Updated 3/6/25
BancFirst Corporation (NASDAQ: BANF) is a strong and steady regional bank based in Oklahoma. With a long-standing reputation for solid financial management and a focus on shareholder returns, it has become a go-to option for investors looking for stability. While it doesn’t offer the highest dividend yield in the banking sector, it makes up for that with consistency, financial strength, and a commitment to long-term dividend growth.
For income-focused investors, BancFirst offers a compelling combination of financial health, sustainable dividends, and a conservative approach to risk. Let’s take a deeper look at what makes this bank an attractive option for dividend investors.
Key Dividend Metrics
📌 Dividend Yield: 1.59%
💰 Annual Dividend: $1.84 per share
📈 5-Year Average Yield: 2.01%
🛡 Payout Ratio: 27.64% (very sustainable)
📆 Next Dividend Payment: April 15, 2025
🚀 Dividend Growth: Consistently increasing
Dividend Overview
BancFirst might not be the first name that comes to mind for high-yield investors, but its commitment to steady and reliable dividends makes it worth a closer look. With a yield of 1.59%, it sits slightly below the industry average, yet its strength lies in its ability to grow payouts year after year.
The payout ratio of 27.64% is a key indicator of dividend safety. This means the company is paying a reasonable portion of its earnings to shareholders while still retaining plenty of capital for future growth. Unlike banks that stretch themselves thin with high dividend commitments, BancFirst takes a measured approach, ensuring dividends remain sustainable even in challenging economic conditions.
For investors who prioritize security and predictability over chasing high yields, BancFirst provides a solid foundation. Its dividend history suggests that while the yield may not be flashy, the company’s approach to rewarding shareholders is steady and disciplined.
Dividend Growth and Safety
BancFirst has built a strong track record of increasing its dividend over time. While the yield might not be the highest in the banking sector, its dividend growth rate has been consistent, making it an appealing option for long-term income investors.
Several factors contribute to BancFirst’s strong dividend safety:
✅ A low payout ratio of 27.64% allows for flexibility in maintaining and growing dividends.
✅ Earnings per share (EPS) of $6.44, with a 15.4% year-over-year increase, signals strong financial performance.
✅ A conservative balance sheet, with only $103 million in total debt and over $3.56 billion in cash, ensures financial stability.
When it comes to dividend safety, BancFirst checks all the right boxes. The company has maintained a disciplined approach, ensuring it can continue to reward shareholders without compromising its financial health. For investors who value reliability, this kind of steady growth is exactly what you want to see.
Chart Analysis
Price Action and Moving Averages
BancFirst Corporation (BANF) has been on an upward trajectory for most of the past year, but recent price action suggests the stock may be entering a period of consolidation or possible correction. The 50-day moving average (orange line) has begun sloping downward slightly, signaling potential short-term weakness. Meanwhile, the 200-day moving average (blue line) remains in a strong uptrend, indicating that the longer-term trend is still intact.
The stock’s recent close at $112.66 places it just below the 50-day moving average, a level that previously acted as support. If the stock continues to trade below this moving average, it could suggest further downside movement in the short term. However, the 200-day moving average around $105 could serve as a key support level if the decline continues.
Volume and Market Activity
Trading volume has remained relatively stable, with no extreme spikes in activity over the past few weeks. A notable volume surge occurred in early October, coinciding with a sharp upward move in the stock price. Since then, volume has normalized, suggesting that the market is waiting for a new catalyst to determine the next move.
Recent daily volume has hovered around 67,708 shares, which is in line with the stock’s typical trading range. A sudden increase in volume, particularly on an upward move, could signal renewed buying interest, whereas heavy selling volume could confirm further downside risk.
RSI and Momentum
The Relative Strength Index (RSI) is currently in a downward trend, reflecting a weakening of momentum. While still above oversold territory, the RSI suggests that buying pressure has faded compared to the stock’s strong rally in late 2024.
If the RSI continues declining and approaches oversold levels (below 30), it could indicate a potential buying opportunity. Conversely, if RSI stabilizes around the mid-range (40-50), it may suggest the stock is in a consolidation phase rather than an outright downtrend.
Recent Candlestick Behavior
The last five trading sessions show a mix of indecision and slight downward pressure. The upper wicks on recent candles suggest sellers are stepping in at higher price levels, preventing the stock from making a strong push upward. Meanwhile, lower wicks indicate some buying interest at key support zones, though not enough to drive a significant rebound.
If this pattern continues, the stock may trade in a tighter range before making a more decisive move. A strong bullish candle with high volume could suggest a reversal, while a breakdown below the recent lows around $112 might indicate further downside ahead.
Analyst Ratings
Recent Upgrades
📈 Keefe, Bruyette & Woods raised their price target for BancFirst Corporation (BANF) from $117 to $135 on December 4, 2024, maintaining a ‘Hold’ rating. This adjustment reflects the firm’s recognition of BancFirst’s strong financial performance, including higher-than-expected spread income and robust fee income. Additionally, the bank’s reduced provision for credit losses and steady loan demand contributed to this optimistic outlook.
Recent Downgrades
📉 Piper Sandler maintained a ‘Sell’ rating on BancFirst, lowering the price target from $84 to $73 on October 23, 2023. This conservative stance was based on concerns about potential challenges in the bank’s earnings growth and overall financial performance, suggesting a cautious view of BancFirst’s future prospects.
Consensus Price Target
💰 As of March 6, 2025, the consensus among analysts is a ‘Hold’ rating for BancFirst, with an average price target of $113.33. This reflects a balanced perspective, acknowledging the bank’s strengths while remaining mindful of potential risks in its operating environment.
Earnings Report Summary
BancFirst Corporation recently announced its financial results for the fourth quarter and full year of 2024, showcasing a period of solid growth and financial stability.
In the fourth quarter of 2024, BancFirst reported a net income of $56.5 million, translating to $1.68 per diluted share. This marks a notable increase from the $48.9 million, or $1.46 per diluted share, recorded in the same quarter of the previous year. For the entire year, net income reached $216.4 million, or $6.44 per diluted share, up from $212.5 million, or $6.34 per diluted share, in 2023.
The bank’s net interest income for the fourth quarter rose to $115.9 million, compared to $105.1 million in the corresponding period of 2023. This growth was primarily driven by increased loan volumes, although it was partially offset by a shift in the mix between interest-bearing and noninterest-bearing deposits. The net interest margin remained relatively stable, standing at 3.68% for the quarter, a slight uptick from 3.67% in the previous year.
Noninterest income also saw an uptick, totaling $47.0 million for the quarter, up from $45.2 million in the same period last year. This increase was attributed to higher revenues from trust services, treasury operations, sweep fees, and insurance commissions. Additionally, the bank recorded a gain of $355,000 on equity securities during the quarter, a positive swing from the $1.4 million loss experienced in the same quarter of the prior year.
On the expense side, noninterest expenses rose to $92.3 million in the fourth quarter, up from $89.8 million in the same period of the previous year. This increase was largely due to a $3.6 million growth in salaries and employee benefits. However, this was partially offset by a lower write-down of other real estate owned, which amounted to $3.9 million in 2024 compared to $5.2 million in 2023.
As of December 31, 2024, BancFirst’s total assets stood at $13.6 billion, reflecting an increase of $1.2 billion from the end of 2023. Loans grew by $373.0 million over the year, reaching a total of $8.0 billion. Deposits experienced a significant uptick, totaling $11.7 billion, an increase of $1.0 billion from the previous year. Sweep accounts also saw substantial growth, rising by $871.6 million to $5.2 billion as of year-end. The company’s total stockholders’ equity increased by $187.3 million, reaching $1.6 billion by the end of 2024.
In terms of asset quality, nonaccrual loans totaled $58.0 million at the end of 2024, representing 0.72% of total loans, up from 0.32% at the end of 2023. The allowance for credit losses to total loans stood at 1.24%, slightly down from 1.26% at the end of the previous year. Net charge-offs remained relatively stable, with $985,000 recorded in the fourth quarter, compared to $976,000 in the same period last year.
Reflecting on these results, BancFirst’s CEO, David Harlow, noted that the company achieved record net income and earnings per share for the fourth consecutive year. He attributed this success primarily to loan growth and maintained strong asset quality. Harlow expressed optimism for 2025, citing encouraging deposit growth and a positive economic outlook for the regions in which the bank operates.
Financial Health and Stability
A strong dividend is only as good as the financial foundation behind it, and BancFirst stands on solid ground.
- The company operates with a net profit margin of 34.76%, reflecting strong profitability.
- An operating margin of 49.28% highlights efficient cost management.
- Return on equity (ROE) of 14.16% indicates that the company is using shareholder capital effectively.
One of the biggest advantages BancFirst holds is its conservative capital structure. With total cash reserves of $3.56 billion and minimal debt, it has plenty of liquidity to weather economic downturns or unexpected challenges. While some banks rely heavily on debt to fuel growth, BancFirst’s approach is far more measured, which is a positive sign for long-term investors.
Valuation and Stock Performance
BancFirst’s stock has performed well over the past year, currently trading at $113.09. It has seen a range between $81.21 and $132.29 over the past 52 weeks, reflecting strong momentum in its price action.
Looking at valuation, the company’s metrics suggest that it’s not exactly a bargain, but its steady performance justifies its current pricing:
- The trailing price-to-earnings (P/E) ratio sits at 17.93.
- The forward P/E ratio is slightly higher at 19.12, reflecting expectations of continued earnings growth.
- A price-to-book ratio of 2.37 suggests the stock is trading at a premium relative to its book value, but this is common for quality banks with strong profitability.
The stock’s beta of 1.04 indicates it moves in line with the broader market, making it a relatively stable option. While it has pulled back slightly from its highs, its overall trend suggests long-term strength.
Risks and Considerations
No stock is without risks, and BancFirst has a few key factors to consider before investing.
🚨 Interest rate fluctuations could impact earnings. As a regional bank, BancFirst’s margins are sensitive to changes in interest rates. If rates decline, profitability could be pressured.
⚖️ The dividend yield is modest compared to other financial stocks. For those seeking high income, BancFirst may not be the best fit.
🏦 Geographic concentration poses some risk. Because BancFirst operates primarily in Oklahoma, its performance is more closely tied to local economic conditions than national banks with broader geographic footprints.
📉 The stock has pulled back slightly. While this may present a buying opportunity, it’s worth monitoring to see if further weakness emerges.
Final Thoughts
BancFirst Corporation is a well-managed regional bank with a strong balance sheet, consistent earnings growth, and a shareholder-friendly dividend policy. While its yield isn’t the highest, its commitment to sustainable dividends and financial discipline make it a solid option for investors looking for stability and long-term income growth.
For those who prioritize safety, steady performance, and a reliable dividend, BancFirst remains an attractive choice. The stock’s valuation reflects its strong fundamentals, and its conservative approach ensures that dividends are well-covered and poised for future growth. While it may not be the flashiest option in the banking sector, it offers something just as valuable—a reliable and growing source of income for patient investors.
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