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Item 1. Financial Statements

2024-08-06 compared with 2024-05-07 · 318 added, 165 removed, 1035 unchanged (32% of the section changed)

44 unchanged sentences

Three Months Ended

Six Months Ended

INTEREST INCOME

17 unchanged sentences

Cash management

(Loss)/gain on sale of other assets

Gain/(loss) on sale of other assets

Total noninterest income

11 unchanged sentences

NET INCOME PER COMMON SHARE

OTHER COMPREHENSIVE (LOSS)/GAIN

Unrealized (losses)/gains on debt securities, net of tax benefit/(expense) of $ 728 and $( 4,504 ), respectively

Other comprehensive (loss)/gain, net of tax benefit/(expense) of $ 728 and $( 4,504 ), respectively

OTHER COMPREHENSIVE GAIN/(LOSS)

Unrealized income/(loss) on debt securities, net of tax (expense)/benefit of $( 1,263 ), $ 4,350 , $( 535 ) and $( 154 ), respectively

Other comprehensive income/(loss), net of tax (expense)/benefit of $( 1,263 ), $ 4,350 , $( 535 ) and $( 154 ), respectively

Comprehensive income

4 unchanged sentences

Three Months Ended

Six Months Ended

Issued at beginning of period

19 unchanged sentences

(Dollars in thousands)

Three Months Ended

Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES

3 unchanged sentences

Net amortization of securities premiums and discounts

Realized securities losses

Realized securities (gains)/losses

Gain on sales of loans

9 unchanged sentences

INVESTING ACTIVITIES

Net decrease in federal funds sold

Net decrease/(increase) in federal funds sold

Purchases of available for sale debt securities

60 unchanged sentences

The following table summarizes the amortized cost and estimated fair values of debt securities held for investment:

March 31, 2024

June 30, 2024

(Dollars in thousands)

7 unchanged sentences

The following table summarizes the amortized cost and estimated fair values of debt securities available for sale:

March 31, 2024

June 30, 2024

(Dollars in thousands)

14 unchanged sentences

For purposes of the maturity table, mortgage-backed securities, which are not due at a single maturity date, have been presented at their contractual maturity.

March 31, 2024

June 30, 2024

December 31, 2023

14 unchanged sentences

The following table is a summary of the Company’s book value of securities that were pledged as collateral for public funds on deposit, repurchase agreements and for other purposes as required or permitted by law:

March 31, 2024

June 30, 2024

December 31, 2023

1 unchanged sentence

Book value of pledged securities

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, 2024 or March 31, 2023.

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 six months ended June 30, 2024 or June 30, 2023.

Realized gains/losses on debt and equity securities are reported as securities transactions within the noninterest income section of the consolidated statement of comprehensive income.

The following table summarizes debt securities with unrealized losses, segregated by the duration of the unrealized loss, at March 31, 2024 and December 31, 2023 respectively:

The following table summarizes debt securities with unrealized losses, segregated by the duration of the unrealized loss, at June 30, 2024 and December 31, 2023 respectively:

Less than 12 Months

2 unchanged sentences

(Dollars in thousands)

March 31, 2024

June 30, 2024

Available for Sale

2 unchanged sentences

States and political subdivisions

Asset backed securities

Other securities

7 unchanged sentences

The Company has the ability and intent to hold the debt securities classified as held for investment until they mature, at which time the Company will receive full value for the debt securities.

Furthermore, as of March 31, 2024 and December 31, 2023, the Company also had the ability and intent to hold the debt securities classified as available for sale for a period of time sufficient for a recovery of cost.

Furthermore, as of June 30, 2024 and December 31, 2023 , the Company also had the ability and intent to hold the debt securities classified as available for sale for a period of time sufficient for a recovery of cost.

The unrealized losses are due to increases in market interest rates over the yields available at the time the underlying debt securities were purchased.

4 unchanged sentences

Loans held for investment are summarized by portfolio segment as follows:

March 31, 2024

June 30, 2024

December 31, 2023

8 unchanged sentences

Consumer non-real estate

(1) Excludes accrued interest receivable of $ 40.9 million at March 31, 2024 and $ 39.4 million at December 31, 2023, that is recorded in accrued interest receivable and other assets.

The Company's loans are currently 84 % held by BancFirst and 16 % held by Pegasus and Worthington.

(1) Excludes accrued interest receivable of $ 42.8 million at June 30, 2024 and $ 39.4 million at December 31, 2023, that is recorded in accrued interest receivable and other assets.

The C ompany's loans are currently 84 % held by BancFirst and 16 % held by Pegasus and Worthington.

In addition, approximately 69 % of the Company's loans are secured by real estate.

6 unchanged sentences

The following is a summary of other real estate owned and repossessed assets:

March 31, 2024

June 30, 2024

December 31, 2023

1 unchanged sentence

Other real estate owned and repossessed assets

As of both March 31, 2024 and December 31, 2023, other real estate owned included a commercial real estate property recorded at approximately $ 30.4 million and $ 29.4 million, respectively.

The increase in OREO and this commercial real estate property was due to tenant improvements during the three months ended March 31, 2024.

As of both June 30, 2024 and December 31, 2023, other real estate owned included a commercial real estate property recorded at approximately $ 30.7 million and $ 29.4 m illion, respectively.

The increase in OREO and this commercial real estate property was due to tenant improvements during the six months ended June 30, 2024.

Rental income for this property is included in other noninterest income on the consolidated statements of comprehensive income.

1 unchanged sentence

This property had the following rental income and operating expenses for the periods presented.

For the Three Months Ended March 31,

Three Months Ended

Six Months Ended

(Dollars in thousands)

1 unchanged sentence

Operating expense

During the three months ended March 31, 2024 , the Company sold property held in other real estate owned for a total gain of $ 177,000 , compared to a total gain of $ 98,000 in the three months ended March 31, 2023.

During the six months ended June 30, 2024, the Company sold property held in other real estate owned for a total gain of $ 1.3 million, compared to a total gain of $ 266,000 in the six months ended June 30, 2023.

The Company charges interest on principal balances outstanding on modified loans during deferral periods.

The current and future financial effects of the recorded balance of loans considered to be modified during the period were not considered to be material.

The recorded balance of loans modified during the three months ended March 31, 2024 was approximately $ 1.1 million compared to $ 5.3 million during the year ended December 31, 2023.

The recorded balance of loans modified during the six months ended June 30, 2024 was approximately $ 5.9 million compared to $ 5.3 million during the year ended December 31, 2023.

Nonaccrual loans

The Company did no t recognize any interest income on nonaccrual loans for either the three months ended March 31, 2024 or 2023.

In addition, all loans identified as nonaccrual loans have related allowances for credit losses at March 31, 2024 and December 31, 2023, respectively.

Had nonaccrual loans performed in accordance with their original contractual terms, the Company would have recognized additional interest income of approximately $ 696,000 for the three months ended March 31, 2024 and approximately $ 358,000 for the three months ended March 31, 2023.

Nonaccrual loans guaranteed by government agencies totaled approximately $ 6.6 million at March 31, 2024 and approximately $ 6.7 million at December 31, 2023.

The Company did no t recognize any interest income on nonaccrual loans for either the six months ended June 30, 2024 or 2023.

In addition, all loans identified as nonaccrual loans have related allowances for credit losses at June 30, 2024 and December 31, 2023 , respectively.

Had nonaccrual loans performed in accordance with their original contractual terms, the Company would have recognized additional interest income of approximately $ 1.8 million for the six months ended June 30, 2024 and approximately $ 718,000 for the six months ended June 30, 2023.

Nonaccrual loans guaranteed by government agencies totaled approximately $ 8.5 million at June 30, 2024 and approximately $ 6.7 million at December 31, 2023.

The following table is a summary of amounts included in nonaccrual loans, segregated by portfolio segment.

March 31, 2024

June 30, 2024

December 31, 2023

12 unchanged sentences

(Dollars in thousands)

As of March 31, 2024

As of June 30, 2024

Commercial real estate owner occupied

19 unchanged sentences

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 loan grades used by the Company are for internal risk identification purposes and do not directly correlate to regulatory categories or any financial reporting definitions.

The general characteristics of the risk grades and the table summarizing the Company’s gross loans held for investment by year of origination and internally assigned credit grades as of December 31, 2023, are disclosed in Note (5) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

5 unchanged sentences

Amortized Cost Basis

As of March 31, 2024

As of June 30, 2024

Commercial real estate owner occupied

22 unchanged sentences

(Dollars in thousands)

Three months ended March 31, 2024

Three months ended June 30, 2024

Commercial real estate owner occupied

21 unchanged sentences

(Dollars in thousands)

Three months ended March 31, 2023

Three months ended June 30, 2023

Commercial real estate owner occupied

17 unchanged sentences

Total current-period gross charge-offs

Term Loans Amortized Cost Basis by Origination Year

Revolving Loans

Amortized Cost Basis

(Dollars in thousands)

Six months ended June 30, 2024

Commercial real estate owner occupied

Current-period gross charge-offs

Commercial real estate non-owner occupied

Current-period gross charge-offs

Construction and development < 60 months

Current-period gross charge-offs

Construction residential real estate < 60 months

Current-period gross charge-offs

Residential real estate first lien

Current-period gross charge-offs

Residential real estate all other

Current-period gross charge-offs

Commercial non-real estate

Current-period gross charge-offs

Consumer non-real estate

Current-period gross charge-offs

Total current-period gross charge-offs

Term Loans Amortized Cost Basis by Origination Year

Revolving Loans

Amortized Cost Basis

(Dollars in thousands)

Six months ended June 30, 2023

Commercial real estate owner occupied

Current-period gross charge-offs

Commercial real estate non-owner occupied

Current-period gross charge-offs

Construction and development < 60 months

Current-period gross charge-offs

Construction residential real estate < 60 months

Current-period gross charge-offs

Residential real estate first lien

Current-period gross charge-offs

Residential real estate all other

Current-period gross charge-offs

Commercial non-real estate

Current-period gross charge-offs

Consumer non-real estate

Current-period gross charge-offs

Total current-period gross charge-offs

Allowance for Credit Losses Methodology

2 unchanged sentences

The allowance for credit losses methodology is disclosed in Note (5) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

The following table details activity in the allowance for credit losses on loans for the period presented.

The following tables detail activity in the allowance for credit losses on loans for the period presented.

Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

2 unchanged sentences

(Dollars in thousands)

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Commercial real estate owner occupied

9 unchanged sentences

(Dollars in thousands)

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Commercial real estate owner occupied

6 unchanged sentences

Consumer non-real estate

Allowance for Credit Losses

Provision for/(benefit from) credit losses on loans

(Dollars in thousands)

Six Months Ended June 30, 2024

Commercial real estate owner occupied

Commercial real estate non-owner occupied

Construction and development < 60 months

Construction residential real estate < 60 months

Residential real estate first lien

Residential real estate all other

Commercial non-real estate

Consumer non-real estate

Allowance for Credit Losses

Provision for/(benefit from) credit losses on loans

(Dollars in thousands)

Six Months Ended June 30, 2023

Commercial real estate owner occupied

Commercial real estate non-owner occupied

Construction and development < 60 months

Construction residential real estate < 60 months

Residential real estate first lien

Residential real estate all other

Commercial non-real estate

Consumer non-real estate

Purchased Credit Deteriorated Loans

The Company has previously purchased loans, for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination.

The Company did not purchase credit-deteriorated loans during the three month period ended March 31, 2024 or March 31, 2023.

The Company did not purchase credit-deteriorated loans during the six months ended June 30, 2024 and 2023.

Collateral Dependent Loans

A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral.

During the three months ended March 31, 2024 and 2023 , no material amount of interest income was recognized on collateral-dependent loans subsequent to their classification as collateral-dependent.

The following table summarizes collateral-dependent gross loans held for investment by collateral type and the related specific allocation as follows:

During the six months ended June 30, 2024 and 2023, 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

2 unchanged sentences

(Dollars in thousands)

As of March 31, 2024

As of June 30, 2024

Commercial real estate owner occupied

24 unchanged sentences

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,

Six Months Ended June 30,

(Dollars in thousands)

4 unchanged sentences

(Dollars in thousands)

March 31, 2024

June 30, 2024

Core deposit intangibles

9 unchanged sentences

(Dollars in thousands)

Three months ended March 31, 2024

Six months ended June 30, 2024

Balance at beginning and end of period

5 unchanged sentences

In March 2004, BFC II issued an additional $ 1 million in Cumulative Trust Preferred Securities through the execution of an over-allotment option.

The Cumulative Trust Preferred Securities qualify as Tier 1 capital under regulatory guidelines.

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.

7 unchanged sentences

The sale of the Subordinated Notes was pursuant to a Subordinated Note Purchase Agreement entered into with each of the investors.

The Subordinated Notes have been structured to qualify as Tier 2 capital under bank regulatory guidelines.

The Subordinated Notes qualify as Tier 2 capital under 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 will 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 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 .

7 unchanged sentences

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, 2024 there were 462,925 shares available for future grants.

At June 30, 2024 there were 462,175 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 .

2 unchanged sentences

The following table is a summary of the activity under the Company's RSU plan.

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

Nonvested at December 31, 2023

Nonvested at March 31, 2024

Nonvested at June 30, 2024

The Company has had the BancFirst Corporation Directors’ Deferred Stock Compensation Plan (the “Deferred Stock Compensation Plan”) since May 1999.

As of March 31, 2024, there are 15,923 shares available for future issuance under the Deferred Stock Compensation Plan.

As of June 30, 2024 , there are 39,525 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.

2 unchanged sentences

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 5,022 and 17,392 shares of common stock distributed from the Deferred Stock Compensation Plan during the three months ended March 31, 2024 and 2023, respectively.

There were 5,022 and 17,797 shares of common stock distributed from the Deferred Stock Compensation Plan during the six months ended June 30, 2024 and 2023, respectively.

A summary of the accumulated stock units under the Deferred Stock Compensation Plan is as follows:

March 31, 2024

June 30, 2024

December 31, 2023

7 unchanged sentences

(Dollars in thousands, except option data)

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

Outstanding at December 31, 2023

1 unchanged sentence

Options canceled, forfeited, or expired

Outstanding at March 31, 2024

Exercisable at March 31, 2024

Outstanding at June 30, 2024

Exercisable at June 30, 2024

The following table has additional information regarding options exercised under both the Employee Plan and the Non-Employee Directors’ Plan:

Three Months Ended

Six Months Ended

(Dollars in thousands)

4 unchanged sentences

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, 2024 or March 31, 2023.

The Company had no cash settlements during the six months ended June 30, 2024 or 2023.

Stock-based compensation expense is charged to salaries and benefits expense on the Consolidated Statements of Comprehensive Income.

1 unchanged sentence

Three Months Ended

Six Months Ended

(Dollars in thousands)

3 unchanged sentences

The following table shows the unearned stock-based compensation expense for unvested stock options and unvested RSUs:

March 31, 2024

June 30, 2024

(Dollars in thousands)

8 unchanged sentences

The following table is a summary of the shares under the SRP:

Three Months Ended

June 30, 2024

Shares remaining to be repurchased

2 unchanged sentences

Failure to meet the minimum capital requirements can initiate certain mandatory or discretionary actions by the regulatory agencies that could have a direct material effect on the Company’s consolidated financial statements.

The Company believes that as of March 31, 2024 , BancFirst Corporation, BancFirst, Pegasus and Worthington each met all capital adequacy requirements to which they are subject.

The Company believes that as of June 30, 2024 , 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:

4 unchanged sentences

(Dollars in thousands)

As of March 31, 2024:

As of June 30, 2024:

Total Capital

10 unchanged sentences

BancFirst Corporation

As of March 31, 2024 , BancFirst, Pegasus and Worthington were classified by the Federal Reserve as “well capitalized” under the prompt corrective action provisions.

As of June 30, 2024, BancFirst, Pegasus and Worthington were classified by the Federal Reserve as “well capitalized” under the prompt corrective action provisions.

The Common Equity Tier 1 Capital of BancFirst Corporation, BancFirst, Pegasus and Worthington includes common stock and related paid-in capital and retained earnings.

1 unchanged sentence

Common Equity Tier 1 Capital for BancFirst Corporation, BancFirst, Pegasus and Worthington is reduced by goodwill and other intangible assets, net of associated deferred tax liabilities.

The Company’s trust preferred securities have continued to be included in Tier 1 capital, as the Company’s total assets do not exceed $ 15 billion.

The Company’s trust preferred securities qualify as Tier 1 capital and its Subordinated Notes qualify as Tier 2 capital.

The Company's Subordinated Notes have been structured to qualify as Tier 2 capital under bank regulatory guidelines.

2 unchanged sentences

Basic and diluted net income per common share are calculated as follows:

Three Months Ended March 31,

Three Months Ended

Six Months Ended

(Dollars in thousands, except per share data)

7 unchanged sentences

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:

Three Months Ended March 31, 2024

Three Months Ended March 31, 2023

Three Months Ended June 30, 2024

Three Months Ended June 30, 2023

Six Months Ended June 30, 2024

Six Months Ended June 30, 2023

(9) FAIR VALUE MEASUREMENTS

16 unchanged sentences

The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S.

Treasury yield curve, live trading levels, trade

execution data, market consensus prepayment speeds, credit information and a bond’s terms and conditions, among other things.

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.

19 unchanged sentences

(Dollars in thousands)

March 31, 2024

June 30, 2024

Debt securities available for sale:

16 unchanged sentences

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,

Six Months Ended June 30,

Twelve Months Ended December 31,

4 unchanged sentences

The Company’s policy is to recognize transfers in and transfers out of Levels 1, 2 and 3 as of the end of the reporting period.

During the three months ended March 31, 2024, the Company did not transfer any debt securities.

During the six months ended June 30, 2024, the Company did not transfer any debt securities.

During the year ended December 31, 2023, the Company transferred debt securities from Level 3 to Level 2 due to a review of the pricing models that determined some state and political subdivision securities to be Level 2.

16 unchanged sentences

(Dollars in thousands)

As of and for the Year-to-date Period Ended March 31, 2024

As of and for the Year-to-date Period Ended June 30, 2024

Equity securities

40 unchanged sentences

The estimated fair values of the Company’s financial instruments that are reported at amortized cost in the Company’s consolidated balance sheets, segregated by the level of valuation inputs within the fair value hierarchy utilized to measure fair value, are as follows:

March 31, 2024

June 30, 2024

December 31, 2023

21 unchanged sentences

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 no t considered to be significant to the Company at March 31, 2024 or December 31, 2023 .

The overall levels of non-financial assets measured at fair value on a nonrecurring basis were no t considered to be significant to the Company at June 30, 2024 or December 31, 2023 .

(10) DERIVATIVE FINANCIAL INSTRUMENTS

3 unchanged sentences

The Company's derivative financial instruments require a daily margin to be posted, which fluctuates with oil and gas prices.

At March 31, 2024 , the Company had a margin asset included in other assets in the amount of $ 4.3 million.

At June 30, 2024 , the Company had a margin asset included in other assets in the amount of $ 7.2 million.

At December 31, 2023 , the Company had a margin liability in other liabilities in the amount of $ 15.5 million.

1 unchanged sentence

The notional amounts and estimated fair values of oil and gas derivative positions outstanding are presented in the following table:

March 31, 2024

June 30, 2024

December 31, 2023

14 unchanged sentences

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,

Three Months Ended June 30,

Six Months Ended June 30,

(Dollars in thousands)

Derivative income

6 unchanged sentences

The following table is a summary of the Company's net credit exposure relating to oil and gas swaps and options with bank counterparties:

March 31, 2024

June 30, 2024

December 31, 2023

4 unchanged sentences

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.

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.

6 unchanged sentences

Pegasus consists of banking locations in the Dallas metropolitan area.

Worthington consists of banking locations in the Dallas and Fort Worth metropolitan areas.

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.

4 unchanged sentences

(Dollars in thousands)

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Net interest income

1 unchanged sentence

Income before taxes

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Net interest income

1 unchanged sentence

Income before taxes

Six Months Ended June 30, 2024

Net interest income

Noninterest income

Income before taxes

Six Months Ended June 30, 2023

Net interest income

Noninterest income

Income before taxes

Total Assets:

March 31, 2024

June 30, 2024

December 31, 2023

4 unchanged sentences

Management’s Discussio n and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition as of March 31, 2024 and December 31, 2023 and results of operations for the three months ended March 31, 2024 should be read in conjunction with our consolidated financial statements and notes to the consolidated financial statements for the year ended December 31, 2023, and the other information included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

The following discussion and analysis of our financial condition as of June 30, 2024 and December 31, 2023 and results of operations for the three and six months ended June 30, 2024 should be read in conjunction with our consolidated financial statements and notes to the consolidated financial statements for the year ended December 31, 2023, and the other information included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Certain risks, uncertainties and other factors, including those set forth under "Risk Factors" in Part I, Item 1A of the 2023 Form 10-K, and "Item 1A, Risk Factors" in this Quarterly Report on Form 10-Q, may cause actual results to differ materially from the results discussed in the forward-looking statements appearing in this discussion and analysis.

14 unchanged sentences

Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

• The impact of the Durbin Amendment of the Dodd-Frank Act ("Durbin Amendment") on noninterest income beginning July 1, 2023.

• Potential impacts of the adverse developments in the banking industry driven by high-profile bank failures, including impacts on customer confidence, demand deposit outflows and the regulatory response thereto .

3 unchanged sentences

• Changes in interest rates.

• The increased time, effort and non-interest expense related to ongoing and increased regulations from the Federal Reserve, the Consumer Financial Protection Bureau and the Securities and Exchange Commission, including requirements related to environmental, social and governance issues and climate disclosures.

• The increased time, effort and noninterest expense related to ongoing and increased regulations from the Federal Reserve, the Consumer Financial Protection Bureau and the Securities and Exchange Commission, including requirements related to environmental, social and governance issues and climate disclosures.

• Local, regional, national and international economic conditions and the impact they may have on the Company and its customers.

9 unchanged sentences

Actual results may differ materially from forward-looking statements.

The Company’s net income for the first quarter of 2024 was $50.3 million, compared to $57.5 million for the first quarter of 2023.

Diluted net income per common share was $1.50 and $1.72 for the first quarter of 2024 and 2023, respectively.

The Company’s net interest income for the first quarter of 2024 decreased to $106.1 million from $109.2 million for the first quarter of 2023.

Net interest income was negatively impacted by a change in the mix of interest-bearing and non-interest bearing deposits, partially offset by higher loan volume.

Net interest margin for the first quarter of 2024 was 3.70% compared to 3.89% for the first quarter of 2023.

For the first quarter of 2024, the Company recorded a provision for credit losses of $4.0 million compared to $2.3 million for the first quarter of 2023.

Noninterest income for the first quarter of 2024 totaled $44.9 million compared to $47.8 million for the first quarter of 2023.

The Company’s net income for the second quarter of 2024 was $50.6 million, compared to $55.0 million for the second quarter of 2023.

Diluted net income per common share was $1.51 and $1.64 for the second quarter of 2024 and 2023, respectively.

The Company’s net interest income for the second quarter of 2024 increased to $109.9 million from $105.9 million for the second quarter of 2023.

Higher loan volume was the primary driver of the change in net interest income, which was partially offset by the impact of the shifting mix between interest-bearing and noninterest-bearing deposits.

Net interest margin for the second quarter of 2024 was 3.76% compared to 3.87% for the second quarter of 2023.

For the second quarter of 2024, the Company recorded a provision for credit losses of $3.4 million compared to $2.8 million for the second quarter of 2023.

Noninterest income for the second quarter of 2024 totaled $43.9 million compared to $48.0 million for the second quarter of 2023.

The decrease in noninterest income was primarily due to an approximate $5.7 million reduction of interchange fees related to the impact of the Durbin Amendment.

Trust revenue, sweep fees and insurance commissions all increased when compared to last year.

Noninterest expense for the first quarter of 2024 increased to $82.8 million compared to $80.3 million for the first quarter of 2023.

Trust revenue, treasury income, sweep fees and insurance commissions each increased when compared to second quarter last year.

Noninterest expense for the second quarter of 2024 increased to $85.3 million compared to $81.1 million for the second quarter of 2023.

The increase in noninterest expense was primarily related to growth in salaries and employee benefits of $2.1 million.

The Company’s effective tax rate was 21.6% for the first quarter of 2024 compared to 22.6% for the first quarter of 2023.

At March 31, 2024, the Company’s total assets were $12.6 billion, an increase of $230.4 million from December 31, 2023.

Loans grew $127.7 million, totaling $7.8 billion at March 31, 2024.

The Company’s effective tax rate was 22.3% for the second quarter of 2024 compared to 21.4% for the second quarter of 2023.

At June 30, 2024, the Company’s total assets were $12.7 billion, an increase of $365.3 million from December 31, 2023.

Loans grew $394.7 million from December 31, 2023, totaling $8.1 billion at June 30, 2024.

Deposits totaled $11.0 billion, an increase of $315.5 million from December 31, 2023.

Off-balance-sheet sweep accounts totaled $4.6 billion at March 31, 2024, up $224.2 million from December 31, 2023.

The Company’s total stockholders’ equity at March 31, 2024 was $1.5 billion, an increase of $35.4 million over December 31, 2023.

Asset quality remained strong as the Company’s nonaccrual loans totaled $42.0 million, representing 0.54% of total loans at March 31, 2024 compared to 0.32% at year-end 2023.

The allowance for credit losses to total loans was 1.25% at March 31, 2024 virtually unchanged from year-end.

Net charge-offs were $3.5 million for the first quarter of 2024 compared to $290,000 for the first quarter of 2023.

Off-balance-sheet sweep accounts totaled $4.5 billion at June 30, 2024, up $153.9 million from December 31, 2023.

The Company’s total stockholders’ equity at June 30, 2024 was $1.5 billion, an increase of $78.6 million over December 31, 2023.

The Company’s nonaccrual loans totaled $44.0 million, representing 0.55% of total loans at June 30, 2024 compared to 0.32% at year-end 2023.

The allowance for credit losses to total loans was 1.24% at June 30, 2024, compared to 1.26% at the end of 2023.

Net charge-offs were $1.0 million for the second quarter of 2024 compared to $664,000 for the second quarter of 2023.

FUTURE APPLICATION OF ACCOUNTING STANDARDS

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(i) average balances are derived from daily averages, (ii) information is shown on a taxable-equivalent basis assuming a 21% tax rate, and (iii) nonaccrual loans are included in the average loan balances and any interest on such nonaccrual loans is recognized on a cash basis.

Loan fees included in interest income were $5.4 million for the three months ended March 31, 2024 compared to $5.6 million for the three months ended March 31, 2023.

Loan fees included in interest income were $5.5 million for the three months ended June 30, 2024 compared to $5.7 million for the three months ended June 30, 2023.

Loan fees included in interest income were $10.9 million for the six months ended June 30, 2024 compared to $11.3 million for the six months ended June 30, 2023.

BANCFIRST CORPORATION

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(Dollars in thousands)

Three Months Ended March 31,

Three Months Ended June 30,

Earning assets:

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Net interest margin

BANCFIRST CORPORATION

CONSOLIDATED AVERAGE BALANCE SHEETS AND INTEREST MARGIN ANALYSIS

Taxable Equivalent Basis

(Dollars in thousands)

Six Months Ended June 30,

Earning assets:

Debt securities – taxable

Debt securities – tax exempt

Federal funds sold and interest-bearing deposits with banks

Total earning assets

Nonearning assets:

Cash and due from banks

Interest receivable and other assets

Allowance for credit losses

Total nonearning assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

Interest-bearing liabilities:

Money market and interest-bearing checking deposits

Savings deposits

Time deposits

Short-term borrowings

Subordinated debt

Total interest-bearing liabilities

Interest-free funds:

Noninterest-bearing deposits

Interest payable and other liabilities

Stockholders’ equity

Total interest free funds

Total liabilities and stockholders’ equity

Net interest income

Net interest spread

Effect of interest free funds

Net interest margin

Selected income statement data and other selected data for the comparable periods were as follows:

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Three Months Ended

Six Months Ended

Income Statement Data

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Net Interest Income

For the three months ended March 31, 2024, net interest income, which is the Company’s principal source of operating revenue, decreased $3.1 million or 2.8% compared to the three months ended March 31, 2023.

Net interest income was negatively impacted by a change in the mix of interest-bearing and non-interest bearing deposits, partially offset by higher loan volume.

For the three months ended June 30, 2024, net interest income, which is the Company’s principal source of operating revenue, increased $4.0 million or 3.7% compared to the three months ended June 30, 2023.

Higher loan volume was the primary driver of the change in net interest income, which was partially offset by the impact of the shifting mix between interest-bearing and noninterest-bearing deposits.

Net interest margin is the ratio of taxable-equivalent net interest income to average earning assets for the period.

As shown in the preceding table, the Company’s net interest margin for the first quarter of 2024 decreased compared to the first quarter of 2023.

The Company’s net interest margin for the second quarter of 2024 decreased compared to the second quarter of 2023.

Net interest income for the six months ended June 30, 2024 increased $918,000 or 0.4% compared to the six months ended June 30, 2023.

Higher loan volume was the primary driver to the increase.

The Company’s net interest margin for the six months ended June 30, 2024 decreased compared to the six months ended June 30, 2023.

Changes in the volume of earning assets and interest-bearing liabilities and changes in interest rates, determine the changes in net interest income.

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Taxable Equivalent Basis

Change during the three months ended March 31, 2024

The following table presents the change in net interest income for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.

(Dollars in thousands)

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(1) The effects of changes in the mix of earning assets and interest-bearing liabilities have been combined with the changes due to volume.

The following table presents the change in net interest income for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

(Dollars in thousands)

INCREASE (DECREASE)

Interest Income:

Securities—taxable

Securities—tax exempt

Federal funds sold and interest-bearing deposits with banks

Total interest income

Interest Expense:

Money market and interest-bearing checking deposits

Savings deposits

Time deposits

Short-term borrowings

Subordinated debt

Total interest expense

Net interest income

(1) The effects of changes in the mix of earning assets and interest-bearing liabilities have been combined with the changes due to volume.

Provision for Credit Losses

The provision for credit losses is presented in the preceding table.

The Company establishes an allowance as an estimate of the expected credit losses in the loan portfolio at the balance sheet date.

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Should any of the factors considered by management in evaluating the appropriate level of the allowance for credit losses change, the Company’s estimate of expected credit losses could also change which could affect the amount of future provisions for credit losses.

Net loan charge-offs were $3.5 million for the first quarter of 2024 compared to net loan charge-offs of $290,000 for the first quarter of 2023.

The rate of net charge-offs to average total loans, as presented in the preceding table, continues to be at a low level.

The increased provision for credit losses for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 was primarily due to loan growth.

Net loan charge-offs were $1.0 million for the second quarter of 2024 compared to net loan charge-offs of $664,000 for the second quarter of 2023.

The increased provision for credit losses for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily due to loan growth.

Net loan charge-offs were $4.5 million for the six months ended June 30, 2024, compared to $954,000 for the same period of the prior year.

Noninterest Income

Noninterest income, as presented in the preceding table, decreased by $2.9 million for the first quarter of 2024 compared to the first quarter of 2023.

Noninterest income decreased by $4.0 million for the second quarter of 2024 compared to the second quarter of 2023.

The decrease in noninterest income was primarily due to an approximate $5.7 million reduction of interchange fees related to the impact of the Durbin Amendment.

Trust revenue, sweep fees and insurance commissions all increased when compared to last year.

Noninterest income included non-sufficient funds ("NSF") and overdraft fees totaling $7.1 million and $6.4 million for the three months ended March 31, 2024 and 2023, respectively.

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 $7.3 million and $6.6 million for the three months ended June 30, 2024 and 2023, respectively.

This represents 16.6% and 13.8% of the Company’s noninterest income for the respective periods.

In addition, the Company had debit card usage and interchange fees totaling $6.5 million and $12.0 million during the three months ended March 31, 2024 and 2023, respectively.

In addition, the Company had debit card usage and interchange fees totaling $6.8 million and $12.4 million during the three months ended June 30, 2024 and 2023, respectively.

This represents 15.4% and 25.9% of the Company’s noninterest income for the respective periods.

Noninterest income decreased by $7.0 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

The decrease in noninterest income was primarily due to an approximate $10.9 million reduction of interchange fees related to the impact of the Durbin Amendment.

Trust revenue, treasury income, sweep fees and insurance commissions each increased when compared to last year.

Noninterest income included NSF and overdraft fees totaling $14.4 million and $13.1 million during the six months ended June 30, 2024 and 2023, respectively.

This represents 16.2% and 13.7% of the Company’s noninterest income for the respective periods.

In addition, the Company had debit card usage and interchange fees totaling $13.3 million and $24.4 million during the six months ended June 30, 2024 and 2023, respectively.

This represents 15.0% and 25.5% of the Company’s noninterest income for the respective periods.

The Company is subject to political pressures that could limit our ability to charge for NSF and overdraft fees.

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Also, the Company became subject to the reduced interchange fees under the Durbin Amendment effective July 1, 2023.

Consequently, the Company's interchange fee revenue was reduced by approximately $11.2 million in the last half of 2023.

The Company expects to experience a reduction of approximately $10.5 million in the first half of 2024.

Consequently, the Company's interchange fee revenue was reduced by approximately $11.2 million in the last half of 2023 and $10.9 million in the first half of 2024.

Noninterest Expense

Noninterest expense, as presented in the preceding table, increased by $2.5 million for first quarter of 2024 compared to the first quarter of 2023.

Noninterest expense increased by $4.2 million for second quarter of 2024 compared to the second quarter of 2023.

The increase in noninterest expenses was primarily related to growth in salaries and employee benefits of $2.1 million.

The Company’s effective tax rate was 21.6% for the first quarter of 2024, compared to 22.6% for the first quarter of 2023.

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.

For the six months ended June 30, 2024, noninterest expense increased by $6.7 million compared to the six months ended June 30, 2023.

Higher noninterest expenses in 2024 was primarily related to growth in salaries and employee benefits of $4.4 million.

The Company’s effective tax rate was 22.3% for the second quarter of 2024, compared to 21.4% for the second quarter of 2023.

The Company’s effective tax rate was 22.0% for the first six months of 2024 and 2023.

The primary reasons for the difference between the Company’s effective tax rate and the federal statutory rate were tax-exempt income, nondeductible expenses, federal and state tax credits and state tax expense.

FINANCIAL POSITION

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This measure should not be considered a substitute for operating results determined in accordance with GAAP.

(3) Government agencies guaranteed approximately $6.6 million of nonaccrual loans at March 31, 2024.

(3) Government agencies guaranteed approximately $8.5 million of nonaccrual loans at June 30, 2024.

Cash and Due from Banks, Federal Funds Sold and Interest-Bearing Deposits with Banks

The aggregate of cash and due from banks, federal funds sold and interest-bearing deposits with banks increased by $127.5 million or 5.3%, to $2.5 billion from December 31, 2023 to March 31, 2024.

The aggregate of cash and due from banks, federal funds sold and interest-bearing deposits with banks increased by $95.6 million or 4.0%, to $2.5 billion from December 31, 2023 to June 30, 2024.

The increase was related to an increase of interest-bearing deposits.

At March 31, 2024, total debt securities decreased $20.4 million, or 1.3% compared to December 31, 2023.

At June 30, 2024, total debt securities decreased $113.7 million, or 7.3% compared to December 31, 2023.

The size of the Company’s securities portfolio is determined by the Company’s liquidity and asset/liability management.

The net unrealized loss on debt securities available for sale, before taxes, was $68.5 million at March 31, 2024, compared to a net unrealized loss of $65.5 million at December 31, 2023.

These unrealized losses of $52.3 million at March 31, 2024 and $50.0 million at December 31, 2023 are included in the Company’s stockholders’ equity as accumulated other comprehensive loss, net of income tax.

The Company did not purchase or sell any debt securities during the quarter ended March 31, 2024.

The net unrealized loss on debt securities available for sale, before taxes, was $63.2 million at June 30, 2024, compared to a net unrealized loss of $65.5 million at December 31, 2023.

These unrealized losses, net of income tax, are included in the Company’s stockholders’ equity as accumulated other comprehensive loss in the amounts of $48.2 million at June 30, 2024 and $50.0 million at December 31, 2023.

During the six months ended June 30, 2024, the Company purchased $270,000 of debt securities and did not sell any debt securities.

See Note (2) of the Notes to Consolidated Financial Statements for disclosures regarding the Company’s securities.

At March 31, 2024, total loans increased $127.7 million or 1.7% compared to December 31, 2023 as a result of internal loan growth.

At June 30, 2024, total loans increased $394.7 million or 5.2% compared to December 31, 2023 as a result of internal loan growth.

The internal loan growth was primarily from the Company's Oklahoma subsidiary BancFirst, with loans essentially flat for the Company's Texas subsidiaries, Pegasus and Worthington.

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Allowance for Credit Losses

The allowance for credit losses to total loans was 1.25% at March 31, 2024 compared to 1.26% at December 31, 2023.

The allowance for credit losses to total loans was 1.24% at June 30, 2024 compared to 1.26% at December 31, 2023.

The overall credit quality of the Company's loan portfolio has remained strong.

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Nonaccrual Loans

Nonaccrual loans totaled $42.0 million at March 31, 2024 compared to $24.6 million at December 31, 2023.

Nonaccrual loans totaled $44.0 million at June 30, 2024 compared to $24.6 million at December 31, 2023.

The level of the Company's nonaccrual loans remains low.

The Company’s nonaccrual loans are primarily construction and development real estate loans and commercial non-real estate loans.

The Company’s nonaccrual loans are primarily comprised of construction and development real estate loans, commercial real estate loans and commercial non-real estate loans.

Nonaccrual loans negatively impact the Company’s net interest margin.

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However, if the full collection of the remaining principal balance is not in doubt, interest income is recognized on certain of these loans on a cash basis.

Had nonaccrual loans performed in accordance with their original contractual terms, the Company would have recognized additional interest income of approximately $696,000 for the three months ended March 31, 2024 and $358,000 for the three months ended March 31, 2023.

Had nonaccrual loans performed in accordance with their original contractual terms, the Company would have recognized additional interest income of approximately $1.8 million for the six months ended June 30, 2024 and $718,000 for the six months ended June 30, 2023.

Only a small amount of this interest is expected to be ultimately collected.

Approximately $6.6 million of nonaccrual loans were guaranteed by government agencies at March 31, 2024.

Approximately $8.5 million of nonaccrual loans were guaranteed by government agencies at June 30, 2024.

The classification of a loan as nonaccrual does not necessarily indicate that loan principal and interest will ultimately be uncollectible;

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The current and future financial effects of the recorded balance of loans considered to be modified during the period were not considered to be material.

The recorded balance of loans modified during the period ended March 31, 2024 was approximately $1.1 million compared to $5.3 million during the year ended December 31, 2023.

The recorded balance of loans modified during the period ended June 30, 2024 was approximately $5.9 million compared to $5.3 million during the year ended December 31, 2023.

Other Real Estate Owned and Repossessed Assets

Other real estate owned (OREO) and repossessed assets totaled $35.1 million at March 31, 2024 compared to $34.2 million at December 31, 2023.

Other real estate owned (OREO) and repossessed assets totaled $38.5 million at June 30, 2024 compared to $34.2 million at December 31, 2023.

OREO consists of properties acquired through foreclosure proceedings or acceptance of a deed in lieu of foreclosure and premises held for sale.

1 unchanged sentence

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.

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.

OREO included a larger commercial real estate property recorded at $30.4 million at March 31, 2024 and $29.4 million at December 31, 2023.

During the quarter ended March 31, 2024, the Company made $996,000 of tenant improvements to this property, which contributed to the increase of total OREO.

OREO included a larger commercial real estate property recorded at $30.7 million at June 30, 2024 and $29.4 million at December 31, 2023.

During the period ended June 30, 2024, the Company made $1.3 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.

1 unchanged sentence

This property had the following rental income and operating expenses for the periods presented:

For the Three Months Ended March 31,

Three Months Ended

Six Months Ended

(Dollars in thousands)

2 unchanged sentences

The Company's total rental income and operating expenses from OREO are presented in the following table:

For the Three Months Ended March 31,

Three Months Ended

Six Months Ended

(Dollars in thousands)

2 unchanged sentences

Intangible Assets, Goodwill and Other Assets

Identifiable intangible assets and goodwill totaled $198.1 million and $199.0 million at March 31, 2024 and December 31, 2023, respectively.

Other assets includes the cash surrender value of key-man life insurance policies totaling $84.4 million at both March 31, 2024 and December 31, 2023.

Derivative financial instruments consisting of oil and gas swaps and option contracts are included in other assets and totaled $27.4 million at March 31, 2024 and $41.1 million at December 31, 2023.

Identifiable intangible assets and goodwill totaled $197.2 million and $199.0 million at June 30, 2024 and December 31, 2023, respectively.

Other assets includes the cash surrender value of key-man life insurance policies totaling $84.1 million and $84.4 million at June 30, 2024 and December 31, 2023, respectively.

Derivative financial instruments consisting of oil and gas swaps and option contracts are included in other assets and totaled $15.2 million at June 30, 2024 and $41.1 million at December 31, 2023.

They require a daily margin to be posted, which fluctuates with oil and gas prices and customer activity.

At March 31, 2024, the Company had a margin asset included in other assets in the amount of $4.3 million.

At June 30, 2024, the Company had a margin asset included in other assets in the amount of $7.2 million.

At December 31, 2023, the Company had a margin liability included in other liabilities in the amount of $15.5 million.

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The realized and unrealized gains and losses are reported as securities transactions in the noninterest income section of the consolidated statements of comprehensive income.

The balance of equity securities was $13.2 million at March 31, 2024 and $13.1 million at December 31, 2023.

The balance of equity securities was $13.3 million at June 30, 2024 and $13.1 million at December 31, 2023.

The Company reviews its portfolio of equity securities for impairment at least quarterly.

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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 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 or reciprocal deposits.

The Company maintains lines of credit from the Federal Home Loan Bank (“FHLB”), federal funds lines of credit with other banks and could also utilize the sale of loans, securities and liquidation of other assets as sources of liquidity and funding.

The Company is highly liquid with 20% of cash and due from banks, interest-bearing deposits with banks and federal funds sold to total assets.

The Company is highly liquid with a total of cash and due from banks, interest-bearing deposits with banks and federal funds sold to total assets of 19.6%.

There have not been any other material changes from the liquidity and funding discussion included in Management’s Discussion and Analysis in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

At March 31, 2024, deposits totaled $10.9 billion, an increase of $209.5 million from December 31, 2023.

At June 30, 2024, deposits totaled $11.0 billion, an increase of $315.5 million from December 31, 2023.

The Company’s core deposits provide it with a stable, low-cost funding source.

The Company’s core deposits as a percentage of total deposits were 97.1% at March 31, 2024 and 97.4% at December 31, 2023.

Noninterest-bearing deposits to total deposits were 35.3% at March 31, 2024 compared to 37.2% at December 31, 2023.

Quantitative tightening by the Federal Reserve and competition for deposits has increased and available yields have similarly increased, causing non-interest bearing deposits to move to interest-bearing deposits and off-balance-sheet sweep account products.

Off-balance-sheet sweep accounts totaled $4.6 billion at March 31, 2024 compared to $4.3 billion at December 31, 2023.

The Company’s core deposits as a percentage of total deposits were 96.8% at June 30, 2024 and 97.4% at December 31, 2023.

Noninterest-bearing deposits to total deposits were 34.6% at June 30, 2024 compared to 37.2% at December 31, 2023.

Quantitative tightening by the Federal Reserve and competition for deposits has increased, and available yields have similarly increased, causing noninterest-bearing deposits to move to interest-bearing deposits and off-balance-sheet sweep account products.

Off-balance-sheet sweep accounts totaled $4.5 billion at June 30, 2024 compared to $4.3 billion at December 31, 2023.

The movement of customers' funds into the Company's off-balance-sheet sweep accounts affected the balances of both cash and deposits.

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The level of these borrowings is determined by various factors, including customer demand and the Company’s ability to earn a favorable spread on the funds obtained.

Short-term borrowings were $9.7 million at March 31, 2024 compared to $3.4 million at December 31, 2023.

Short-term borrowings were $4.3 million at June 30, 2024 compared to $3.4 million at December 31, 2023.

The Company has several lines of credit available.

At March 31, 2024, BancFirst had $835.0 million available on its line of credit from the FHLB of Topeka, Kansas and a $25.0 million line of credit with another financial institution that is an overnight federal funds facility.

At March 31, 2024, BancFirst had no advances outstanding under either line of credit.

Worthington has $10.5 million in lines of credit with other financial institutions that serve as overnight federal funds facilities, a Federal Reserve discount window capacity of $29.0 million and an $81.9 million line of credit from the FHLB of Dallas, Texas to use for liquidity or to match-fund certain long-term rate loans.

Worthington has no advances outstanding at March 31, 2024 under any of these lines of credit.

At June 30, 2024, BancFirst had $850.1 million available on its line of credit from the FHLB of Topeka, Kansas and a $25.0 million line of credit with another financial institution that is an overnight federal funds facility.

At June 30, 2024, BancFirst had no advances outstanding under either line of credit.

Worthington has $10.5 million in lines of credit with other financial institutions that serve as overnight federal funds facilities, a Federal Reserve discount window capacity of $28.8 million and a $77.7 million line of credit from the FHLB of Dallas, Texas to use for liquidity or to match-fund certain long-term rate loans.

Worthington has no advances outstanding at June 30, 2024 under any of these lines of credit.

Capital Resources

Stockholders’ equity totaled $1.5 billion at March 31, 2024, an increase of $35.4 million from December 31, 2023.

In addition to net income of $50.3 million, other changes in stockholders’ equity during the three months ended March 31, 2024 included $851,000 related to common stock issuances for stock option exercises and $662,000 related to stock-based compensation that were partially offset by a $2.3 million decrease in accumulated other comprehensive income and $14.2 million in dividends.

The Company’s leverage ratio and total risk-based capital ratios at March 31, 2024 were well in excess of the regulatory requirements.

Stockholders’ equity totaled $1.5 billion at June 30, 2024, an increase of $78.6 million from December 31, 2023.

In addition to net income of $101.0 million, other increases in stockholders’ equity during the six months ended June 30, 2024 included $2.6 million related to common stock issuances for stock option exercises, $1.4 million related to stock-based compensation and $1.8 million in accumulated other comprehensive income, that were partially offset by $28.4 million in dividends.

The Company’s leverage ratio and other risk-based capital ratios at June 30, 2024 were well in excess of the regulatory requirements.

See Note (7) of the Notes to Consolidated Financial Statements for a discussion of capital ratios and requirements.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements