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 June 30, 2024


☐	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 July 31, 2024 there were 33,022,124 shares of the registrant’s Common Stock outstanding.

BancFirst Corporation

Quarterly Report on Form 10-Q

June 30, 2024

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	31
3.	Quantitative and Qualitative Disclosure About Market Risk	42
4.	Controls and Procedures	42

	PART II – Other Information
1.	Legal Proceedings	43
1A.	Risk Factors	43
2.	Unregistered Sales of Equity Securities	43
3.	Defaults Upon Senior Securities	43
4.	Mine Safety Disclosures	43
5.	Other Information	43
6.	Exhibits	44
	Signatures	45

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

BANCFIRST CORPORATION

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)


	June 30,			December 31,
	2024			2023
	(unaudited)			(see Note 1)
ASSETS
Cash and due from banks	$	194,273		$	225,462
Interest-bearing deposits with banks		2,299,019			2,172,001
Federal funds sold		1,102			1,316
Debt securities held for investment (fair value: $838 and $1,190, respectively)		838			1,190
Debt securities available for sale at fair value		1,440,527			1,553,905
Loans held for sale		7,408			3,489
Loans held for investment (net of unearned interest)		8,047,448			7,656,645
Allowance for credit losses		(99,626	)		(96,800	)
Loans, net of allowance for credit losses		7,947,822			7,559,845
Premises and equipment, net		285,131			278,594
Other real estate owned		37,823			33,718
Intangible assets, net		14,931			16,704
Goodwill		182,263			182,263
Accrued interest receivable and other assets		326,181			343,555
Total assets	$	12,737,318		$	12,372,042

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing	$	3,815,818		$	3,982,226
Interest-bearing		7,199,784			6,717,896
Total deposits		11,015,602			10,700,122
Short-term borrowings		4,264			3,351
Accrued interest payable and other liabilities		118,831			148,577
Subordinated debt		86,129			86,101
Total liabilities		11,224,826			10,938,151

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: 33,022,124 and 32,933,018, respectively		33,022			32,933
Capital surplus		178,806			174,695
Retained earnings		1,348,905			1,276,305
Accumulated other comprehensive loss, net of tax benefit of $14,938 and $15,473, respectively		(48,241	)		(50,042	)
Total stockholders' equity		1,512,492			1,433,891
Total liabilities and stockholders' equity	$	12,737,318		$	12,372,042

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					Six Months Ended
	June 30,					June 30,
	2024		2023			2024			2023
INTEREST INCOME
Loans, including fees	$	137,710	$	114,612		$	269,836		$	219,008
Securities:
Taxable		8,932		9,408			18,113			18,399
Tax-exempt		18		23			38			30
Federal funds sold		5		81			24			113
Interest-bearing deposits with banks		31,800		26,694			62,097			58,714
Total interest income		178,465		150,818			350,108			296,264
INTEREST EXPENSE
Deposits		67,479		43,732			131,892			78,909
Short-term borrowings		59		129			155			212
Subordinated debt		1,031		1,031			2,061			2,061
Total interest expense		68,569		44,892			134,108			81,182
Net interest income		109,896		105,926			216,000			215,082
Provision for credit losses		3,358		2,824			7,373			5,146
Net interest income after provision for credit losses		106,538		103,102			208,627			209,936
NONINTEREST INCOME
Trust revenue		5,490		4,590			10,578			8,812
Service charges on deposits		17,280		22,268			33,708			43,499
Securities transactions		317		110			50			(103	)
Sales of loans		733		757			1,224			1,361
Insurance commissions		6,668		6,225			16,123			14,966
Cash management		9,149		7,927			17,800			14,661
Gain/(loss) on sale of other assets		55		315			(4	)		794
Other		4,252		5,782			9,365			11,812
Total noninterest income		43,944		47,974			88,844			95,802
NONINTEREST EXPENSE
Salaries and employee benefits		51,928		49,803			103,456			99,055
Occupancy, net		5,233		5,118			10,439			10,101
Depreciation		4,504		4,769			9,060			9,412
Amortization of intangible assets		887		880			1,773			1,760
Data processing services		2,696		2,217			5,312			4,324
Net expense from other real estate owned		1,656		2,889			3,858			5,348
Marketing and business promotion		2,246		1,900			4,502			4,427
Deposit insurance		1,614		1,463			3,052			3,076
Other		14,552		12,071			26,643			23,924
Total noninterest expense		85,316		81,110			168,095			161,427
Income before taxes		65,166		69,966			129,376			144,311
Income tax expense		14,525		14,956			28,401			31,768
Net income	$	50,641	$	55,010		$	100,975		$	112,543
NET INCOME PER COMMON SHARE
Basic	$	1.53	$	1.67		$	3.06		$	3.42
Diluted	$	1.51	$	1.64		$	3.01		$	3.36
OTHER COMPREHENSIVE GAIN/(LOSS)
Unrealized income/(loss) on debt securities, net of tax (expense)/benefit of $(1,263), $4,350, $(535) and $(154), respectively		4,105		(14,091	)		1,801			558
Other comprehensive income/(loss), net of tax (expense)/benefit of $(1,263), $4,350, $(535) and $(154), respectively		4,105		(14,091	)		1,801			558
Comprehensive income	$	54,746	$	40,919		$	102,776		$	113,101

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						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
COMMON STOCK
Issued at beginning of period	$	32,967		$	32,900		$	32,933		$	32,876
Shares issued for stock options		55			39			89			63
Issued at end of period	$	33,022		$	32,939		$	33,022		$	32,939
CAPITAL SURPLUS
Balance at beginning of period	$	176,227		$	170,231		$	174,695		$	169,231
Common stock issued for stock options		1,659			1,296			2,476			1,914
Stock-based compensation arrangements		920			831			1,635			1,213
Balance at end of period	$	178,806		$	172,358		$	178,806		$	172,358
RETAINED EARNINGS
Balance at beginning of period	$	1,312,464		$	1,164,665		$	1,276,305		$	1,120,292
Net income		50,641			55,010			100,975			112,543
Dividends on common stock ($0.43, $0.40, $0.86 and $0.80 per share, respectively)		(14,200	)		(13,176	)		(28,375	)		(26,336	)
Balance at end of period	$	1,348,905		$	1,206,499		$	1,348,905		$	1,206,499
ACCUMULATED OTHER COMPREHENSIVE LOSS
Unrealized (losses)/gains on securities:
Balance at beginning of period	$	(52,346	)	$	(56,914	)	$	(50,042	)	$	(71,563	)
Net change		4,105			(14,091	)		1,801			558
Balance at end of period	$	(48,241	)	$	(71,005	)	$	(48,241	)	$	(71,005	)
Total stockholders’ equity	$	1,512,492		$	1,340,791		$	1,512,492		$	1,340,791

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

BANCFIRST CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOW

(Unaudited)

(Dollars in thousands)


	Six Months Ended
	June 30,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	100,975		$	112,543
Adjustments to reconcile to net cash provided by operating activities:
Provision for credit losses		7,373			5,146
Depreciation and amortization		10,833			11,172
Net amortization of securities premiums and discounts		(627	)		(577	)
Realized securities (gains)/losses		(50	)		103
Gain on sales of loans		(1,224	)		(1,361	)
Cash receipts from the sale of loans originated for sale		110,096			77,758
Cash disbursements for loans originated for sale		(72,791	)		(78,948	)
Deferred income tax benefit		(1,764	)		(1,489	)
Gain on sale of other assets		(1,319	)		(1,061	)
Increase in interest receivable		(3,074	)		(3,387	)
Increase in interest payable		5,314			3,005
Amortization of stock-based compensation arrangements		1,635			1,213
Excess tax benefit from stock-based compensation arrangements		(750	)		(734	)
Other, net		11,848			5,797
Net cash provided by operating activities		166,475			129,180
INVESTING ACTIVITIES
Net decrease/(increase) in federal funds sold		214			(1,631	)
Purchases of available for sale debt securities		(270	)		(94,112	)
Proceeds from maturities, calls and paydowns of held for investment debt securities		352			1,349
Proceeds from maturities, calls and paydowns of available for sale debt securities		116,611			64,036
Purchase of equity securities		(404	)		(294	)
Proceeds from paydowns and sales of equity securities		206			531
Net change in loans		(445,920	)		(357,140	)
Net (payments)/receipts on derivative asset contracts		(22,293	)		11,628
Purchases of premises, equipment and computer software		(16,273	)		(13,016	)
Purchase of tax credits		(2,469	)		(3,813	)
Other, net		8,978			23,302
Net cash used in investing activities		(361,268	)		(369,160	)
FINANCING ACTIVITIES
Net change in deposits		315,480			(499,048	)
Net change in short-term borrowings		913			3,593
Issuance of common stock in connection with stock options, net		2,565			1,977
Cash dividends paid		(28,336	)		(26,310	)
Net cash provided by (used in) financing activities		290,622			(519,788	)
Net increase/(decrease) in cash, due from banks and interest-bearing deposits		95,829			(759,768	)
Cash, due from banks and interest-bearing deposits at the beginning of the period		2,397,463			3,168,910
Cash, due from banks and interest-bearing deposits at the end of the period	$	2,493,292		$	2,409,142
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest	$	128,794		$	78,176
Cash paid during the period for income taxes	$	22,349		$	31,180
Noncash investing and financing activities:
Unpaid common stock dividends declared	$	14,200		$	13,176

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

BANCFIRST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting and reporting policies of BancFirst Corporation and its subsidiaries (the “Company”) conform to accounting principles generally accepted in the United States of America (U.S. GAAP) and general practice within the banking industry. A summary of significant accounting policies can be found in Note (1) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Basis of Presentation

The accompanying unaudited interim consolidated financial statements include the accounts of BancFirst Corporation, Council Oak Partners, LLC, BancFirst Insurance Services, Inc., Pegasus Bank ("Pegasus"), Worthington Bank ("Worthington") and BancFirst and its subsidiaries ("BancFirst"). The principal operating subsidiaries of BancFirst are BFTower, LLC, BFC-PNC LLC, and BancFirst Agency, Inc. All significant intercompany accounts and transactions have been eliminated. Assets held in a fiduciary or agency capacity are not assets of the Company and, accordingly, are not included in the unaudited interim consolidated financial statements.

The accompanying unaudited interim consolidated financial statements and notes are presented in accordance with U.S. GAAP for interim financial information and the instructions for Form 10-Q adopted by the Securities and Exchange Commission (“SEC”). The information contained in the consolidated financial statements and footnotes included in BancFirst Corporation’s Annual Report on Form 10-K for the year ended December 31, 2023, should be referred to in connection with these unaudited interim consolidated financial statements. Operating results for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year or any future period.

The unaudited interim consolidated financial statements contained herein reflect all adjustments, which are, in the opinion of management, necessary to provide a fair statement of the financial position and results of operations of the Company for the interim periods presented. All such adjustments are of a normal and recurring nature.

Reclassifications

Certain items in prior consolidated financial statements have been reclassified to conform to the current presentation. Such reclassifications had no effect on previously reported cash flows, stockholders’ equity or comprehensive income.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with accounting principles generally accepted in the United States inherently involves the use of estimates and assumptions that affect the amounts reported in the financial statements and the related disclosures. These estimates relate principally to the determination of the allowance for credit losses, income taxes, the fair value of financial instruments and the valuation of assets and liabilities acquired in a business combination, including identifiable intangible assets. Such estimates and assumptions may change over time and actual amounts realized may differ from those reported.

Recent Accounting Pronouncements

Standards Not Yet Adopted:

In December 2023, the Financial Accounting Standards Board (“FASB“) issued Accounting Standards Update (“ASU”) No. 2023-09, “Income Taxes - Improvements to Income Tax Disclosures” requiring enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 on a prospective basis and retrospective application is permitted. The Company does not expect adoption of the standard to have a material impact on its consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting - Improvements to Reportable Segment Disclosures” requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 on a retrospective basis. The amendments are to be applied retrospectively to all periods presented and segment expense categories are required to be based on the categories identified at adoption. The Company is currently evaluating the provisions of this ASU and expects to adopt them for the year ending December 31, 2024. The Company does not expect the adoption to have a significant impact on the Company’s consolidated financial statements.

(2) SECURITIES

The following table summarizes the amortized cost and estimated fair values of debt securities held for investment:



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
June 30, 2024	(Dollars in thousands)
Mortgage backed securities (1)	$	3	$	—	$	—	$	3
States and political subdivisions		335		—		—		335
Other securities		500		—		—		500
Total	$	838	$	—	$	—	$	838
December 31, 2023
Mortgage backed securities (1)	$	5	$	—	$	—	$	5
States and political subdivisions		685		—		—		685
Other securities		500