Company: BANFP
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000950170-25-030159
Chunk: 59

Company: BANCFIRST CORP /OK/
Filing Date: 2025-02-28
Form: 10-K
Item: Item 7
Chunk 59
---
 99,388

    $
    68,315

    (1)  Government agencies guarantee approximately $9.0 million of nonaccrual loans at December 31, 2024, and $6.7 million at December 31, 2023.

Nonaccrual Loans

Nonaccrual loans increased during 2024, primarily nonaccrual construction and development loans with an approximate 58% increase and nonaccrual commercial real estate loans with an approximate 42% increase. Although nonaccrual loans increased during 2024, they represent only 0.72% of loans at December 31, 2024. Nonaccrual loans negatively impact the Company’s net interest margin. A loan is placed on nonaccrual status when, in the opinion of management, the future collectability of both interest and principal is in serious doubt. Interest income is not recognized until the principal balance is fully collected. However, if the full collection of the remaining principal balance is not in doubt, interest income is recognized on certain of these loans on a cash basis. Had nonaccrual loans performed in accordance with their original contractual terms, the Company would have recognized additional interest income of $3.5 million for 2024, $1.6 million for 2023 and $1.3 million for 2022. Only a small amount of this interest is expected to be ultimately collected. 

The classification of a loan as nonaccrual does not necessarily indicate that loan principal and interest will ultimately be uncollectible; although, in an economic downturn, the Company’s experience has been that the level of collections decline. The above normal risk associated with nonaccrual loans has been considered in the determination of the allowance for credit losses. The level of nonaccrual loans and credit losses could rise over time as a result of adverse economic conditions. At December 31, 2024, the allowance for credit losses as a percentage of nonaccrual loans was 171.6%, compared to 393.9%, at the end of 2023. 

Modified Loans

As of January 1, 2023, the Company adopted ASU No. 2022-02, which eliminates the Troubled Debt Restructurings (“TDR”) recognition and measurement guidance and, instead, requires that the Company evaluate, based on the accounting for loan modifications, whether the modification represents a new loan or a continuation of an existing loan when a