QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For
the quarterly period ended March
31, 2025
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 0-14384
BancFirst
Corporation
(Exact
name of registrant as specified in charter)
Oklahoma
73-1221379
(State
or other Jurisdiction of
(I.R.S.
Employer
incorporation
or organization)
Identification
No.)
100
N. Broadway Ave.,
Oklahoma
City,
Oklahoma
73102-8405
(Address
of principal executive offices)
(Zip
Code)
(405)
270-1086
(Registrant�s
telephone number, including area code)
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class
Trading
Symbol(s)
Name
of each exchange on which registered
Common
Stock, $1.00 Par Value Per Share
BANF
NASDAQ Global
Select Market System
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes
☒ No ☐.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File
required to be submitted pursuant to Rule 405 of Regulation S-T (sec. 232-405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant was required to
submit such files). Yes
☒ No ☐.
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a
non-accelerated filer. See definition of �accelerated filer and large accelerated filer� in Rule
12b-2 of the Exchange Act.
Large
accelerated filer
☒
Accelerated
filer
☐
Non-accelerated
filer
☐
Smaller
reporting company
☐
Emerging
growth company
☐
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, 2025, there were 33,242,814shares
of the registrant�s Common Stock outstanding.
Common
stock, $1.00
par,
40,000,000
shares
authorized; shares issued
and outstanding: 33,241,564
and
33,216,519
,
respectively
33,242
33,217
Capital
surplus
188,718
187,062
Retained
earnings
1,474,589
1,433,768
Accumulated
other comprehensive loss, net of tax benefit of $7,353 and
$10,191,
respectively
(23,722
)
(32,860
)
Total
stockholders' equity
1,672,827
1,621,187
Total
liabilities and stockholders' equity
$
14,038,055
$
13,554,314
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)
Three
Months Ended
March
31,
2025
2024
INTEREST
INCOME
Loans,
including fees
$
136,984
$
132,126
Securities:
Taxable
7,006
9,181
Tax-exempt
18
20
Federal
funds sold
1
19
Interest-bearing
deposits with banks
38,467
30,297
Total
interest income
182,476
171,643
INTEREST
EXPENSE
Deposits
65,490
64,413
Short-term
borrowings
7
96
Subordinated
debt
1,030
1,030
Total
interest expense
66,527
65,539
Net
interest income
115,949
106,104
Provision
for credit losses on loans
1,461
4,015
Provision
for off-balance sheet credit exposures
125
�
Total
provision for credit losses
1,586
4,015
Net
interest income after provision for credit losses
114,363
102,089
NONINTEREST
INCOME
Trust
revenue
5,539
5,088
Service
charges on deposits
16,804
16,428
Securities
transactions
(333
)
(267
)
Sales
of loans
636
491
Insurance
commissions
10,410
9,455
Cash
management
10,051
8,651
Gain/(loss)
on sale of other assets
158
(59
)
Other
5,629
5,113
Total
noninterest income
48,894
44,900
NONINTEREST
EXPENSE
Salaries
and employee benefits
54,593
51,528
Occupancy,
net
5,753
5,206
Depreciation
4,808
4,556
Amortization
of intangible assets
886
886
Data
processing services
2,892
2,616
Net
expense from other real estate owned
2,658
2,202
Marketing
and business promotion
2,461
2,256
Deposit
insurance
1,725
1,438
Other
16,403
12,091
Total
noninterest expense
92,179
82,779
Income
before taxes
71,078
64,210
Income
tax expense
14,966
13,876
Net
income
$
56,112
$
50,334
NET
INCOME PER COMMON SHARE
Basic
$
1.69
$
1.53
Diluted
$
1.66
$
1.50
OTHER
COMPREHENSIVE GAIN/(LOSS)
Unrealized
gains/(losses) on debt securities, net of (expense)/tax benefit of
$(2,838
)
and $728,
respectively
9,138
(2,304
)
Other
comprehensive gain/(loss), net of tax (expense)/benefit of $(2,838
)
and $728,
respectively
9,138
(2,304
)
Comprehensive
income
$
65,250
$
48,030
The
accompanying Notes are an integral part of these consolidated financial statements.
3
BANCFIRST
CORPORATION
CONSOLIDATED
STATEMENTS
OF STOCKHOLDERS� EQUITY
(Unaudited)
(Dollars
in thousands)
Three
Months Ended
March
31,
2025
2024
COMMON
STOCK
Issued
at beginning of period
$
33,217
$
32,933
Shares
issued for stock options
25
34
Issued
at end of period
$
33,242
$
32,967
CAPITAL
SURPLUS
Balance
at beginning of period
$
187,062
$
174,695
Common
stock issued for stock options
866
817
Stock-based
compensation arrangements
790
715
Balance
at end of period
$
188,718
$
176,227
RETAINED
EARNINGS
Balance
at beginning of period
$
1,433,768
$
1,276,305
Net
income
56,112
50,334
Dividends
on common stock ($0.46 and
$0.43 per
share, respectively)
(15,291
)
(14,175
)
Balance
at end of period
$
1,474,589
$
1,312,464
ACCUMULATED
OTHER COMPREHENSIVE LOSS
Unrealized
(losses)/gains on securities:
Balance
at beginning of period
$
(32,860
)
$
(50,042
)
Net
change
9,138
(2,304
)
Balance
at end of period
$
(23,722
)
$
(52,346
)
Total
stockholders� equity
$
1,672,827
$
1,469,312
The
accompanying Notes are an integral part of these consolidated financial statements.
4
BANCFIRST
CORPORATION
CONSOLIDATED
STATEMENTS OF CASH FLOW
(Unaudited)
(Dollars
in thousands)
Three
Months Ended
March
31,
2025
2024
CASH
FLOWS FROM OPERATING ACTIVITIES
Net
income
$
56,112
$
50,334
Adjustments
to reconcile to net cash provided by operating activities:
Provision
for credit losses
1,586
4,015
Depreciation
and amortization
5,694
5,442
Net
amortization of securities premiums and discounts
(55
)
(306
)
Realized
securities losses
333
267
Gain
on sales of loans
(636
)
(491
)
Cash
receipts from the sale of loans originated for sale
37,201
28,773
Cash
disbursements for loans originated for sale
(36,775
)
(30,789
)
Deferred
income tax benefit
(1,256
)
(822
)
Gain
on sale of other assets
(183
)
(122
)
Increase
in interest receivable
(729
)
(2,517
)
(Decrease)/increase
in interest payable
(322
)
3,374
Amortization
of stock-based compensation arrangements
790
715
Excess
tax benefit from stock-based compensation arrangements
(456
)
(470
)
Other,
net
15,647
8,921
Net
cash provided by operating activities
76,951
66,324
INVESTING
ACTIVITIES
Net
decrease in federal funds sold
195
107
Proceeds
from maturities, calls and paydowns of held for investment debt
securities
60
61
Proceeds
from maturities, calls and paydowns of available for sale debt securities
56,284
17,657
Purchase
of equity securities
(256
)
(366
)
Proceeds
from paydowns and sales of equity securities
52
42
Net
change in loans
(71,778
)
(130,801
)
Net
(payments)/receipts on derivative asset contracts
(12,284
)
(19,595
)
Purchases
of premises, equipment and computer software
(11,310
)
(10,251
)
Purchase
of tax credits
(12,946
)
(429
)
Other,
net
1,616
2,346
Net
cash used in investing activities
(50,367
)
(141,229
)
FINANCING
ACTIVITIES
Net
change in deposits
408,204
209,499
Net
change in short-term borrowings
�
6,348
Issuance
of common stock in connection with stock options, net
891
851
Cash
dividends paid
(15,279
)
(14,161
)
Net
cash provided by financing activities
393,816
202,537
Net
increase in cash, due from banks and interest-bearing deposits
420,400
127,632
Cash,
due from banks and interest-bearing deposits at the beginning of the
period
3,553,772
2,397,463
Cash,
due from banks and interest-bearing deposits at the end of the period
$
3,974,172
$
2,525,095
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION:
Cash
paid during the period for interest
$
66,849
$
62,164
Cash
paid during the period for income taxes
$
1,981
$
249
Noncash
investing and financing activities:
Unpaid
common stock dividends declared
$
15,291
$
14,175
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, 2024.
Basis
of Presentation
The
accompanying unaudited interim consolidated financial statements include the
accounts of BancFirst Corporation, Council Oak Partners, LLC, BFC-PNC 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 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, 2024, 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.
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
November 2024, the Financial Accounting Standards Board (�FASB�) issued
Accounting Standards Update (�ASU�) 2024-03, �Income Statement - Reporting
Comprehensive Income - Expense Disaggregation Disclosures� requiring disclosure
of certain costs and expenses in the notes to financial statements. This ASU is
effective for annual reporting periods beginning after December 15, 2026, and
interim periods within annual reporting periods beginning after December 15,
2027. The amendments may be applied prospectively or retrospectively to all
periods presented. The Company does not expect adoption of the standard to have
a material impact on its consolidated financial statements.
In
December 2023, FASB issued 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 annual periods 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.
6
(2)
SECURITIES
The
following table summarizes the amortized cost and estimated fair values of debt
securities held for investment:
Amortized Cost
Gross Unrealized Gains
Gross Unrealized Losses
Estimated Fair Value
March
31, 2025
(Dollars
in thousands)
Mortgage
backed securities (1)
$
2
$
�
$
�
$
2
States
and political subdivisions
275
�
�
275
Other
securities
500
�
�
500
Total
$
777
$
�
$
�
$
777
December
31, 2024
Mortgage
backed securities (1)
$
2
$
�
$
�
$
2
States
and political subdivisions
335
�
�
335
Other
securities
500
�
�
500
Total
$
837
$
�
$
�
$
837
The
following table summarizes the amortized cost and estimated fair values of debt
securities available for sale:
Amortized Cost
Gross Unrealized Gains
Gross Unrealized Losses
Estimated Fair Value
March
31, 2025
(Dollars
in thousands)
U.S.
treasuries
$
1,161,345
$
41
$
(28,550
)
$
1,132,836
U.S.
federal agencies
7,674
61
(7
)
7,728
Mortgage
backed securities (1)
14,494
9
(1,539
)
12,964
States
and political subdivisions
6,063
5
(128
)
5,940
Other
securities
8,163
�
(967
)
7,196
Total
$
1,197,739
$
116
$
(31,191
)
$
1,166,664
December
31, 2024
U.S.
treasuries
$
1,216,258
$
�
$
(40,249
)
$
1,176,009
U.S.
federal agencies
8,170
68
(6
)
8,232
Mortgage
backed securities (1)
14,807
9
(1,772
)
13,044
States
and political subdivisions
6,570
6
(140
)
6,436
Other
securities
8,163
�
(967
)
7,196
Total
$
1,253,968
$
83
$
(43,134
)
$
1,210,917
(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, 2025
December
31, 2024
Amortized Cost
Estimated Fair Value
Amortized Cost
Estimated Fair Value
(Dollars
in thousands)
Held
for Investment
Contractual
maturity of debt securities:
Within
one year
$
776
$
776
$
776
$
776
After
one year but within five years
1
1
61
61
After
five years but within ten years
�
�
�
�
After
ten years
�
�
�
�
Total
$
777
$
777
$
837
$
837
Available
for Sale
Contractual
maturity of debt securities:
Within
one year
$
339,766
$
335,452
$
335,108
$
330,076
After
one year but within five years
828,383
804,188
888,721
853,508
After
five years but within ten years
13,579
12,570
13,369
12,354
After
ten years
16,011
14,454
16,770
14,979
Total
debt securities
$
1,197,739
$
1,166,664
$
1,253,968
$
1,210,917
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, 2025
December
31, 2024
(Dollarsin
thousands)
Book
value of pledged securities
$
862,425
$
918,523
8
There
were no
sales of debt securities and therefore no
proceeds from sales or realized securities gains or losses on available for sale debt
securities for the three months ended March 31, 2025 or March 31, 2024.
Realized
gains or 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, 2025 and December 31, 2024
respectively:
Less
than 12 Months
More
than 12 Months
Total
Number
of investments
Estimated Fair
Value
Unrealized Losses
Estimated Fair
Value
Unrealized Losses
Estimated Fair
Value
Unrealized Losses
(Dollars
in thousands)
March
31, 2025
Available
for Sale
U.S.
treasuries
47
$
�
$
�
$
1,041,956
$
28,550
$
1,041,956
$
28,550
U.S.
federal agencies
5
660
5
470
2
1,130
7
Mortgage
backed securities
58
1,194
3
11,437
1,536
12,631
1,539
States
and political subdivisions
4
802
2
761
126
1,563
128
Other
securities
3
�
�
7,196
967
7,196
967
Total
117
$
2,656
$
10
$
1,061,820
$
31,181
$
1,064,476
$
31,191
December
31, 2024
Available
for Sale
U.S.
treasuries
51
$
89,867
$
1,030
$
1,086,142
$
39,219
$
1,176,009
$
40,249
U.S.
federal agencies
5
681
4
500
2
1,181
6
Mortgage
backed securities
63
1,214
15
11,498
1,757
12,712
1,772
States
and political subdivisions
4
802
2
752
138
1,554
140
Other
securities
3
�
�
7,196
967
7,196
967
Total
126
$
92,564
$
1,051
$
1,106,088
$
42,083
$
1,198,652
$
43,134
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, 2025 and December 31, 2024, 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, 2025
December
31, 2024
(Dollars
in thousands)
Real
estate:
Commercial
real estate owner occupied
938,368
931,709
Commercial
real estate non-owner occupied
1,630,208
1,578,483
Construction
and development < 60 months
747,671
756,662
Construction
residential real estate < 60 months
247,725
250,373
Residential
real estate first lien
1,449,075
1,431,265
Residential
real estate all other
282,314
275,461
Agriculture
456,110
449,190
Commercial
non-real estate
1,352,493
1,363,462
Consumer
non-real estate
478,912
478,647
Oil
and gas
511,651
509,858
Total
(1)
$
8,094,527
$
8,025,110
(1)
Excludes accrued interest receivable of $
40.4 million
at March 31, 2025 and $
40.9 million
at December 31, 2024, that is recorded in accrued interest
receivable and other assets.
The
Company's loans are currently 83
%
held by BancFirst and 17
%
held by Pegasus and Worthington. In addition, approximately71%
of the Company's loans are secured by real estate. Credit
risk on loans is managed through limits on amounts loaned to individual and related
borrowers, underwriting standards and loan monitoring procedures. The amounts and types of
collateral obtained, if any, to secure loans are based upon the Company�s underwriting
standards and management�s credit evaluation. Collateral varies, but may include real
estate, equipment, accounts receivable, inventory, livestock and/or securities. The
Company�s interest in collateral is secured through filing mortgages and liens, or by
possession of the collateral.
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, 2024.
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, 2025
December
31, 2024
(Dollars
in thousands)
Other
real estate owned and repossessed assets
$
35,542
$
33,665
As
of both March 31, 2025 and December 31, 2024, other real estate owned included a
commercial real estate property recorded at approximately $29.5
million and $28.1
million, respectively. The increase in OREO and this commercial real estate property was
due to tenant improvements during the three months ended March 31, 2025. 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
other real estate owned in 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,
2025
2024
(Dollars
in thousands)
Rental
income
$
3,121
$
2,941
Operating
expense
2,624
2,250
During
the three months ended March 31, 2025,
the Company sold property held in other real estate owned for a total gain of
$25,000,
compared to a total gain of $177,000
in the three
months ended March 31, 2024.
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, 2025 was
approximately
$1.9
million compared to $14.8
million during the year ended December 31, 2024.
Nonaccrual
loans
The
Company did not
recognize any interest income on nonaccrual loans for either the three months ended March
31, 2025 or 2024. In addition, all loans identified as nonaccrual loans have related
allowances for credit losses at March 31, 2025 and December 31, 2024, respectively. Had
nonaccrual loans performed in accordance with their original contractual terms, the
Company would have recognized additional interest income of approximately
$1.0
million for
the three months ended March 31, 2025
and approximately $696,000
for the three
months ended March 31, 2024.
Nonaccrual
loans guaranteed by government agencies totaled approximately $9.2
million at March
31, 2025
and approximately $9.0
million at December
31, 2024.
The
following table is a summary of amounts included in nonaccrual loans, segregated
by portfolio segment.
March
31, 2025
December
31, 2024
(Dollars
in thousands)
Real
estate:
Commercial
real estate owner occupied
$
8,156
$
7,957
Commercial
real estate non-owner occupied
8,010
8,913
Construction
and development < 60 months
20,603
20,445
Construction
residential real estate < 60 months
2,115
1,481
Residential
real estate first lien
4,753
5,193
Residential
real estate all other
918
653
Agriculture
1,344
2,047
Commercial
non-real estate
7,673
8,552
Consumer
non-real estate
1,109
1,028
Oil
and gas
1,690
1,715
Total
$
56,371
$
57,984
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
Days Past Due
60-89
Days Past Due
90
Days and Greater
Total Past
Due Loans
Current Loans
Total
Loans
Accruing Loans
90 Days or More Past Due
(Dollars
in thousands)
As
of March 31, 2025
Real
estate:
Commercial
real estate owner occupied
$
4,753
$
201
$
7,690
$
12,644
$
925,724
$
938,368
$
436
Commercial
real estate non-owner occupied
782
�
233
1,015
1,629,193
1,630,208
228
Construction
and development < 60 months
1,011
16
20,685
21,712
725,959
747,671
174
Construction
residential real estate < 60 months
165
113
1,239
1,517
246,208
247,725
�
Residential
real estate first lien
5,429
2,975
4,379
12,783
1,436,292
1,449,075
1,739
Residential
real estate all other
3,374
131
981
4,486
277,828
282,314
248
Agriculture
4,167
944
1,185
6,296
449,814
456,110
632
Commercial
non-real estate
7,423
429
5,610
13,462
1,339,031
1,352,493
1,151
Consumer
non-real estate
3,685
832
1,247
5,764
473,148
478,912
512
Oil
and gas
108
450
1,111
1,669
509,982
511,651
�
Total
$
30,897
$
6,091
$
44,360
$
81,348
$
8,013,179
$
8,094,527
$
5,120
As
of December 31, 2024
Real
estate:
Commercial
real estate owner occupied
$
2,810
$
273
$
7,963
$
11,046
$
920,663
$
931,709
$
569
Commercial
real estate non-owner occupied
603
16,871
610
18,084
1,560,399
1,578,483
41
Construction
and development < 60 months
317
351
20,327
20,995
735,667
756,662
116
Construction
residential real estate < 60 months
292
622
616
1,530
248,843
250,373
�
Residential
real estate first lien
9,128
2,118
3,332
14,578
1,416,687
1,431,265
797
Residential
real estate all other
1,498
559
828
2,885
272,576
275,461
370
Agriculture
1,569
1,357
5,691
8,617
440,573
449,190
4,754
Commercial
non-real estate
4,325
1,019
5,983
11,327
1,352,135
1,363,462
356
Consumer
non-real estate
3,748
907
1,173
5,828
472,819
478,647
504
Oil
and gas
1,111
458
232
1,801
508,057
509,858
232
Total
$
25,401
$
24,535
$
46,755
$
96,691
$
7,928,419
$
8,025,110
$
7,739
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, 2024, are disclosed in Note (5) to the Company�s Annual Report on Form 10-K
for the year ended December 31, 2024.
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)
2025
2024
2023
2022
2021
Prior
Amortized
Cost Basis
Total
As
of March 31, 2025
Commercial
real estate owner occupied
Grade
1
$
21,686
$
77,228
$
105,688
$
136,337
$
93,581
$
209,640
$
17,585
$
661,745
Grade
2
16,711
33,382
32,599
47,572
46,421
56,775
5,996
239,456
Grade
3
387
14,041
9,920
3,080
2,441
2,010
138
32,017
Grade
4
332
1,506
377
153
387
2,273
122
5,150
Total
commercial real estate owner occupied
39,116
126,157
148,584
187,142
142,830
270,698
23,841
938,368
Commercial
real estate non-owner occupied
Grade
1
$
56,154
$
109,497
$
282,664
$
262,068
$
173,442
$
176,336
$
23,464
$
1,083,625
Grade
2
33,254
82,361
108,531
141,844
52,448
83,323
13,497
515,258
Grade
3
�
20,633
125
735
�
30
�
21,523
Grade
4
�
5,751
�
�
1,947
2,104
�
9,802
Total
commercial real estate non-owner occupied
89,408
218,242
391,320
404,647
227,837
261,793
36,961
1,630,208
Construction
and development < 60 months
Grade
1
$
40,297
$
107,456
$
97,643
$
151,160
$
8,330
$
14,092
$
31,049
$
450,027
Grade
2
50,697
88,588
50,994
55,526
658
15,465
11,422
273,350
Grade
3
2,588
483
123
�
352
128
�
3,674
Grade
4
�
�
18
816
308
136
19,342
20,620
Total
construction and development < 60 months
93,582
196,527
148,778
207,502
9,648
29,821
61,813
747,671
Construction
residential real estate < 60 months
Grade
1
$
32,101
$
93,178
$
11,462
$
4,470
$
89
$
1,758
$
4,271
$
147,329
Grade
2
25,058
54,685
1,218
553
�
�
15,912
97,426
Grade
3
237
619
�
�
�
�
�
856
Grade
4
�
1,791
117
206
�
�
�
2,114
Total
construction residential real estate < 60 months
57,396
150,273
12,797
5,229
89
1,758
20,183
247,725
Residential
real estate first lien
Grade
1
$
67,422
$
246,761
$
189,340
$
195,013
$
142,744
$
251,378
$
4,856
$
1,097,514
Grade
2
18,221
76,975
72,008
47,839
37,344
65,901
969
319,257
Grade
3
3,520
6,168
3,204
3,401
2,707
6,231
�
25,231
Grade
4
�
1,870
802
616
1,930
1,855
�
7,073
Total
residential real estate first lien
89,163
331,774
265,354
246,869
184,725
325,365
5,825
1,449,075
Residential
real estate all other
Grade
1
$
7,051
$
36,798
$
24,767
$
18,504
$
5,291
$
15,416
$
52,478
$
160,305
Grade
2
1,250
6,992
5,255
3,783
1,219
4,920
92,263
115,682
Grade
3
247
918
394
265
171
482
1,924
4,401
Grade
4
329
68
245
108
�
186
990
1,926
Total
residential real estate all other
8,877
44,776
30,661
22,660
6,681
21,004
147,655
282,314
Agriculture
Grade
1
$
15,224
$
38,758
$
37,016
$
37,398
$
26,324
$
56,517
$
52,148
$
263,385
Grade
2
18,495
34,417
21,982
17,310
12,002
24,776
41,465
170,447
Grade
3
413
1,260
2,306
2,319
1,742
4,501
7,471
20,012
Grade
4
10
461
246
865
162
397
125
2,266
Total
Agriculture
34,142
74,896
61,550
57,892
40,230
86,191
101,209
456,110
Commercial
non-real estate
Grade
1
$
53,825
$
126,977
$
90,837
$
132,250
$
106,919
$
66,222
$
282,164
$
859,194
Grade
2
32,121
84,894
69,514
28,032
15,275
7,963
208,939
446,738
Grade
3
447
1,391
1,652
1,701
371
347
36,508
42,417
Grade
4
559
669
1,212
601
124
381
345
3,891
Grade
5
�
�
4
71
6
172
�
253
Total
commercial non-real estate
86,952
213,931
163,219
162,655
122,695
75,085
527,956
1,352,493
Consumer
non-real estate
Grade
1
$
48,308
$
165,238
$
94,651
$
46,454
$
20,379
$
8,293
$
21,697
$
405,020
Grade
2
5,231
17,991
14,393
8,298
3,716
1,625
12,744
63,998
Grade
3
248
1,409
2,135
1,119
742
401
13
6,067
Grade
4
1,815
533
594
514
223
146
2
3,827
Total
consumer non-real estate
55,602
185,171
111,773
56,385
25,060
10,465
34,456
478,912
Oil
and gas
Grade
1
$
73,126
$
15,712
$
10,877
$
4,130
$
20,084
$
8,089
$
223,596
$
355,614
Grade
2
33,690
9,395
6,677
4,168
1,538
2,413
96,888
154,769
Grade
3
28
22
81
�
165
56
450
802
Grade
4
�
�
�
�
58
408
�
466
Total
oil and gas
106,844
25,129
17,635
8,298
21,845
10,966
320,934
511,651
Total
loans held for investment
$
661,082
$
1,566,876
$
1,351,671
$
1,359,279
$
781,640
$
1,093,146
$
1,280,833
$
8,094,527
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
2025
2024
2023
2022
2021
Prior
Amortized
Cost Basis
Total
(Dollars
in thousands)
Three
months ended March 31, 2025
Commercial
real estate owner occupied
Current-period
gross charge-offs
$
�
$
�
$
�
$
17
$
6
$
�
$
�
$
23
Commercial
real estate non-owner occupied
Current-period
gross charge-offs
�
�
�
�
�
�
�
�
Construction
and development < 60 months
Current-period
gross charge-offs
�
�
�
�
3
�
�
3
Construction
residential real estate < 60 months
Current-period
gross charge-offs
�
25
�
�
�
�
�
25
Residential
real estate first lien
Current-period
gross charge-offs
�
6
2
1
5
37
�
51
Residential
real estate all other
Current-period
gross charge-offs
�
�
�
�
�
�
6
6
Agriculture
Current-period
gross charge-offs
�
9
�
�
1
�
17
27
Commercial
non-real estate
Current-period
gross charge-offs
19
10
21
33
33
72
13
201
Consumer
non-real estate
Current-period
gross charge-offs
�
157
224
54
6
6
�
447
Oil
and gas
Current-period
gross charge-offs
�
�
�
�
�
�
�
�
Total
current-period gross charge-offs
$
19
$
207
$
247
$
105
$
54
$
115
$
36
$
783
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
$
�
$
�
$
�
$
15
$
�
$
�
$
�
$
15
Commercial
real estate non-owner occupied
Current-period
gross charge-offs
�
12
�
�
1
�
�
13
Construction
and development < 60 months
Current-period
gross charge-offs
�
�
�
�
�
�
�
�
Construction
residential real estate < 60 months
Current-period
gross charge-offs
�
3
�
�
�
�
�
3
Residential
real estate first lien
Current-period
gross charge-offs
1
�
�
1
�
21
�
23
Residential
real estate all other
Current-period
gross charge-offs
�
�
�
�
�
2
27
29
Agriculture
Current-period
gross charge-offs
�
�
31
�
�
�
�
31
Commercial
non-real estate
Current-period
gross charge-offs
�
1,001
275
132
12
126
1,508
3,054
Consumer
non-real estate
Current-period
gross charge-offs
�
244
97
51
13
15
11
431
Oil
and gas
Current-period
gross charge-offs
�
9
83
�
�
�
�
92
Total
current-period gross charge-offs
$
1
$
1,269
$
486
$
199
$
26
$
164
$
1,546
$
3,691
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, 2024.
The
following tables detail activity in the allowance for credit losses on loans for
the periods 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 beginning of period
Charge- offs
Recoveries
Net
charge-offs
Provision
for /(benefit from) credit losses on loans
Balance
at end of period
(Dollars
in thousands)
Three
Months Ended March 31, 2025
Real
estate:
Commercial
real estate owner occupied
$
6,869
$
(23
)
$
39
$
16
$
106
$
6,991
Commercial
real estate non-owner occupied
33,097
�
�
�
656
33,753
Construction
and development < 60 months
8,671
(3
)
�
(3
)
(55
)
8,613
Construction
residential real estate < 60 months
2,336
(25
)
�
(25
)
(29
)
2,282
Residential
real estate first lien
4,568
(51
)
3
(48
)
146
4,666
Residential
real estate all other
1,741
(6
)
21
15
34
1,790
Agriculture
5,696
(27
)
11
(16
)
96
5,776
Commercial
non-real estate
24,150
(201
)
125
(76
)
(197
)
23,877
Consumer
non-real estate
4,833
(447
)
81
(366
)
353
4,820
Oil
and gas
7,536
�
�
�
351
7,887
Total
$
99,497
$
(783
)
$
280
$
(503
)
$
1,461
$
100,455
Allowance
for Credit Losses
Balance
at beginning of period
Charge- offs
Recoveries
Net
charge-offs
Provision
for /(benefit from) credit losses on loans
Balance
at end of period
(Dollars
in thousands)
Three
Months Ended March 31, 2024
Real
estate:
Commercial
real estate owner occupied
$
7,483
$
(15
)
$
20
$
5
$
(20
)
$
7,468
Commercial
real estate non-owner occupied
33,080
(13
)
�
(13
)
113
33,180
Construction
and development < 60 months
3,950
�
�
�
2,646
6,596
Construction
residential real estate < 60 months
3,414
(3
)
�
(3
)
53
3,464
Residential
real estate first lien
4,914
(23
)
4
(19
)
28
4,923
Residential
real estate all other
1,646
(29
)
5
(24
)
30
1,652
Agriculture
6,137
(31
)
12
(19
)
19
6,137
Commercial
non-real estate
22,745
(3,054
)
33
(3,021
)
758
20,482
Consumer
non-real estate
4,401
(431
)
69
(362
)
296
4,335
Oil
and gas
9,030
(92
)
�
(92
)
92
9,030
Total
$
96,800
$
(3,691
)
$
143
$
(3,548
)
$
4,015
$
97,267
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, 2025
or March 31, 2024.
15
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, 2025 and 2024,
no material amount of interest income was recognized on collateral-dependent loans
subsequent to their classification as collateral-dependent. The
following tables summarize collateral-dependent gross loans held for investment
by collateral type and the related specific allocation as follows:
Collateral
Type
Real
Estate
Business
Assets
Other
Assets
Total
Specific
Allocation
(Dollars
in thousands)
As
of March 31, 2025
Real
estate:
Commercial
real estate owner occupied
$
125
$
�
$
�
$
125
$
50
Commercial
real estate non-owner occupied
7,822
�
�
7,822
880
Construction
and development < 60 months
20,142
�
�
20,142
3,755
Construction
residential real estate < 60 months
206
�
�
206
75
Residential
real estate first lien
343
�
�
343
99
Residential
real estate all other
98
�
�
98
33
Agriculture
1,584
110
13
1,707
688
Commercial
non-real estate
�
9,510
66
9,576
2,052
Consumer
non-real estate
�
�
562
562
316
Oil
and gas
�
�
�
�
110
Total
collateral-dependent loans held for investment
$
30,320
$
9,620
$
641
$
40,581
$
8,058
Collateral
Type
Real
Estate
Business
Assets
Other
Assets
Total
Specific
Allocation
(Dollars
in thousands)
As
of December 31, 2024
Real
estate:
Commercial
real estate owner occupied
$
�
$
�
$
�
$
�
$
�
Commercial
real estate non-owner occupied
7,890
�
�
7,890
879
Construction
and development < 60 months
20,142
�
�
20,142
3,755
Construction
residential real estate < 60 months
206
�
�
206
75
Residential
real estate first lien
300
�
�
300
93
Residential
real estate all other
100
�
�
100
34
Agriculture
1,584
110
13
1,707
688
Commercial
non-real estate
�
10,087
108
10,195
2,222
Consumer
non-real estate
�
�
399
399
242
Oil
and gas
�
�
�
�
�
Total
collateral-dependent loans held for investment
$
30,222
$
10,197
$
520
$
40,939
$
7,988
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.
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,
2025
2024
(Dollars
in thousands)
Other
real estate owned
$
909
$
1,582
Repossessed
assets
824
455
Total
$
1,733
$
2,037
16
(4)
INTANGIBLE ASSETS AND GOODWILL
The
following is a summary of intangible assets as of the date listed:
Gross Carrying Amount
Accumulated Amortization
Net Carrying Amount
(Dollars
in thousands)
March
31, 2025
Core
deposit intangibles
$
33,550
$
(21,311
)
$
12,239
Customer
relationship intangibles
3,350
(3,317
)
33
Total
$
36,900
$
(24,628
)
$
12,272
December
31, 2024
Core
deposit intangibles
$
33,550
$
(20,454
)
$
13,096
Customer
relationship intangibles
3,350
(3,288
)
62
Total
$
36,900
$
(23,742
)
$
13,158
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, 2025
Balance
at beginning and end of period
$
13,767
$
61,420
$
68,855
$
32,133
$
5,464
$
624
$
182,263
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, 2024.
(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 $25
million of aggregate liquidation amount of 7.20%
Cumulative Trust Preferred Securities (the �Cumulative Trust Preferred Securities�) to
other investors. In March 2004, BFC II issued an additional $1
million in Cumulative Trust Preferred Securities through the execution of an
over-allotment option. The proceeds from the sale of the Cumulative Trust Preferred
Securities and the common securities of BFC II were invested in $26.8
million of 7.20%
Junior Subordinated Debentures of the Company. Interest payments on the $26.8
million of 7.20%
Junior Subordinated Debentures are payable
January 15, April 15, July 15 and October 15 of each year.
Such interest payments may be deferred for up to twenty consecutive quarters. The stated
maturity date of the $26.8
million of 7.20%
Junior Subordinated Debentures is March
31, 2034,
but they are subject to mandatory redemption pursuant to optional prepayment terms. The
Cumulative Trust Preferred Securities represent an undivided interest in the $26.8
million of 7.20%
Junior Subordinated Debentures and are guaranteed by the Company. During any deferral
period or during any event of default, the Company may not declare or pay any dividends on
any of its capital stock. The Cumulative Trust Preferred Securities have been callable at
par, in whole or in part, since March 31, 2009.
On
June 17, 2021, the Company completed a private placement, under Regulation D of the
Securities Act of 1933, of $60
million aggregate principal amount of 3.50%
Fixed-to-Floating Rate Subordinated Notes due 2036 (the �Subordinated Notes�) to various
institutional accredited investors. The sale of the Subordinated Notes was pursuant to a
Subordinated Note Purchase Agreement entered into with each of the investors. The
Subordinated Notes qualify as Tier 2 capital under bank regulatory guidelines. The net
proceeds to the Company from the sale of the Subordinated Notes were approximately
$59.15
million net of commissions and offering expenses. The Company used the proceeds from the
sale of the Subordinated Notes for general corporate purposes. The
Subordinated Notes initially bear interest at a fixed rate of 3.50
%
per annum, from and including June 17, 2021 to but excluding June 30, 2031,
payable
semi-annually in arrears on June 30 and December 31 of each
year,
commencing December
31, 2021.
Then, from and including June 30, 2031, to but excluding the maturity date, the
Subordinated Notes will bear interest at a floating rate equal to the benchmark
(initially, three-month term SOFR), reset quarterly, plus a spread of
229
basis points, payable
quarterly in arrears on March 31, June 30, September 30 and December
31 of each year.
The Subordinated Notes mature on June
30, 2036.
17
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, the
Company may redeem all, but not less than all, of the Subordinated Notes at any
time upon the occurrence of a �Tier 2 Capital Event,� a �Tax Event� or an
�Investment Company Event� (each as defined in the Subordinated Notes). Any such
redemption is subject to obtaining the prior approval of the Board of Governors
of the Federal Reserve System (or its designee). The redemption price with
respect to any such redemption will be equal to 100%
of the principal amount of the Subordinated Note, or portion thereof, to be
redeemed, plus accrued but unpaid interest, if any, thereon to, but excluding,
the redemption date.
(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 ten
years
thereafter. The RSU Plan will continue in effect after such ten-year period until all
matters relating to the payment of awards and administration of the RSU Plan have been
settled. At March 31, 2025 there were 453,175
shares available for future grants. The
restricted stock units ("RSU's") vest beginning two
years
from the date of grant at the rate of 20
%
per year for five
years.
The RSU's are settled and distributed as of each vesting date. The fair value of each RSU
granted is equal to the market price of the Company�s stock at the date of
grant.
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, 2025
Nonvested
at December 31, 2024
42,825
$
90.35
Granted
4,000
113.41
Nonvested
at March 31, 2025
46,825
92.32
The
Company has had the BancFirst Corporation Directors� Deferred Stock Compensation Plan (the
�Deferred Stock Compensation Plan�) since May 1999. As of March 31, 2025, there are
33,528
shares available for future issuance under the Deferred Stock Compensation Plan. The
Deferred Stock Compensation Plan will terminate on December
31, 2030,
if not extended. Under the plan, directors and members of the community advisory boards of
the Company and its subsidiaries may defer up to 100%
of their board fees. They are credited for each deferral with a number of stock units
based on the current market price of the Company�s stock, which accumulate in an account
until such time as the director or community board member terminates serving as a board
member. Shares of common stock of the Company are then distributed to the terminating
director or community board member based upon the number of stock units accumulated in his
or her account. There were 4,045
and 5,022
shares of common stock distributed from the Deferred Stock Compensation Plan during the
three months ended March 31, 2025 and 2024, respectively.
A
summary of the accumulated stock units under the Deferred Stock Compensation
Plan is as follows:
March
31, 2025
December
31, 2024
Accumulated
stock units
119,058
120,984
Average
price
$
46.51
$
44.70
The
Company terminated the BancFirst Corporation Stock Option Plan (the �Employee Plan�) on
June
1, 2023.
The
remaining options will continue to vest and are exercisable beginning
four
years
from the date of grant at the rate of 25
%
per year for four
years,
and expire no later than the end of fifteen
years
from the date of grant.
The
Company terminated the BancFirst Corporation Non-Employee Directors� Stock Option Plan
(the �Non-Employee Directors� Plan�) on June
1, 2023.
The
remaining options will continue to vest and are exercisable beginning
one
year
from the date of grant at the rate of 25
%
per year for four
years,
and expire no later than the end of fifteen
years
from the date of grant.
18
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, 2025
Outstanding
at December 31, 2024
947,921
$
58.42
Options
exercised
(21,000
)
36.82
Options
canceled, forfeited, or expired
(5,000
)
90.56
Outstanding
at March 31, 2025
921,921
58.74
9.55 Yrs.
$
47,140
Exercisable
at March 31, 2025
391,046
43.95
7.21 Yrs.
$
25,776
The
following table has additional information regarding options exercised under
both the Employee Plan and the Non-Employee Directors� Plan:
Three
Months Ended March 31,
2025
2024
(Dollars
in thousands)
Total
intrinsic value of options exercised
$
1,734
$
1,831
Cash
received from options exercised
773
708
Tax
benefit realized from options exercised
417
440
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 no
cash settlements during the three months ended March 31, 2025 or March 31,
2024.
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 March 31,
2025
2024
(Dollars
in thousands)
Stock-based
compensation expense
$
790
$
715
Tax
benefit
190
172
Stock-based
compensation expense, net of tax
$
600
$
543
The
Company amortizes the unearned stock-based compensation expense over the remaining vesting
period of approximately five
years
for unvested stock options and six
years
for unvested RSU's. The following table shows the unearned stock-based compensation
expense for unvested stock options and unvested RSU's:
March
31, 2025
(Dollars
in thousands)
Unearned
stock-based compensation expense for unvested stock
options
$
6,802
Unearned
stock-based compensation expense for unvested RSU's
3,480
(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
19
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 March 31,
2025
2024
Shares
remaining to be repurchased
479,784
479,784
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,
2025,
BancFirst Corporation, BancFirst, Pegasus and Worthington each met all capital adequacy
requirements to which they are subject. The
actual and required capital amounts and ratios are shown in the following
table:
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, 2025:
Total
Capital
(to
Risk Weighted Assets)-
BancFirst
Corporation
$
1,687,961
19.11%
$
706,663
8.00%
$
927,495
10.50%
N/A
N/A
BancFirst
1,273,409
17.42%
584,793
8.00%
767,541
10.50%
$
730,992
10.00%
Pegasus
160,653
16.66%
77,151
8.00%
101,261
10.50%
96,439
10.00%
Worthington
56,901
12.10%
37,625
8.00%
49,383
10.50%
47,032
10.00%
Common
Equity Tier 1 Capital
(to
Risk Weighted Assets)-
BancFirst
Corporation
$
1,502,014
17.00%
$
397,498
4.50%
$
618,330
7.00%
N/A
N/A
BancFirst
1,170,053
16.01%
328,946
4.50%
511,694
7.00%
$
475,145
6.50%
Pegasus
150,762
15.63%
43,398
4.50%
67,507
7.00%
62,686
6.50%
Worthington
52,561
11.18%
21,164
4.50%
32,922
7.00%
30,571
6.50%
Tier
1 Capital
(to
Risk Weighted Assets)-
BancFirst
Corporation
$
1,528,014
17.30%
$
529,997
6.00%
$
750,830
8.50%
N/A
N/A
BancFirst
1,190,053
16.28%
438,595
6.00%
621,343
8.50%
$
584,793
8.00%
Pegasus
150,762
15.63%
57,864
6.00%
81,973
8.50%
77,151
8.00%
Worthington
52,561
11.18%
28,219
6.00%
39,977
8.50%
37,625
8.00%
Tier
1 Capital
(to
Quarterly Average Assets)-
BancFirst
Corporation
$
1,528,014
11.30%
$
541,122
4.00%
N/A
N/A
N/A
N/A
BancFirst
1,190,053
10.36%
459,297
4.00%
N/A
N/A
$
574,121
5.00%
Pegasus
150,762
11.11%
54,274
4.00%
N/A
N/A
67,843
5.00%
Worthington
52,561
8.51%
24,699
4.00%
N/A
N/A
30,873
5.00%
As
of March 31, 2025,
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 qualify as Tier 1 capital and its
Subordinated Notes qualify as Tier 2 capital. BancFirst, Pegasus and Worthington have had
no events or conditions that management believes would materially change their category
under capital requirements existing as of the report dates.
20
(8)
NET INCOME PER COMMON SHARE
Basic
and diluted net income per common share are calculated as follows:
Three
Months Ended March 31,
2025
2024
(Dollars
in thousands, except per share data)
(Numerator)
Income
available to common stockholders
$
56,112
$
50,334
(Denominator)
Weighted
average shares outstanding for basic earnings per common
share
33,232,788
32,947,983
Dilutive
effect of stock compensation
536,085
565,429
Weighted-average
shares outstanding for diluted earnings per common
share
33,768,873
33,513,412
Basic
earnings per share
$
1.69
$
1.53
Diluted
earnings per share
$
1.66
$
1.50
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, 2025
57,733
Three
Months Ended March 31, 2024
270,417
(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:
�
Level
1 Inputs to the valuation methodology are quoted prices (unadjusted) for identical
assets or liabilities in active markets.
�
Level
2 Inputs to the valuation methodology include quoted prices for similar assets and
liabilities in active markets, and inputs that are observable for the asset and
liability, either directly or indirectly, for substantially the full term of the
financial instrument.
�
Level
3 Unobservable inputs that are supported by little or no market activity and that are
significant to the fair value of the assets or liabilities. Level 3 assets and
liabilities include financial instruments whose values are determined using pricing
models, discounted cash flow methodologies, or similar techniques, as well as
instruments for which the determination of fair value requires significant judgment
or estimation. This category includes certain collaterally dependent loans,
repossessed assets, other real estate owned, goodwill and other intangible
assets.
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
21
observable
data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield
curve, live trading levels, trade 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, 2025
Debt
securities available for sale:
U.S.
Treasury
$
1,132,836
$
�
$
�
$
1,132,836
U.S.
federal agencies
�
7,728
�
7,728
Mortgage-backed
securities
�
12,964
�
12,964
States
and political subdivisions
�
5,790
150
5,940
Other
debt securities
�
7,196
�
7,196
Derivative
assets
�
19,893
�
19,893
Derivative
liabilities
�
18,237
�
18,237
December
31, 2024
Debt
securities available for sale:
U.S.
Treasury
$
1,176,009
$
�
$
�
$
1,176,009
U.S.
federal agencies
�
8,232
�
8,232
Mortgage-backed
securities
�
13,044
�
13,044
States
and political subdivisions
�
6,286
150
6,436
Other
debt securities
7,196
7,196
Derivative
assets
�
10,479
�
10,479
Derivative
liabilities
�
9,105
�
9,105
22
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,
2025
2024
(Dollars
in thousands)
Balance
at the beginning of the year
$
150
$
180
Settlements
�
(30
)
Balance
at the end of the period
$
150
$
150
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, 2025, and the
year ended December 31, 2024, the Company did not transfer any debt
securities.
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,
2025
Equity
securities
$
12,785
Collateral
dependent loans
760
Repossessed
assets
588
Other
real estate owned
1,077
As
of and for the Year-to-date Period Ended December 31,
2024
Equity
securities
$
13,014
Collateral
dependent loans
7,337
Repossessed
assets
614
Other
real estate owned
32,868
23
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 30
days of origination. Loans held for sale are valued using Level 2 inputs. Gains or losses
recognized upon the sale of the loans are determined on a specific identification
basis.
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.
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.
24
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, 2025
December
31, 2024
Carrying Amount
Fair
Value
Carrying Amount
Fair
Value
(Dollars
in thousands)
FINANCIAL
ASSETS
Level
2 inputs:
Cash
and cash equivalents
$
3,974,172
$
3,974,172
$
3,553,772
$
3,553,772
Federal
funds sold
520
520
$
715
715
Debt
securities held for investment
775
775
2
2
Loans
held for sale
8,283
8,283
8,073
8,073
Level
3 inputs:
Debt
securities held for investment
2
2
835
835
Loans,
net of allowance for credit losses
7,994,072
8,792,307
7,925,613
8,643,418
FINANCIAL
LIABILITIES
Level
2 inputs:
Deposits
12,126,750
11,451,560
11,718,546
10,966,958
Subordinated
debt
86,171
79,800
86,157
77,998
OFF-BALANCE-SHEET
FINANCIAL INSTRUMENTS
Loan
commitments
4,290
4,313
Letters
of credit
716
769
Non-financial
Assets and Non-financial Liabilities Measured at Fair Value
The
Company has no
non-financial assets or non-financial liabilities measured at fair value on a recurring
basis. In addition, the Company has no non-financial liabilities measured at fair value on
a nonrecurring basis. Non-financial assets measured at fair value on a nonrecurring basis
include intangible assets. The intangible assets are evaluated at least annually for
impairment. The overall levels of non-financial assets measured at fair value on a
nonrecurring basis were not
considered to be significant to the Company at March
31, 2025 or December 31, 2024.
25
(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, 2025 and December 31, 2024,
the Company had a margin asset included in other assets in the amount of $12.6
million and $463,000,
respectively.
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, 2025
December
31, 2024
Oil
and Natural Gas Swaps and Options
Notional
Units
Notional Amount
Estimated Fair
Value
Notional Amount
Estimated Fair
Value
(Notional
amounts and dollars in thousands)
Oil
Derivative
assets
Barrels
2,293
$
6,790
2,404
$
7,507
Derivative
liabilities
Barrels
(2,293
)
(
6,172
)
(2,404
)
(
6,860
)
Gas/Natural
Gas Liquids
Derivative
assets
MMBTUs/Gallons
39,210
13,103
25,561
2,972
Derivative
liabilities
MMBTUs/Gallons
(39,210
)
(
12,065
)
(25,561
)
(
2,245
)
Total
Fair Value
Included
in
Derivative
assets
Other
assets
19,893
10,479
Derivative
liabilities
Other
liabilities
(
18,237
)
(
9,105
)
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,
2025
2024
(Dollars
in thousands)
Derivative
income
$
221
$
103
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 35%.
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 Moody'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, 2025
December
31, 2024
(Dollars
inthousands)
Credit
exposure
$
210
$
8,074
26
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 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, along with its chief operating decision maker (CODM), which is BancFirst
Corporation's Chief
Executive Officer,
evaluates its performance with an internal profitability
measurement system that measures the profitability of its business units on a
pre-tax basis. The
financial information for each business unit is presented on the basis used
internally by management and the CODM 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. Capital
expenditures are generally charged to the business unit using the asset.
The
six
principal business units are BancFirst metropolitan banks, BancFirst community banks,
Pegasus, Worthington, other financial services and executive, operations and support.
BancFirst metropolitan banks, BancFirst community banks, Pegasus and Worthington offer
traditional banking products such as commercial and retail lending and a full line of
deposit accounts. BancFirst metropolitan banks consist of banking locations in the
metropolitan Oklahoma City and Tulsa areas. BancFirst community banks consist of banking
locations in communities in Oklahoma outside the Oklahoma City and Tulsa metropolitan
areas. Pegasus consists of banking locations in the Dallas metropolitan area. Worthington
consists of banking locations in the Arlington, Fort Worth
and Denton Texas. Other financial services are specialty product business units including
guaranteed small business lending, residential mortgage lending, trust services,
securities brokerage, electronic banking and insurance. The executive, operations and
support groups represent executive management, operational support and corporate functions
that are not allocated to the other business units.
The
results of operations and selected financial information for the six business
units are as follows:
27
BancFirst
Metropolitan Banks
BancFirst
Community Banks
Pegasus
Worthington
Other Financial Services
Executive, Operations &
Support
Eliminations
Consolidated
(Dollars
in thousands)
Three
Months Ended March 31, 2025
Interest
income
$
49,386
$
105,612
$
19,709
$
8,593
$
2,376
$
(2,041
)
$
(1,159
)
$
182,476
Interest
expense
20,529
39,465
7,185
3,197
979
(3,641
)
(1,187
)
66,527
Total
provision for/(benefit from) credit
losses
(51
)
1,187
105
132
18
195
�
1,586
Noninterest
income
6,227
17,746
559
229
16,662
62,203
(54,732
)
48,894
Depreciation
and amortization
480
2,653
148
168
143
2,102
�
5,694
Other
noninterest expense
11,562
34,726
5,642
3,762
14,617
16,317
(141
)
86,485
Income
before taxes
$
23,093
$
45,327
$
7,188
$
1,563
$
3,281
$
45,189
$
(54,563
)
$
71,078
Loans
held for investment
$
2,423,864
$
4,129,905
$
888,551
$
462,816
$
96,689
$
92,702
$
�
$
8,094,527
Total
assets
$
3,559,494
$
8,049,771
$
1,518,402
$
668,920
$
102,351
$
1,869,371
$
(
1,730,254
)
$
14,038,055
Total
deposits
$
2,973,626
$
7,414,687
$
1,296,438
$
581,139
$
�
$
�
$
(
139,140
)
$
12,126,750
Capital
expenditures
$
940
$
2,451
$
194
$
36
$
272
$
7,417
$
�
$
11,310
Three
Months Ended March 31, 2024
Interest
income
$
50,976
$
98,878
$
18,864
$
7,510
$
2,304
$
(5,557
)
$
(1,332
)
$
171,643
Interest
expense
22,783
38,867
7,997
3,121
1,285
(7,182
)
(1,332
)
65,539
Total
provision for/(benefit from) credit
losses
(244
)
1,323
2,730
122
43
41
�
4,015
Noninterest
income
5,169
15,918
320
221
15,163
58,428
(50,319
)
44,900
Depreciation
and amortization
547
2,464
181
161
120
1,969
�
5,442
Other
noninterest expense
10,728
33,350
5,131
3,658
9,684
14,972
(186
)
77,337
Income
before taxes
$
22,331
$
38,792
$
3,145
$
669
$
6,335
$
43,071
$
(50,133
)
$
64,210
Loans
held for investment
$
2,413,397
$
3,951,360
$
812,261
$
427,922
$
102,115
$
97,805
$
(23,000
)
$
7,781,860
Total
assets
$
3,283,434
$
7,452,457
$
1,322,543
$
618,111
$
111,953
$
1,404,833
$
(
1,590,906
)
$
12,602,425
Total
deposits
$
2,538,277
$
6,842,481
$
1,122,732
$
512,205
$
�
$
�
$
(
106,074
)
$
10,909,621
Capital
expenditures
$
680
$
2,722
$
26
$
4,526
$
35
$
2,262
$
�
$
10,251
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, 2025 and December 31,
2024 and results of operations for the three months ended March 31, 2025 should be read in
conjunction with our consolidated financial statements and notes to the consolidated financial
statements for the year ended December 31, 2024, and the other information included in the
Company�s Annual Report on Form 10-K for the year ended December 31, 2024. Certain
risks, uncertainties and other factors, including those set forth under "Risk Factors" in Part I,
Item 1A of the 2024 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:
�
Potential
impacts of adverse developments in the banking industry that could impact customer confidence.
�
Changes
in the regulatory environment for the banking industry, including rule-making, supervision,
examination, and enforcement.
�
Changes
in fiscal, monetary or regulatory policy may have adverse consequences including impacts to the
labor market, tariffs and inflation which may impact our financial performance.
�
Deterioration
in the market for commercial office property could have an adverse effect on the value of the
Company's other real estate owned as well as commercial office collateral for the Company's
commercial real estate loans.
�
Further
shift in deposit mix from noninterest-bearing deposits to interest-bearing deposits could
negatively impact net interest margin.
�
Changes
in interest rates.
�
The
increased time and effort related to ongoing and/or changed regulations from regulatory bodies
could negatively impact noninterest expense.
�
Local,
regional, national and international economic conditions, including the effect of a government
shutdown, and the impact they may have on the Company and its customers.
�
Changes
in the mix of loan sectors and types or the level of non-performing assets and
charge-offs.
�
Inflation,
including wage inflation, energy prices, securities markets and monetary fluctuations.
�
Impairment
of the Company�s goodwill or other intangible assets.
�
Changes
in consumer spending, borrowing and savings habits.
�
Changes
in the financial performance and/or condition of the Company�s borrowers, including the impact
of higher interest rates.
�
Technological
changes.
29
�
Cyber
threats.
�
The
effect of changes in accounting policies and practices, as may be adopted by the regulatory
agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting
Standards Board and other accounting standard setters.
�
The
Company�s success at managing the risks involved in the foregoing items.
Actual
results may differ materially from forward-looking statements.
SUMMARY
The
Company�s net income for the first quarter of 2025 was $56.1 million, compared to $50.3 million for
the first quarter of 2024. Diluted net income per common share was $1.66 and $1.50 for the first
quarter of 2025 and 2024, respectively. The Company�s net interest income for the first quarter of
2025 increased to $115.9 million from $106.1 million for the first quarter of 2024. Higher loan
volume along with general growth in earning assets were the primary drivers of the change in net
interest income. Net interest margin was unchanged at 3.70% for both the first quarter of 2025 and
2024. The Company recorded a provision for credit losses on loans of $1.5 million in the first
quarter of 2025 compared to $4.0 million for the first quarter of 2024.
Noninterest income for the quarter totaled $49.0 million compared to $44.9 million last year. Trust
revenue, treasury income, sweep fees and insurance commissions each increased when compared to the
first quarter last year.
Noninterest
expense grew to $92.2 million for the quarter-ended March 31, 2025 compared to $82.8 million in the
same quarter in 2024. The Company recorded a $4.4 million expense related to the disposition of
certain equity investments no longer permissible under the Volcker Rule, which prohibits banks with
more than $10 billion in assets from holding certain private equity investments. Additionally, the
increase in noninterest expense was augmented by growth in salaries and employee benefits of $3.1
million.
At
March 31, 2025, the Company�s total assets were $14.0 billion, an increase of $483.7 million from
December 31, 2024. Loans grew $69.6 million from December 31, 2024, totaling $8.1 billion at March
31, 2025. Deposits totaled $12.1 billion, an increase of $408.2 million from year-end 2024. Sweep
accounts totaled $5.5 billion at March 31, 2025, up $324.6 million from December 31, 2024. The
Company�s total stockholders� equity was $1.7 billion, an increase of $51.6 million over December
31, 2024.
Nonaccrual
loans totaled $56.4 million, representing 0.70% of total loans at March 31, 2025, down slightly from
0.72% at year-end 2024. The allowance for credit losses to total loans was 1.24% at March 31, 2025,
unchanged from December 31, 2024. Net charge-offs were $503,000 for the first quarter of 2025
compared to $3.5 million for the first quarter of 2024.
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, 2024, 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 $5.0 million for the three months ended March 31, 2025
compared to $5.4 million for the three months ended March 31, 2024.
BANCFIRST
CORPORATION
CONSOLIDATED
AVERAGE BALANCE SHEETS AND INTEREST MARGIN ANALYSIS
(Unaudited)
Taxable
Equivalent Basis
(Dollars
in thousands)
Three
Months Ended March 31,
2025
2024
Interest
Average
Interest
Average
Average
Income/
Yield/
Average
Income/
Yield/
Balance
Expense
Rate
Balance
Expense
Rate
ASSETS
Earning
assets:
Loans
$
8,050,816
$
137,178
6.91
%
$
7,730,753
$
132,249
6.86
%
Securities
� taxable
1,195,306
7,006
2.38
1,557,806
9,181
2.36
Securities
� tax exempt
2,192
22
4.13
2,642
25
3.76
Federal
funds sold and interest-bearing deposits with banks
3,492,467
38,468
4.47
2,212,788
30,316
5.50
Total
earning assets
12,740,781
182,674
5.81
11,503,989
171,771
5.99
Nonearning
assets:
Cash
and due from banks
214,859
202,300
Interest
receivable and other assets
828,449
804,575
Allowance
for credit losses
(99,703
)
(97,061
)
Total
nonearning assets
943,605
909,814
Total
assets
$
13,684,386
$
12,413,803
LIABILITIES
AND STOCKHOLDERS� EQUITY
Interest-bearing
liabilities:
Money
market and interest-bearing checking deposits
$
5,302,584
$
40,720
3.11
%
$
4,814,772
$
44,217
3.68
%
Savings
deposits
1,138,173
8,900
3.17
1,056,727
9,003
3.42
Time
deposits
1,494,885
15,870
4.31
1,027,039
11,193
4.37
Short-term
borrowings
643
7
4.36
8,018
96
4.79
Subordinated
debt
86,162
1,030
4.85
86,106
1,030
4.80
Total
interest-bearing liabilities
8,022,447
66,527
3.36
6,992,662
65,539
3.76
Interest-free
funds:
Noninterest-bearing
deposits
3,889,812
3,843,371
Interest
payable and other liabilities
129,460
131,898
Stockholders�
equity
1,642,667
1,445,872
Total
interest free funds
5,661,939
5,421,141
Total
liabilities and stockholders� equity
$
13,684,386
$
12,413,803
Net
interest income
$
116,147
$
106,232
Net
interest spread
2.45
%
2.23
%
Effect
of interest free funds
1.25
%
1.47
%
Net
interest margin
3.70
%
3.70
%
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 March 31,
2025
2024
Income
Statement Data
Net
interest income
$
115,949
$
106,104
Provision
for credit losses on loans
1,461
4,015
Securities
transactions
(333
)
(267
)
Total
noninterest income
48,894
44,900
Salaries
and employee benefits
54,593
51,528
Total
noninterest expense
92,179
82,779
Net
income
56,112
50,334
Per
Common Share Data
Net
income � basic
$
1.69
$
1.53
Net
income � diluted
1.66
1.50
Cash
dividends
0.46
0.43
Performance
Data
Return
on average assets
1.66
%
1.63
%
Return
on average stockholders� equity
13.85
13.96
Cash
dividend payout ratio
27.22
28.10
Net
interest spread
2.45
2.23
Net
interest margin
3.70
3.70
Efficiency
ratio
55.92
54.82
Net
charge-offs to average loans
0.01
0.05
Net
Interest Income
For
the three months ended March 31, 2025, net interest income, which is the Company�s principal source
of operating revenue, increased $9.8 million or 9.3% compared to the three months ended March 31,
2024. Higher loan volume along with general growth in earning assets were the primary drivers of the
change in net interest income. Net interest margin is the ratio of taxable-equivalent net interest
income to average earning assets for the period. The Company�s net interest margin was unchanged for
the first quarter of 2025 compared to the first quarter of 2024.
Provision
for Credit Losses on loans
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 $503,000 million for the first quarter of 2025 compared to net loan
charge-offs of $3.5 million for the first quarter of 2024. The rate of net charge-offs to average
total loans continues to be at a low level.
Noninterest
Income
Noninterest
income increased by $4.0 million for the first quarter of 2025 compared to the first quarter of
2024. Trust revenue, treasury income, sweep fees and insurance commissions each increased when
compared to last year.
Noninterest
income included non-sufficient funds ("NSF") and overdraft fees totaling $7.4 million and $7.1
million for the three months ended March 31, 2025 and 2024, respectively. This represents 15.1% and
15.9% of the Company�s noninterest income for the
32
respective
periods. In addition, the Company had debit card usage and interchange fees totaling $6.5 million
during the three months ended March 31, 2025 and 2024. This represents 13.3% and 14.6% of the
Company�s noninterest income for the respective periods.
Noninterest
Expense
Noninterest
expense increased by $9.4 million for first quarter of 2025 compared to the first quarter of 2024.
The Company recorded a $4.4 million expense related to the disposition of certain equity investments
no longer permissible under the Volcker Rule, which prohibits banks with more than $10 billion in
assets from holding certain private equity investments. Additionally, the increase in noninterest
expense was augmented by growth in salaries and employee benefits of $3.1 million.
Income
Taxes
The
Company�s effective tax rate was 21.1% for the first quarter of 2025, compared to 21.6% for the
first quarter of 2024. 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.
33
FINANCIAL
POSITION
BANCFIRST
CORPORATION
SELECTED
CONSOLIDATED FINANCIAL DATA
(Dollars
in thousands, except per share data)
March
31,
December
31,
2025
2024
(unaudited)
Balance
Sheet Data
Total
assets
$
14,038,055
$
13,554,314
Interest-bearing
deposits with banks
3,706,328
3,315,932
Debt
securities
1,167,441
1,211,754
Total
loans (net of unearned interest)
8,102,810
8,033,183
Allowance
for credit losses
100,455
99,497
Noninterest-bearing
demand deposits
4,027,797
3,907,060
Money
market and interest-bearing checking deposits
5,393,995
5,231,327
Savings
deposits
1,174,685
1,110,020
Time
deposits
1,530,273
1,470,139
Total
deposits
12,126,750
11,718,546
Stockholders'
equity
1,672,827
1,621,187
Book
value per share
50.32
48.81
Tangible
book value per share (non-GAAP)(1)
44.47
42.92
Reconciliation
of Tangible Book Value per Common Share (non-GAAP)(2)
Stockholders'
equity
$
1,672,827
$
1,621,187
Less
goodwill
182,263
182,263
Less
intangible assets, net
12,272
13,158
Tangible
stockholders' equity (non-GAAP)
$
1,478,292
$
1,425,766
Common
shares outstanding
33,241,564
33,216,519
Tangible
book value per share (non-GAAP)
$
44.47
$
42.92
Selected
Financial Ratios
Balance
Sheet Ratios:
Average
loans to deposits (year-to-date)
68.08
%
71.50
%
Average
earning assets to total assets (year-to-date)
93.10
92.91
Average
stockholders� equity to average assets (year-to-date)
12.00
11.78
Asset
Quality Data
Loans
past due 90 days and still accruing
$
5,120
$
7,739
Nonaccrual
loans (3)
56,371
57,984
Other
real estate owned and repossessed assets
35,542
33,665
Asset
Quality Ratios:
Nonaccrual
loans to total loans
0.70
%
0.72
%
Allowance
for credit losses to total loans
1.24
1.24
Allowance
for credit losses to nonaccrual loans
178.20
171.59
(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 $9.2 million of nonaccrual loans at
March 31, 2025.
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 $420.2 million or 11.8%, to $4.0 billion from December 31, 2024 to March 31, 2025. The
increase was related to an increase of interest-bearing deposits in addition to maturing
securities.
34
Securities
At
March 31, 2025, total debt securities decreased $44.3 million, or 3.7% compared to December 31,
2024. 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 $31.1 million at March 31, 2025, compared to a net unrealized loss of $43.1 million at
December 31, 2024. These unrealized losses of $23.7 million at March 31, 2025 and $32.9 million at
December 31, 2024 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, 2025. The Company did not recognize a gain or loss on debt
securities during the quarters ended March 31, 2025 or 2024. The Company had maturities and paydowns
of debt securities totaling $56.3 million during the quarter ended March 31, 2025 and $17.7 million
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, 2025, total loans increased $69.6 million or 0.9% compared to December 31, 2024 as a
result of internal loan growth. Of the total increase in loans, commercial real estate made up the
largest increase with $58.4 million. The internal loan growth was primarily from the Company's
Oklahoma subsidiary BancFirst.
See
Note (3) of the Notes to Consolidated Financial Statements for disclosures regarding the Company�s
loan portfolio segments.
Allowance
for Credit Losses
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 $56.4 million at March 31, 2025 compared to $58.0 million at December 31, 2024. The
Company�s nonaccrual construction and development real estate loans made up 37% of nonaccrual loans
and nonaccrual commercial real estate made up 29%. 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 $1.0 million for the
three months ended March 31, 2025 and $696,000 for the three months ended March 31, 2024. Only a
small amount of this interest is expected to be ultimately collected. Approximately $9.2 million of
nonaccrual loans were guaranteed by government agencies at March 31, 2025.
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 level of collections decline. 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.
Modified
Loans
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, 2025 was approximately $1.9 million compared to $14.8 million during the
year ended December 31, 2024.
Other
Real Estate Owned and Repossessed Assets
Other
real estate owned ("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 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. The Company's write-downs in OREO totaled $20,000 for the
three months ended March 31, 2025 compared to $50,000 for the three months ended March 31,
2024.
35
OREO
included a larger commercial real estate property recorded at $29.5 million at March 31, 2025 and
$28.1 million at December 31, 2024. During the quarter ended March 31, 2025, the Company made $1.4
million 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,
2025
2024
(Dollars
in thousands)
Rental
income
$
3,121
$
2,941
Operating
expense
2,624
2,250
The
Company's total rental income and operating expenses from OREO are presented in the following
table:
For
the Three Months Ended March 31,
2025
2024
(Dollars
in thousands)
Rental
income
$
3,121
$
3,002
Operating
expense
2,663
2,329
Intangible
Assets, Goodwill and Other Assets
Identifiable
intangible assets and goodwill totaled $194.5 million and $195.4 million at March 31, 2025 and
December 31, 2024, respectively.
Other
assets includes the cash surrender value of key-man life insurance policies totaling $84.3 million
at March 31, 2025 and $84.4 million at December 31, 2024.
Derivative
financial instruments consisting of oil and gas swaps and option contracts are included in other
assets and totaled $19.9 million at March 31, 2025 and $10.5 million at December 31, 2024. They
require a daily margin to be posted, which fluctuates with oil and gas prices and customer activity.
The Company had a margin asset included in other assets in the amount of $12.6 million at March 31,
2025 and $463,000 at December 31, 2024. 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 $12.8 million
at March 31, 2025 and $13.4 million at December 31, 2024. The Company reviews its portfolio of
equity securities for impairment at least quarterly.
Low-Income
Housing, New Market Tax Credit Investments and Historic Tax Credit Investments
During
2025, the Company�s low-income housing tax credit ("LIHTC") investments increased $6.5 million
totaling $65.1 million at March 31, 2025, New Markets Tax Credits ("NMTC") investments increased
$5.3 million totaling $12.8 million at March 31, 2025 and the Historic Tax Credit Investments
remained at $6.3 million, all of 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, 2024 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
36
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 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 percent of cash and due from banks, interest-bearing deposits with
banks and federal funds sold to total assets of 28.3% at March 31, 2025, compared to 26.2% at
December 31, 2024.
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, 2024.
Deposits
At
March 31, 2025, deposits totaled $12.1 billion, an increase of $408.2 million from December 31,
2024. 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 95.5% at both March 31, 2025 and December 31,
2024. Noninterest-bearing deposits to total deposits were 33.2% at March 31, 2025 compared to 33.3%
at December 31, 2024.
Uninsured
deposits are defined as the portion of deposit accounts in U.S. offices that exceed the FDIC
insurance limit and amounts in any other uninsured investment or deposit account that are classified
as deposits and are not subject to any federal or state deposit insurance regimes. Total uninsured
deposits were $4.1 billion at March 31, 2025 and $4.0 billion at December 31, 2024, as calculated
per regulatory guidance. This was approximately 34% of deposits at both March 31, 2025 and December
31, 2024. The Company has existing and contingent sources of liquidity equivalent to approximately
150% of it uninsured deposits.
Off-balance-sheet
sweep accounts totaled $5.5 billion at March 31, 2025 compared to $5.2 billion at December 31, 2024.
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.
Lines
of Credit
The
Company has several lines of credit available. At March 31, 2025, BancFirst had $911.4 million
available on its line of credit from the FHLB of Topeka, Kansas. At March 31, 2025, BancFirst had no
advances outstanding under this line of credit. Pegasus had a Federal Reserve discount window
capacity of $127.7 million. At March 31, 2025, Pegasus had no advances outstanding under this line
of credit. Worthington had $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 $30.4
million and an $87.6 million line of credit from the FHLB of Dallas, Texas to use for liquidity or
to match-fund certain long-term rate loans. Worthington had no advances outstanding at March 31,
2025 under any of these lines of credit.
Capital
Resources
Stockholders�
equity totaled $1.7 billion at March 31, 2025, an increase of $51.6 million from December 31, 2024.
In addition to net income of $56.1 million, other changes in stockholders� equity during the three
months ended March 31, 2025 included $891,000 related to common stock issuances for stock option
exercises, $790,000 related to stock-based compensation and $9.1 million in accumulated other
comprehensive income that were partially offset by $15.3 million in dividends. The Company�s
leverage ratio and total risk-based capital ratios at March 31, 2025 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, 2024.
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, 2024, 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 Chairman of the Board, 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, 2025, 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,
2024.
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.
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.