BancFirst Corporation Reports Second Quarter Earnings

OKLAHOMA CITY, July 16, 2020

The provision for loan losses for the second quarter of 2020 was $19.3 million compared to $2.4 million a year ago. BancFirst Corporation Executive Chairman David Rainbolt commented, "Our provision for loan losses remained consistent with the previous quarter as the economic effects of the pandemic continued.  It reflects an extension of our modestly optimistic assumption on the timing of the end of the pandemic and the government's stimulus response to it.  We believe this view is aligned with those expressed by the Federal Reserve Board indicating a lack of economic clarity. Absent an improvement in this assessment, we would expect provisions in future quarters to continue to be elevated."

The Company's net interest income for the second quarter of 2020 increased to $77.2 million compared to $69.0 million for the second quarter of 2019. The net interest margin for the quarter was 3.54% compared to 3.89% a year ago.  The Company had net recoveries for the quarter of less than 0.01% of average loans, compared to net charge-offs of less than 0.01% of average loans for the second quarter of 2019.  Noninterest income for the quarter totaled $32.1 million, compared to $34.1 million last year. The decrease in noninterest income is primarily due to a decrease in interchange and deposit charges resulting from lower economic activity. Noninterest expense for the quarter totaled $64.7 million compared to $56.6 million last year. The increase in noninterest expense was primarily due to salary increases in 2020 related to annual merit increases, acquisition of Pegasus bank and pandemic related salary expenses. The Company's effective tax rate was 18.1% compared to 22.0% for the second quarter of 2019.  

At June 30, 2020, the Company's total assets were $9.6 billion, an increase of $1.1 billion from December 31, 2019. Debt securities of $608.0 million were up $116.4 million from December 31, 2019. Loans totaled $6.7 billion, an increase of $1.0 billion from December 31, 2019. Deposits totaled $8.5 billion, an increase of $1.0 billion from the December 31, 2019 total. The increase in assets, loans and deposits were primarily related to the Paycheck Protection Program. At June 30, 2020, the balance of the Paycheck Protection Program loans was $851.3 million.  The Company's total stockholders' equity was $1.0 billion, an increase of $29.2 million over December 31, 2019.

Nonaccrual loans represent 0.74% of total loans at June 30, 2020, up from 0.32% at year-end 2019. The increase in nonaccrual loans was due to further downgrades of energy loans. The allowance to total loans was 1.33% up from 0.96% at year-end 2019. The allowance to nonaccrual loans was approximately 181% compared to 302% at year-end 2019.

BancFirst Corporation CEO David Harlow commented, "The Company has performed admirably in the face of low energy prices, the pandemic, and the Federal Reserve's zero interest-rate policy.  Pre-tax, pre-provision earnings for the quarter and first half of the year were $44.6 million and $92.5 million respectively compared to $46.3 million and $89.0 million for the same periods last year.  PPP loan funding, government stimulus checks, a later income tax filing date, and cash conservation by customers combined to cause deposits to increase $914 million or 12% when compared to the end of the first quarter.  Economic activity and the rate of unemployment in our region have improved slightly from levels experienced earlier in the quarter following the shuttering of the economy, although loan demand absent PPP has been modest."

BancFirst Corporation (the Company) is an Oklahoma based financial services holding company.  The Company operates two subsidiary banks, BancFirst, is Oklahoma's largest state-chartered bank with 108 banking locations serving 59 communities across Oklahoma, and Pegasus Bank, with 3 banking locations in Dallas, TX. More information can be found at www.bancfirst.bank.