BancFirst (BANF)

Oklahoma-based financial institution BancFirst Corporation (NASDAQ:BANF) reported revenue ahead of Wall Streets expectations in Q4 CY2025, with sales up 10.7% year on year to $180.2 million. Its non-GAAP profit of $1.75 per share was 2.1% below analysts’ consensus estimates.

Company Overview

Operating as a "super community bank" with a decentralized management approach that emphasizes local responsiveness, BancFirst Corporation (NASDAQ:BANF) operates as a financial holding company providing commercial banking services to retail customers and small to medium-sized businesses primarily in Oklahoma and Texas.

Regional banks, financial institutions operating within specific geographic areas, serve as intermediaries between local depositors and borrowers. They benefit from rising interest rates that improve net interest margins (the difference between loan yields and deposit costs), digital transformation reducing operational expenses, and local economic growth driving loan demand. However, these banks face headwinds from fintech competition, deposit outflows to higher-yielding alternatives, credit deterioration (increasing loan defaults) during economic slowdowns, and regulatory compliance costs. Recent concerns about regional bank stability following high-profile failures and significant commercial real estate exposure present additional challenges.

BancFirst Corporation competes with other regional banks operating in Oklahoma and Texas, including BOK Financial Corporation (NASDAQ:BOKF), Prosperity Bancshares (NYSE:PB), and Simmons First National Corporation (NASDAQ:SFNC), as well as national banks with significant presence in its markets.

From lending activities to service fees, most banks build their revenue model around two income sources. Interest rate spreads between loans and deposits create the first stream, with the second coming from charges on everything from basic bank accounts to complex investment banking transactions. Unfortunately, BancFirst’s 9.2% annualized revenue growth over the last five years was mediocre. This fell short of our benchmark for the banking sector and is a tough starting point for our analysis.

Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. BancFirst’s recent performance shows its demand has slowed as its annualized revenue growth of 6.2% over the last two years was below its five-year trend. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, BancFirst reported year-on-year revenue growth of 10.7%, and its $180.2 million of revenue exceeded Wall Street’s estimates by 3.8%.

Net interest income made up 68.5% of the company’s total revenue during the last five years, meaning lending operations are BancFirst’s largest source of revenue.

Net interest income commands greater market attention due to its reliability and consistency, whereas non-interest income is often seen as lower-quality revenue that lacks the same dependable characteristics.

Topline growth alone doesn't tell the complete story - the profitability of that growth shapes actual earnings impact. Banks track this dynamic through efficiency ratios, which compare non-interest expenses such as personnel, rent, IT, and marketing costs to total revenue streams.

Investors focus on efficiency ratio changes rather than absolute levels, understanding that expense structures vary by revenue mix. Counterintuitively, lower efficiency ratios indicate better performance since they represent lower costs relative to revenue.

Over the last five years, BancFirst’s efficiency ratio has swelled by 4.9 percentage points, going from 57.4% to 53.5%. Said differently, the company’s expenses have grown at a slower rate than revenue, which typically signals prudent management.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

BancFirst’s EPS grew at an astounding 18.9% compounded annual growth rate over the last five years, higher than its 9.2% annualized revenue growth. However, we take this with a grain of salt because its efficiency ratio didn’t improve and it didn’t repurchase its shares, meaning the delta came from factors we consider non-core or less sustainable over the long term.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For BancFirst, its two-year annual EPS growth of 6% was lower than its five-year trend. We hope its growth can accelerate in the future.

In Q4, BancFirst reported adjusted EPS of $1.75, up from $1.68 in the same quarter last year. Despite growing year on year, this print missed analysts’ estimates, but we care more about long-term adjusted EPS growth than short-term movements. Over the next 12 months, Wall Street expects BancFirst’s full-year EPS of $7.12 to shrink by 4.8%. This is unusual as its revenue and operating margin are anticipated to increase, signaling the fall likely stems from "below-the-line" items such as taxes.

Banks profit by intermediating between depositors and borrowers, making them fundamentally balance sheet-driven enterprises. Market participants emphasize balance sheet quality and sustained book value growth when evaluating these institutions.

This is why we consider tangible book value per share (TBVPS) the most important metric to track for banks. TBVPS represents the real, liquid net worth per share of a bank, excluding intangible assets that have debatable value upon liquidation. Traditional metrics like EPS are helpful but face distortion from M&A activity and loan loss accounting rules.

BancFirst’s TBVPS grew at an incredible 11.7% annual clip over the last five years. TBVPS growth has also accelerated recently, growing by 12.8% annually over the last two years from $37.50 to $47.71 per share.

Over the next 12 months, Consensus estimates call for BancFirst’s TBVPS to grow by 14% to $54.38, decent growth rate.

Leverage is core to a financial firm’s business model (loans funded by deposits). To ensure economic stability and avoid a repeat of the 2008 GFC, regulators require certain levels of capital and liquidity, focusing on the Tier 1 capital ratio.

Tier 1 capital is the highest-quality capital that a firm holds, consisting primarily of common stock and retained earnings, but also physical gold. It serves as the primary cushion against losses and is the first line of defense in times of financial distress.

This capital is divided by risk-weighted assets to derive the Tier 1 capital ratio. Risk-weighted means that cash and US treasury securities are assigned little risk while unsecured consumer loans and equity investments get much higher risk weights, for example.

New regulation after the 2008 financial crisis requires that all firms must maintain a Tier 1 capital ratio greater than 4.5%. On top of this, there are additional buffers based on scale, risk profile, and other regulatory classifications, so that at the end of the day, firms generally must maintain a 7-10% ratio at minimum.

Over the last two years, BancFirst has averaged a Tier 1 capital ratio of 16.4%, which is considered safe and well capitalized in the event that macro or market conditions suddenly deteriorate.

Return on equity, or ROE, tells us how much profit a company generates for each dollar of shareholder equity, a key funding source for banks. Over a long period, banks with high ROE tend to compound shareholder wealth faster through retained earnings, buybacks, and dividends.

Over the last five years, BancFirst has averaged an ROE of 15%, impressive for a company operating in a sector where the average shakes out around 7.5% and those putting up 15%+ are greatly admired. This is a bright spot for BancFirst.

We enjoyed seeing BancFirst beat analysts’ revenue expectations this quarter. We were also happy its net interest income outperformed Wall Street’s estimates. On the other hand, its EPS missed and its tangible book value per share fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock remained flat at $108.82 immediately following the results.

Updated: January 23, 2026 at 11:46 PM EST

The latest quarterly earnings matters, sure, but we actually think longer-term fundamentals and valuation matter more. Investors should consider all these pieces before deciding whether or not to invest in BancFirst.

BancFirst doesn’t top our investment wishlist, but we understand that it’s not a bad business. Although its revenue growth was mediocre over the last five years and analysts expect growth to slow over the next 12 months, its astounding EPS growth over the last five years shows its profits are trickling down to shareholders. Tread carefully with this one, however, as its projected EPS for the next year is lacking.

BancFirst’s P/B ratio based on the next 12 months is 1.9x. Beauty is in the eye of the beholder, but our analysis shows the upside isn’t great compared to the potential downside. We're pretty confident there are more exciting stocks to buy at the moment.

Wall Street analysts have a consensus one-year price target of $122.67 on the company (compared to the current share price of $108.82).