UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
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
(Exact name of registrant as specified in charter)
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(I.R.S. Employer |
incorporation or organization) |
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Identification No.) |
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(Address of principal executive offices) |
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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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.
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).
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.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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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 30, 2024 there were
BancFirst Corporation
Quarterly Report on Form 10-Q
March 31, 2024
Table of Contents
Item |
PART I – Financial Information |
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1. |
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6 |
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2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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3. |
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38 |
4. |
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PART II – Other Information |
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1. |
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1A. |
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2. |
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3. |
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4. |
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5. |
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6. |
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41 |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
BANCFIRST CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
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March 31, |
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December 31, |
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2024 |
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2023 |
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(unaudited) |
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(see Note 1) |
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ASSETS |
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Cash and due from banks |
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$ |
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$ |
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Interest-bearing deposits with banks |
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Federal funds sold |
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Debt securities held for investment (fair value: $ |
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Debt securities available for sale at fair value |
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Loans held for sale |
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Loans held for investment (net of unearned interest) |
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Allowance for credit losses |
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Loans, net of allowance for credit losses |
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Premises and equipment, net |
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Other real estate owned |
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Intangible assets, net |
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Goodwill |
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Accrued interest receivable and other assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Deposits: |
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Noninterest-bearing |
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$ |
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$ |
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Interest-bearing |
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Total deposits |
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Short-term borrowings |
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Accrued interest payable and other liabilities |
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Subordinated debt |
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Total liabilities |
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Stockholders' equity: |
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Senior preferred stock, $ |
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Cumulative preferred stock, $ |
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Common stock, $ |
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Capital surplus |
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Retained earnings |
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Accumulated other comprehensive loss, net of tax benefit of $ |
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( |
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( |
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Total stockholders' equity |
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Total liabilities and stockholders' equity |
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$ |
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$ |
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The accompanying Notes are an integral part of these consolidated financial statements.
2
BANCFIRST CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(Dollars in thousands, except per share data)
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Three Months Ended |
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March 31, |
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2024 |
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2023 |
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INTEREST INCOME |
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Loans, including fees |
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$ |
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$ |
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Securities: |
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Taxable |
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Tax-exempt |
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Federal funds sold |
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Interest-bearing deposits with banks |
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Total interest income |
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INTEREST EXPENSE |
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Deposits |
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Short-term borrowings |
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Subordinated debt |
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Total interest expense |
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Net interest income |
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Provision for credit losses |
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Net interest income after provision for credit losses |
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NONINTEREST INCOME |
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Trust revenue |
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Service charges on deposits |
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Securities transactions |
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( |
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( |
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Sales of loans |
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Insurance commissions |
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Cash management |
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(Loss)/gain on sale of other assets |
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Other |
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Total noninterest income |
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NONINTEREST EXPENSE |
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Salaries and employee benefits |
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Occupancy, net |
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Depreciation |
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Amortization of intangible assets |
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Data processing services |
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Net expense from other real estate owned |
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Marketing and business promotion |
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Deposit insurance |
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Other |
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Total noninterest expense |
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Income before taxes |
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Income tax expense |
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Net income |
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$ |
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$ |
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NET INCOME PER COMMON SHARE |
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Basic |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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OTHER COMPREHENSIVE (LOSS)/GAIN |
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Unrealized (losses)/gains on debt securities, net of tax benefit/(expense) of $ |
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( |
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Other comprehensive (loss)/gain, net of tax benefit/(expense) of $ |
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( |
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Comprehensive income |
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$ |
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$ |
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The accompanying Notes are an integral part of these consolidated financial statements.
3
BANCFIRST CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
(Dollars in thousands)
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Three Months Ended |
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March 31, |
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2024 |
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2023 |
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COMMON STOCK |
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Issued at beginning of period |
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$ |
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$ |
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Shares issued for stock options |
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Issued at end of period |
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$ |
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$ |
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CAPITAL SURPLUS |
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Balance at beginning of period |
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$ |
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$ |
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Common stock issued for stock options |
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Stock-based compensation arrangements |
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Balance at end of period |
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$ |
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$ |
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RETAINED EARNINGS |
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Balance at beginning of period |
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$ |
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$ |
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Net income |
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Dividends on common stock ($ |
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Balance at end of period |
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$ |
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$ |
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ACCUMULATED OTHER COMPREHENSIVE LOSS |
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Unrealized (losses)/gains on securities: |
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Balance at beginning of period |
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$ |
( |
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$ |
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Net change |
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( |
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Balance at end of period |
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$ |
( |
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$ |
( |
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Total stockholders’ equity |
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$ |
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$ |
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The accompanying Notes are an integral part of these consolidated financial statements.
4
BANCFIRST CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
(Dollars in thousands)
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Three Months Ended |
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March 31, |
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2024 |
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2023 |
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CASH FLOWS FROM OPERATING ACTIVITIES |
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Net income |
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$ |
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$ |
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Adjustments to reconcile to net cash provided by operating activities: |
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Provision for credit losses |
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Depreciation and amortization |
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Net amortization of securities premiums and discounts |
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( |
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Realized securities losses |
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Gain on sales of loans |
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( |
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Cash receipts from the sale of loans originated for sale |
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Cash disbursements for loans originated for sale |
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( |
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( |
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Deferred income tax benefit |
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( |
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( |
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Gain on sale of other assets |
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( |
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( |
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Increase in interest receivable |
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( |
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( |
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Increase in interest payable |
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Amortization of stock-based compensation arrangements |
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Excess tax benefit from stock-based compensation arrangements |
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( |
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( |
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Other, net |
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Net cash provided by operating activities |
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INVESTING ACTIVITIES |
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Net decrease in federal funds sold |
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Purchases of available for sale debt securities |
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— |
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( |
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Proceeds from maturities, calls and paydowns of held for investment debt securities |
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Proceeds from maturities, calls and paydowns of available for sale debt securities |
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Purchase of equity securities |
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( |
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Proceeds from paydowns and sales of equity securities |
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Net change in loans |
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( |
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( |
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Net (payments)/receipts on derivative asset contracts |
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( |
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Purchases of premises, equipment and computer software |
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( |
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( |
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Purchase of tax credits |
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( |
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( |
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Other, net |
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Net cash used in investing activities |
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( |
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FINANCING ACTIVITIES |
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Net change in deposits |
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( |
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Net change in short-term borrowings |
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Issuance of common stock in connection with stock options, net |
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Cash dividends paid |
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( |
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Net cash provided by (used in) financing activities |
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( |
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Net increase/(decrease) in cash, due from banks and interest-bearing deposits |
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( |
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Cash, due from banks and interest-bearing deposits at the beginning of the period |
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Cash, due from banks and interest-bearing deposits at the end of the period |
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$ |
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$ |
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |
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Cash paid during the period for interest |
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$ |
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$ |
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Cash paid during the period for income taxes |
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$ |
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$ |
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Noncash investing and financing activities: |
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Unpaid common stock dividends declared |
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$ |
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$ |
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The accompanying Notes are an integral part of these consolidated financial statements.
5
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
6
(2) SECURITIES
The following table summarizes the amortized cost and estimated fair values of debt securities held for investment:
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Amortized |
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Gross |
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Gross |
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Estimated |
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March 31, 2024 |
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(Dollars in thousands) |
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Mortgage backed securities (1) |
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$ |
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$ |
— |
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$ |
— |
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$ |
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States and political subdivisions |
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— |
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— |
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Other securities |
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— |
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— |
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Total |
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$ |
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$ |
— |
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$ |
— |
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$ |
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December 31, 2023 |
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Mortgage backed securities (1) |
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$ |
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$ |
— |
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$ |
— |
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$ |
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States and political subdivisions |
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— |
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— |
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Other securities |
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— |
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— |
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Total |
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$ |
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$ |
— |
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$ |
— |
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$ |
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The following table summarizes the amortized cost and estimated fair values of debt securities available for sale:
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Amortized |
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Gross |
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Gross |
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Estimated |
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March 31, 2024 |
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(Dollars in thousands) |
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U.S. treasuries |
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$ |
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$ |
— |
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$ |
( |
) |
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$ |
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U.S. federal agencies |
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( |
) |
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Mortgage backed securities (1) |
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( |
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States and political subdivisions |
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( |
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Asset backed securities |
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|
|
— |
|
|
|
( |
) |
|
|
|
||
Other securities |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
Total |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. treasuries |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
U.S. federal agencies |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Mortgage backed securities (1) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
States and political subdivisions |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Asset backed securities |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
Other securities |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
Total |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
(1) Primarily consists of FHLMC, FNMA, GNMA and mortgage backed securities through U.S. agencies.
7
The maturities of debt securities held for investment and available for sale are summarized in the following table using contractual maturities. Actual maturities may differ from contractual maturities due to obligations that are called or prepaid. For purposes of the maturity table, mortgage-backed securities, which are not due at a single maturity date, have been presented at their contractual maturity.
|
|
March 31, 2024 |
|
|
December 31, 2023 |
|
||||||||||
|
|
Amortized |
|
|
Estimated |
|
|
Amortized |
|
|
Estimated |
|
||||
|
|
(Dollars in thousands) |
|
|||||||||||||
Held for Investment |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contractual maturity of debt securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Within one year |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
After one year but within five years |
|
|
|
|
|
|
|
|
|
|
|
|
||||
After five years but within ten years |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
After ten years |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Available for Sale |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contractual maturity of debt securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Within one year |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
After one year but within five years |
|
|
|
|
|
|
|
|
|
|
|
|
||||
After five years but within ten years |
|
|
|
|
|
|
|
|
|
|
|
|
||||
After ten years |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total debt securities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
The following table is a summary of the Company’s book value of securities that were pledged as collateral for public funds on deposit, repurchase agreements and for other purposes as required or permitted by law:
|
|
March 31, 2024 |
|
|
December 31, 2023 |
|
||
|
|
(Dollars in thousands) |
|
|||||
Book value of pledged securities |
|
$ |
|
|
$ |
|
8
There were
Realized gains/losses on debt and equity securities are reported as securities transactions within the noninterest income section of the consolidated statement of comprehensive income.
The following table summarizes debt securities with unrealized losses, segregated by the duration of the unrealized loss, at March 31, 2024 and December 31, 2023 respectively:
|
|
|
|
Less than 12 Months |
|
|
More than 12 Months |
|
|
Total |
|
||||||||||||||||
|
Number of investments |
|
|
Estimated |
|
|
Unrealized |
|
|
Estimated |
|
|
Unrealized |
|
|
Estimated |
|
|
Unrealized |
|
|||||||
|
|
|
|
(Dollars in thousands) |
|
||||||||||||||||||||||
March 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Available for Sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
U.S. treasuries |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
U.S. federal agencies |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||||
Mortgage backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
States and political subdivisions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Asset backed securities |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other securities |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Available for Sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
U.S. treasuries |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
U.S. federal agencies |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||||
Mortgage backed securities |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
States and political subdivisions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Asset backed securities |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other securities |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
The Company has the ability and intent to hold the debt securities classified as held for investment until they mature, at which time the Company will receive full value for the debt securities. Furthermore, as of March 31, 2024 and December 31, 2023, the Company also had the ability and intent to hold the debt securities classified as available for sale for a period of time sufficient for a recovery of cost. The unrealized losses are due to increases in market interest rates over the yields available at the time the underlying debt securities were purchased. The fair value of those debt securities having unrealized losses is expected to recover as the securities approach their maturity date or repricing date, or if market yields for such investments decline. The Company has no intent or requirement to sell before the recovery of the unrealized loss; therefore, no impairment loss was realized in the Company’s consolidated statement of comprehensive income.
9
(3) LOANS HELD FOR INVESTMENT AND ALLOWANCE FOR CREDIT LOSSES ON LOANS
Loans held for investment are summarized by portfolio segment as follows:
|
March 31, 2024 |
|
|
December 31, 2023 |
|
||
|
(Dollars in thousands) |
|
|||||
Real estate: |
|
|
|
|
|
||
Commercial real estate owner occupied |
|
|
|
|
|
||
Commercial real estate non-owner occupied |
|
|
|
|
|
||
Construction and development < 60 months |
|
|
|
|
|
||
Construction residential real estate < 60 months |
|
|
|
|
|
||
Residential real estate first lien |
|
|
|
|
|
||
Residential real estate all other |
|
|
|
|
|
||
Agriculture |
|
|
|
|
|
||
Commercial non-real estate |
|
|
|
|
|
||
Consumer non-real estate |
|
|
|
|
|
||
Oil and gas |
|
|
|
|
|
||
Total (1) |
$ |
|
|
$ |
|
||
(1) Excludes accrued interest receivable of $ |
|
||||||
|
|
The Company's loans are currently
The Company's portfolio segment descriptions and the weighted average remaining life of portfolio segments are disclosed in Note (5) to the Company's Annual Report on Form 10-K for the year ended December 31, 2023.
Other Real Estate Owned and Repossessed Assets and Loan Modifications
The following is a summary of other real estate owned and repossessed assets:
|
|
|
|
|
|
|
||
|
|
March 31, 2024 |
|
|
December 31, 2023 |
|
||
|
|
(Dollars in thousands) |
|
|||||
Other real estate owned and repossessed assets |
|
$ |
|
|
$ |
|
As of both March 31, 2024 and December 31, 2023, other real estate owned included a commercial real estate property recorded at approximately $
This property had the following rental income and operating expenses for the periods presented.
|
|
For the Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
(Dollars in thousands) |
|
|||||
Rental income |
|
$ |
|
|
$ |
|
||
Operating expense |
|
|
|
|
|
|
During the three months ended March 31, 2024, the Company sold property held in other real estate owned for a total gain of $
10
The Company charges interest on principal balances outstanding on modified loans during deferral periods. The current and future financial effects of the recorded balance of loans considered to be modified during the period were not considered to be material. The recorded balance of loans modified during the three months ended March 31, 2024 was approximately $
Nonaccrual loans
The Company did
Nonaccrual loans guaranteed by government agencies totaled approximately $
The following table is a summary of amounts included in nonaccrual loans, segregated by portfolio segment.
|
|
March 31, 2024 |
|
|
December 31, 2023 |
|
||
|
|
(Dollars in thousands) |
|
|||||
Real estate: |
|
|
|
|
|
|
||
Commercial real estate owner occupied |
|
$ |
|
|
$ |
|
||
Commercial real estate non-owner occupied |
|
|
|
|
|
|
||
Construction and development < 60 months |
|
|
|
|
|
|
||
Construction residential real estate < 60 months |
|
|
|
|
|
|
||
Residential real estate first lien |
|
|
|
|
|
|
||
Residential real estate all other |
|
|
|
|
|
|
||
Agriculture |
|
|
|
|
|
|
||
Commercial non-real estate |
|
|
|
|
|
|
||
Consumer non-real estate |
|
|
|
|
|
|
||
Oil and gas |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
11
Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. The following table presents an age analysis of the Company's loans held for investment:
|
|
Age Analysis of Past Due Loans |
|
|||||||||||||||||||||||||
|
|
30-59 |
|
|
60-89 |
|
|
90 Days |
|
|
Total |
|
|
Current |
|
|
Total Loans |
|
|
Accruing |
|
|||||||
|
|
(Dollars in thousands) |
|
|||||||||||||||||||||||||
As of March 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Commercial real estate owner occupied |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Commercial real estate non-owner occupied |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Construction and development < 60 months |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
||||||
Construction residential real estate < 60 months |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
||||||
Residential real estate first lien |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Residential real estate all other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Agriculture |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Commercial non-real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Consumer non-real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Oil and gas |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
As of December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Commercial real estate owner occupied |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Commercial real estate non-owner occupied |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Construction and development < 60 months |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
||||||
Construction residential real estate < 60 months |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Residential real estate first lien |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Residential real estate all other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Agriculture |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Commercial non-real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Consumer non-real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Oil and gas |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
Credit Quality Indicators
The Company considers credit quality indicators to monitor the credit risk in the loan portfolio including volume and severity of loan delinquencies, nonaccrual loans, internal grading of loans, historical credit loss experience and economic conditions. These indicators are reviewed and updated regularly throughout the year. An internal risk grading system is used to indicate the credit risk of loans. The loan grades used by the Company are for internal risk identification purposes and do not directly correlate to regulatory classification categories or any financial reporting definitions. The general characteristics of the risk grades and the table summarizing the Company’s gross loans held for investment by year of origination and internally assigned credit grades as of December 31, 2023, are disclosed in Note (5) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
The Company’s revolving loans that are converted to term loans are not material and therefore have not been presented.
The following table summarizes the Company’s gross loans held for investment by year of origination and internally assigned credit grades:
12
|
|
Term Loans Amortized Cost Basis by Origination Year |
|
|
Revolving Loans |
|
|
|
|
|||||||||||||||||||||||
(Dollars in thousands) |
|
2024 |
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
Prior |
|
|
Amortized Cost Basis |
|
|
Total |
|
||||||||
As of March 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial real estate owner occupied |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Grade 1 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Grade 2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Grade 3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Grade 4 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Grade 5 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Total commercial real estate owner occupied |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial real estate non-owner occupied |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Grade 1 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Grade 2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Grade 3 |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||||
Grade 4 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||||
Total commercial real estate non-owner occupied |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Construction and development < 60 months |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Grade 1 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Grade 2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Grade 3 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||||
Grade 4 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Total construction and development < 60 months |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Construction residential real estate < 60 months |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Grade 1 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Grade 2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Grade 3 |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Grade 4 |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Total construction residential real estate < 60 months |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Residential real estate first lien |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Grade 1 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Grade 2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||||||
Grade 3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||||||
Grade 4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||||||
Total residential real estate first lien |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Residential real estate all other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Grade 1 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Grade 2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Grade 3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Grade 4 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||||
Total residential real estate all other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Agriculture |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Grade 1 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Grade 2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Grade 3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Grade 4 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total Agriculture |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial non-real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Grade 1 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Grade 2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Grade 3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Grade 4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Grade 5 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Total commercial non-real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Consumer non-real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Grade 1 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Grade 2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Grade 3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Grade 4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total consumer non-real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Oil and gas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Grade 1 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Grade 2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Grade 3 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Grade 4 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Total oil and gas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total loans held for investment |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
13
The following tables summarize the Company's gross charge-offs by year of origination for the periods indicated:
|
|
Term Loans Amortized Cost Basis by Origination Year |
|
|
Revolving Loans |
|
|
|
|
|||||||||||||||||||||||
|
|
2024 |
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
Prior |
|
|
Amortized Cost Basis |
|
|
Total |
|
||||||||
|
|
(Dollars in thousands) |
|
|||||||||||||||||||||||||||||
Three months ended March 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial real estate owner occupied |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current-period gross charge-offs |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Commercial real estate non-owner occupied |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current-period gross charge-offs |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Construction and development < 60 months |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current-period gross charge-offs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Construction residential real estate < 60 months |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current-period gross charge-offs |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Residential real estate first lien |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current-period gross charge-offs |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Residential real estate all other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current-period gross charge-offs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Agriculture |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current-period gross charge-offs |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Commercial non-real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current-period gross charge-offs |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Consumer non-real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current-period gross charge-offs |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Oil and gas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current-period gross charge-offs |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Total current-period gross charge-offs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
Term Loans Amortized Cost Basis by Origination Year |
|
|
Revolving Loans |
|
|
|
|
|||||||||||||||||||||||
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
Prior |
|
|
Amortized Cost Basis |
|
|
Total |
|
||||||||
|
|
(Dollars in thousands) |
|
|||||||||||||||||||||||||||||
Three months ended March 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial real estate owner occupied |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current-period gross charge-offs |
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|||||
Commercial real estate non-owner occupied |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current-period gross charge-offs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Construction and development < 60 months |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current-period gross charge-offs |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Construction residential real estate < 60 months |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current-period gross charge-offs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Residential real estate first lien |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current-period gross charge-offs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Residential real estate all other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current-period gross charge-offs |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||||
Agriculture |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current-period gross charge-offs |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||||
Commercial non-real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current-period gross charge-offs |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Consumer non-real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current-period gross charge-offs |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Oil and gas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current-period gross charge-offs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total current-period gross charge-offs |
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
14
Allowance for Credit Losses Methodology
The Company determines its provision for credit losses and allowance for credit losses using the current expected credit loss methodology that is referred to as the current expected credit loss ("CECL") model. The allowance for current expected credit losses is measured on a collective (pool) basis when similar risk characteristics exist. The allowance for credit losses methodology is disclosed in Note (5) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
The following table details activity in the allowance for credit losses on loans for the period presented. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.
|
|
Allowance for Credit Losses |
|
|||||||||||||||||||||
|
|
Balance at |
|
|
Charge- |
|
|
Recoveries |
|
|
Net |
|
|
Provision for /(benefit from) credit losses on loans |
|
|
Balance at |
|
||||||
|
|
(Dollars in thousands) |
|
|||||||||||||||||||||
Three Months Ended March 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial real estate owner occupied |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Commercial real estate non-owner occupied |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
|
|||
Construction and development < 60 months |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Construction residential real estate < 60 months |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
|
|||
Residential real estate first lien |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Residential real estate all other |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Agriculture |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Commercial non-real estate |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Consumer non-real estate |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Oil and gas |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
|
|||
Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
|
Allowance for Credit Losses |
|
|||||||||||||||||||||
|
|
Balance at |
|
|
Charge- |
|
|
Recoveries |
|
|
Net |
|
|
Provision for /(benefit from) credit losses on loans |
|
|
Balance at |
|
||||||
|
|
(Dollars in thousands) |
|
|||||||||||||||||||||
Three Months Ended March 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial real estate owner occupied |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Commercial real estate non-owner occupied |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
|
|||
Construction and development < 60 months |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Construction residential real estate < 60 months |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
Residential real estate first lien |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential real estate all other |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Agriculture |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Commercial non-real estate |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Consumer non-real estate |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Oil and gas |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
15
Purchased Credit Deteriorated Loans
The Company has previously purchased loans, for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination. The Company did not purchase credit-deteriorated loans during the three month period ended March 31, 2024 or March 31, 2023.
Collateral Dependent Loans
A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. During the three months ended March 31, 2024 and 2023, no material amount of interest income was recognized on collateral-dependent loans subsequent to their classification as collateral-dependent.
|
|
Collateral Type |
|
|
|
|
|
|
|
|||||||||||
|
|
Real Estate |
|
|
Business Assets |
|
|
Other Assets |
|
|
Total |
|
|
Specific Allocation |
|
|||||
|
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|||||||||||
As of March 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Commercial real estate owner occupied |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Commercial real estate non-owner occupied |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Construction and development < 60 months |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Construction residential real estate < 60 months |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Residential real estate first lien |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Residential real estate all other |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Agriculture |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Commercial non-real estate |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Consumer non-real estate |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Oil and gas |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total collateral-dependent loans held for investment |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
Collateral Type |
|
|
|
|
|
|
|
|||||||||||
|
|
Real Estate |
|
|
Business Assets |
|
|
Other Assets |
|
|
Total |
|
|
Specific Allocation |
|
|||||
|
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|||||||||||
As of December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Commercial real estate owner occupied |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Commercial real estate non-owner occupied |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Construction and development < 60 months |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Construction residential real estate < 60 months |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Residential real estate first lien |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Residential real estate all other |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Agriculture |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Commercial non-real estate |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Consumer non-real estate |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Oil and gas |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total collateral-dependent loans held for investment |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
Non-Cash Transfers from Loans and Premises and Equipment
Transfers from loans and premises and equipment to other real estate owned and repossessed assets are non-cash transactions, and are not included in the consolidated statements of cash flow.
16
Transfers from loans and premises and equipment to other real estate owned and repossessed assets during the periods presented are summarized as follows:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
(Dollars in thousands) |
|
|||||
Other real estate owned |
|
$ |
|
|
$ |
|
||
Repossessed assets |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
(4) INTANGIBLE ASSETS AND GOODWILL
The following is a summary of intangible assets as of the date listed:
|
|
Gross |
|
|
Accumulated |
|
|
Net |
|
|||
|
|
(Dollars in thousands) |
|
|||||||||
March 31, 2024 |
|
|
|
|
|
|
|
|
|
|||
Core deposit intangibles |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Customer relationship intangibles |
|
|
|
|
|
( |
) |
|
|
|
||
Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
December 31, 2023 |
|
|
|
|
|
|
|
|
|
|||
Core deposit intangibles |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Customer relationship intangibles |
|
|
|
|
|
( |
) |
|
|
|
||
Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
The following is a summary of goodwill by business segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
BancFirst Metropolitan Banks |
|
|
BancFirst Community Banks |
|
|
Pegasus |
|
|
Worthington |
|
|
Other Financial Services |
|
|
Executive, Operations & Support |
|
|
Consolidated |
|
|||||||
|
|
(Dollars in thousands) |
|
|||||||||||||||||||||||||
Three months ended March 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning and end of period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
Additional information for intangible assets can be found in Note (7) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
(5) SUBORDINATED DEBT
In January 2004, the Company established BFC Capital Trust II (“BFC II”), a trust formed under the Delaware Business Trust Act. The Company owns all of the common securities of BFC II. In February 2004, BFC II issued $
17
On June 17, 2021, the Company completed a private placement, under Regulation D of the Securities Act of 1933, of $
The Company may, at its option, beginning with the interest payment date of June 30, 2031, and on any scheduled interest payment date thereafter, redeem the Subordinated Notes, in whole or in part. In addition,
(6) STOCK-BASED COMPENSATION
On May 25, 2023, the shareholders of the Company adopted the BancFirst Corporation 2023 Restricted Stock Unit Plan (the "RSU Plan"). The RSU Plan was effective as of June 1, 2023 and for a period of
The following table is a summary of the activity under the Company's RSU plan.
|
|
|
|
|
|
|
||
|
|
|
|
|
Wgtd. Avg. |
|
||
|
|
Restricted |
|
|
Grant Date |
|
||
|
|
Stock Units |
|
|
Fair Value |
|
||
Three Months Ended March 31, 2024 |
|
|
|
|
|
|
||
Nonvested at December 31, 2023 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Forfeited |
|
|
( |
) |
|
|
|
|
Nonvested at March 31, 2024 |
|
|
|
|
|
|
The Company has had the BancFirst Corporation Directors’ Deferred Stock Compensation Plan (the “Deferred Stock Compensation Plan”) since May 1999. As of March 31, 2024, there are
A summary of the accumulated stock units under the Deferred Stock Compensation Plan is as follows:
|
|
|
|
|
|
|
||
|
|
March 31, 2024 |
|
|
December 31, 2023 |
|
||
Accumulated stock units |
|
|
|
|
|
|
||
Average price |
|
$ |
|
|
$ |
|
18
The Company terminated the BancFirst Corporation Stock Option Plan (the “Employee Plan”) on
The Company terminated the BancFirst Corporation Non-Employee Directors’ Stock Option Plan (the “Non-Employee Directors’ Plan”) on
The following table is a summary of the activity under both the Employee Plan and the Non-Employee Directors’ Plan:
|
|
|
|
|
|
|
|
Wgtd. Avg. |
|
|
|
|||
|
|
|
|
|
Wgtd. Avg. |
|
|
Remaining |
|
Aggregate |
|
|||
|
|
|
|
|
Exercise |
|
|
Contractual |
|
Intrinsic |
|
|||
|
|
Options |
|
|
Price |
|
|
Term |
|
Value |
|
|||
|
|
(Dollars in thousands, except option data) |
|
|||||||||||
Three Months Ended March 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|||
Outstanding at December 31, 2023 |
|
|
|
|
$ |
|
|
|
|
|
|
|||
Options exercised |
|
|
( |
) |
|
|
|
|
|
|
|
|
||
Options canceled, forfeited, or expired |
|
|
( |
) |
|
|
|
|
|
|
|
|
||
Outstanding at March 31, 2024 |
|
|
|
|
|
|
|
|
$ |
|
||||
Exercisable at March 31, 2024 |
|
|
|
|
|
|
|
|
$ |
|
The following table has additional information regarding options exercised under both the Employee Plan and the Non-Employee Directors’ Plan:
|
|
Three Months Ended |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
(Dollars in thousands) |
|
|||||
Total intrinsic value of options exercised |
|
$ |
|
|
$ |
|
||
Cash received from options exercised |
|
|
|
|
|
|
||
Tax benefit realized from options exercised |
|
|
|
|
|
|
The Company currently uses newly issued shares for stock option exercises, but reserves the right to use shares purchased under the Company’s Stock Repurchase Program (the “SRP”) in the future.
Although not required or expected, the Company may settle some options or restricted stock units in cash on a limited basis at the discretion of the Company. The Company had
Stock-based compensation expense is charged to salaries and benefits expense on the Consolidated Statements of Comprehensive Income.
The components of stock-based compensation expense for all share-based compensation plans and related tax benefits are as follows:
|
|
Three Months Ended |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
(Dollars in thousands) |
|
|||||
Stock-based compensation expense |
|
$ |
|
|
$ |
|
||
Tax benefit |
|
|
|
|
|
|
||
Stock-based compensation expense, net of tax |
|
$ |
|
|
$ |
|
19
The Company will continue to amortize the unearned stock-based compensation expense over the remaining weighted average vesting period of approximately
|
|
March 31, 2024 |
|
|
|
|
(Dollars in thousands) |
|
|
Unearned stock-based compensation expense for unvested stock options |
|
$ |
|
|
Unearned stock-based compensation expense for unvested RSU's |
|
|
|
(7) STOCKHOLDERS’ EQUITY
The Company has adopted a Stock Repurchase Program (the “SRP”). The SRP may be used as a means to increase earnings per share and return on equity. In addition, the SRP may be used to purchase treasury stock for the exercise of stock options or for distributions under the Deferred Stock Compensation Plan, to provide liquidity for optionees to dispose of stock from exercises of their stock options and to provide liquidity for stockholders wishing to sell their stock. All shares repurchased under the SRP have been retired and not held as treasury stock. The timing, price and amount of stock repurchases under the SRP is determined by management and approved by the Company’s Executive Committee.
The following table is a summary of the shares under the SRP:
|
|
Three Months Ended |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Shares remaining to be repurchased |
|
|
|
|
|
|
20
BancFirst Corporation, BancFirst, Pegasus and Worthington are subject to risk-based capital guidelines issued by the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation (“FDIC”). These guidelines are used to evaluate capital adequacy and involve both quantitative and qualitative evaluations of assets, liabilities and certain off-balance-sheet items calculated under regulatory practices. Failure to meet the minimum capital requirements can initiate certain mandatory or discretionary actions by the regulatory agencies that could have a direct material effect on the Company’s consolidated financial statements. The Company believes that as of March 31, 2024, BancFirst Corporation, BancFirst, Pegasus and Worthington each met all capital adequacy requirements to which they are subject.
|
|
|
|
|
|
|
Required |
|
|
|
To Be Well |
|||||||||||||
|
|
|
|
|
|
|
For Capital |
|
With |
|
Capitalized Under |
|||||||||||||
|
|
|
|
|
|
|
Adequacy |
|
Capital Conservation |
|
Prompt Corrective |
|||||||||||||
|
|
Actual |
|
Purposes |
|
Buffer |
|
Action Provisions |
||||||||||||||||
|
|
Amount |
|
|
Ratio |
|
Amount |
|
|
Ratio |
|
Amount |
|
|
Ratio |
|
Amount |
|
|
Ratio |
||||
|
|
(Dollars in thousands) |
||||||||||||||||||||||
As of March 31, 2024: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Capital |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(to Risk Weighted Assets)- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
BancFirst Corporation |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
N/A |
|
|
N/A |
|||||||
BancFirst |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
||||||||
Pegasus |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Worthington |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Common Equity Tier 1 Capital |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(to Risk Weighted Assets)- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
BancFirst Corporation |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
N/A |
|
|
N/A |
|||||||
BancFirst |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
||||||||
Pegasus |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Worthington |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Tier 1 Capital |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(to Risk Weighted Assets)- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
BancFirst Corporation |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
N/A |
|
|
N/A |
|||||||
BancFirst |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
||||||||
Pegasus |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Worthington |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Tier 1 Capital |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(to Quarterly Average Assets)- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
BancFirst Corporation |
|
$ |
|
|
|
$ |
|
|
|
N/A |
|
|
N/A |
|
N/A |
|
|
N/A |
||||||
BancFirst |
|
|
|
|
|
|
|
|
|
N/A |
|
|
N/A |
|
$ |
|
|
|||||||
Pegasus |
|
|
|
|
|
|
|
|
|
N/A |
|
|
N/A |
|
|
|
|
|||||||
Worthington |
|
|
|
|
|
|
|
|
|
N/A |
|
|
N/A |
|
|
|
|
As of March 31, 2024, BancFirst, Pegasus and Worthington were classified by the Federal Reserve as “well capitalized” under the prompt corrective action provisions. The Common Equity Tier 1 Capital of BancFirst Corporation, BancFirst, Pegasus and Worthington includes common stock and related paid-in capital and retained earnings. In connection with the adoption of the Basel III Capital Rules, the election was made to opt-out of the requirement to include most components of accumulated other comprehensive income in Common Equity Tier 1 Capital. Common Equity Tier 1 Capital for BancFirst Corporation, BancFirst, Pegasus and Worthington is reduced by goodwill and other intangible assets, net of associated deferred tax liabilities. The Company’s trust preferred securities have continued to be included in Tier 1 capital, as the Company’s total assets do not exceed $
21
(8) NET INCOME PER COMMON SHARE
Basic and diluted net income per common share are calculated as follows:
|
|
|
|
|
|
|
||
|
|
Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
(Dollars in thousands, except per share data) |
|
|||||
|
|
|
|
|
|
|
||
(Numerator) |
|
|
|
|
|
|
||
Income available to common stockholders |
|
$ |
|
|
$ |
|
||
(Denominator) |
|
|
|
|
|
|
||
Weighted average shares outstanding for basic earnings per common share |
|
|
|
|
|
|
||
Dilutive effect of stock compensation |
|
|
|
|
|
|
||
Weighted-average shares outstanding for diluted earnings per common share |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Basic earnings per share |
|
$ |
|
|
$ |
|
||
Diluted earnings per share |
|
$ |
|
|
$ |
|
The following table shows the number of options and RSU's that were excluded from the computation of diluted net income per common share for each period because they were anti-dilutive for the period:
|
|
Shares |
|
|
Three Months Ended March 31, 2024 |
|
|
|
|
Three Months Ended March 31, 2023 |
|
|
|
(9) FAIR VALUE MEASUREMENTS
Accounting standards define fair value as the price that would be received to sell an asset or the price paid to transfer a liability in the principal or most advantageous market available to the entity in an orderly transaction between market participants on the measurement date.
FASB Accounting Standards Codification (“ASC”) Topic 820 establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:
Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis
A description of the valuation methodologies and key inputs used to measure financial assets and financial liabilities at fair value on a recurring basis, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to the following categories of the Company’s financial assets and financial liabilities.
Debt Securities Available for Sale
Debt securities classified as available for sale are reported at fair value. U.S. Treasuries are valued using Level 1 inputs. Other debt securities available for sale including U.S. federal agencies, registered mortgage backed debt securities and state and political subdivisions are valued using prices from an independent pricing service utilizing Level 2 data. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade
22
execution data, market consensus prepayment speeds, credit information and a bond’s terms and conditions, among other things. The Company also invests in private label mortgage backed debt securities for which observable information is not readily available. These debt securities are reported at fair value utilizing Level 3 inputs. For these debt securities, management determines the fair value based on replacement cost, the income approach or information provided by outside consultants or lead investors. Discount rates are primarily based on reference to interest rate spreads on comparable debt securities of similar duration and credit rating as determined by the nationally recognized rating agencies adjusted for a lack of trading volume. Significant unobservable inputs are developed by investment securities professionals involved in the active trading of similar debt securities.
The Company reviews the prices for Level 1 and Level 2 debt securities supplied by the independent pricing service for reasonableness and to ensure such prices are aligned with traditional pricing matrices. In general, the Company does not purchase investment portfolio debt securities that are esoteric or that have complicated structures. The Company’s portfolio primarily consists of traditional investments including U.S. Treasury obligations, federal agency mortgage pass-through debt securities, general obligation municipal bonds and municipal revenue bonds. Pricing for such instruments is easily obtained. For in-state bond issues that have relatively low issue sizes and liquidity, the Company utilizes the same parameters for pricing mentioned in the preceding paragraph adjusted for the specific issue. Periodically, the Company will validate prices supplied by the independent pricing service by comparison to prices obtained from third party sources.
Derivatives
Derivatives are reported at fair value utilizing Level 2 inputs. The Company obtains dealer and market quotations to value its oil and gas swaps and options. The Company utilizes dealer quotes and observable market data inputs to substantiate internal valuation models.
The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of the periods presented, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:
|
|
Level 1 Inputs |
|
|
Level 2 Inputs |
|
|
Level 3 Inputs |
|
|
Total Fair Value |
|
||||
|
|
(Dollars in thousands) |
|
|||||||||||||
March 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Debt securities available for sale: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Treasury |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
U.S. federal agencies |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Mortgage-backed securities |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
States and political subdivisions |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Asset backed securities |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Other debt securities |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Debt securities available for sale: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Treasury |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
U.S. federal agencies |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Mortgage-backed securities |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
States and political subdivisions |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Asset backed securities |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Other debt securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
23
The changes in Level 3 assets measured at estimated fair value on a recurring basis during the periods presented were as follows:
|
|
Three Months Ended March 31, |
|
|
Twelve Months Ended December 31, |
|
||
|
|
2024 |
|
|
2023 |
|
||
|
|
(Dollars in thousands) |
|
|||||
Balance at the beginning of the year |
|
$ |
|
|
$ |
|
||
Transfers to level 2 |
|
|
|
|
|
( |
) |
|
Settlements |
|
|
— |
|
|
|
( |
) |
Balance at the end of the period |
|
$ |
|
|
$ |
|
The Company’s policy is to recognize transfers in and transfers out of Levels 1, 2 and 3 as of the end of the reporting period. During the three months ended March 31, 2024, the Company did not transfer any debt securities. During the year ended December 31, 2023, the Company transferred debt securities from Level 3 to Level 2 due to a review of the pricing models that determined some state and political subdivision securities to be Level 2.
Financial Assets and Financial Liabilities Measured at Fair Value on a Nonrecurring Basis
Certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis; the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). These financial assets and financial liabilities are reported at fair value utilizing Level 3 inputs.
The Company invests in equity securities without readily determinable fair values and utilizes Level 3 inputs. These equity securities are reported at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The realized and unrealized gains and losses are reported as securities transactions in the noninterest income section of the consolidated statements of comprehensive income.
Collateral dependent loans are reported at the fair value of the underlying collateral if repayment is dependent on liquidation of the collateral. When the Company determines that foreclosure is probable or when the borrower is experiencing financial difficulty at the reporting date and repayment is expected to be provided substantially through the operation or sale of the collateral, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. In no case does the fair value of a collateral dependent loan exceed the fair value of the underlying collateral. The collateral dependent loans are adjusted to fair value through a specific allocation of the allowance for credit losses or a direct charge-down of the loan.
Repossessed assets, upon initial recognition, are measured and adjusted to fair value through a charge-off to the allowance for possible credit losses based upon the fair value of the repossessed asset.
Other real estate owned is revalued at fair value subsequent to initial recognition, with any losses recognized in net expense from other real estate owned.
The following table summarizes assets measured at fair value on a nonrecurring basis during the period presented. These nonrecurring fair values do not represent all assets, only those assets that have been adjusted during the reporting period:
|
|
Total Fair Value |
|
|
|
|
Level 3 |
|
|
|
|
(Dollars in thousands) |
|
|
As of and for the Year-to-date Period Ended March 31, 2024 |
|
|
|
|
Equity securities |
|
$ |
|
|
Collateral dependent loans |
|
|
|
|
Repossessed assets |
|
|
|
|
Other real estate owned |
|
|
|
|
As of and for the Year-to-date Period Ended December 31, 2023 |
|
|
|
|
Equity securities |
|
$ |
|
|
Collateral dependent loans |
|
|
|
|
Repossessed assets |
|
|
|
|
Other real estate owned |
|
|
|
24
Estimated Fair Value of Financial Instruments
The Company is required under current authoritative accounting guidance to disclose the estimated fair value of their financial instruments that are not recorded at fair value. For the Company, as for most financial institutions, substantially all of its assets and liabilities are considered financial instruments. A financial instrument is defined as cash, evidence of an ownership interest in an entity or a contract that creates a contractual obligation or right to deliver or receive cash or another financial instrument from a second entity. The following methods and assumptions are used to estimate the fair value of each class of financial instruments:
Cash and Cash Equivalents Include: Cash and Due from Banks and Interest-Bearing Deposits with Banks
The carrying amount of these short-term instruments is based on a reasonable estimate of fair value.
Federal Funds Sold
The carrying amount of these short-term instruments is a reasonable estimate of fair value.
Debt Securities Held for Investment
For debt securities held for investment, which are generally traded in secondary markets, fair values are based on quoted market prices or dealer quotes, if available. If a quoted market price is not available, fair value is estimated using quoted market prices for similar debt securities making adjustments for credit or liquidity if applicable.
Loans Held For Sale
The Company originates mortgage loans to be sold. At the time of origination, the acquiring bank has already been determined and the terms of the loan, including interest rate, have already been set by the acquiring bank, allowing the Company to originate the loan at fair value. Mortgage loans are generally sold within
Loans Held For Investment
To determine the fair value of loans held for investment, the Company uses an exit price calculation, which takes into account factors such as liquidity, credit and the nonperformance risk of loans. For certain homogeneous categories of loans, such as some residential mortgages, fair values are estimated using the quoted market prices for securities backed by similar loans, adjusted for differences in loan characteristics. The fair values of other types of loans are estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.
Deposits
The fair values of transaction and savings accounts are the amounts payable on demand at the reporting date. The fair values of fixed-maturity certificates of deposit are estimated using the rates currently offered for deposits of similar remaining maturities.
Short-Term Borrowings
The amounts payable on these short-term instruments are reasonable estimates of fair value.
Subordinated Debt
The fair values of subordinated debt are estimated using the rates that would be charged for subordinated debt of similar remaining maturities.
Loan Commitments and Letters of Credit
The fair values of commitments are estimated using the fees currently charged to enter into similar agreements, taking into account the terms of the agreements. The fair values of letters of credit are based on fees currently charged for similar agreements.
25
The estimated fair values of the Company’s financial instruments that are reported at amortized cost in the Company’s consolidated balance sheets, segregated by the level of valuation inputs within the fair value hierarchy utilized to measure fair value, are as follows:
|
|
|
|
|
|
|
||||||||||
|
|
March 31, 2024 |
|
|
December 31, 2023 |
|
||||||||||
|
|
Carrying |
|
|
Fair Value |
|
|
Carrying |
|
|
Fair Value |
|
||||
|
|
(Dollars in thousands) |
|
|||||||||||||
FINANCIAL ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Level 2 inputs: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Federal funds sold |
|
|
|
|
|
|
|
$ |
|
|
|
|
||||
Debt securities held for investment |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loans held for sale |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Level 3 inputs: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Debt securities held for investment |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loans, net of allowance for credit losses |
|
|
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|
||||
FINANCIAL LIABILITIES |
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||||
Level 2 inputs: |
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|
||||
Deposits |
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|
||||
Short-term borrowings |
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|
||||
Subordinated debt |
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|
|
|
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|
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|
||||
OFF-BALANCE-SHEET FINANCIAL INSTRUMENTS |
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||||
Loan commitments |
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|
||||
Letters of credit |
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|
|
Non-financial Assets and Non-financial Liabilities Measured at Fair Value
The Company has
26
(10) DERIVATIVE FINANCIAL INSTRUMENTS
The Company enters into oil and gas swaps and options contracts to accommodate the business needs of its customers. Upon the origination of an oil or gas swap or option contract with a customer, to mitigate the exposure to fluctuations in oil and gas prices, the Company simultaneously enters into an offsetting contract with a counterparty. These derivatives are not designated as hedged instruments and are recorded on the Company's consolidated balance sheet at fair value and are included in other assets. The Company's derivative financial instruments require a daily margin to be posted, which fluctuates with oil and gas prices. At March 31, 2024, the Company had a margin asset included in other assets in the amount of $
The Company utilizes dealer quotations and observable market data inputs to substantiate internal valuation models. The notional amounts and estimated fair values of oil and gas derivative positions outstanding are presented in the following table:
|
|
|
|
March 31, 2024 |
|
|
December 31, 2023 |
|
||||||||||
Oil and Natural Gas Swaps and Options |
|
Notional Units |
|
Notional |
|
|
Estimated |
|
|
Notional |
|
|
Estimated |
|
||||
|
|
|
|
(Notional amounts and dollars in thousands) |
|
|||||||||||||
Oil |
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|
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|
||||
Derivative assets |
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Barrels |
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|
|
$ |
|
|
|
|
|
$ |
|
||||
Derivative liabilities |
|
Barrels |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
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|
||||
Gas/Natural Gas Liquids |
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|
|
|
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|
||||
Derivative assets |
|
MMBTUs/Gallons |
|
|
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|
|
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|
|
||||
Derivative liabilities |
|
MMBTUs/Gallons |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
||||
Total Fair Value |
|
Included in |
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|
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|
|
|
|
|
|
|
|
||||
|
Other assets |
|
|
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|
|
|
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|
|||||
|
Other liabilities |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
The following table is a summary of the Company's recognized income related to the activity, which was included in other noninterest income:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
(Dollars in thousands) |
|
|||||
|
$ |
|
|
$ |
|
The Company's credit exposure on oil and gas swaps and options varies based on the current market prices of oil and natural gas. Other than credit risk, changes in the fair value of customer positions will be offset by equal and opposite changes in the counterparty positions. The net positive fair value of the contracts represents the profit derived from the activity and is unaffected by the market price movements. The Company's share of total profit is approximately
Customer credit exposure is managed by strict position limits and is primarily offset by first liens on production while the remainder is offset by cash. Counterparty credit exposure is managed by selecting highly rated counterparties (rated A- or better by Standard and Poor's) and monitoring market information.
The following table is a summary of the Company's net credit exposure relating to oil and gas swaps and options with bank counterparties:
|
|
March 31, 2024 |
|
|
December 31, 2023 |
|
||
|
|
(Dollars in thousands) |
|
|||||
Credit exposure |
|
$ |
|
|
$ |
|
Balance Sheet Offsetting
Derivatives may be eligible for offset in the consolidated balance sheet and/or subject to master netting arrangements. The Company's derivative transactions with upstream financial institution counterparties and bank customers are generally executed under International Swaps and Derivative Association ("ISDA") master agreements, which include "right of set-off" provisions. In such cases
27
there is generally a legally enforceable right to offset recognized amounts and there may be an intention to settle such amounts on a net basis. Nonetheless, the Company does not generally offset such financial instruments for financial reporting purposes.
(11) SEGMENT INFORMATION
The Company evaluates its performance with an internal profitability measurement system that measures the profitability of its business units on a pre-tax basis. The
The results of operations and selected financial information for the six business units are as follows:
|
|
BancFirst Metropolitan |
|
|
BancFirst Community |
|
|
Pegasus |
|
|
Worthington |
|
|
Other |
|
|
Executive, |
|
|
Eliminations |
|
|
Consolidated |
|
||||||||
|
|
(Dollars in thousands) |
|
|||||||||||||||||||||||||||||
Three Months Ended March 31, 2024 |
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|||||||
Noninterest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||||||
Income before taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended March 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|||||||
Noninterest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||||||
Income before taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
March 31, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||||||
December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
The financial information for each business unit is presented on the basis used internally by management to evaluate performance and allocate resources. The Company utilizes a transfer pricing system to allocate the benefit or cost of funds provided or used by the various business units. Certain services provided by the support group to other business units, such as item processing, are allocated at rates approximating the cost of providing the services. Eliminations are adjustments to consolidate the business units and companies.
28
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition as of March 31, 2024 and December 31, 2023 and results of operations for the three months ended March 31, 2024 should be read in conjunction with our consolidated financial statements and notes to the consolidated financial statements for the year ended December 31, 2023, and the other information included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Certain risks, uncertainties and other factors, including those set forth under "Risk Factors" in Part I, Item 1A of the 2023 Form 10-K, and "Item 1A, Risk Factors" in this Quarterly Report on Form 10-Q, may cause actual results to differ materially from the results discussed in the forward-looking statements appearing in this discussion and analysis.
FORWARD LOOKING STATEMENTS
The Company may make forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 with respect to earnings, credit quality, corporate objectives, interest rates and other financial and business matters. Forward-looking statements include estimates and give management’s current expectations or forecasts of future events. The Company cautions readers that these forward-looking statements are subject to numerous assumptions, risks and uncertainties, including economic conditions; the performance of financial markets and interest rates; legislative and regulatory actions and reforms; competition; as well as other factors, all of which change over time. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statements of plans, objectives and expectations, including those relating to products or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Words such as “believes”, “anticipates”, “expects”, “intends”, “targeted”, “continue”, “remain”, “will”, “should”, “may” and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.
Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:
29
Actual results may differ materially from forward-looking statements.
SUMMARY
The Company’s net income for the first quarter of 2024 was $50.3 million, compared to $57.5 million for the first quarter of 2023. Diluted net income per common share was $1.50 and $1.72 for the first quarter of 2024 and 2023, respectively. The Company’s net interest income for the first quarter of 2024 decreased to $106.1 million from $109.2 million for the first quarter of 2023. Net interest income was negatively impacted by a change in the mix of interest-bearing and non-interest bearing deposits, partially offset by higher loan volume. Net interest margin for the first quarter of 2024 was 3.70% compared to 3.89% for the first quarter of 2023. For the first quarter of 2024, the Company recorded a provision for credit losses of $4.0 million compared to $2.3 million for the first quarter of 2023.
Noninterest income for the first quarter of 2024 totaled $44.9 million compared to $47.8 million for the first quarter of 2023. The decrease in noninterest income was primarily due to an approximate $5.3 million reduction of interchange fees related to the impact of the Durbin Amendment. Trust revenue, sweep fees and insurance commissions all increased when compared to last year.
Noninterest expense for the first quarter of 2024 increased to $82.8 million compared to $80.3 million for the first quarter of 2023. The increase in noninterest expense was primarily related to growth in salaries and employee benefits of $2.3 million.
The Company’s effective tax rate was 21.6% for the first quarter of 2024 compared to 22.6% for the first quarter of 2023.
At March 31, 2024, the Company’s total assets were $12.6 billion, an increase of $230.4 million from December 31, 2023. Loans grew $127.7 million, totaling $7.8 billion at March 31, 2024. Deposits totaled $10.9 billion, an increase of $209.5 million from December 31, 2023. Off-balance-sheet sweep accounts totaled $4.6 billion at March 31, 2024, up $224.2 million from December 31, 2023. The Company’s total stockholders’ equity at March 31, 2024 was $1.5 billion, an increase of $35.4 million over December 31, 2023.
Asset quality remained strong as the Company’s nonaccrual loans totaled $42.0 million, representing 0.54% of total loans at March 31, 2024 compared to 0.32% at year-end 2023. The allowance for credit losses to total loans was 1.25% at March 31, 2024 virtually unchanged from year-end. Net charge-offs were $3.5 million for the first quarter of 2024 compared to $290,000 for the first quarter of 2023.
FUTURE APPLICATION OF ACCOUNTING STANDARDS
See Note (1) of the Notes to the Consolidated Financial Statements for disclosures regarding recently issued accounting pronouncements since December 31, 2023, the date of its most recent annual report to stockholders.
SEGMENT INFORMATION
See Note (11) of the Notes to the Consolidated Financial Statements for disclosures regarding business segments.
30
RESULTS OF OPERATIONS
Average Balances, Income, Expenses and Rates
The following table presents certain information related to the Company's consolidated average balance sheet, average yields on assets and average costs of liabilities. Such yields are derived by dividing income or expense by the average balance of the corresponding assets or liabilities. For these computations: (i) average balances are derived from daily averages, (ii) information is shown on a taxable-equivalent basis assuming a 21% tax rate, and (iii) nonaccrual loans are included in the average loan balances and any interest on such nonaccrual loans is recognized on a cash basis. Loan fees included in interest income were $5.4 million for the three months ended March 31, 2024 compared to $5.6 million for the three months ended March 31, 2023.
BANCFIRST CORPORATION |
|
|||||||||||||||||||||||
CONSOLIDATED AVERAGE BALANCE SHEETS AND INTEREST MARGIN ANALYSIS |
|
|||||||||||||||||||||||
(Unaudited) |
|
|||||||||||||||||||||||
Taxable Equivalent Basis |
|
|||||||||||||||||||||||
(Dollars in thousands) |
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Three Months Ended March 31, |
|
|||||||||||||||||||||
|
|
2024 |
|
|
2023 |
|
||||||||||||||||||
|
|
|
|
|
Interest |
|
|
Average |
|
|
|
|
|
Interest |
|
|
Average |
|
||||||
|
|
Average |
|
|
Income/ |
|
|
Yield/ |
|
|
Average |
|
|
Income/ |
|
|
Yield/ |
|
||||||
|
|
Balance |
|
|
Expense |
|
|
Rate |
|
|
Balance |
|
|
Expense |
|
|
Rate |
|
||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Loans (1) |
|
$ |
7,730,753 |
|
|
$ |
132,249 |
|
|
|
6.86 |
% |
|
$ |
7,005,731 |
|
|
$ |
104,481 |
|
|
|
6.05 |
% |
Securities – taxable |
|
|
1,557,806 |
|
|
|
9,181 |
|
|
|
2.36 |
|
|
|
1,572,278 |
|
|
|
8,991 |
|
|
|
2.32 |
|
Securities – tax exempt |
|
|
2,642 |
|
|
|
25 |
|
|
|
3.76 |
|
|
|
3,481 |
|
|
|
9 |
|
|
|
1.07 |
|
Federal funds sold and interest-bearing deposits with banks |
|
|
2,212,788 |
|
|
|
30,316 |
|
|
|
5.50 |
|
|
|
2,799,540 |
|
|
|
32,052 |
|
|
|
4.64 |
|
Total earning assets |
|
|
11,503,989 |
|
|
|
171,771 |
|
|
|
5.99 |
|
|
|
11,381,030 |
|
|
|
145,533 |
|
|
|
5.19 |
|
Nonearning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash and due from banks |
|
|
202,300 |
|
|
|
|
|
|
|
|
|
218,164 |
|
|
|
|
|
|
|
||||
Interest receivable and other assets |
|
|
804,575 |
|
|
|
|
|
|
|
|
|
795,316 |
|
|
|
|
|
|
|
||||
Allowance for credit losses |
|
|
(97,061 |
) |
|
|
|
|
|
|
|
|
(93,316 |
) |
|
|
|
|
|
|
||||
Total nonearning assets |
|
|
909,814 |
|
|
|
|
|
|
|
|
|
920,164 |
|
|
|
|
|
|
|
||||
Total assets |
|
$ |
12,413,803 |
|
|
|
|
|
|
|
|
$ |
12,301,194 |
|
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Money market and interest-bearing checking deposits |
|
$ |
4,814,772 |
|
|
$ |
44,217 |
|
|
|
3.68 |
% |
|
$ |
4,216,293 |
|
|
$ |
26,866 |
|
|
|
2.58 |
% |
Savings deposits |
|
|
1,056,727 |
|
|
|
9,003 |
|
|
|
3.42 |
|
|
|
1,135,035 |
|
|
|
5,257 |
|
|
|
1.88 |
|
Time deposits |
|
|
1,027,039 |
|
|
|
11,193 |
|
|
|
4.37 |
|
|
|
705,787 |
|
|
|
3,054 |
|
|
|
1.76 |
|
Short-term borrowings |
|
|
8,018 |
|
|
|
96 |
|
|
|
4.79 |
|
|
|
6,844 |
|
|
|
83 |
|
|
|
4.94 |
|
Subordinated debt |
|
|
86,106 |
|
|
|
1,030 |
|
|
|
4.80 |
|
|
|
86,049 |
|
|
|
1,030 |
|
|
|
4.86 |
|
Total interest-bearing liabilities |
|
|
6,992,662 |
|
|
|
65,539 |
|
|
|
3.76 |
|
|
|
6,150,008 |
|
|
|
36,290 |
|
|
|
2.39 |
|
Interest-free funds: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Noninterest-bearing deposits |
|
|
3,843,371 |
|
|
|
|
|
|
|
|
|
4,797,014 |
|
|
|
|
|
|
|
||||
Interest payable and other liabilities |
|
|
131,898 |
|
|
|
|
|
|
|
|
|
79,735 |
|
|
|
|
|
|
|
||||
Stockholders’ equity |
|
|
1,445,872 |
|
|
|
|
|
|
|
|
|
1,274,437 |
|
|
|
|
|
|
|
||||
Total interest free funds |
|
|
5,421,141 |
|
|
|
|
|
|
|
|
|
6,151,186 |
|
|
|
|
|
|
|
||||
Total liabilities and stockholders’ equity |
|
$ |
12,413,803 |
|
|
|
|
|
|
|
|
$ |
12,301,194 |
|
|
|
|
|
|
|
||||
Net interest income |
|
|
|
|
$ |
106,232 |
|
|
|
|
|
|
|
|
$ |
109,243 |
|
|
|
|
||||
Net interest spread |
|
|
|
|
|
|
|
|
2.23 |
% |
|
|
|
|
|
|
|
|
2.80 |
% |
||||
Effect of interest free funds |
|
|
|
|
|
|
|
|
1.47 |
% |
|
|
|
|
|
|
|
|
1.09 |
% |
||||
Net interest margin |
|
|
|
|
|
|
|
|
3.70 |
% |
|
|
|
|
|
|
|
|
3.89 |
% |
31
Selected income statement data and other selected data for the comparable periods were as follows:
BANCFIRST CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(Unaudited)
(Dollars in thousands, except per share data)
|
|
Three Months Ended |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Income Statement Data |
|
|
|
|
|
|
||
Net interest income |
|
$ |
106,104 |
|
|
$ |
109,156 |
|
Provision for credit losses |
|
|
4,015 |
|
|
|
2,322 |
|
Securities transactions |
|
|
(267 |
) |
|
|
(213 |
) |
Total noninterest income |
|
|
44,900 |
|
|
|
47,828 |
|
Salaries and employee benefits |
|
|
51,528 |
|
|
|
49,252 |
|
Total noninterest expense |
|
|
82,779 |
|
|
|
80,317 |
|
Net income |
|
|
50,334 |
|
|
|
57,533 |
|
Per Common Share Data |
|
|
|
|
|
|
||
Net income – basic |
|
$ |
1.53 |
|
|
$ |
1.75 |
|
Net income – diluted |
|
|
1.50 |
|
|
|
1.72 |
|
Cash dividends |
|
|
0.43 |
|
|
|
0.40 |
|
Performance Data |
|
|
|
|
|
|
||
Return on average assets |
|
|
1.63 |
% |
|
|
1.90 |
% |
Return on average stockholders’ equity |
|
|
13.96 |
|
|
|
18.31 |
|
Cash dividend payout ratio |
|
|
28.10 |
|
|
|
22.86 |
|
Net interest spread |
|
|
2.23 |
|
|
|
2.80 |
|
Net interest margin |
|
|
3.70 |
|
|
|
3.89 |
|
Efficiency ratio |
|
|
54.82 |
|
|
|
51.16 |
|
Net charge-offs to average loans |
|
|
0.05 |
|
|
|
0.00 |
|
Net Interest Income
For the three months ended March 31, 2024, net interest income, which is the Company’s principal source of operating revenue, decreased $3.1 million or 2.8% compared to the three months ended March 31, 2023. Net interest income was negatively impacted by a change in the mix of interest-bearing and non-interest bearing deposits, partially offset by higher loan volume. Net interest margin is the ratio of taxable-equivalent net interest income to average earning assets for the period. As shown in the preceding table, the Company’s net interest margin for the first quarter of 2024 decreased compared to the first quarter of 2023.
32
Changes in the volume of earning assets and interest-bearing liabilities and changes in interest rates, determine the changes in net interest income. The following volume/rate analysis summarizes the relative contribution of each of these components to the changes in net interest income.
VOLUME/RATE ANALYSIS
Taxable Equivalent Basis
|
|
Change during the three months ended March 31, 2024 |
|
|||||||||
|
|
Total |
|
|
Due to |
|
|
Due to |
|
|||
|
|
(Dollars in thousands) |
|
|||||||||
INCREASE (DECREASE) |
|
|
|
|
|
|
|
|
|
|||
Interest Income: |
|
|
|
|
|
|
|
|
|
|||
Loans |
|
$ |
27,768 |
|
|
$ |
12,224 |
|
|
$ |
15,544 |
|
Securities—taxable |
|
|
190 |
|
|
|
(26 |
) |
|
|
216 |
|
Securities—tax exempt |
|
|
16 |
|
|
|
(2 |
) |
|
|
18 |
|
Federal funds sold and interest-bearing deposits with banks |
|
|
(1,736 |
) |
|
|
(6,453 |
) |
|
|
4,717 |
|
Total interest income |
|
|
26,238 |
|
|
|
5,743 |
|
|
|
20,495 |
|
Interest Expense: |
|
|
|
|
|
|
|
|
|
|||
Money market and interest-bearing checking deposits |
|
|
17,351 |
|
|
|
5,430 |
|
|
|
11,921 |
|
Savings deposits |
|
|
3,746 |
|
|
|
(308 |
) |
|
|
4,054 |
|
Time deposits |
|
|
8,139 |
|
|
|
1,514 |
|
|
|
6,625 |
|
Short-term borrowings |
|
|
13 |
|
|
|
(15 |
) |
|
|
28 |
|
Subordinated debt |
|
|
— |
|
|
|
12 |
|
|
|
(12 |
) |
Total interest expense |
|
|
29,249 |
|
|
|
6,633 |
|
|
|
22,616 |
|
Net interest income |
|
$ |
(3,011 |
) |
|
$ |
(890 |
) |
|
$ |
(2,121 |
) |
(1) The effects of changes in the mix of earning assets and interest-bearing liabilities have been combined with the changes due to volume. |
|
Provision for Credit Losses
The provision for credit losses is presented in the preceding table. The Company establishes an allowance as an estimate of the expected credit losses in the loan portfolio at the balance sheet date. Management believes the allowance for credit losses is appropriate based upon management’s best estimate of expected losses within the existing loan portfolio. Should any of the factors considered by management in evaluating the appropriate level of the allowance for credit losses change, the Company’s estimate of expected credit losses could also change which could affect the amount of future provisions for credit losses. Net loan charge-offs were $3.5 million for the first quarter of 2024 compared to net loan charge-offs of $290,000 for the first quarter of 2023. The rate of net charge-offs to average total loans, as presented in the preceding table, continues to be at a low level.
Noninterest Income
Noninterest income, as presented in the preceding table, decreased by $2.9 million for the first quarter of 2024 compared to the first quarter of 2023. The decrease in noninterest income was primarily due to an approximate $5.3 million reduction of interchange fees related to the impact of the Durbin Amendment. Trust revenue, sweep fees and insurance commissions all increased when compared to last year.
Noninterest income included non-sufficient funds ("NSF") and overdraft fees totaling $7.1 million and $6.4 million for the three months ended March 31, 2024 and 2023, respectively. This represents 15.9% and 13.5% of the Company’s noninterest income for the respective periods. In addition, the Company had debit card usage and interchange fees totaling $6.5 million and $12.0 million during the three months ended March 31, 2024 and 2023, respectively. This represents 14.6% and 25.2% of the Company’s noninterest income for the respective periods.
The Company is subject to political pressures that could limit our ability to charge for NSF and overdraft fees. Over the last few years the Company lowered the rates charged on NSF and overdraft fees. Also, the Company became subject to the reduced interchange fees under the Durbin Amendment effective July 1, 2023. Consequently, the Company's interchange fee revenue was reduced by approximately $11.2 million in the last half of 2023. The Company expects to experience a reduction of approximately $10.5 million in the first half of 2024.
33
Noninterest Expense
Noninterest expense, as presented in the preceding table, increased by $2.5 million for first quarter of 2024 compared to the first quarter of 2023. The increase in noninterest expenses was primarily related to growth in salaries and employee benefits of $2.3 million.
Income Taxes
The Company’s effective tax rate was 21.6% for the first quarter of 2024, compared to 22.6% for the first quarter of 2023. The primary reasons for the difference between the Company’s effective tax rate and the federal statutory rate were tax-exempt income, nondeductible amortization, federal and state tax credits and state tax expense.
FINANCIAL POSITION
BANCFIRST CORPORATION |
|
|||||||
SELECTED CONSOLIDATED FINANCIAL DATA |
|
|||||||
(Dollars in thousands, except per share data) |
|
|||||||
|
|
|
|
|
|
|
||
|
|
March 31, |
|
|
December 31, |
|
||
|
|
2024 |
|
|
2023 |
|
||
|
|
(unaudited) |
|
|
|
|
||
Balance Sheet Data |
|
|
|
|
|
|
||
Total assets |
|
$ |
12,602,425 |
|
|
$ |
12,372,042 |
|
Total loans (net of unearned interest) |
|
|
7,787,857 |
|
|
|
7,660,134 |
|
Allowance for credit losses |
|
|
97,267 |
|
|
|
96,800 |
|
Debt securities |
|
|
1,534,651 |
|
|
|
1,555,095 |
|
Deposits |
|
|
10,909,621 |
|
|
|
10,700,122 |
|
Stockholders' equity |
|
|
1,469,312 |
|
|
|
1,433,891 |
|
Book value per share |
|
|
44.57 |
|
|
|
43.54 |
|
Tangible book value per share (non-GAAP)(1) |
|
|
38.56 |
|
|
|
37.50 |
|
Reconciliation of Tangible Book Value per Common Share (non-GAAP)(2) |
|
|
|
|
||||
Stockholders' equity |
|
$ |
1,469,312 |
|
|
$ |
1,433,891 |
|
Less goodwill |
|
|
182,263 |
|
|
|
182,263 |
|
Less intangible assets, net |
|
|
15,818 |
|
|
|
16,704 |
|
Tangible stockholders' equity (non-GAAP) |
|
$ |
1,271,231 |
|
|
$ |
1,234,924 |
|
Common shares outstanding |
|
|
32,966,678 |
|
|
|
32,933,018 |
|
Tangible book value per share (non-GAAP) |
|
$ |
38.56 |
|
|
$ |
37.50 |
|
Selected Financial Ratios |
|
|
|
|
|
|
||
Balance Sheet Ratios: |
|
|
|
|
|
|
||
Average loans to deposits (year-to-date) |
|
|
71.97 |
% |
|
|
68.87 |
% |
Average earning assets to total assets (year-to-date) |
|
|
92.67 |
|
|
|
92.39 |
|
Average stockholders’ equity to average assets (year-to-date) |
|
|
11.65 |
|
|
|
11.03 |
|
Asset Quality Data |
|
|
|
|
|
|
||
Loans past due 90 days and still accruing |
|
$ |
6,332 |
|
|
$ |
9,542 |
|
Nonaccrual loans (3) |
|
|
41,996 |
|
|
|
24,573 |
|
Other real estate owned and repossessed assets |
|
|
35,116 |
|
|
|
34,200 |
|
Asset Quality Ratios: |
|
|
|
|
|
|
||
Nonaccrual loans to total loans |
|
|
0.54 |
% |
|
|
0.32 |
% |
Allowance for credit losses to total loans |
|
|
1.25 |
|
|
|
1.26 |
|
Allowance for credit losses to nonaccrual loans |
|
|
231.61 |
|
|
|
393.92 |
|
(1) Refer to the “Reconciliation of Tangible Book Value per Common Share (non-GAAP)” Table. |
|
|||||||
(2) Tangible book value per common share is stockholders’ equity less goodwill and intangible assets, net, divided by common shares outstanding. This amount is a non-GAAP financial measure but has been included as it is considered to be a critical metric with which to analyze and evaluate the financial condition and capital strength of the Company. This measure should not be considered a substitute for operating results determined in accordance with GAAP. |
|
|||||||
(3) Government agencies guaranteed approximately $6.6 million of nonaccrual loans at March 31, 2024. |
|
Cash and Due from Banks, Federal Funds Sold and Interest-Bearing Deposits with Banks
The aggregate of cash and due from banks, federal funds sold and interest-bearing deposits with banks increased by $127.5 million or 5.3%, to $2.5 billion from December 31, 2023 to March 31, 2024. The increase was related to an increase of interest-bearing deposits.
34
Securities
At March 31, 2024, total debt securities decreased $20.4 million, or 1.3% compared to December 31, 2023. The size of the Company’s securities portfolio is determined by the Company’s liquidity and asset/liability management. The net unrealized loss on debt securities available for sale, before taxes, was $68.5 million at March 31, 2024, compared to a net unrealized loss of $65.5 million at December 31, 2023. These unrealized losses of $52.3 million at March 31, 2024 and $50.0 million at December 31, 2023 are included in the Company’s stockholders’ equity as accumulated other comprehensive loss, net of income tax. The Company did not purchase or sell any debt securities during the quarter ended March 31, 2024.
See Note (2) of the Notes to Consolidated Financial Statements for disclosures regarding the Company’s securities.
Loans
At March 31, 2024, total loans increased $127.7 million or 1.7% compared to December 31, 2023 as a result of internal loan growth. The internal loan growth was primarily from the Company's Oklahoma subsidiary BancFirst, with loans essentially flat for the Company's Texas subsidiaries, Pegasus and Worthington.
See Note (3) of the Notes to Consolidated Financial Statements for disclosures regarding the Company’s loan portfolio segments.
Allowance for Credit Losses
The allowance for credit losses to total loans was 1.25% at March 31, 2024 compared to 1.26% at December 31, 2023. The overall credit quality of the Company's loan portfolio has remained strong. If unforeseen adverse changes occur in the national or local economy, or in the credit markets, it would be reasonable to expect that the allowance for credit losses would increase in future periods.
Nonaccrual Loans
Nonaccrual loans totaled $42.0 million at March 31, 2024 compared to $24.6 million at December 31, 2023. The level of the Company's nonaccrual loans remains low. The Company’s nonaccrual loans are primarily construction and development real estate loans and commercial non-real estate loans. Nonaccrual loans negatively impact the Company’s net interest margin. A loan is placed on nonaccrual status when, in the opinion of management, the future collectability of both interest and principal is in serious doubt. Interest income is not recognized until the principal balance is fully collected. However, if the full collection of the remaining principal balance is not in doubt, interest income is recognized on certain of these loans on a cash basis. Had nonaccrual loans performed in accordance with their original contractual terms, the Company would have recognized additional interest income of approximately $696,000 for the three months ended March 31, 2024 and $358,000 for the three months ended March 31, 2023. Only a small amount of this interest is expected to be ultimately collected. Approximately $6.6 million of nonaccrual loans were guaranteed by government agencies at March 31, 2024.
The classification of a loan as nonaccrual does not necessarily indicate that loan principal and interest will ultimately be uncollectible; although, in an economic downturn, the Company’s experience has been that the risk of loss is heightened. The above normal risk associated with nonaccrual loans has been considered in the determination of the allowance for credit losses. The level of nonaccrual loans and credit losses could rise over time as a result of adverse economic conditions. The allowance for credit losses as a percentage of nonaccrual loans is shown in the table above.
Modified Loans
As of January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) No. 2022-02, which eliminated the Troubled Debt Restructurings (“TDR”) recognition and measurement guidance and, instead, requires that the Company evaluate, based on the accounting for loan modifications, whether the modification represents a new loan or a continuation of an existing loan when a borrower is experiencing financial difficulty. The current and future financial effects of the recorded balance of loans considered to be modified during the period were not considered to be material. The recorded balance of loans modified during the period ended March 31, 2024 was approximately $1.1 million compared to $5.3 million during the year ended December 31, 2023.
Other Real Estate Owned and Repossessed Assets
Other real estate owned (OREO) and repossessed assets totaled $35.1 million at March 31, 2024 compared to $34.2 million at December 31, 2023. OREO consists of properties acquired through foreclosure proceedings or acceptance of a deed in lieu of foreclosure and premises held for sale. These properties are carried at the lower of the book values of the related loans or fair values based upon appraisals of the properties, less estimated costs to sell. Write-downs arising at the time of reclassification of such properties from loans to OREO are charged directly to the allowance for credit losses. Any losses on bank premises designated to be sold are charged to
35
operating expense at the time of transfer from premises to OREO. Decreases in values of properties subsequent to their classification as OREO are charged to operating expense.
OREO included a larger commercial real estate property recorded at $30.4 million at March 31, 2024 and $29.4 million at December 31, 2023. During the quarter ended March 31, 2024, the Company made $996,000 of tenant improvements to this property, which contributed to the increase of total OREO. Rental income for this property is included in other noninterest income on the consolidated statements of comprehensive income. Operating expense for this property is included in net expense from OREO in other noninterest expense on the consolidated statements of comprehensive income.
This property had the following rental income and operating expenses for the periods presented:
|
|
For the Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
(Dollars in thousands) |
|
|||||
Rental income |
|
$ |
2,941 |
|
|
$ |
2,690 |
|
Operating expense |
|
|
2,250 |
|
|
|
2,381 |
|
The Company's total rental income and operating expenses from OREO are presented in the following table:
|
|
For the Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
(Dollars in thousands) |
|
|||||
Rental income |
|
$ |
3,002 |
|
|
$ |
2,820 |
|
Operating expense |
|
|
2,329 |
|
|
|
2,557 |
|
Intangible Assets, Goodwill and Other Assets
Identifiable intangible assets and goodwill totaled $198.1 million and $199.0 million at March 31, 2024 and December 31, 2023, respectively.
Other assets includes the cash surrender value of key-man life insurance policies totaling $84.4 million at both March 31, 2024 and December 31, 2023.
Derivative financial instruments consisting of oil and gas swaps and option contracts are included in other assets and totaled $27.4 million at March 31, 2024 and $41.1 million at December 31, 2023. They require a daily margin to be posted, which fluctuates with oil and gas prices and customer activity. At March 31, 2024, the Company had a margin asset included in other assets in the amount of $4.3 million. At December 31, 2023, the Company had a margin liability included in other liabilities in the amount of $15.5 million. See Note (10) of the Notes to Consolidated Financial Statements for a complete discussion of the Company’s derivative financial instruments.
Equity securities are reported in other assets on the Company’s consolidated balance sheet. The Company invests in equity securities without readily determinable fair values. The realized and unrealized gains and losses are reported as securities transactions in the noninterest income section of the consolidated statements of comprehensive income. The balance of equity securities was $13.2 million at March 31, 2024 and $13.1 million at December 31, 2023. The Company reviews its portfolio of equity securities for impairment at least quarterly.
Low-Income Housing and New Market Tax Credit Investments
During 2024, there have not been any material changes in the Company’s low-income housing tax credit ("LIHTC") investments and New Markets Tax Credits ("NMTC") investments, which are included in other assets on the Company’s consolidated balance sheet.
See Note (6) of the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 for disclosures regarding these investments.
Liquidity and Funding
The Company’s principal source of liquidity and funding is its broad deposit base generated from customer relationships. The availability of deposits is affected by economic conditions, competition with other financial institutions and alternative investments available to customers. Through interest rates paid, service charge levels and services offered, the Company can affect its level of deposits to a limited extent. The level and maturity of funding necessary to support the Company’s lending and investment functions is
36
determined through the Company’s asset/liability management process. The Company currently does not rely heavily on long-term borrowings and does not utilize brokered CDs. The Company maintains lines of credit from the Federal Home Loan Bank (“FHLB”), federal funds lines of credit with other banks and could also utilize the sale of loans, securities and liquidation of other assets as sources of liquidity and funding. The Company is highly liquid with 20% of cash and due from banks, interest-bearing deposits with banks and federal funds sold to total assets.
There have not been any other material changes from the liquidity and funding discussion included in Management’s Discussion and Analysis in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Deposits
At March 31, 2024, deposits totaled $10.9 billion, an increase of $209.5 million from December 31, 2023. The Company’s core deposits provide it with a stable, low-cost funding source. The Company’s core deposits as a percentage of total deposits were 97.1% at March 31, 2024 and 97.4% at December 31, 2023. Noninterest-bearing deposits to total deposits were 35.3% at March 31, 2024 compared to 37.2% at December 31, 2023. Quantitative tightening by the Federal Reserve and competition for deposits has increased and available yields have similarly increased, causing non-interest bearing deposits to move to interest-bearing deposits and off-balance-sheet sweep account products.
Off-balance-sheet sweep accounts totaled $4.6 billion at March 31, 2024 compared to $4.3 billion at December 31, 2023. The movement of customers' funds into the Company's off-balance-sheet sweep accounts affected the balances of both cash and deposits.
Subordinated Debt
See Note (5) of the Notes to Consolidated Financial Statements for a complete discussion of the Company’s subordinated debt.
Short-Term Borrowings and Lines of Credit
Short-term borrowings, consisting primarily of federal funds purchased and repurchase agreements, are another source of funds for the Company. The level of these borrowings is determined by various factors, including customer demand and the Company’s ability to earn a favorable spread on the funds obtained. Short-term borrowings were $9.7 million at March 31, 2024 compared to $3.4 million at December 31, 2023.
The Company has several lines of credit available. At March 31, 2024, BancFirst had $835.0 million available on its line of credit from the FHLB of Topeka, Kansas and a $25.0 million line of credit with another financial institution that is an overnight federal funds facility. At March 31, 2024, BancFirst had no advances outstanding under either line of credit. Worthington has $10.5 million in lines of credit with other financial institutions that serve as overnight federal funds facilities, a Federal Reserve discount window capacity of $29.0 million and an $81.9 million line of credit from the FHLB of Dallas, Texas to use for liquidity or to match-fund certain long-term rate loans. Worthington has no advances outstanding at March 31, 2024 under any of these lines of credit.
Capital Resources
Stockholders’ equity totaled $1.5 billion at March 31, 2024, an increase of $35.4 million from December 31, 2023. In addition to net income of $50.3 million, other changes in stockholders’ equity during the three months ended March 31, 2024 included $851,000 related to common stock issuances for stock option exercises and $662,000 related to stock-based compensation that were partially offset by a $2.3 million decrease in accumulated other comprehensive income and $14.2 million in dividends. The Company’s leverage ratio and total risk-based capital ratios at March 31, 2024 were well in excess of the regulatory requirements.
See Note (7) of the Notes to Consolidated Financial Statements for a discussion of capital ratios and requirements.
Liquidity Risk and Off-Balance-Sheet Arrangements
There have not been any material changes in the Company’s liquidity risk and off-balance-sheet arrangements included in Management’s Discussion and Analysis which was included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
37
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
There have been no significant changes in the Company’s disclosures regarding market risk since December 31, 2023, the date of its most recent annual report to stockholders.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures. Pursuant to Rule 13a-15 of the Securities Exchange Act of 1934 (the “Exchange Act”), the Company’s Chief Executive Officer, Chief Financial Officer and its Disclosure Committee, which includes the Company’s Executive Chairman, Chief Risk Officer, Chief Internal Auditor, Chief Asset Quality Officer, Controller, General Counsel and Director of Financial Reporting, have evaluated, as of the last day of the period covered by this report, the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Based on their evaluation they concluded that the disclosure controls and procedures of the Company are effective to ensure that information required to be disclosed by the Company in the reports filed or submitted by it under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms.
Changes in Internal Control Over Financial Reporting. During the period to which this report relates, there have not been any changes in the Company’s internal controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, such controls.
38
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
The Company has been named as a defendant in various legal actions arising from the conduct of its normal business activities. Although the amount of any liability that could arise with respect to these actions cannot be accurately predicted, in the opinion of the Company, any such liability will not have a material adverse effect on the consolidated financial statements of the Company.
Item 1A. Risk Factors.
As of March 31, 2024, there have been no material changes from the risk factors previously disclosed in Part I, Item 1A, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
None.
Item 5. Other Information.
None.
39
Item 6. Exhibits.
Exhibit |
|
Exhibit |
3.1 |
|
|
|
|
|
3.2 |
|
|
|
|
|
31.1* |
|
Chief Executive Officer’s Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a). |
|
|
|
31.2* |
|
Chief Financial Officer’s Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a). |
|
|
|
32** |
|
|
|
|
|
101.INS |
|
Inline XBRL Instance Document. |
|
|
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents. |
|
|
|
104 |
|
Cover page Interactive Data File (formatted as Inline XBRL and included in Exhibit 101). |
|
|
|
* |
|
Filed herewith. |
** |
|
This exhibit is furnished herewith and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act. |
40
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
BANCFIRST CORPORATION |
|
|
(Registrant) |
|
|
|
Date: May 7, 2024 |
|
/s/ David Harlow |
|
|
David Harlow |
|
|
President |
|
|
Chief Executive Officer |
|
|
(Principal Executive Officer) |
|
|
|
Date: May 7, 2024 |
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/s/ Kevin Lawrence |
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Kevin Lawrence |
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Executive Vice President |
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Chief Financial Officer |
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(Principal Financial Officer) |
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