- BancFirst Corporation (NASDAQ:BANF) has a Return on Invested Capital (ROIC) of 11.75% and a Weighted Average Cost of Capital (WACC) of 12.00%, indicating room for improvement in capital efficiency.
- City Holding Company (CHCO) showcases superior efficiency with a ROIC of 35.96% and a WACC of 7.94%, leading to the highest ROIC to WACC ratio among peers.
- Westamerica Bancorporation (WABC) and Community Trust Bancorp, Inc. (CTBI) demonstrate varying levels of capital utilization efficiency, with WABC performing significantly better.
BancFirst Corporation (NASDAQ:BANF) is a financial services company based in Oklahoma City, Oklahoma. It provides a range of banking services, including commercial and retail banking, investment management, and trust services. BancFirst operates through a network of branches across Oklahoma, serving both individual and business clients. The company competes with other regional banks such as Community Trust Bancorp, Inc. (CTBI), City Holding Company (CHCO), Westamerica Bancorporation (WABC), BOK Financial Corporation (BOKF), and Arrow Financial Corporation (AROW).
In evaluating BancFirst’s financial performance, the Return on Invested Capital (ROIC) and the Weighted Average Cost of Capital (WACC) are key metrics. BancFirst’s ROIC is 11.75%, slightly below its WACC of 12.00%, resulting in a ROIC to WACC ratio of 0.979. This suggests that BancFirst is not currently generating returns above its cost of capital, indicating room for improvement in capital efficiency.
Comparatively, Community Trust Bancorp, Inc. (CTBI) has a ROIC of 8.01% and a WACC of 12.54%, leading to a ROIC to WACC ratio of 0.638. This lower ratio indicates that CTBI is less efficient than BancFirst in generating returns over its cost of capital. Meanwhile, City Holding Company (CHCO) excels with a ROIC of 35.96% and a WACC of 7.94%, resulting in a ROIC to WACC ratio of 4.52, the highest among the peers. This highlights CHCO’s superior efficiency in capital utilization.
Westamerica Bancorporation (WABC) also demonstrates strong performance with a ROIC of 12.40% and a WACC of 6.86%, achieving a ROIC to WACC ratio of 1.80. This indicates that WABC is generating returns well above its cost of capital. On the other hand, BOK Financial Corporation (BOKF) and Arrow Financial Corporation (AROW) show less favorable results, with ROIC to WACC ratios of 0.300 and -0.041, respectively, suggesting inefficiencies in their capital utilization.
