset contracts		11,141			(70,694	)
Purchases of premises, equipment and computer software		(7,962	)		(6,896	)
Purchase of tax credits		(536	)		(770	)
Other, net		1,658			3,078
Net cash used in investing activities		(228,584	)		(745,970	)
FINANCING ACTIVITIES
Net change in deposits		(364,125	)		2,729,040
Net change in short-term borrowings		203,194			3,300
Issuance of common stock in connection with stock options, net		642			3,143
Cash dividends paid		(13,150	)		(11,738	)
Net cash (used in) provided by financing activities		(173,439	)		2,723,745
Net (decrease)/increase in cash, due from banks and interest-bearing deposits		(332,519	)		2,041,382
Cash, due from banks and interest-bearing deposits at the beginning of the period