banf-10q_20200630.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, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” 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 July 31, 2020 there were 32,662,691 shares of the registrant’s Common Stock outstanding.

	June 30,			December 31,
		2020			2019
	(unaudited)			(see Note 1)
ASSETS
Cash and due from banks	$	205,227		$	222,043
Interest-bearing deposits with banks		1,583,116			1,646,238
Federal funds sold		—			1,000
Securities held for investment (fair value: $3,048 and $1,903, respectively)		3,055			1,903
Securities available for sale at fair value		604,976			489,723
Loans held for sale		21,902			11,001
Loans (net of unearned interest)		6,674,954			5,662,143
Allowance for credit losses		(89,500	)		(54,238	)
Loans, net of allowance for credit losses		6,585,454			5,607,905
Premises and equipment, net		232,517			206,275
Other real estate owned		4,668			5,607
Intangible assets, net		20,882			22,608
Goodwill		149,922			148,604
Accrued interest receivable and other assets		200,734			202,851
Total assets	$	9,612,453		$	8,565,758

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing	$	3,709,330		$	2,956,370
Interest-bearing		4,777,341			4,527,265
Total deposits		8,486,671			7,483,635
Short-term borrowings		8,100			1,100
Long-term borrowings		3,000			—
Accrued interest payable and other liabilities		53,679			49,230
Junior subordinated debentures		26,804			26,804
Total liabilities		8,578,254			7,560,769

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: 32,662,691 and 32,694,268, respectively		32,663			32,694
Capital surplus		154,692			153,353
Retained earnings		837,154			815,488
Accumulated other comprehensive income, net of income tax of $3,278 and $1,187, respectively		9,690			3,454
Total stockholders' equity		1,034,199			1,004,989
Total liabilities and stockholders' equity	$	9,612,453		$	8,565,758

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
		2020			2019			2020			2019
INTEREST INCOME
Loans, including fees	$	78,855		$	70,990		$	155,373		$	139,720
Securities:
Taxable		2,047			3,855			4,633			8,190
Tax-exempt		154			118			252			244
Federal funds sold		—			—			—			2
Interest-bearing deposits with banks		395			8,135			5,164			15,883
Total interest income		81,451			83,098			165,422			164,039
INTEREST EXPENSE
Deposits		3,750			13,802			13,150			27,339
Short-term borrowings		1			12			8			22
Junior subordinated debentures		492			492			983			983
Total interest expense		4,243			14,306			14,141			28,344
Net interest income		77,208			68,792			151,281			135,695
Provision for credit losses		19,333			2,433			38,916			4,117
Net interest income after provision for credit losses		57,875			66,359			112,365			131,578
NONINTEREST INCOME
Trust revenue		3,368			3,250			7,023			6,427
Service charges on deposits		16,760			19,114			35,564			36,777
Securities transactions (includes no accumulated other comprehensive income reclassifications)		(595	)		821			(545	)		821
Income from sales of loans		1,561			868			2,342			1,566
Insurance commissions		4,443			4,420			10,119			9,685
Cash management		4,255			4,402			8,575			8,178
Gain/(loss) on sale of other assets		49			(7	)		135			(11	)
Other		2,241			1,209			4,014			2,635
Total noninterest income		32,082			34,077			67,227			66,078
NONINTEREST EXPENSE
Salaries and employee benefits		42,226			36,124			81,982			72,295
Occupancy, net		3,839			2,953			7,385			5,580
Depreciation		3,544			3,015			7,035			6,000
Amortization of intangible assets		968			758			1,932			1,517
Data processing services		1,629			1,262			3,321			2,742
Net income from other real estate owned		(12	)		97			(2,147	)		(387	)
Marketing and business promotion		1,485			1,919			3,840			4,180
Deposit insurance		365			544			501			1,077
Other		10,607			9,936			22,187			19,810
Total noninterest expense		64,651			56,608			126,036			112,814
Income before taxes		25,306			43,828			53,556			84,842
Income tax expense		4,576			9,661			10,218			18,838
Net income	$	20,730		$	34,167		$	43,338		$	66,004
NET INCOME PER COMMON SHARE
Basic	$	0.64		$	1.04		$	1.33		$	2.02
Diluted	$	0.63		$	1.02		$	1.31		$	1.98
OTHER COMPREHENSIVE (LOSS) GAIN
Unrealized (loss) gain on securities, net of tax of $85, $(1,112), $(2,091) and $(1,980) respectively		(189	)		3,254			6,236			5,794
Comprehensive income	$	20,541		$	37,421		$	49,574		$	71,798

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020			2019
COMMON STOCK
Issued at beginning of period	$	32,647	$	32,618	$	32,694		$	32,604
Shares issued for stock options		16		22		28			36
Shares acquired and canceled		—		—		(59	)		—
Issued at end of period	$	32,663	$	32,640	$	32,663		$	32,640
CAPITAL SURPLUS
Balance at beginning of period	$	153,999	$	150,195	$	153,353		$	149,709
Common stock issued for stock options		287		433		507			745
Stock-based compensation arrangements		406		367		832			541
Balance at end of period	$	154,692	$	150,995	$	154,692		$	150,995
RETAINED EARNINGS

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	31
3.	Quantitative and Qualitative Disclosure About Market Risk	40
4.	Controls and Procedures	41

	PART II – Other Information
1.	Legal Proceedings	42
1A.	Risk Factors	42
2.	Unregistered Sales of Equity Securities	42
3.	Defaults Upon Senior Securities	42
4.	Mine Safety Disclosures	43
5.	Other Information	43
6.	Exhibits	44
Signatures		46

Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

Emerging growth company	☐