banf-10q_20190930.htm

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, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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 31, 2019 there were 32,666,268 shares of the registrant’s Common Stock outstanding.

	September 30,			December 31,
		2019			2018
	(unaudited)			(see Note 1)
ASSETS
Cash and due from banks	$	225,526		$	228,431
Interest-bearing deposits with banks		1,476,340			1,195,824
Federal funds sold		300			—
Securities held for investment (fair value: $1,911 and $1,433, respectively)		1,911			1,428
Securities available for sale at fair value		553,664			770,704
Loans held for sale		16,089			8,174
Loans (net of unearned interest)		5,606,808			4,975,976
Allowance for loan losses		(55,928	)		(51,389	)
Loans, net of allowance for loan losses		5,550,880			4,924,587
Premises and equipment, net		203,772			174,362
Other real estate owned		6,829			6,690
Intangible assets, net		24,025			16,470
Goodwill		147,013			79,749
Accrued interest receivable and other assets		182,467			167,839
Total assets	$	8,388,816		$	7,574,258

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing	$	2,879,746		$	2,613,876
Interest-bearing		4,450,931			3,991,619
Total deposits		7,330,677			6,605,495
Short-term borrowings		605			1,675
Accrued interest payable and other liabilities		50,978			37,495
Junior subordinated debentures		26,804			26,804
Total liabilities		7,409,064			6,671,469

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: 32,644,018 and 32,603,926, respectively		32,644			32,604
Capital surplus		151,470			149,709
Retained earnings		792,009			722,615
Accumulated other comprehensive income (loss), net of income tax of $1,248 and $(731), respectively		3,629			(2,139	)
Total stockholders' equity		979,752			902,789
Total liabilities and stockholders' equity	$	8,388,816		$	7,574,258

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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
		2019			2018			2019			2018
INTEREST INCOME
Loans, including fees	$	75,260		$	66,788		$	214,980		$	195,311
Securities:
Taxable		2,361			2,246			10,551			6,100
Tax-exempt		103			145			347			478
Federal funds sold		1			89			3			288
Interest-bearing deposits with banks		8,704			8,165			24,587			21,272
Total interest income		86,429			77,433			250,468			223,449
INTEREST EXPENSE
Deposits		13,644			11,171			40,983			28,150
Short-term borrowings		7			42			29			85
Junior subordinated debentures		491			547			1,474			1,626
Total interest expense		14,142			11,760			42,486			29,861
Net interest income		72,287			65,673			207,982			193,588
Provision for loan losses		2,758			747			6,875			2,286
Net interest income after provision for loan losses		69,529			64,926			201,107			191,302
NONINTEREST INCOME
Trust revenue		3,490			3,281			9,917			9,806
Service charges on deposits		19,866			18,103			56,643			52,293
Securities transactions (includes accumulated other comprehensive income reclassifications of $0, $9, $0 and $9, respectively)		—			(64	)		821			37
Income from sales of loans		964			800			2,530			2,253
Insurance commissions		5,535			5,207			15,220			14,333
Cash management		4,430			3,383			12,608			9,785
(Loss)/gain on sale of other assets		(1	)		195			(12	)		348
Other		1,343			1,896			3,978			4,493
Total noninterest income		35,627			32,801			101,705			93,348
NONINTEREST EXPENSE
Salaries and employee benefits		40,354			35,051			112,649			104,017
Occupancy, net		3,386			3,386			8,966			10,184
Depreciation		3,268			2,733			9,268			7,572
Amortization of intangible assets		842			740			2,359			2,232
Data processing services		1,467			1,418			4,209			3,816
Net expense/(income) from other real estate owned		26			64			(361	)		109
Marketing and business promotion		2,047			1,997			6,227			5,998
Deposit insurance		(81	)		597			996			1,856
Other		10,882			9,823			30,692			30,171
Total noninterest expense		62,191			55,809			175,005			165,955
Income before taxes		42,965			41,918			127,807			118,695
Income tax expense		9,597			9,035			28,435			25,606
Net income	$	33,368		$	32,883		$	99,372		$	93,089
NET INCOME PER COMMON SHARE
Basic	$	1.02		$	1.01		$	3.04		$	2.85
Diluted	$	1.00		$	0.98		$	2.98		$	2.78
OTHER COMPREHENSIVE GAIN/(LOSS)
Unrealized (losses)/gains on securities, net of tax of $1, $352, $(1,979) and $1,005, respectively		(26	)		(1,027	)		5,768			(2,956	)
Reclassification adjustment for losses included in net income		—			(7	)		—			(7	)
Other comprehensive (losses)/gains, net of tax of $1, $354, $(1,979) and $802, respectively		(26	)		(1,034	)		5,768			(2,963	)
Comprehensive income	$	33,342		$	31,849		$	105,140		$	90,126

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
COMMON STOCK
Issued at beginning of period	$	32,640	$	32,731	$	32,604	$	31,895
Shares issued for stock options		4		19		40		122
Shares issued for acquisitions		—		—		—		733
Issued at end of period	$	32,644	$	32,750	$	32,644	$	32,750
CAPITAL SURPLUS
Balance at beginning of period	$	150,995	$	148,494	$	149,709	$	107,481
Common stock issued for stock options		128		395		873		2,015
Common stock issued for acquisitions		—		—		—		38,765
Stock-based compensation arrangements		347		353		888		981
Balance at end of period	$	151,470	$	149,242	$	151,470	$	149,242
RETAINED EARNINGS
Balance at beginning of period	$	769,090	$	684,425	$	722,615	$	638,580
Net income		33,368

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

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

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	27
3.	Quantitative and Qualitative Disclosure About Market Risk	36
4.	Controls and Procedures	36

	PART II – Other Information
1.	Legal Proceedings	37
1A.	Risk Factors	37
2.	Unregistered Sales of Equity Securities	37
3.	Defaults Upon Senior Securities	37
4.	Mine Safety Disclosures	37
5.	Other Information	37
6.	Exhibits	38
Signatures		40


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


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

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐