MidFirst Earnings Strong Despite Tough Market

Amid news of government bailouts and troubled banks around the nation, Oklahoma City-based MidFirst Bank – with a growing Tulsa presence – continues to see double-digit growth on its earnings reports.
MidFirst Bank, the second-largest bank in Oklahoma, has posted hefty earnings growth for three consecutive quarters. Earnings grew 34 percent last quarter, 31 percent the first quarter of 2008 and 15 percent at the end of last year. Total assets at MidFirst finished June 30 at $14.2 billion.
Earnings for the first six months of 2008 totaled $138.5 million, compared to $104.6 million for the same period last year. Earnings for the second quarter of 2008 were $70.3 million compared to $52.6 million in the same quarter of 2007.
Ed Fariss, executive vice president at MidFirst, attributed the bank’s success to a continued focus on core business lines like investment strategies, government-backed mortgage initiatives and continued diversification in the industry and the geographical mix of its commercial lending portfolio.
Though he expects the economy will put downward pressure on earnings at MidFirst during the coming months, the bank’s plans are to continue to expand in the Tulsa market, including a deal to open a new office in November in the Utica Place building for its private banking group.
The MidFirst Private Bank will be located in 4,500 SF on the fifth floor and will be dedicated to serving the bank’s wealth management clients.

TBJ: How has MidFirst responded to the current banking market? Does the bank abide by a steadfast plan, or has your strategy changed?
Fariss: MidFirst Bank remains focused on maintaining strong loan loss reserves and managing our lending portfolio. As we continue to grow our core lending strategies, we will keep a significant focus on credit quality. MidFirst never took part in the risky sub-prime mortgage business so we are not feeling many of the difficulties being experienced by some in the banking industry.

TBJ: Who would you consider to be your peers in the banking market?
Fariss: MidFirst Bank holds a unique position in the marketplace. As the third-largest, privately owned bank in the U.S., MidFirst can offer the full range of products and services of a nationwide bank but with the personal touch of a community bank. This unique position allows MidFirst to compete effectively with most any bank in our market, however we view locally owned banks of similar size to be our primary competition.

TBJ: What and where are your growth areas?
Fariss: MidFirst Bank continues to stay focused on long-term growth initiatives and we hope to develop a significant presence in the Tulsa market over the next five to 10 years. We have six banking center locations under development in the Tulsa area – two in Jenks, two in Broken Arrow and two in Tulsa – and we will add a new office in the Utica Place building for our private bank group in November. We are also expanding in the Phoenix market. We continue to look for new banking center opportunities in Tulsa, Phoenix and in-fill opportunities in Oklahoma City with the goal of providing customers with more convenience.

TBJ: Has the incidence of nonperforming loans increased? Are you stocking reserves to buffer against possible loan losses?
Fariss: MidFirst Bank is fortunate to be in a strong position with equity and reserves in excess of $1 billion. While, like most banks, we have seen an increase in problem loans, we rank better than the Oklahoma and national averages for nonperforming assets.

TBJ: In a market commonly considered “over-banked,” how does Midfirst differentiate itself?
Fariss: As mentioned above, MidFirst Bank’s private ownership combined with more than $14 billion in assets provides a unique position in the marketplace. MidFirst Bank customers can find a full range of financial products and services coupled with more-than-you’d-expect customer service. The bank offers a full range of retail, commercial and private banking products.

TBJ: MidFirst experienced negative growth during the first quarter of ’07. What caused the dip?
Fariss: MidFirst experienced hyper earnings growth during the latter part of 2005 and 2006 as a result of the interest rate environment during that time. Our earnings in 2007 returned to more normal levels.

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