BANCFIRST CORP /OK/ (BANF)

RESULTS OF OPERATIONS

Average Balances, Income, Expenses and Rates

The following tables present certain information related to the Company's consolidated average balance sheet, average yields on assets and average costs of liabilities. Such yields are derived by dividing income or expense by the average balance of the corresponding assets or liabilities. For these computations: (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 $6.2 million for the three months ended June 30, 2026 compared to $5.1 million for the three months ended June 30, 2025. Loan fees included in interest income were $11.3 million for the six months ended June 30, 2026 compared to $10.1 million for the six months ended June 30, 2025.

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

BANCFIRST CORPORATION

SELECTED CONSOLIDATED FINANCIAL DATA

(Unaudited)

(Dollars in thousands, except per share data)

Net Interest Income

For the three months ended June 30, 2026, net interest income, which is the Company’s principal source of operating revenue, increased $12.3 million or 10.1% compared to the three months ended June 30, 2025. Higher loan volume and general growth in earning assets were the primary drivers of the change in net interest income. Net interest margin is the ratio of taxable-equivalent net interest income to average earning assets for the period.

Net interest income for the six months ended June 30, 2026 increased $23.9 million or 10.1% compared to the six months ended June 30, 2025. Higher loan volume and general growth in earning assets were the primary drivers to the increase.

Provision for Credit Losses on loans

The Company establishes an allowance as an estimate of the expected credit losses in the loan portfolio at the balance sheet date. Management believes the allowance for credit losses is appropriate based upon management’s best estimate of expected losses within the existing loan portfolio. 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 $2.4 million for the second quarter of 2026 compared to net loan charge-offs of $4.7 million for the second quarter of 2025. The rate of net charge-offs to average total loans continues to be at a low level.

Net loan charge-offs

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis presents factors that the Company believes are relevant to an assessment and understanding of the Company’s financial position and results of operations for the three years ended December 31, 2025. This discussion and analysis should be read in conjunction with the consolidated financial statements and notes thereto and the selected consolidated financial data included herein.

FORWARD-LOOKING STATEMENTS

The Company may make forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 with respect to earnings, credit quality, corporate objectives, interest rates and other financial and business matters. Forward-looking statements include estimates and give management’s current expectations or forecasts of future events. The Company cautions readers that these forward-looking statements are subject to numerous assumptions, risks and uncertainties, including economic conditions; the performance of financial markets and interest rates; legislative and regulatory actions and reforms; competition; as well as other factors, all of which change over time. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statements of plans, objectives and expectations, including those relating to products or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Words such as “believes”, “anticipates”, “expects”, “intends”, “targeted”, “continue”, “remain”, “will”, “should”, “may” and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

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The effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters.

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Changes in fiscal, monetary or regulatory policy may have adverse consequences including impacts to the labor market, tariffs and inflation which may impact our financial performance.

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Changes in the regulatory environment for the banking industry, including rule-making, supervision, examination and enforcement.

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The increased time, effort and staffing needs related to ongoing and/or changed regulations from regulatory bodies could negatively impact noninterest expense.

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Local, regional, national and international economic conditions, including the effect of a government shutdown, and the impact they may have on the Company and its customers.

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Inflation, including wage inflation, energy prices, securities markets and monetary fluctuations.

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Changes in oil and gas commodity prices and the potential impact to the related loan portfolio as well as the overall impact to the regional economic environment.

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Changes in interest rates.

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Potential impacts of adverse developments in the banking industry that could impact customer confidence.

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Further shift in deposit mix from noninterest-bearing deposits to interest-bearing deposits could negatively impact net interest margin.

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Changes in the financial performance and/or condition of the Company’s borrowers, including the impact of higher interest rates.

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Changes in consumer spending, borrowing and savings habits.

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Changes in the mix of loan sectors and types or the level of non-performing assets and charge-offs.

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Deterioration in the market for commercial office property could have an adverse effect on the value of the Company's other real estate owned as well as commercial office collateral for the Company's commercial real estate loans.

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Impairment of the Company’s goodwill or other intangible assets.

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Technological changes, fintech competition and disruption to the traditional banking systems, including emerging regulation around stablecoins, blockchain technology in payment networks and market acceptance of digital assets.

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Cyber threats.

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The Company’s success at managing the risks involved in the foregoing items.

Actual results may differ materially from forward-looking statements.

SUMMARY

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.

In 2025, net interest income increased to $490.5 million, compared to $446.9 million in 2024. Higher loan volume and growth in other earning assets were the primary drivers of the change in net interest income. The Company’s 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. The Company's provision for credit losses decreased in 2025 primarily due to the 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. The increase in noninterest income was partially due to a gain on the sale of Visa B-1 stock of $4.5 million. In addition, trust revenue, treasury income, sweep fees and insurance commissions each increased during the year.

Noninterest expense was $379.8 million in 2025 compared to $347.2 million in 2024. Higher noninterest expenses in 2025 were primarily related to growth in salaries and employee benefits of $14.0 million related to annual merit increases and new hires. Also contributing to noninterest expense was 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, other real estate expense of $1.8 million and a decrease in loss on sales of $1.5 million. Data processing expense increased $1.1 million in 2025 compared to 2024.

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. The Company’s total stockholders’ equity totaled $1.9 billion at December 31, 2025.

Asset quality was strong through the year. 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. 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.

See Note (2) of the Notes to Consolidated Financial Statements for disclosure regarding the Company’s recent developments, including mergers and acquisitions.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Company’s significant accounting policies are described in Note (1) to the consolidated financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States inherently involves the use of estimates and assumptions, which affect the amounts reported in the financial statements and the related disclosures. These estimates

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relate principally to the allowance for credit losses, income taxes, intangible assets and the fair value of financial instruments. Such estimates and assumptions may change over time and actual amounts realized may differ from those reported. The following is a summary of the accounting policies and estimates that management believes are the most critical.

Allowance for Credit losses

The Company determines its provision for credit losses and allowance for credit losses using the current expected credit loss methodology that is referred to as the current expected credit loss ("CECL") model. The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist.

The allowance for credit losses is increased by provisions charged to operating expense and is reduced by net loan charge-offs. The amount of the allowance for credit losses is measured using relevant information about past events, including historical credit loss experience on financial assets with similar risk characteristics, current conditions and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the financial assets.

To estimate expected losses using historical loss information, the Company elected to utilize a methodology known as vintage loss analysis. Vintage loss analysis measures impairment based on the age of the accounts and the historical performance of assets with similar risk characteristics. Vintage loss analysis determines expected losses by allowing the Company to calculate the cumulative loss rates of a given loan pool and, in so doing, determine the loan pool’s lifetime expected loss experience relative to the appropriate type of financial assets that share similar risk characteristics. Vintage loss analysis uses different “vintages” analyzed by year of origination through the weighted average maturity of each loan pool. The key quantitative inputs used in the Company’s estimate of the allowance for credit losses include 1) all available loan data tracked by year of origination, 2) total charge-offs for each specific loan pool recorded since year of origination, 3) recovery rate calculated by the average recovery over the previous seven years across all loan pools and 4) a weighting factor biased to more recent loss experience. The quantitative expected credit loss is calculated by dividing each year’s net charge-offs by the original balance. The respective vintage’s original balance remains the denominator in each annual calculation, as it references the specific vintage’s initial balance. The loss experience of this original balance is tracked annually and summed over the life of the loan for each separate loan pool, leaving a cumulative life of credit loss rate based on historic averages weighted towards more recent loss experience. These key quantitative inputs change from period to period as new loans are originated and charge-offs and recoveries are recognized. The recovery rate is revised on an annual basis, taking into consideration the most recent seven years. The weighting factor percentages remain static; however, the most recent year receives the highest weighting percentage.

The Senior Loan Committee (“the SLC”) approves qualitative adjustments for each loan pool. In approving the qualitative adjustments, they consider several factors, including external economic information, peer bank comparisons and experience with the loan portfolio, among others. The SLC also considers other current conditions adjustments and reasonable and supportable forecasts derived from third party information, primarily Moody’s Analytics economic scenarios. To determine the appropriateness of the economic scenarios, the Company uses judgment and statistical analysis which correlates charge-off history to the economic scenarios. The Company then forecasts future loss expectations based on the

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