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| BANF > SEC Filings for BANF > Form 8-K on 12-Feb-2009 | All Recent SEC Filings |
12-Feb-2009
Regulation FD Disclosure
The following unaudited financial information is being provided as of the filing date of this Report, pursuant to Item 7.01 of Form 8-K, "Regulation FD Disclosure." Pursuant to general instruction B.2 to Form 8-K, the information furnished pursuant to Item 7.01 shall not be deemed to be "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section.
BANCFIRST CORPORATION
CONSOLIDATED BALANCE SHEET
(Unaudited)
(Dollars in thousands, except per share data)
December 31,
2008 2007
ASSETS
Cash and due from banks $ 126,227 $ 194,103
Interest-bearing deposits with banks 326,874 2,387
Federal funds sold 1,000 399,000
Securities (market value: $456,075 and $467,921,
respectively) 455,568 467,719
Loans:
Total loans (net of unearned interest) 2,757,854 2,487,099
Allowance for loan losses (34,290 ) (29,127 )
Loans, net 2,723,564 2,457,972
Premises and equipment, net 91,411 88,110
Other real estate owned 3,782 1,300
Intangible assets, net 7,508 8,099
Goodwill 34,327 34,327
Accrued interest receivable 24,398 26,093
Other assets 72,545 63,896
Total assets $ 3,867,204 $ 3,743,006
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing $ 1,025,749 $ 966,214
Interest-bearing 2,351,859 2,322,290
Total deposits 3,377,608 3,288,504
Short-term borrowings 12,884 30,400
Accrued interest payable 5,827 7,831
Other liabilities 30,290 16,899
Long-term borrowings -- 606
Junior subordinated debentures 26,804 26,804
Total liabilities 3,453,413 3,371,044
Commitments and contingent liabilities
Stockholders' equity:
Senior preferred stock, $1.00 par; 10,000,000 shares
authorized; none issued -- --
Cumulative preferred stock, $5.00 par; 900,000 shares
authorized; none issued -- --
Common stock, $1.00 par; 20,000,000 shares authorized;
shares issued and outstanding: 15,281,141 and 15,217,230,
respectively 15,281 15,217
Capital surplus 67,975 63,917
Retained earnings 315,858 285,879
Accumulated other comprehensive income, net of income tax
of
$(7,903) and $(3,742), respectively 14,677 6,949
Total stockholders' equity 413,791 371,962
Total liabilities and stockholders' equity $ 3,867,204 $ 3,743,006
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The accompanying notes are an integral part of these consolidated financial statements.
BANCFIRST CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
(Dollars in thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2008 2007 2008 2007
INTEREST INCOME
Loans, including fees $ 41,819 $ 48,023 $ 172,234 $ 189,786
Securities:
Taxable 3,748 4,649 16,387 18,397
Tax-exempt 395 345 1,439 1,398
Federal funds sold 69 4,800 7,315 21,047
Interest-bearing deposits with banks 439 28 549 121
Total interest income 46,470 57,845 197,924 230,749
INTEREST EXPENSE
Deposits 12,238 19,517 56,384 78,606
Short-term borrowings 45 322 458 1,667
Long-term borrowings -- 8 9 50
Junior subordinated debentures 492 492 1,966 2,140
Total interest expense 12,775 20,339 58,817 82,463
Net interest income 33,695 37,506 139,107 148,286
Provision for loan losses 3,087 980 10,676 3,329
Net interest income after provision for
loan losses 30,608 36,526 128,431 144,957
NONINTEREST INCOME
Trust revenue 1,491 1,428 5,972 6,077
Service charges on deposits 8,620 7,785 33,060 29,395
Securities transactions 13 48 6,938 8,337
Income from sales of loans 328 493 2,127 2,397
Insurance commissions and premiums 1,459 1,492 6,913 6,434
Insurance recovery -- -- -- 3,139
Cash Management 2,802 2,454 10,796 9,296
Gain on Sale of Other Assets (13 ) 48 2,971 31
Other 1,330 1,483 5,608 6,032
Total noninterest income 16,030 15,231 74,385 71,138
NONINTEREST EXPENSE
Salaries and employee benefits 19,293 19,574 79,886 76,814
Occupancy and fixed assets expense, net 2,437 2,221 8,956 8,357
Depreciation 2,042 2,095 7,647 7,568
Amortization of intangibles assets 228 224 902 968
Data processing services 931 734 3,297 2,783
Net expense (income) from other real
estate owned 250 85 179 128
Marketing and business promotions 1,951 1,747 6,271 7,606
Early extinguishment of debt -- -- -- 1,894
Other 7,043 7,560 27,868 28,328
Total noninterest expense 34,175 34,240 135,006 134,446
Income before taxes 12,463 17,517 67,810 81,649
Income tax expense 4,394 5,893 23,452 28,556
Net income 8,069 11,624 44,358 53,093
Other comprehensive income, net of tax:
Unrealized gains (losses) on securities 9,876 3,519 3,218 4,899
Reclassification adjustment for losses
in net income 8 31 4,510 1,950
Comprehensive income $ 17,953 $ 15,174 $ 52,086 $ 59,942
NET INCOME PER COMMON SHARE
Basic $ 0.53 $ 0.76 $ 2.91 $ 3.41
Diluted $ 0.52 $ 0.75 $ 2.85 $ 3.33
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The accompanying notes are an integral part of these consolidated financial statements.
(1) GENERAL
The accompanying consolidated financial statements include the accounts of BancFirst Corporation, Council Oak Partners, LLC, Wilcox Jones & McGrath, Inc., and BancFirst and its subsidiaries (the "Company"). The operating subsidiaries of BancFirst are Council Oak Investment Corporation, BancFirst Agency, Inc., Lenders Collection Corporation, BancFirst Community Development Corporation and Council Oak Real Estate, Inc. All significant intercompany accounts and transactions have been eliminated. Assets held in a fiduciary or agency capacity are not assets of the Company and, accordingly, are not included in the consolidated financial statements.
The unaudited interim financial statements contained herein reflect all adjustments which are, in the opinion of management, necessary to provide a fair statement of the financial position and results of operations of the Company for the interim periods presented. All such adjustments are of a normal and recurring nature. There have been no significant changes in the accounting policies of the Company since December 31, 2007, the date of the most recent annual report.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States inherently involves the use of estimates and assumptions that affect the amounts reported in the financial statements and the related disclosures. These estimates relate principally to the determination of the allowance for loan losses, income taxes and the fair values of financial instruments. Such estimates and assumptions may change over time and actual amounts realized may differ from those reported.
(2) RECENT ACCOUNTING PRONOUNCEMENTS
FAS No. 162 ("FAS 162"), "The Hierarchy of Generally Accepted Accounting Principles" identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States (the GAAP hierarchy). The hierarchical guidance provided by FAS 162 is effective for the Company on November 15, 2008 and is not expected to have a significant impact on the Company's financial statements.
FAS No. 161 ("FAS 161"), "Disclosures About Derivative Instruments and Hedging Activities, and Amendment of FASB Statement No. 133" amends FAS 133, "Accounting for Derivative Instruments and Hedging Activities," to amend and expand the disclosure requirements of FAS 133 to provide greater transparency about (i) how and why an entity uses derivative instruments, (ii) how derivative instruments and related hedge items are accounted for under FAS 133 and its related interpretations, and (iii) how derivative instruments and related hedged items affect an entity's financial position, results of operations and cash flows. To meet those objectives, FAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments and disclosures about credit-risk-related contingent features in derivative agreements. FAS 161 is effective for the Company on January 1, 2009 and is not expected to have a significant impact on the Company's financial statements.
Effective January 1, 2008, the Company adopted the provisions of FAS No. 157 ("FAS 157"), "Fair Value Measurements," for financial assets and financial liabilities. In accordance with Financial Accounting Standards Board Staff Positions (FSP) No. 157-2, "Effective Date of FASB Statement No. 157," the Company will delay application of FAS 157 for non-financial assets and non-financial liabilities, until January 1, 2009. FAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. The Company adopted FAS 157, with the exception of non-financial assets and non-financial liabilities as provided by FAS 157-2, with no significant impact on the Company's financial statements. FSP 157-2 becomes effective for the Company on January 1, 2009 as is not expected to have a significant impact on the Company's financial statements.
In February 2007, the FASB issued FAS No. 159 ("FAS 159"), "The Fair Value Option for Financial Assets and Financial Liabilities, including an amendment of FASB Statement No. 115." FAS 159 allows entities to irrevocably elect fair value as the initial and subsequent measurement attribute for certain financial assets and financial liabilities that are not otherwise required to be measured at fair value, with changes in fair value recognized in earnings as they occur. FAS 159 also requires entities to report those financial assets and financial liabilities measured at fair value in a manner that separates those reported fair values from the carrying amounts of similar assets and liabilities measured using another measurement attribute on the face of the statement of financial position. Lastly, FAS 159 establishes presentation and disclosure requirements designed to improve comparability between entities that elect different measurement attributes for similar assets and liabilities. FAS 159 is effective for fiscal years beginning after November 15, 2007, with early adoption permitted if an entity also early adopts the provisions of FAS 157. The Company has determined that it does not intend to elect to use the fair value option to value financial assets and liabilities in accordance with FAS 159.
In December 2007, the FASB issued FAS No. 141R, "Business Combinations" ("FAS 141R"), which establishes principles and requirements for the reporting entity in a business combination, including recognition and measurement in the financial statements of the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree. This statement also establishes disclosure requirements to enable financial statement users to evaluate the nature and financial effects of the business combination. FAS 141R applies prospectively to business combinations for which the acquisition date is on or after fiscal years beginning after December 15, 2008. FAS 141R will become effective for our fiscal year beginning January 1, 2009. The Company will evaluate the effect that the adoption of FAS 141R will have on future acquisitions.
(3) RECENT DEVELOPMENTS; MERGERS, ACQUISITIONS AND DISPOSALS
In November 2006, the Company announced its intent to exercise the optional prepayment terms of its 9.65% Junior Subordinated Debentures. The securities were redeemed effective January 15, 2007 for a redemption price equal to 104.825% of the aggregate $25 million liquidation amount of the trust securities plus all accrued and unpaid interest to the redemption date. As a result of the prepayment, the Company incurred a loss of approximately $1.2 million after taxes at the time of the redemption. The loss reflects the premium paid and the acceleration of the unamortized issuance costs.
During the first quarter of 2007 the Company entered into an agreement to acquire Armor Assurance Company (Armor), an insurance agency in Muskogee, Oklahoma for cash of approximately $3.3 million and a $372,000 note payable in three equal annual installments. The transaction was consummated in April 2007. Armor had total assets of approximately $364,000. As a result of the acquisition, Armor was merged with the Company's existing property casualty agency, Wilcox & Jones, to form Wilcox, Jones & McGrath, Inc. The acquisition was accounted for as a purchase. Accordingly, the effects of the acquisition are included in the Company's consolidated financial statements from the date of the acquisition forward. The acquisition did not have a material effect on the results of operations of the Company for 2007.
In June 2007, the Company entered into an agreement to sell one of its investments held by Council Oak Investment Corporation, a wholly-owned subsidiary of BancFirst, that resulted in a one-time gain of approximately $7.8 million. The transaction was consummated on August 1, 2007 and included in noninterest income - securities transactions in the third quarter of 2007. The Company made a $1 million contribution to its charitable foundation with the funds from the gain. This one-time gain, net of related expenses, income taxes and the contribution had a net income effect of approximately $3.9 million.
In July 2007, the Company was awarded and received the $3.1 million bond claim by their fidelity bond carrier for the $3.3 million cash shortfall that was reported in the second quarter of 2005.
In September 2007, the Company completed a modified Dutch Auction self-tender offer and purchased 539,453 shares of its common stock for the maximum offer price of $45.00 per share. Cash on hand was used to pay for the purchase of the stock.
In March 2008, the Company, as a member bank of Visa, recorded a $1.8 million pre-tax gain from the mandatory partial redemption of the Company's Visa shares received in the first quarter initial public offering. The gain was included in gain on sale of other assets.
In April 2008, the Company completed an $80 million sale of securities resulting in a securities pre-tax gain of $6.1 million. The transaction resulted in the sale of $80 million of US Treasury securities and the purchase of Government Sponsored Enterprises (GSE) senior debt securities of similar amounts and maturities. The after-tax impact of these transactions was approximately $3.8 million for the second quarter and $3.3 million for the year.
(4) SECURITIES
The table below summarizes securities held for investment and securities
available for sale.
December 31,
2008 2007
(dollars in thousands)
Held for investment at cost (market value: $34,975
and $25,472, respectively) $ 34,468 $ 25,270
Available for sale, at market value 421,100 442,449
Total $ 455,568 $ 467,719
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(5) LOANS AND ALLOWANCE FOR LOAN LOSSES
The following is a schedule of loans outstanding by category:
December 31,
2008 2007
Amount Percent Amount Percent
(dollars in thousands)
Commercial and industrial $ 513,647 18.63 % $ 493,860 19.86 %
Oil & Gas Production & Equipment 84,770 3.07 92,759 3.73
Agriculture 86,752 3.15 87,035 3.50
State and political subdivisions:
Taxable 5,595 0.20 5,972 0.24
Tax-exempt 8,292 0.30 8,937 0.36
Real Estate:
Construction 246,269 8.93 222,820 8.96
Farmland 92,050 3.34 95,137 3.82
One to four family residences 543,183 19.70 513,969 20.67
Multifamily residential properties 45,250 1.64 20,248 0.81
Commercial 768,562 27.87 653,066 26.26
Consumer 335,938 12.18 270,735 10.89
Other 27,546 0.99 22,561 0.90
Total loans $ 2,757,854 100.00 % $ 2,487,099 100.00 %
Loans held for sale (included above) $ 5,136 $ 8,320
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The Company's loans are mostly to customers within Oklahoma and over half of the loans are secured by real estate. Credit risk on loans is managed through limits on amounts loaned to individual borrowers, underwriting standards and loan monitoring procedures. The amounts and types of collateral obtained to secure loans are based upon the Company's underwriting standards and management's credit evaluation. Collateral varies, but may include real estate, equipment, accounts receivable, inventory, livestock and securities. The Company's interest in collateral is secured through filing mortgages and liens, and in some cases, by possession of the collateral. The amount of estimated loss due to credit risk in the Company's loan portfolio is provided for in the allowance for loan losses. The amount of the allowance required to provide for all existing losses in the loan portfolio is an estimate based upon evaluations of loans, appraisals of collateral and other estimates which are subject to rapid change due to changing economic conditions and the economic prospects of borrowers. It is reasonably possible that a material change could occur in the estimated allowance for loan losses in the near term.
Changes in the allowance for loan losses are summarized as follows:
Three Months Ended D Year Ended
ecember 31, December 31,
2008 2007 2008 2007
(dollars in thousands)
Balance at beginning of period $ 33,862 $ 28,829 $ 29,127 $ 27,700
Charge-offs (2,937 ) (823 ) (6,274 ) (2,683 )
Recoveries 278 141 761 781
Net charge-offs (2,659 ) (682 ) (5,513 ) (1,902 )
Provisions charged to operations 3,087 980 10,676 3,329
Balance at end of period $ 34,290 $ 29,127 $ 34,290 $ 29,127
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The net charge-offs by category are summarized as follows:
Three Months Ended Year Ended
December 31, December 31,
2008 2007 2008 2007
(dollars in thousands)
Commercial, financial and other $ 228 $ (27 ) $ 1,629 $ 225
Real estate - construction 22 6 346 558
Real estate - mortgage 2,126 538 2,862 543
Consumer 283 165 676 576
Total $ 2,659 $ 682 $ 5,513 $ 1,902
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(6) NONPERFORMING AND RESTRUCTURED ASSETS
Below is a summary of nonperforming and restructured assets:
December 31,
2008 2007
(dollars in thousands)
Past due over 90 days and still accruing $ 1,346 $ 823
Nonaccrual 21,359 11,568
Restructured 1,022 1,121
Total nonperforming and restructured loans 23,727 13,512
Other real estate owned and repossessed assets 3,997 1,568
Total nonperforming and restructured assets $ 27,724 $ 15,080
Nonperforming and restructured loans to total loans 0.86 % 0.54 %
Nonperforming and restructured assets to total assets 0.72 % 0.40 %
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(7) CAPITAL
The Company is subject to risk-based capital guidelines issued by the Board of Governors of the Federal Reserve System. These guidelines are used to evaluate capital adequacy and involve both quantitative and qualitative evaluations of the Company's assets, liabilities, and certain off-balance-sheet items calculated under regulatory practices. Failure to meet the minimum capital requirements can initiate certain mandatory or discretionary actions by the regulatory agencies that could have a direct material effect on the Company's financial statements. The required minimums and the Company's respective ratios are shown below.
Minimum December 31,
Required 2008 2007
(dollars in thousands)
Tier 1 capital $ 383,255 $ 348,564
Total capital $ 418,710 $ 378,755
Risk-adjusted assets $ 2,988,538 $ 2,826,072
Leverage ratio 3.00 % 10.02 % 9.42 %
Tier 1 capital ratio 4.00 % 12.82 % 12.33 %
Total capital ratio 8.00 % 14.01 % 13.40 %
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To be "well capitalized" under federal bank regulatory agency definitions, a depository institution must have a Tier 1 Ratio of at least 6%, a combined Tier 1 and Tier 2 Ratio of at least 10%, and a Leverage Ratio of at least 5%. As of December 31, 2007 and 2008, the Company was considered to be "well capitalized". There are no conditions or events since the most recent notification of the Company's capital category that management believes would change its category.
(8) STOCK REPURCHASE PLAN
In November 1999, the Company adopted a new Stock Repurchase Program (the "SRP") authorizing management to repurchase up to 600,000 shares of the Company's common stock. The SRP was amended in May 2001, August of 2002, and September of . . .
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