BancFirst (BANF) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Earnings Highlights BancFirst Corporation reported strong Q2 2025 earnings, with significant growth in net income and EPS, alongside balance sheet expansion and management insights Financial Performance Overview BancFirst Corporation reported strong Q2 2025 results with significant year-over-year increases in net income and diluted EPS, driven by net interest income and noninterest income growth Key Financial Performance (Q2 2025 vs Q2 2024): | Metric | Q2 2025 | Q2 2024 | Change ($ million) | % Change | | :-------------------------- | :------ | :------ | :----- | :------- | | Net Income | $62.3 million | $50.6 million | $11.7 million | 23.1% | | Diluted EPS | $1.85 | $1.51 | $0.34 | 22.5% | | Net Interest Income | $121.3 million | $109.9 million | $11.4 million | 10.4% | | Net Interest Margin | 3.75% | 3.76% | -0.01% | -0.27% | | Provision for Credit Losses | $1.2 million | $3.4 million | -$2.2 million | -64.7% | | Noninterest Income | $48.0 million | $43.9 million | $4.1 million | 9.3% | | Noninterest Expense | $88.2 million | $85.3 million | $2.9 million | 3.4% | - Noninterest income growth was driven by increases in trust revenue, treasury income, sweep fees, insurance commissions, and other noninterest income, with the latter boosted by changes in cash surrender value of life insurance and gains on asset disposal, partially offset by equity security losses[3] - The increase in noninterest expenses was primarily due to a $3.2 million rise in salaries and employee benefits, an $804,000 increase in occupancy expense, and a $1.3 million increase in net expense from other real estate owned[4] Balance Sheet and Asset Quality Overview The company's balance sheet expanded across assets, loans, and deposits, with improved asset quality despite increased net charge-offs from a specific real estate loan Key Balance Sheet & Asset Quality Data (June 30, 2025 vs December 31, 2024): | Metric | June 30, 2025 | December 31, 2024 | Change ($ million) | | :-------------------------------- | :------------ | :---------------- | :----- | | Total Assets | $14.0 billion | $13.5 billion | +$491.5 million | | Total Loans | $8.1 billion | $8.0 billion | +$91.3 million | | Total Deposits | $12.1 billion | $11.7 billion | +$337.6 million | | Total Stockholders' Equity | $1.7 billion | $1.6 billion | +$106.9 million | | Nonaccrual Loans to Total Loans | 0.61% | 0.72% | -0.11% | | Allowance for Credit Losses to Total Loans | 1.19% | 1.24% | -0.05% | | Net Charge-offs (Q2) | $4.7 million | $0.999 million (Q2 2024) | +$3.7 million | - Net charge-offs for Q2 2025 included $3.7 million relating to one real estate loan that was taken into other real estate[6] Management Commentary CEO David Harlow highlighted strong quarterly results, the upcoming American Bank of Oklahoma acquisition, and preparedness for potential Fed rate cuts - The quarter's results were impacted by one-time events, which had an approximate $0.05 per diluted share effect[7] - The company expects to close the American Bank of Oklahoma acquisition in the third quarter, adding Collinsville and Skiatook communities to its service area[7] - BancFirst is in a well-balanced position to handle potential Federal Reserve rate reductions in the latter half of the year, while maintaining a healthy loan loss reserve due to uncertainties in global trade policy and geopolitical risks[7] Company Information This section details BancFirst Corporation's business operations, forward-looking statement disclaimers, and investor relations contact information Business Description BancFirst Corporation is an Oklahoma-based financial services holding company operating three subsidiary banks across Oklahoma and Texas - BancFirst Corporation is an Oklahoma-based financial services holding company[8] - It operates three subsidiary banks: BancFirst (Oklahoma, 104 locations in 59 communities), Pegasus Bank (Texas, 3 locations in Dallas Metroplex), and Worthington Bank (Texas, 3 locations in Fort Worth Metroplex, 1 in Arlington, 1 in Denton)[8] Forward-Looking Statements Disclaimer Forward-looking statements are subject to various risks and uncertainties, including economic conditions and regulatory changes, which may cause actual results to differ - Forward-looking statements relate to earnings, credit quality, corporate objectives, interest rates, and other financial and business matters[9] - These statements are subject to numerous assumptions, risks, and uncertainties, including economic conditions, financial markets, interest rates, legislative/regulatory actions, and competition[9] - Actual results may differ materially from forward-looking statements[9] Investor Relations Contact Contact information for the Chief Financial Officer and Chief Executive Officer is provided for investor inquiries - For additional information, contact Hannah Andrus, Chief Financial Officer at (405) 218-4174, or David Harlow, Chief Executive Officer at (405) 270-1082[10] Summary Financial Information - Quarterly This section presents condensed income statements, per common share data, and performance ratios for quarterly periods Condensed Income Statements Condensed income statements show strong year-over-year growth in net interest income and net income for Q2 2025, with decreased provision for credit losses Condensed Income Statements (Dollars in thousands): | Metric | Q2 2025 ($ thousands) | Q1 2025 ($ thousands) | Q2 2024 ($ thousands) | YoY Change ($ thousands) | YoY Change (%) | QoQ Change ($ thousands) | QoQ Change (%) | | :-------------------------------- | :------ | :------ | :------ | :-------------- | :------------- | :-------------- | :------------- | | Net interest income | 121,256 | 115,949 | 109,896 | 11,360 | 10.34% | 5,307 | 4.58% | | Provision for credit losses on loans | 1,239 | 1,461 | 3,358 | (2,119) | -63.10% | (222) | -15.19% | | Total noninterest income | 48,048 | 48,894 | 43,944 | 4,104 | 9.34% | (846) | -1.73% | | Total noninterest expense | 88,199 | 92,179 | 85,316 | 2,883 | 3.38% | (3,980) | -4.32% | | Net income | 62,347 | 56,112 | 50,641 | 11,706 | 23.12% | 6,235 | 11.11% | Per Common Share Data Diluted net income per common share increased significantly year-over-year and sequentially in Q2 2025, while cash dividends remained stable Per Common Share Data: | Metric | Q2 2025 ($) | Q1 2025 ($) | Q2 2024 ($) | YoY Change ($) | YoY Change (%) | QoQ Change ($) | QoQ Change (%) | | :---------------------- | :------ | :------ | :------ | :--------- | :------------- | :--------- | :------------- | | Net income-basic | $1.87 | $1.69 | $1.53 | $0.34 | 22.22% | $0.18 | 10.65% | | Net income-diluted | $1.85 | $1.66 | $1.51 | $0.34 | 22.52% | $0.19 | 11.45% | | Cash dividends declared | $0.46 | $0.46 | $0.43 | $0.03 | 6.98% | $0.00 | 0.00% | Performance Ratios Key performance ratios, including return on assets, return on equity, and efficiency ratio, improved year-over-year and sequentially in Q2 2025 Performance Ratios: | Metric | Q2 2025 (%) | Q1 2025 (%) | Q2 2024 (%) | YoY Change (pp) | QoQ Change (pp) | | :-------------------------- | :------ | :------ | :------ | :-------------- | :-------------- | | Return on average assets | 1.79% | 1.66% | 1.61% | 0.18 | 0.13 | | Return on average stockholders' equity | 14.74% | 13.85% | 13.72% | 1.02 | 0.89 | | Net interest margin | 3.75% | 3.70% | 3.76% | -0.01 | 0.05 | | Efficiency ratio | 52.10% | 55.92% | 55.46% | -3.36 | -3.82 | Summary Financial Information - Six Months Ended This section provides condensed income statements, per common share data, and performance ratios for the six months ended June 30 Condensed Income Statements For the six months ended June 30, 2025, net interest income, noninterest income, and net income increased significantly year-over-year Condensed Income Statements (Six Months Ended June 30, Dollars in thousands): | Metric | 6M 2025 ($ thousands) | 6M 2024 ($ thousands) | YoY Change ($ thousands) | YoY Change (%) | | :-------------------------------- | :------ | :------ | :-------------- | :------------- | | Net interest income | 237,205 | 216,000 | 21,205 | 9.82% | | Provision for credit losses on loans | 2,700 | 7,373 | (4,673) | -63.38% | | Total noninterest income | 96,942 | 88,844 | 8,098 | 9.12% | | Total noninterest expense | 180,378 | 168,095 | 12,283 | 7.31% | | Net income | 118,459 | 100,975 | 17,484 | 17.32% | Per Common Share Data Diluted net income per common share for the first six months of 2025 increased by 16.6% year-over-year, with higher cash dividends declared Per Common Share Data (Six Months Ended June 30): | Metric | 6M 2025 ($) | 6M 2024 ($) | YoY Change ($) | YoY Change (%) | | :---------------------- | :------ | :------ | :--------- | :------------- | | Net income-basic | $3.56 | $3.06 | $0.50 | 16.34% | | Net income-diluted | $3.51 | $3.01 | $0.50 | 16.61% | | Cash dividends declared | $0.92 | $0.86 | $0.06 | 6.98% | Performance Ratios Performance ratios for the six months ended June 30, 2025, showed improvements in return on assets, return on equity, and efficiency ratio Performance Ratios (Six Months Ended June 30): | Metric | 6M 2025 (%) | 6M 2024 (%) | YoY Change (pp) | | :-------------------------- | :------ | :------ | :-------------- | | Return on average assets | 1.73% | 1.62% | 0.11 | | Return on average stockholders' equity | 14.31% | 13.84% | 0.47 | | Net interest margin | 3.72% | 3.73% | -0.01 | | Efficiency ratio | 53.98% | 55.14% | -1.16 | Balance Sheet and Asset Quality Data This section presents detailed balance sheet data, balance sheet ratios, and asset quality metrics, including a non-GAAP reconciliation Balance Sheet Data BancFirst Corporation's balance sheet at June 30, 2025, reflects consistent growth across total assets, loans, deposits, and stockholders' equity Key Balance Sheet Data (Dollars in thousands): | Metric | Q2 2025 ($ thousands) | Q1 2025 ($ thousands) | Q2 2024 ($ thousands) | YoY Change ($ thousands) | YoY Change (%) | QoQ Change ($ thousands) | QoQ Change (%) | | :-------------------------- | :-------- | :-------- | :-------- | :-------------- | :------------- | :-------------- | :------------- | | Total assets | 14,045,780 | 14,038,055 | 12,737,318 | 1,308,462 | 10.27% | 7,725 | 0.05% | | Total loans | 8,124,497 | 8,102,810 | 8,054,856 | 69,641 | 0.86% | 21,687 | 0.27% | | Total deposits | 12,056,192 | 12,126,750 | 11,015,602 | 1,040,590 | 9.45% | (70,558) | -0.58% | | Stockholders' equity | 1,728,038 | 1,672,827 | 1,512,492 | 215,546 | 14.25% | 55,211 | 3.30% | Balance Sheet Ratios Balance sheet ratios indicate a decrease in average loans to deposits year-over-year, with stable average earning assets to total assets Balance Sheet Ratios: | Metric | Q2 2025 (%) | Q1 2025 (%) | Q2 2024 (%) | YoY Change (pp) | QoQ Change (pp) | | :-------------------------------- | :------ | :------ | :------ | :-------------- | :-------------- | | Average loans to deposits | 67.11% | 68.08% | 72.25% | -5.14 | -0.97 | | Average earning assets to total assets | 92.97% | 93.10% | 92.77% | 0.20 | -0.13 | | Average stockholders' equity to average assets | 12.14% | 12.00% | 11.71% | 0.43 | 0.14 | Asset Quality Data Asset quality metrics show a decrease in nonaccrual loans relative to total loans, but an increase in net charge-offs to average loans Asset Quality Data: | Metric | Q2 2025 (%) | Q1 2025 (%) | Q2 2024 (%) | YoY Change (pp) | QoQ Change (pp) | | :-------------------------- | :------ | :------ | :------ | :-------------- | :-------------- | | Nonaccrual loans to total loans | 0.61% | 0.70% | 0.55% | 0.06 | -0.09 | | Allowance to total loans | 1.19% | 1.24% | 1.24% | -0.05 | -0.05 | | Allowance to nonaccrual loans | 194.45% | 178.20% | 226.32% | -31.87 | 16.25 | | Net charge-offs to average loans | 0.05% | 0.01% | 0.01% | 0.04 | 0.04 | - Government Agencies guarantee approximately $9.5 million of nonaccrual loans at June 30, 2025[16] Reconciliation of Tangible Book Value Per Common Share (Non-GAAP) Tangible book value per common share, a non-GAAP measure, demonstrated consistent growth from Q2 2024 to Q2 2025 Tangible Book Value Per Common Share (Non-GAAP): | Metric | Q2 2025 ($) | Q1 2025 ($) | Q2 2024 ($) | YoY Change ($) | YoY Change (%) | QoQ Change ($) | QoQ Change (%) | | :-------------------------------------- | :------ | :------ | :------ | :--------- | :------------- | :--------- | :------------- | | Tangible book value per common share | $46.12 | $44.47 | $39.83 | $6.29 | 15.79% | $1.65 | 3.71% | - Tangible book value per common share is calculated as stockholders' equity less goodwill and intangible assets, net, divided by common shares outstanding[15] - This non-GAAP measure is considered a critical metric for analyzing the company's financial condition and capital strength, but it should not be considered a substitute for GAAP operating results[15] Consolidated Average Balance Sheets and Interest Margin Analysis This section provides a detailed analysis of average balance sheets and interest margins for both the three and six months ended June 30, 2025 Three Months Ended June 30, 2025 For Q2 2025, BancFirst reported average earning assets of $12.99 billion with a 5.82% yield, resulting in a 3.75% net interest margin Key Interest Margin Data (Q2 2025, Dollars in thousands): | Metric | Average Balance ($ thousands) | Interest Income/Expense ($ thousands) | Yield/Rate (%) | | :-------------------------------- | :-------------- | :---------------------- | :--------- | | Loans | 8,064,423 | 139,532 | 6.94% | | Total earning assets | 12,990,848 | 188,627 | 5.82% | | Money market and interest-bearing checking deposits | 5,322,205 | 40,562 | 3.06% | | Total interest bearing liabilities | 8,164,057 | 67,171 | 3.30% | | Net interest income | | 121,456 | | | Net interest spread | | | 2.52% | | Net interest margin | | | 3.75% | Six Months Ended June 30, 2025 For the six months ended June 30, 2025, average earning assets were $12.87 billion with a 5.82% yield, leading to a 3.72% net interest margin Key Interest Margin Data (Six Months Ended June 30, 2025, Dollars in thousands): | Metric | Average Balance ($ thousands) | Interest Income/Expense ($ thousands) | Yield/Rate (%) | | :-------------------------------- | :-------------- | :---------------------- | :--------- | | Loans | 8,057,657 | 276,710 | 6.93% | | Total earning assets | 12,866,505 | 371,301 | 5.82% | | Money market and interest-bearing checking deposits | 5,312,449 | 81,283 | 3.09% | | Total interest bearing liabilities | 8,093,644 | 133,698 | 3.33% | | Net interest income | | 237,603 | | | Net interest spread | | | 2.49% | | Net interest margin | | | 3.72% |