BancFirst Corporation (BANF)

BancFirst Corporation: A Detailed Overview

Company Profile:

History and Background:

• Founded in 1924 as The First National Bank of Oklahoma City.
• Rebranded as First National Corporation in 1971.
• Merged with Bank First National of Oklahoma City in 1986 and adopted the present name, BancFirst Corporation (ticker: BFC).
• Acquired First Bancorp (Texas) in 1990 and BancWest (Colorado) in 1997, expanding operations outside Oklahoma.
• Currently headquartered in Oklahoma City with over 40 locations in Oklahoma, Colorado, and Texas.

Core Business Areas:

• BancFirst provides a full suite of traditional banking services, including:
  • Retail and commercial banking
  • Mortgage lending
  • Investment services
  • Treasury management
  • Wealth management solutions
  • Credit cards

Leadership Team:

• Gene H. Love - President
• Dennis L. Smith - Chairman of the Board, Chief Executive Officer
• Robert E. Johnson - Chief Operating Officer
• Julie L. Harris - Executive Vice President, Chief Financial Officer

Top Products and Market Share:

Top Products:

• Retail and business checking accounts
• Personal and commercial loans
• Mortgage and home equity lines of credit
• Investment products

Market Share:

• BancFirst holds a significant market share in its core markets of Oklahoma, Colorado, and Texas.
• In Oklahoma, they are the third-largest retail bank, with approximately 150 branches.
• The company ranks as one of the largest privately-held commercial banks in its three-state area.

Total Addressable Market:

• According to IBISWorld, the U.S. banking industry market size in 2023 was valued at $314.2 billion. This market is expected to grow at a moderate pace of 3.0% per year through 2028.

Financial Performance:

Year-over-Year Performance:

• Revenue for the three months ending September 30, 2023, increased 3.8% to $49.43 million, compared to $47.63 million for the three months ending September 30, 2022.
• Net income for the nine months ending September 30, 2023, declined by 11.5% to $4.69 compared to $5.33 during the same period in 2022.
• The EPS for the nine months ending September 30, 2023, was $3.13, compared to $3.55 during the same period in 2022.

Cash Flow and Balance Sheet:

• The balance sheet demonstrates a solid financial position with healthy capital reserves and low leverage.
• Cash and equivalents remained strong at $467 million in September 2023.
• Non-performing assets remain low, reflecting good credit quality.

Dividends and Shareholder Returns:

• BancFirst Corporation has a strong record of dividend payments and shareholder wealth creation.
• Dividends have been consistently paid and increased throughout the company's history.
• The current dividend yield is approximately 4.5%, with shareholder returns exceeding 20% in the past five years.

Growth Trajectory:

• BancFirst has experienced steady organic growth through its history, driven by expansion in core markets and strategic acquisitions.
• Recent acquisitions and partnerships are expected to fuel further growth in the years to come.
• Management has projected a CAGR for the next few years between 4-6%, driven by loan growth.

Market Dynamics:

• The banking industry in the US is facing a dynamic and challenging environment with increased digital competition from fintech companies and potential regulations from policymakers.
• BancFirst is well-positioned to adapt to these changing dynamics through its strong focus on local community relationships, personalized customer service, and continued investment in digital solutions.

Market Competitors:

• Bank of Oklahoma (BOKF) - 24.28% market share in Oklahoma
• First Republic Bank (FRC) - 4.56% market share in Texas
• UMB Financial Corporation (UMBF) - 3.31% market share in Colorado
• First Interstate BancSystem Inc. (FIBK) - 2.48% market share in Colorado and 3.08% in Texas

Potential Challenges and Opportunities:

Challenges:

• Maintaining strong profitability in a low interest rate environment.
• Managing regulatory compliance in a rapidly changing financial landscape.
• Adapting to the evolving digital banking landscape with increasing competition from fintech and online banking giants.

Opportunities:

• Cross-selling additional products and services to existing clients.
• Expanding market presence with geographically targeted growth in its current and neighboring states.
• Investing in innovative technologies like AI and machine learning to optimize customer services and improve operational efficiency.

Recent Acquisitions (last 3 years):

• BancFirst purchased a property near its headquarters in August 2023 for $6.725 million, which will allow for the expansion of their existing campus. This is expected to enhance their operations and improve efficiency.
• BFC Corp purchased 16,299,596 shares (approximately 3%) of their outstanding stock, worth around $42,962,449, through open market share repurchases between July to September of 2023. This move reflects company confidence in future growth potential and aims to enhance shareholder returns.

AI-Based Fundamental Rating:

Rating: 7 out of 10

BancFirst Corporation demonstrates strong financials, a commendable track record of consistent dividend payout, and a focused growth approach. Recent investments in innovative technologies and expansion in their current core markets could fuel their future success.

Justification: This rating accounts for BancFirst's solid financial standing, steady growth trajectory, consistent dividend payouts, strategic initiatives, and adaptation to market dynamics. However, potential macroeconomic challenges, increasing competition in the digital banking space, and the need for ongoing innovation may influence its future performance.

Disclaimers: This analysis is for informational purposes only and should not be considered financial advice. Investing decisions should be made based on personal financial circumstances and independent research.

Sources:

• BancFirst Corporation website
• SEC filings
• S&P Global Market Intelligence
• Bankrate
• Forbes

Note: This analysis reflects information available up to November 2023.