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BANCFIRST CORP /OK/

BANF
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Business Summary

BancFirst Corporation operates as a financial holding company headquartered in Oklahoma City, Oklahoma, registered under the Bank Holding Company Act of 1956. It conducts the vast majority of its operating activities through its wholly-owned subsidiary BancFirst, an Oklahoma state-chartered bank, and also through wholly-owned subsidiaries Pegasus Bank, a Texas state-chartered bank headquartered in Dallas, Texas, Worthington Bank, a Texas state-chartered bank headquartered in Arlington, Texas, and prior to its merger with BancFirst in February 2026, American Bank of Oklahoma, an Oklahoma state-chartered bank. The banking environment in Oklahoma is very competitive, and the geographic dispersion of BancFirst’s banking locations presents several different levels and types of competition, with each location competing with other banking institutions, savings and loan associations, brokerage firms, personal loan finance companies and credit unions within their respective market areas. The major areas of competition include interest rates charged on loans, underwriting terms and conditions, interest rates paid on deposits, fees on non-credit services, levels of service charges on deposits, completeness of product lines and quality of service. BancFirst operates as a super community bank, managing its community banking offices on a decentralized basis, which permits them to be responsive to local customer needs, while generally having a larger lending capacity, broader product line and greater operational scale than its principal competitors in non-metropolitan market areas. In the metropolitan markets served by BancFirst, the strategy is to focus on the needs of local businesses and seek to provide more responsive services than are available at larger institutions. The banking environment in North Texas is one of the most competitive in the nation, and Pegasus and Worthington's marketing avoids media campaigns, with their growth dependent on the experience, knowledge and contacts of their relationship officers and directors.

As reported by the Federal Deposit Insurance Corporation, the Company’s market share of deposits within the state of Oklahoma was 7.58% as of June 30, 2025 and 6.84% as of June 30, 2024. The Company has six principal business units: BancFirst metropolitan banks, BancFirst community banks, Pegasus, Worthington, other financial services and executive operations and support. Affiliates of the Company beneficially own approximately 35% of the outstanding shares of the Company’s common stock as of January 31, 2026, and while they do not have legal control, they have effective control of the Company. The Company’s directors and executive officers, as a group, beneficially owned 31% of its outstanding common stock as of January 31, 2026.

The Company generates revenue primarily through net interest income, which is the difference between interest earned on loans and investments and the interest paid on deposits and borrowings, and through noninterest income from sources such as service charges on deposits, trust revenue, treasury income, sweep fees, insurance commissions, and debit card interchange fees. The Company’s lending and investing activities are funded almost entirely by core deposits, and it centralizes virtually all of its processing, support and investment functions to achieve consistency and operational efficiencies. BancFirst provides a wide range of retail and commercial banking services including commercial, real estate, energy, agricultural and consumer lending; depository and funds transfer services; collections; safe deposit boxes; cash management services; trust services; and other services tailored for both individual and corporate customers. BancFirst also provides item processing, research and other correspondent banking services to financial institutions and governmental units. Trust services offered through BancFirst’s Trust and Investment Management Division consist primarily of investment management and administration of trusts for individuals, corporations and employee benefit plans, and the Trust Division serves as bond trustee and paying agent for various Oklahoma municipalities and governmental entities. Insurance services offered through BancFirst Insurance Services, Inc. consist of business and personal insurance, employee benefits, surety bonds and claims and risk management.

BancFirst’s primary lending activity is the financing of business and industry in its market areas, with commercial loan customers generally being small to medium-sized businesses engaged in light manufacturing, local wholesale and retail trade, commercial and residential real estate development and construction, services, agriculture and the energy industry. Most forms of commercial lending are offered, including commercial mortgages, other forms of asset-based financing and working capital lines of credit, and BancFirst offers Small Business Administration guaranteed loans through BancFirst Commercial Capital, a division established in 1991. Consumer lending activities consist of traditional forms of financing for automobiles, home equity loans and other personal loans, and residential loans consist primarily of home loans in non-metropolitan areas, which are generally shorter in duration than typical mortgages and reprice within five years. BancFirst’s range of deposit services include checking accounts, Negotiable Order of Withdrawal accounts, savings accounts, money market accounts, Health Savings Accounts, Coverdell Education Accounts, individual retirement accounts and certificates of deposit, with overdraft protection and auto draft services also offered. Pegasus and Worthington's lending activities include private banking, commercial and residential real estate, commercial and industrial and energy loans, and they each have a full complement of deposit products including sweep accounts and securities investment products.

As of December 31, 2025, the Company employed 2,260 full time equivalent employees, none of whom are represented by collective bargaining agreements. The Company views its employees as a differentiator, enabling it to meet customer needs through highly trained and motivated employees, and its approach to human capital resources focuses on objectives including providing fair and equitable compensation, training employees to reach heightened skill sets and standards of motivation, identifying and developing proficiencies of all employees, encouraging transparent and open communication, and providing employees with opportunities to gain a deeper appreciation for how they are making an impact. The Company recognizes the importance of maintaining a culture of feedback and employee recognition, provides competitive compensation and benefits packages, encourages employees to be alert for opportunities to improve quality and efficiency, affords employees opportunities to learn how their work fits into the bigger picture, and identifies high potential candidates with specifically tailored plans for actualizing their development goals and career trajectories. The Company is committed to a policy of consistent treatment and equal employment opportunity in all recruitment and employment practices and is an affirmative action employer.

The Company’s net income for 2025 was $240.6 million , or $7.11 per diluted share , compared to $216.4 million , or $6.44 per diluted share for 2024. Net interest income increased to $490.5 million in 2025, compared to $446.9 million in 2024, with higher loan volume and growth in other earning assets being the primary drivers. The net interest margin increased to 3.74% for 2025 compared to 3.73% for 2024. The Company recorded a provision for credit losses of $5.7 million in 2025 compared to $9.0 million in 2024, with the decrease primarily due to lower loss rates experienced in more recent periods and the impact on the vintage loss analysis. Noninterest income totaled $200.1 million in 2025 compared to $184.6 million in 2024, with the increase partially due to a gain on the sale of Visa B-1 stock of $4.5 million , along with increases in trust revenue, treasury income, sweep fees and insurance commissions. Noninterest expense was $379.8 million in 2025 compared to $347.2 million in 2024, primarily related to growth in salaries and employee benefits of $14.0 million related to annual merit increases and new hires, an increase in net expense from other real estate owned of $7.4 million , which largely consisted of an increase in write-downs of other real estate of $4.1 million , and an increase in data processing expense of $1.1 million . The Company’s assets at year-end 2025 totaled $14.8 billion , an increase of $1.3 billion from December 31, 2024. Loans grew $511.5 million from December 31, 2024, totaling $8.5 billion at December 31, 2025. Deposits totaled $12.7 billion at December 31, 2025, an increase of $951.8 million from December 31, 2024. Off-balance-sheet sweep accounts totaled $4.9 billion at December 31, 2025, down $262.6 million from December 31, 2024. Total stockholders’ equity totaled $1.9 billion at December 31, 2025. Nonaccrual loans of $61.1 million represented 0.72% of total loans at December 31, 2025, relatively unchanged from $58.0 million or 0.72% of total loans at December 31, 2024. The allowance for credit losses to total loans was 1.22% at December 31, 2025, down slightly from 1.24% at December 31, 2024. Net charge-offs were $8.5 million for the year, compared to $6.3 million for the year ended December 31, 2024.

Business Outlook

The Company has historically generated loan growth from both internal originations and bank acquisitions, and total loans held for investment increased $507.7 million , or 6.3% in 2025, as a result of internal loan growth and its acquisition of ABOK, which added $243.1 million of the increase. The Company has continued to expand through the acquisition of over 40 banks, several branch acquisitions, multiple insurance agencies and de-novo branches, and BancFirst currently has 109 banking locations serving 62 communities throughout Oklahoma, Pegasus has three banking locations in the Dallas Metroplex area, and Worthington has three locations in the Fort Worth Metroplex area, one location in Arlington Texas and one location in Denton Texas. The Company’s strategy focuses on providing a full range of commercial banking services to retail customers and small to medium-sized businesses in both the non-metropolitan trade centers and cities in the metropolitan statistical areas of Oklahoma, and BancFirst maintains a strong community orientation by selecting members of the communities in which its branches operate to local consulting boards that assist in marketing and providing feedback on products and services.

The Company’s growth strategy also includes expanding through acquisitions, as evidenced by the acquisition of ABOK on November 17, 2025, which added six banking locations in communities located in northeast Oklahoma. The Company also owns 100% of the common securities of BFC Capital Trust II, 100% of Council Oak Partners LLC engaging in investing activities, 100% of BancFirst Insurance Services, Inc. operating as an independent insurance agency, 100% of BFC-PNC, LLC to hold other real estate owned, and 80% of Calimesa Town Center, LLC to hold other real estate owned. BancFirst has the following 100% owned principal subsidiary: BFTower, LLC, which owns a 49% ownership interest in SFPG, LLC, a parking garage, and a 100% ownership interest in ParcFirst@Bricktown, LLC, a parking garage.

The Company’s net interest margin increased to 3.74% for 2025 compared to 3.73% for 2024, and the net interest spread was 2.54% for 2025 compared to 2.29% for 2024. The efficiency ratio was 55.00% for 2025 compared to 54.98% for 2024. Noninterest expense increased by $32.7 million , or 9.4% for 2025 compared to 2024, with higher expenses primarily related to growth in salaries and employee benefits of $14.0 million related to annual merit increases and new hires, and an increase in net expense from other real estate owned of $7.4 million .

As of December 31, 2025, the Company employed 2,260 full time equivalent employees . The Company centralizes virtually all of its processing, support and investment functions in order to achieve consistency and operational efficiencies, and maintains centralized control functions such as operations support, bookkeeping, accounting, loan review, compliance and internal auditing to ensure effective risk management. The Company also provides, on a centralized basis, certain specialized financial services that require unique expertise.

The Company has a Stock Repurchase Program under which, at December 31, 2025, up to 479,784 shares could be repurchased. The Company has historically paid a common stock dividend, with cash dividends of $1.90 per share in 2025, $1.78 per share in 2024, and $1.66 per share in 2023. The cash dividends payout ratio was 26.32% for 2025, 27.18% for 2024, and 25.74% for 2023. The Company’s FDIC deposit insurance assessment expense totaled $6.8 million , $6.3 million and $5.8 million in 2025, 2024 and 2023, respectively.

The Company faces significant competition from banks and other financial institutions, including savings and loan associations, savings banks, finance companies and credit unions, with a portion of these competitors having substantially greater resources and lending limits, larger branch systems and other banking services that the Company does not offer. The Company also competes to a limited extent with other providers of financial services such as money market mutual funds, brokerage firms, consumer finance companies and insurance companies. Changes in consumer use of banks and changes in consumer spending and savings habits could adversely affect financial results, as technology and other changes now allow many customers to complete financial transactions without using banks, potentially resulting in the loss of fee income, customer deposits and income generated from those deposits.

The Company is subject to extensive regulation, supervision and examination by federal and state banking authorities, and any change in applicable regulations or federal or state legislation could have a substantial impact on results of operations. Changes to statutes, regulations or regulatory policies or supervisory guidance, including changes in interpretation or implementation, could affect the Company in substantial and unpredictable ways, subjecting it to additional costs, limiting the types of financial services and products it may offer, and increasing the ability of non-banks to offer competing financial services and products. The current presidential administration has sought to implement regulatory reform, and changes in the regulatory environment for the banking industry, including rule-making, supervision, examination, enforcement and other executive and legislative changes add uncertainty, including timing and scope of potential changes. Additional changes in fiscal, monetary or regulatory policy may have adverse consequences including impacts to the labor market, tariffs and inflation which may impact financial performance.

Risk Factors

Fluctuations in interest rates could reduce profitability, as the Company realizes income primarily from the difference between interest earned on loans and investments and the interest paid on deposits and borrowings, and changes in market interest rates could either positively or negatively affect net interest income and profitability. A substantial portion of the loan portfolio is secured by real estate, with this percentage being approximately 71% at December 31, 2025, and deterioration in real estate markets could lead to losses. As of December 31, 2025, oil and gas loans comprised 6.4% of the loan portfolio, and declining crude oil and natural gas prices could result in weaker energy loan demand and increased losses within the energy portfolio, as well as indirect impacts on other loan portfolio segments such as commercial real estate. The Company operates exclusively within the State of Oklahoma through BancFirst, and its financial condition, results of operations and cash flows are subject to changes in economic conditions in the State of Oklahoma. Debit card interchange revenue represented 13.6% of noninterest income for the year ended December 31, 2025, and technological advances in payment processing and the Durbin Amendment, which limits debit card interchange fees for banks with over $10 billion in assets such as the Company, could negatively impact interchange revenue. NSF and overdraft fees represented 15.8% of noninterest income for the year ended December 31, 2025, and the Company is subject to political pressures that could limit its ability to charge such fees.

Management Priorities

Management’s discussion emphasizes that the Company’s net income for 2025 was $240.6 million , or $7.11 per diluted share , compared to $216.4 million , or $6.44 per diluted share for 2024, and that net interest income increased to $490.5 million compared to $446.9 million in 2024, driven by higher loan volume and growth in other earning assets. The net interest margin increased to 3.74% for 2025 compared to 3.73% for 2024. The provision for credit losses decreased to $5.7 million in 2025 from $9.0 million in 2024, primarily due to lower loss rates experienced in more recent periods and the impact on the vintage loss analysis. Noninterest income totaled $200.1 million in 2025 compared to $184.6 million in 2024, partially due to a gain on the sale of Visa B-1 stock of $4.5 million , and noninterest expense was $379.8 million in 2025 compared to $347.2 million in 2024, primarily related to growth in salaries and employee benefits. The Company’s assets at year-end 2025 totaled $14.8 billion , an increase of $1.3 billion from December 31, 2024, loans grew $511.5 million totaling $8.5 billion , and deposits totaled $12.7 billion an increase of $951.8 million . Asset quality was strong through the year, with nonaccrual loans of $61.1 million representing 0.72% of total loans at December 31, 2025, relatively unchanged from $58.0 million or 0.72% of total loans at December 31, 2024, and the allowance for credit losses to total loans was 1.22% at December 31, 2025, down slightly from 1.24% at December 31, 2024. Net charge-offs were $8.5 million for the year, compared to $6.3 million for the year ended December 31, 2024.

View Source Annual Report on SEC.gov ↗

References

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Analysis on 9/28/2026