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BANCFIRST CORP /OK/

BANFP
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Business Summary

BancFirst Corporation (the "Company") operates as a financial holding company, primarily conducting its activities through its wholly-owned subsidiary, BancFirst, an Oklahoma state-chartered bank. The Company also operates through Pegasus Bank and Worthington Bank, Texas state-chartered banks, and, prior to its February 2026 merger with BancFirst, American Bank of Oklahoma (ABOK), an Oklahoma state-chartered bank. The Company's strategy focuses on providing commercial banking services to retail customers and small to medium-sized businesses in both non-metropolitan trade centers and metropolitan statistical areas of Oklahoma. BancFirst maintains 109 banking locations across 62 communities in Oklahoma, while Pegasus has three locations in the Dallas Metroplex area, and Worthington has five locations in the Fort Worth Metroplex area, including Arlington and Denton, Texas. The Company's market share of deposits within Oklahoma was 7.58% as of June 30, 2025, up from 6.84% as of June 30, 2024 .

The Company's core business model revolves around generating revenue from commercial banking services, including commercial, real estate, energy, agricultural, and consumer lending, as well as depository and funds transfer services, collections, safe deposit boxes, cash management, and trust services. BancFirst also provides item processing, research, and correspondent banking services to financial institutions and governmental units. Lending activities are funded almost entirely by core deposits, and the Company centralizes processing, support, and investment functions for efficiency and risk management. Additionally, the Company offers insurance services through BancFirst Insurance Services, Inc., covering business and personal insurance, employee benefits, surety bonds, and claims and risk management.

The Company has six principal business units: BancFirst metropolitan banks, BancFirst community banks, Pegasus, Worthington, other financial services, and executive operations and support. BancFirst's primary lending activity is financing business and industry in its market areas, including light manufacturing, wholesale and retail trade, real estate development and construction, services, agriculture, and the energy industry. It also offers Small Business Administration (SBA) guaranteed loans through BancFirst Commercial Capital. Consumer lending includes financing for automobiles, home equity loans, and other personal loans, with residential loans primarily being shorter-duration home loans in non-metropolitan areas that reprice within five years. Pegasus and Worthington's lending activities include private banking, commercial and residential real estate, commercial and industrial, and energy loans.

For the fiscal year ended December 31, 2025, the Company reported net income of $240.6 million , or $7.11 per diluted share , compared to $216.4 million , or $6.44 per diluted share , in 2024. Net interest income increased to $490.5 million in 2025 from $446.9 million in 2024. The net interest margin for 2025 was 3.74% , a slight increase from 3.73% in 2024. The provision for credit losses was $5.7 million in 2025, down from $9.0 million in 2024. Noninterest income totaled $200.1 million in 2025, an increase from $184.6 million in 2024. Noninterest expense rose to $379.8 million in 2025 from $347.2 million in 2024. Total assets reached $14.8 billion at year-end 2025, an increase of $1.3 billion from December 31, 2024. Loans grew by $511.5 million to $8.5 billion at December 31, 2025. Deposits totaled $12.7 billion , an increase of $951.8 million from December 31, 2024. The Company's total stockholders' equity was $1.9 billion at December 31, 2025.

Year-over-year, net interest income increased by $43.6 million in 2025, driven by higher loan volume and growth in other earning assets. The net interest margin saw a marginal increase of 0.01% . Noninterest income increased by $15.6 million , or 8.4% , primarily due to a $4.5 million gain on the sale of Visa B-1 stock, a $3.5 million increase in sweep fees, a $1.3 million increase in trust revenue, a $1.4 million increase in treasury income, a $1.5 million increase in insurance commissions, a $1.5 million increase in service charges on deposits, and a $1.0 million increase in gain on sale of other assets. Noninterest expense increased by $32.7 million , or 9.4% , mainly due to a $14.0 million increase in salaries and employee benefits from annual merit increases and new hires, a $7.4 million increase in net expense from other real estate owned (including a $4.1 million increase in write-downs), and a $1.1 million increase in data processing expense. Occupancy expense also increased by $3.0 million .

Significant operational developments during the period include the acquisition of American Bank of Oklahoma (ABOK) on November 17, 2025, for approximately $33 million . This acquisition added $243.1 million in loans and $329.5 million in deposits, expanding the Company's banking communities in Oklahoma. As a result of the ABOK acquisition, the Company recorded a core deposit intangible of approximately $11.6 million and goodwill of approximately $476,000 . ABOK was merged into BancFirst in February 2026. The Company also disposed 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.

Business Outlook

The Company's model simulations project that a 100 basis point increase in interest rates would result in a positive variance in net interest income of 4.93% relative to the base case over the next twelve months. A 200 basis point increase is projected to result in a positive variance of 10.06% . Conversely, a decrease in interest rates of 100 basis points is projected to result in a negative variance in net interest income of 7.24% relative to the base case over the next twelve months. Management believes that, based upon the anticipated performance of the Company, regular dividend payments will continue in 2026.

The acquisition of American Bank of Oklahoma (ABOK) on November 17, 2025, for approximately $33 million , is a key growth area, expanding the Company's banking communities in Oklahoma. This acquisition added approximately $414 million in total assets, $244 million in loans, and $341 million in deposits at the time of acquisition. The Company recorded a core deposit intangible of approximately $11.6 million and goodwill of approximately $476,000 as a result. ABOK was subsequently merged into BancFirst in February 2026.

The Company's liquidity position is strong, with cash and due from banks, interest-bearing deposits with banks, and federal funds sold representing 30.3% of total assets at December 31, 2025, an increase from 26.2% at December 31, 2024. This increased liquidity is attributed to an increase in interest-bearing deposits and maturing securities. This strong liquidity positions BancFirst to respond to increased loan demand and other funding requirements or decreases in funding sources.

Planned capital allocation includes the Stock Repurchase Program (SRP), which may be used to increase earnings per share and return on equity, purchase treasury stock for stock-based compensation plans, and provide liquidity for optionees and stockholders. As of December 31, 2025, up to 479,784 shares could be repurchased under the SRP. No shares were repurchased in 2025 or 2024. The Company's trust preferred securities qualify as Tier 1 capital and its Subordinated Notes qualify as Tier 2 capital under bank regulatory guidelines. At January 1, 2026, BancFirst had approximately $204.9 million of equity available for dividends to BancFirst Corporation without regulatory approval.

The Company explicitly flags several structural headwinds and execution risks. A further shift in deposit mix from noninterest-bearing deposits to interest-bearing deposits could negatively impact net interest margin. Deterioration in the market for commercial office property could adversely affect the value of the Company's other real estate owned and commercial office collateral for its commercial real estate loans. Technological advances in payment processing are expected to negatively impact interchange revenue, which represented 13.6% of noninterest income for the year ended December 31, 2025. Consumer protection laws and the Durbin Amendment may also reduce noninterest income, particularly from NSF and overdraft fees, which totaled $31.6 million in 2025, representing 15.8% of noninterest income. The proposed changes to the Durbin Amendment, if adopted, could further reduce the maximum permissible interchange fee for electronic debit transactions.

Geographic, regulatory, and macro factors identified as constraints include the Company's concentration in Oklahoma, making its financial condition and results of operations subject to changes in the economic conditions of the state. The banking environment in North Texas is also highly competitive. Changes in fiscal, monetary, or regulatory policy, including rule-making, supervision, examination, and enforcement, add uncertainty and could lead to increased costs or limits on financial services offered. The stay of enforcement and subsequent withdrawal of the SEC's climate-related disclosure rules, and the unclear status of proposed rules on human capital management and board diversity, highlight regulatory uncertainty. The joint final rule to modernize the CRA regulatory framework, which introduces new tests for banks over $2 billion in assets and data collection requirements for banks over $10 billion in assets, is also subject to pending litigation and an announced intention to rescind. The CFPB's final rule requiring data availability to consumers and third parties is also subject to pending litigation and revisions.

Risk Factors

The Company faces significant interest rate risk, as fluctuations could reduce profitability, particularly if interest rates decline, leading to net interest margin compression. Credit and lending risks are material, especially given that approximately 71% of the loan portfolio is secured by real estate, making the Company vulnerable to deterioration in real estate markets. Declining crude oil and natural gas prices could weaken energy loan demand and increase losses in the energy portfolio, which comprised 6.4% of the loan portfolio as of December 31, 2025, and indirectly impact other loan segments like commercial real estate. Environmental liability risk is also present due to real property collateral. External and market-related risks include adverse economic conditions, particularly in Oklahoma, which could negatively impact loan generation, repayments, and deposit attraction. Competition from other financial institutions, including those with greater resources, could reduce margins and market share. Failure to keep pace with rapid technological changes, including the adoption of AI, could lead to a competitive disadvantage and increased costs, with potential risks around cybersecurity, privacy, accuracy, bias/discrimination, and intellectual property. Operational risks include the potential ineffectiveness of accounting estimates and risk-management processes, particularly concerning the allowance for credit losses and fair value measurements, which rely on analytical and forecasting models that may be inaccurate. Cybersecurity threats are severe and increasing, posing risks of system disruptions, data loss, regulatory scrutiny, litigation, and reputational damage, despite the Company's layered defensive approach and cyber insurance coverage. Compliance and regulatory risks are substantial due to the highly regulated banking environment, with changes in federal and state laws, regulations, and policies potentially leading to increased costs, limitations on services, enforcement actions, and financial penalties. The Durbin Amendment and consumer protection laws may reduce noninterest income, specifically from interchange fees and NSF/overdraft fees. Acquisition-related risks include integration difficulties, unforeseen operating challenges, and exposure to unknown liabilities of acquired entities. Liquidity risk is also a concern, as market disruptions or a loss of substantial deposit relationships could impact funding levels and costs, potentially requiring asset sales at a loss.

Management Priorities

Management's message to shareholders emphasizes the Company's strong financial performance in 2025, with net income increasing to $240.6 million and diluted EPS rising to $7.11 . They highlight the growth in net interest income to $490.5 million , driven by higher loan volume and growth in other earning assets, and a stable net interest margin of 3.74% . Management notes the decrease in the provision for credit losses to $5.7 million due to lower loss rates and the impact on vintage loss analysis, indicating robust asset quality with nonaccrual loans remaining relatively unchanged at 0.72% of total loans. Strategic priorities include continued internal loan growth, as evidenced by the $507.7 million increase in total loans held for investment in 2025, and expansion through acquisitions, such as the American Bank of Oklahoma acquisition which added $243.1 million in loans and $329.5 million in deposits. Management also stresses the importance of maintaining a strong liquidity position, with cash and interest-bearing deposits increasing by $941.6 million to $4.5 billion at December 31, 2025, positioning the Company to respond to increased loan demand. They anticipate that regular dividend payments will continue in 2026, based on the Company's expected performance.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Market Areas and Competition
  2. [2] Item 7, MD&A — Summary
  3. [3] Item 7, MD&A — Summary
  4. [4] Item 7, MD&A — Summary
  5. [5] Item 7, MD&A — Summary
  6. [6] Item 7, MD&A — Summary
  7. [7] Item 7, MD&A — Summary
  8. [8] Item 7, MD&A — Summary
  9. [9] Item 7, MD&A — Summary
  10. [10] Item 7, MD&A — Summary
  11. [11] Item 7, MD&A — Summary
  12. [12] Item 7, MD&A — Summary
  13. [13] Item 7, MD&A — Summary
  14. [14] Item 7, MD&A — Summary
  15. [15] Item 7, MD&A — Summary
  16. [16] Item 7, MD&A — Summary
  17. [17] Item 7, MD&A — Summary
  18. [18] Item 7, MD&A — Summary
  19. [19] Item 7, MD&A — Summary
  20. [20] Item 7, MD&A — Summary
  21. [21] Item 7, MD&A — Summary
  22. [22] Item 7, MD&A — Summary
  23. [23] Item 7, MD&A — Net Interest Income
  24. [24] Item 7, MD&A — Summary
  25. [25] Item 7, MD&A — Noninterest Income
  26. [26] Item 7, MD&A — Noninterest Income
  27. [27] Item 7, MD&A — Noninterest Income
  28. [28] Item 7, MD&A — Noninterest Income
  29. [29] Item 7, MD&A — Noninterest Income
  30. [30] Item 7, MD&A — Noninterest Income
  31. [31] Item 7, MD&A — Noninterest Income
  32. [32] Item 7, MD&A — Noninterest Income
  33. [33] Item 7, MD&A — Noninterest Income
  34. [34] Item 7, MD&A — Noninterest Expense
  35. [35] Item 7, MD&A — Noninterest Expense
  36. [36] Item 7, MD&A — Noninterest Expense
  37. [37] Item 7, MD&A — Noninterest Expense
  38. [38] Item 7, MD&A — Noninterest Expense
  39. [39] Item 7, MD&A — Noninterest Expense
  40. [40] Item 7, MD&A — Noninterest Expense
  41. [41] Item 7, MD&A — Summary
  42. [42] Item 7, MD&A — Loans
  43. [43] Item 7, MD&A — Deposits
  44. [44] Item 7, MD&A — Summary
  45. [45] Item 7, MD&A — Summary
  46. [46] Item 7, MD&A — Noninterest Expense
  47. [47] Item 7A, Quantitative and Qualitative Disclosures about Market Risk
  48. [48] Item 7A, Quantitative and Qualitative Disclosures about Market Risk
  49. [49] Item 7A, Quantitative and Qualitative Disclosures about Market Risk
  50. [50] Item 2, Recent Developments, Including Mergers and Acquisitions
  51. [51] Item 2, Recent Developments, Including Mergers and Acquisitions
  52. [52] Item 2, Recent Developments, Including Mergers and Acquisitions
  53. [53] Item 2, Recent Developments, Including Mergers and Acquisitions
  54. [54] Item 2, Recent Developments, Including Mergers and Acquisitions
  55. [55] Item 2, Recent Developments, Including Mergers and Acquisitions
  56. [56] Item 7, MD&A — Liquidity and Funding
  57. [57] Item 7, MD&A — Liquidity and Funding
  58. [58] Item 7, MD&A — Capital Resources
  59. [59] Item 7, MD&A — Liquidity and Funding
  60. [60] Item 7, MD&A — Noninterest Income
  61. [61] Item 7, MD&A — Noninterest Income
  62. [62] Item 7, MD&A — Noninterest Income
  63. [63] Item 1, Business — Community Reinvestment Act
  64. [64] Item 1, Business — Community Reinvestment Act
  65. [65] Item 1A, Risk Factors — Credit and Lending Risks
  66. [66] Item 1A, Risk Factors — Credit and Lending Risks
  67. [67] Item 7, MD&A — Summary
  68. [68] Item 7, MD&A — Summary
  69. [69] Item 7, MD&A — Summary
  70. [70] Item 7, MD&A — Summary
  71. [71] Item 7, MD&A — Summary
  72. [72] Item 7, MD&A — Summary
  73. [73] Item 7, MD&A — Loans
  74. [74] Item 7, MD&A — Loans
  75. [75] Item 7, MD&A — Deposits
  76. [76] Item 7, MD&A — Cash, Federal Funds Sold and Interest-Bearing Deposits with Banks
  77. [77] Item 7, MD&A — Cash, Federal Funds Sold and Interest-Bearing Deposits with Banks

Analysis on 5/22/2026