FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------------
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended JuneSeptember 30, 1995 Commission File Number 0-14384
BANCFIRST CORPORATION
(Exact name of registrant as specified in charter)
OKLAHOMA 73-1221379
(State or other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
101 N. Broadway, Suite 200
Oklahoma City, Oklahoma 73102-8401
(Address of principal executive offices)
(405) 270-1000
(Registrant's area code and telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No .
---- ----
As of JulyOctober 31, 1995, there were 6,197,3746,215,624 shares of Common Stock outstanding.
FORM 10-Q
CROSS-REFERENCE INDEX
ITEM PART I. FINANCIAL INFORMATION PAGE
------- -------------------------------------------------- --------------- ---- ------------------------------------------------- -----
1. Financial Statements 1
2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 67
PART II. OTHER INFORMATION
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1. Legal Proceedings Not Applicable
2. Changes in Securities Not Applicable
3. Defaults Upon Senior Securities Not Applicable
4. Submission of Matters to a Vote of Security Holders 9Not Applicable
5. Other Information Not Applicable
6. Exhibits and Reports on Form 8-K 911
Signatures 1012
PART I. FINANCIAL INFORMATION
------------------------------
BANCFIRST CORPORATION
CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
JuneSEPTEMBER 30, ------------------- DecemberDECEMBER 31,
------------------------
1995 1994 1994
-------- ----------------- --------- ------------
ASSETS
Cash and due from banks $ 64,04957,919 $ 55,87959,033 $ 53,564
Interest-bearing deposits with banks 3865 -- --
Securities:
Held for investment, at cost (market value: $34,663, $23,662$42,643, $22,189
and $20,395, respectively) 34,269 23,63142,148 22,333 20,779
Available for sale, at market value 217,681 217,609213,201 209,786 202,265
Federal funds sold 16,983 37,64017,368 24,965 28,260
Loans:
Total loansLoans (net of unearned interest) 591,512 488,019604,642 510,106 522,314
Allowance for possible loan losses (10,322) (9,339)(10,338) (9,585) (9,729)
--------- -------- ----------------- ---------
Loans, net 581,190 478,680594,304 500,521 512,585
Premises and equipment, net 27,152 26,68127,729 26,713 26,462
Other real estate owned 2,635 2,3602,149 2,091 2,183
Intangible assets, net 9,268 8,4888,195 8,267 7,960
Accrued interest receivable 9,512 7,95110,293 8,387 8,518
Other assets 7,979 10,5887,858 9,917 10,339
--------- -------- ----------------- ---------
Total assets $970,756 $869,507 $872,915$ 981,229 $ 872,013 $ 872,915
--------- --------- ---------
--------- --------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing $176,299 $164,088 $168,426$ 173,346 $ 167,411 $ 168,426
Interest-bearing 696,834 618,126693,684 617,601 616,425
--------- -------- ----------------- ---------
Total deposits 873,133 782,214867,030 785,012 784,851
Securities sold under repurchase agreements and
other short-term borrowings 224 9411,532 34 117
Long-term borrowings 810 -- --
Accrued interest payable 2,876 1,6353,434 2,197 2,089
Other liabilities 3,283 5,2663,629 3,681 3,897
Minority interest -- 1,019 --
--------- -------- ----------------- ---------
Total liabilities 879,516 790,228886,435 790,924 790,954
--------- -------- ----------------- ---------
Commitments and contingent liabilities
Stockholders' equity:
Common stock (issued: 6,194,874,(shares issued: 6,210,624, 6,202,814
and 6,202,814, shares, respectively) 6,1956,211 6,203 6,203
Capital surplus 34,31534,408 34,259 34,259
Retained earnings 50,089 40,68753,293 43,089 45,611
Unrealized securities losses,gains (losses), net of tax 641 (1,870)882 (2,462) (4,112)
--------- -------- ----------------- ---------
Total stockholders' equity 91,240 79,27994,794 81,089 81,961
--------- -------- ----------------- ---------
Total liabilities and stockholders' equity $970,756 $869,507 $872,915$ 981,229 $ 872,013 $ 872,915
--------- -------- --------
--------- -------- -----------------
--------- --------- ---------
See accompanying notes to consolidated financial statements.
1
BANCFIRST CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(Dollars in thousands, except per share data)
Three Months Ended Six Months Ended
JuneTHREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, JuneSEPTEMBER 30,
--------------------- ---------------------------------------------- -------------------------
1995 1994 1995 1994
---------- ---------- ---------- ----------
INTEREST INCOME
Loans, including fees $ 14,62115,060 $ 11,13111,763 $ 27,65142,711 $ 21,25433,017
Interest-bearing deposits with banks 81 -- 89 --
Securities:
Taxable 3,624 3,076 6,599 6,0553,585 3,168 10,184 9,223
Tax-exempt 159 151 295 307150 446 457
Federal funds sold 398 327 863 648363 360 1,226 1,008
---------- ---------- ------------------- ----------
Total interest income 18,810 14,685 35,416 28,26419,160 15,441 54,576 43,705
---------- ---------- ---------- ----------
INTEREST EXPENSE
Deposits 7,885 4,964 14,520 9,6297,809 5,322 22,329 14,951
Securities sold under repurchase agreements
and other short-term borrowings 13 (18) 22 1220 4 58 6
Line of credit -- 10 16 19
---------- ---------- ---------- ------------ 29
Total interest expense 7,898 4,956 14,558 9,6607,829 5,336 22,387 14,996
---------- ---------- ---------- ----------
Net interest income 10,912 9,729 20,858 18,60411,331 10,105 32,189 28,709
Provision for possible loan losses 196 (9) 258 (272)150 321 408 49
---------- ---------- ---------- ----------
Net interest income after provision for possible
loan losses 10,716 9,738 20,600 18,87611,181 9,784 31,781 28,660
---------- ---------- ---------- ----------
NONINTEREST INCOME
Service charges on deposits 2,017 1,935 3,922 3,7831,987 1,943 5,909 5,727
Securities transactions 56 -- 63 --48 (1) 111 (1)
Other 1,091 935 2,008 1,8311,145 857 3,153 2,688
---------- ---------- ---------- ----------
Total noninterest income 3,164 2,870 5,993 5,6143,180 2,799 9,173 8,414
---------- ---------- ---------- ----------
NONINTEREST EXPENSE
Salaries and employee benefits 5,089 4,434 9,829 8,6105,141 4,524 14,970 13,134
Occupancy and fixed assets expense, net 486 322 926 776550 516 1,475 1,293
Depreciation 487 461 943 848431 440 1,374 1,288
Amortization 365 324 674 624397 325 1,071 949
Data processing services 294 327 594 736284 325 878 1,061
Net (income) expense from other real 30 18 55 (325)estate owned 16 (45) 50 (370)
Other 2,281 2,155 4,300 4,1471,806 2,196 6,128 6,343
---------- ---------- ---------- ----------
Total noninterest expense 9,032 8,041 17,321 15,4168,625 8,281 25,946 23,698
---------- ---------- ---------- ----------
Income before taxes 4,848 4,567 9,272 9,0745,736 4,302 15,008 13,376
Income tax expense (1,828) (1,778) (3,497) (3,208)(2,097) (1,528) (5,594) (4,735)
---------- ---------- ---------- ----------
Net income $ 3,0203,639 $ $2,7892,774 $ 5,7759,414 $ 5,8668,641
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
PER SHARE DATA (PRIMARY AND FULLY DILUTED)
Net income $ 0.470.57 $ 0.440.43 $ 0.901.47 $ 0.911.34
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Average common stock and common stock 6,394,966 6,376,262 6,395,801 6,372,392equivalents 6,408,592 6,398,009 6,388,743 6,398,553
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
See accompanying notes to consolidated financial statements.
2
BANCFIRST CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in thousands)
Six Months Ended
JuneNINE MONTHS ENDED
SEPTEMBER 30,
-------------------------------------------------------
1995 1994
---------- ------------------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES $ 6,96111,614 $ 6,78610,613
--------- ---------
INVESTING ACTIVITIES
Purchases of securities (42,263) (52,136)
Maturities of securities 57,147 49,525
Proceeds from sales and calls of securities 4,043 2,287
Net decrease in federal funds sold 21,199 16,576
Purchases of loans (9,383) (8,877)
Proceeds from sales of loans 38,102 40,944
Net other increase in loans (68,233) (51,356)
Cash and due from banks from acquisitionsacquisition (15,542) 166
Purchases of securities (26,758) (45,048)
Maturities of securities 8,181 34,868
Proceeds from sales of securities 687 2,085
Net decrease in federal funds sold 21,584 3,901
Purchases of loans (3,017) (3,147)
Proceeds from sales of loans 20,971 26,530
Net other increase in loans (44,434) (20,278)164
Purchases of premises and equipment (1,290) (8,383)(2,175) (8,922)
Proceeds from sales of other real estate owned 366 2,23981 22,662
Other, net 330 116926 (857)
--------- ---------
Net cash provided (used)used by investing activities 1,078 (6,951)(15,367) (9,990)
--------- ---------
FINANCING ACTIVITIES
Net increase (decrease) in demand, transaction
and savings deposits (7,949) 10,152(17,263) 6,775
Net increase in certificates of deposit 11,575 2,73714,786 8,912
Net increase (decrease) in securities sold under repurchase
agreements and other short-term borrowings 107 (841)11,415 (901)
Net increase in long-term borrowings 810 --
Issuance of common stock 197305 30
Payments to repurchase common stock (577) --
Redemption of 10% Preferred Stock -- (3,953)
Cash dividends paid (869) (939)(1,303) (1,311)
Other, net (577) (3,953)
--------- ---------
Net cash provided (used) by financing activities 2,484 7,1868,173 9,552
--------- ---------
Net increase in cash and due from banks 10,523 7,0214,420 10,175
Cash and due from banks at the beginning of the period 53,564 48,858
--------- ---------
Cash and due from banks at the end of the period $ 64,08757,919 $ 55,87959,033
--------- ---------
--------- ---------
SUPPLEMENTAL DISCLOSURE
Cash paid during the period for interest $ 13,77121,042 $ 9,50414,278
--------- ---------
--------- ---------
Cash paid during the period for income taxes $ 3,4755,439 $ 3,0083,714
--------- ---------
--------- ---------
See accompanying notes to consolidated financial statements.
3
BANCFIRST CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
(1) GENERAL
The accompanying consolidated financial statements include the accounts of
BancFirst Corporation, BancFirst Investment Corporation, BancFirst, Lenders
Collection Corporation and National Express Corporation. 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.
There have been no significant changes in the accounting policies of the
Company since December 31, 1994, the date of the most recent annual report,
other than the adoption of Statement of Financial Accounting Standards No. 114,
"Accounting by Creditors for Impairment of a Loan" as discussed in note (3)
below.
The 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. Certain amounts in the 1994 financial statements have been reclassified
to conform with the 1995 presentation.
(2) ACQUISITIONS
In March 1995, the Company acquired State National Bank of Marlow,
Oklahoma, which had total assets of $101,976. The acquisition was for cash of
$17,485, with an additional $500 placed in escrow pending the resolution of
certain matters. State National Bank was immediately merged into BancFirst.
The acquisition was accounted for as a purchase. Accordingly, the effect of the
transaction is included in the Company's consolidated financial statements from
the date of the acquisition forward. A core deposit intangible of $406 and
goodwill of $810 were recorded for the acquisition. Subsequent payments from
the escrow, if any, to the former shareholders of State National Bank will
increase the goodwill recorded. Pro forma condensed results of operations, as
though State National Bank had been acquired January 1, 1994, are as follows:
Six Months Ended Year Ended
JuneNINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DecemberDECEMBER 31,
1995 1994
---------------------- ------------
Net interest income.income . . . . . . . . . . . .$21,541 $42,160$ 32,850 $ 42,160
Net income . . . . . . . . . . . . . . . . .$ 5,953 $12,296$ 9,593 $ 12,296
Net income per common share . .
and common stock equivalent.equivalent . . . . . . . . . . . . .$ 0.93$ 1.50 $ 1.91
In June 1995, the Company announcedentered into an agreement of merger with Commerce
Bancorporation, Inc. of McLoud, Oklahoma ("Commerce Bancorp"), which has
approximately $18 million$18,000 in total assets. Commerce Bancorp is controlled by
certain executive officers of the Company. Under the terms of the agreement,
156,510 shares of BancFirst Corporation common stock would be issued for the
22,573 shares of Commerce Bancorp common stock outstanding. The merger is
subject to regulatory and shareholder approvals and is expected to be completed
in mid-1996.
In September 1995, the Company entered into an agreement of merger with
Johnston County Bancshares, Inc. of Tishomingo, Oklahoma ("Johnston County
Bancshares"), which has approximately $10,000 in total assets. Johnston County
Bancshares is controlled by certain executive officers and directors of the
Company. Under the terms of the agreement, each of the 49,620 shares
outstanding of Johnston County Bancshares common stock would be exchanged for
0.47 shares of Company common stock, subject to adjustment based upon the market
price of Company common stock at the effective time of the merger. Preferred
stock of Johnston County Bancshares would be purchased for cash of approximately
$97 and minority shares of Johnston County Bancshares' subsidiary bank would be
purchased for cash of approximately $120. The merger is subject to regulatory
and shareholder approvals and is expected to be completed in December 1995.
In September 1995, BancFirst entered into an agreement to acquire City
Bankshares, Inc. of Oklahoma City, Oklahoma ("City Bankshares"), which has
approximately $140,000 in total assets. Under the terms of the agreement, the
Company
4
would acquire all the stock outstanding of City Bankshares for cash of $19,125.
C-Teq, Inc., an 85% owned data processing subsidiary of City Bankshares, would
be spun off to the shareholders of City Bankshares prior to the acquisition.
Additionally, City Bankshares would be required to have stockholders' equity of
at least $13,000 at the time of closing. BancFirst also entered into an
agreement with the CEO of City Bankshares whereby upon consummation of the
acquisition BancFirst would pay the CEO $1,250 in exchange for an agreement not
to compete with BancFirst for a period of four years. The acquisition is
subject to regulatory approval and is expected to be completed in the first half
of 1996.
(3) LOANS
The Company adopted Financial Accounting Standards No. 114, "Accounting by
Creditors for Impairment of a Loan", effective January 1, 1995. This new
accounting standard requires that impaired loans be measured based upon the
present value of expected future cash flows discounted at the loan's effective
interest rate or, as a practical expedient, at the loan's observable market
price or the fair value of the collateral if the loan is collateral dependent.
A loan is impaired when, based on current information and events, it is probable
that all amounts due according to the contractual terms of the loan agreement
will not be collected. The adoption of FAS 114 did not have a material effect
on the financial position or results of operation of the Company.
4
(4) FEDERAL HOME LOAN BANK BORROWINGS
BancFirst joined the Federal Home Loan Bank of Topeka, Kansas ("the FHLB")
in May 1995, for the primary purpose of participating in the borrowing programs
offered by the FHLB. BancFirst was subsequently approved for a $19,600 credit
line secured by residential mortgages held by the Bank, and has made two
borrowings under the credit line as follows.
(a) Short-term borrowing of $10,000; interest at 5.92%, payable monthly;
due on May 22, 1996.
(b) Long-term borrowing of $810; principle payments due every six months;
interest at 6.64%, payable monthly; due September 30, 2010.
(5) NET INCOME PER SHARE
Net income per share is calculated as follows:
Three Months Six Months
Ended Ended
JuneTHREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, JuneSEPTEMBER 30,
-------------- --------------------------------- ----------------
1995 1994 1995 1994
------ ------ ------ -------------
Net income.income . . . . . . . . . . . . . . . . . . . . . . . $3,020 $2,789 $5,775 $5,866$3,639 $2,774 $9,414 $8,641
Less 10% Preferred dividends. . . .dividends . . . . . . . . . . . -- -- -- (55)
------ ------ ------ ------
Net income applicable to common stockholders.stockholders . . . . . . $3,020 $2,789 $5,775 $5,811$3,639 $2,774 $9,414 $8,586
------ ------ ------ ------
------ ------ ------ ------
Average common shares and common stock
equivalents outstanding (in thousands). . . . . . . . . . . . . . . . 6,395 6,376 6,396 6,3726,409 6,398 6,389 6,399
------ ------ ------ ------
------ ------ ------ ------
Net income per common share
and common stock equivalent . $0.47. . . . . . . . $ 0.44 $0.90 $0.910.57 $ 0.43 $ 1.47 $ 1.34
------ ------ ------ ------
------ ------ ------ ------
The 10% Preferred dividends for 1994 represent the accumulated dividends paid
upon the redemption of the 10% Preferred Stock. Average common shares and
common stock equivalents includes shares relating to stock options exercisable
within the next five years.
(5)5
(6) STOCK REPURCHASE PROGRAM
OnIn March 23, 1995, the Company adopted a Stock Repurchase Program authorizing
management to repurchase up to 200,000 shares of the Company's common stock.
The program is to be used for purchases of stock by the Company's Employee Stock
Ownership and Thrift Plan, and may also be used to enhance earnings per share,
provide stock for the exercise of stock options under the Company's Stock Option
Plan or to provide additional liquidity for the stock. Stock purchases under
the program must satisfy certain criteria regarding effects on earnings per
share and book value dilution, resulting equity ratios and the price to book
value of comparable size institutions.
56
BANCFIRST CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SUMMARY
The Company reported net income of $3.02$3.64 million for the quarter ended
JuneSeptember 30, 1995, compared to net income of $2.79$2.77 million for the secondthird
quarter of 1994. Third quarter 1995 earnings included a $542,000 refund of FDIC
insurance premiums. Earnings per share was $0.47$0.57 for the secondthird quarter of 1995,
compared to $0.44$0.43 for the same quarter of the prior year.
Net income for the first sixnine months of 1995 was $5.78$9.41 million, compared
to $5.87exceeding
the $8.64 million for the same period of 1994. Year-to-date1994, even though earnings per
share was $0.90, compared to $0.91 for the first half of 1994. Earnings in 1994
benefitted from loan recoveries, gains on sales of other real estate and a lower
effective tax rate. Year-to-date earnings per share was $1.47, compared to
$1.34 for the first nine months of 1994.
Total assets were $971$981 million at JuneSeptember 30, 1995, an increase of $97.8$108
million from December 31, 1994 and $101$109 million from JuneSeptember 30, 1994 due
primarily to the acquisition of State National Bank of Marlow, Oklahoma, with
total assets of $102 million, in March 1995. Stockholders' equity increased
$9.28$12.8 million compared to December 31, 1994 and $12$13.7 million compared to
JuneSeptember 30, 1994.
RESULTS OF OPERATIONS
SECONDTHIRD QUARTER --
Net interest income increased for the secondthird quarter of 1995 by $1.18$1.23
million, or 12.2%12.1%, as compared to the same quarter of 1994. Net interest spread
decreased 3028 basis points while average net earning assets increased $19.6$22.3
million. Net interest margin on a taxable equivalent basis was 5.17%5.24% for the
secondthird quarter, compared to 5.20%5.29% for the same quarter of 1994.
The Company provided $196,000$150,000 for possible loan losses for the quarter,
compared to income recognized from loan recoveries of $9,000$321,000 for the same quarter of 1994. Net loan recoveriescharge-offs were
$54,000$134,000 for the secondthird quarter of 1995 and $18,000$77,000 for the secondthird quarter of
1994, representing annualized rates of (0.04)%0.09% and (0.01)%0.06% of total loans,
respectively.
Noninterest income increased $294,000,$381,000, or 10.2%13.6%, compared to the secondthird
quarter of 1994 due to income added by the bank acquired in 1995 and gains on
securities transactions. Noninterest expense increased $991,000,only $344,000, or 12.3%4.15%,
due toas the added operating expenses of the bank acquired.acquired were partially offset by
the refund of FDIC insurance premiums in the third quarter.
YEAR-TO-DATE --
For the first sixnine months of 1995, net interest income increased by $2.25$3.48
million, or 12.1%, as compared to the same period of 1994. Net interest spread
decreased 1217 basis points while average net earning assets increased $16$18
million. Net interest margin on a taxable equivalent basis was 5.21%5.22% for the
sixnine months, compared to 5.07%5.15% for the same period of 1994.
The Company provided $258,000$408,000 for possible loan losses for the first halfnine
months of 1995, compared to income recognized from loan recoveries of $272,000only $49,000 for the first halfnine months of 1994. Net
loan charge-offs were $27,000$162,000 in 1995, compared to net loan recoveries of
$268,000$191,000 in 1994, representing annualized rates of 0.01%0.04% and (0.11)(0.05)% of total
loans, respectively.
Noninterest income increased $379,000,$759,000, or 6.75%9.02%, compared to the first sixnine
months of 1994, due to income of the bank acquired in 1995 and gains on
securities transactions. Noninterest expense increased $1.91$2.25 million, or 12.4%9.49%,
compared to 1994, due to the added expenses of the bank acquired, which were
partially offset by the FDIC insurance premium refund in the third quarter, and
the net income on other real estate owned in 1994.
Income tax expense of $3.5$5.59 million was recognized for the first sixnine
months of 1995, compared to $3.21$4.74 million for the same period of 1994. The
Company's effective tax rate increased from 35% in 1994 to 38%37% in 1995 due to a
higher level of taxable income, lower tax-exempt interest and less tax benefit
carryforwards available for utilization.
67
FINANCIAL POSITION
Total securities increased $28.9$32.3 million compared to December 31, 1994 and
$10.7$23.2 million compared to JuneSeptember 30, 1994, as a net result of securities
added by the bank acquisition and maturities of securities used to fund loan
growth. The net unrealized gain on securities available for sale was $986,000$1.36
million at the end of the secondthird quarter of 1995, compared to net unrealized
losses of $6.33 million and $2.73$3.83 million at December 31 and JuneSeptember 30, 1994,
respectively. The average taxable equivalent yield on the securities portfolio
for the secondthird quarter increased to 6.15%6.06% from 5.56%5.62% in the same quarter of 1994,
reflecting the rise in interest rates during that time.
Total loans increased $69.2$82.3 million since December 31, 1994 and $103$94.5
million since JuneSeptember 30, 1994 from both internal loan growth and the bank
acquisition. The allowance for possible loan losses increased $593,000$609,000 in the
first sixnine months of 1995 due primarily to purchased reserves from the bank
acquisition
in March and provisions for losses. The allowance as a percentage of total
loans was 1.75%1.71%, 1.86% and 1.91%1.88% at JuneSeptember 30, 1995, December 31, 1994 and
JuneSeptember 30, 1994, respectively.
Nonperforming and restructured assets increased in the first sixnine months of
1995 to $7.38$6.83 million from $6.07 million at both year-end 1994 and $5.82 million at
the end of the secondthird quarter of 1994, due to the nonperforming assets of the
bank acquired in 1995. Although, the ratio of nonperforming and restructured
assets to total assets remained at only 0.76%0.70%, compared to 0.70% at year-end
and the second quarter of 1994, it is reasonable to expect that
over the next several years problem loans will rise to historical norms as a
result of economic and credit cycles.
Total deposits increased $88.3$82 million sincecompared to both December 31, 1994 and
$90.9
million since JuneSeptember 30, 1994 due primarily to the bank acquisition and internal growth.acquisition. The Company's deposit
base continues to be comprised substantially of core deposits, with large
denomination certificates of deposit being only 10%9.5% of total deposits at
JuneSeptember 30, 1995.
BancFirst joined the Federal Home Loan Bank of Topeka, Kansas in May 1995
and was approved for a $19.6 million credit line. In September 1995, the Bank
borrowed $10 million which matures in May 1996 and $810,000 which matures in
September 2010. Both borrowings are at fixed rates and are for the purpose of
funding loan growth.
Stockholders' equity increased $9.28$12.8 million compared to year-end 1994 and
$12$13.7 million compared to JuneSeptember 30, 1994. These increases were the result
of accumulated earnings and a change from net unrealized losses to a net
unrealized gaingains on securities available for sale. Average stockholders' equity
to average assets dropped slightly to 9.04%9.30% from 9.34% at December 31, 1994 due
to the bank acquisition in 1995. The Company's regulatory capital ratios all
remain well in excess of the minimum requirements.
OnIn March 23, 1995, the Company adopted a Stock Repurchase Program authorizing
management to repurchase up to 200,000 shares of the Company's common stock.
The program is to be used for purchases of stock by the Company's Employee Stock
Ownership and Thrift Plan, and may also be used to enhance earnings per share,
provide stock for the exercise of stock options under the Company's Stock Option
Plan or to provide additional liquidity for the stock. Stock purchases under
the program must satisfy certain criteria regarding effects on earnings per
share and book value dilution, resulting equity ratios and the price to book
value of comparable size institutions.
In June 1995, the Company announcedentered into an agreement of merger with Commerce
Bancorporation, Inc. of McLoud, Oklahoma ("Commerce Bancorp"), which has
approximately $18 million in total assets. Commerce Bancorp is controlled by
certain executive officers of the Company. Under the terms of the agreement,
156,510 shares of BancFirst Corporation common stock would be issued for the
22,573 shares of Commerce Bancorp common stock outstanding. The merger is
subject to regulatory and shareholder approvals and is expected to be completed
in mid-1996.
7In September 1995, the Company entered into an agreement of merger with
Johnston County Bancshares, Inc. of Tishomingo, Oklahoma ("Johnston County
Bancshares"), which has approximately $10 million in total assets. Johnston
County Bancshares is controlled by certain executive officers and directors of
the Company. Under the terms of the agreement, each of the 49,620 shares
outstanding of Johnston County Bancshares common stock would be exchanged for
0.47 shares of Company common stock, subject to adjustment based upon the market
price of Company common stock at the effective time of the merger. Preferred
stock of Johnston County Bancshares would be purchased for cash of approximately
$97,000 and minority shares of Johnston County Bancshares' subsidiary bank would
be purchased for cash of approximately $120,000. The merger is subject to
regulatory and shareholder approvals and is expected to be completed in December
1995.
8
In September 1995, BancFirst entered into an agreement to acquire City
Bankshares, Inc. of Oklahoma City, Oklahoma ("City Bankshares"), which has
approximately $140,000 in total assets. Under the terms of the agreement, the
Company would acquire all the stock outstanding of City Bankshares for cash of
$19.1 million. C-Teq, Inc., an 85% owned data processing subsidiary of City
Bankshares, would be spun off to the shareholders of City Bankshares prior to
the acquisition. Additionally, City Bankshares would be required to have
stockholders' equity of at least $13 million at the time of closing. BancFirst
also entered into an agreement with the CEO of City Bankshares whereby upon
consummation of the acquisition BancFirst would pay the CEO $1.25 million in
exchange for an agreement not to compete with BancFirst for a period of four
years. The acquisition is subject to regulatory approval and is expected to be
completed in the first half of 1996.
9
BANCFIRST CORPORATION
SELECTED FINANCIAL STATISTICS
(Dollars in thousands, except per share data)
Three Months Ended Six Months Ended
JuneTHREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, JuneSEPTEMBER 30,
--------------------- -------------------------------------- -----------------
1995 1994 1995 1994
------ ------ ------ ------------- ------- ------- -------
PER COMMONCOMMOM SHARE DATA:
Income before extraordinary item and accounting change $ 0.470.57 $ 0.440.43 $ 0.901.47 $ 0.911.34
Net income 0.47 0.44 0.90 0.910.57 0.43 1.47 1.34
Cash dividends declared 0.07 0.06 0.14 0.120.21 0.18
Book value at period end 14.73 12.7815.26 13.07
Tangible book value at period end 13.94 11.74
PERFORMANCE RATIOS:
Return on average assets 1.24% 1.28% 1.24% 1.38%1.48% 1.27% 1.32% 1.34%
Return on average common equity 13.73 14.09 13.53 14.6215.76 13.77 14.24 14.43
Increase in tangible book value (annualized) 21.47 11.57 22.46 8.71
Noninterest expense/(net interest income + noninterest income) 64.16 64.53 64.51 63.6560.61 64.17 62.73 63.84
JuneSEPTEMBER 30, DecemberDECEMBER 31,
------------------- ----------------------------
1995 1994 1994
------- ------- -------------- ------ -------------
BALANCE SHEET RATIOS:
Average loans to deposits (year to date) 66.12% 62.70%66.66% 62.67% 63.39%
Allowance for possible loan losses to total loans 1.75 1.911.71 1.88 1.86
Allowance for possible loan losses to nonperforming and
restructured loans 222.70 259.66226.41 265.66 261.53
Nonperforming and restructured assets to total assets 0.76 0.70 0.67 0.70
CAPITAL RATIOS:
Average stockholders' equity to average assets (year to date) 9.04% 9.10%9.30% 9.20 9.34%
Leverage ratio (regulatory minimum 3%) 8.50 8.408.84 8.49 9.08
Total risk-based capital ratio (regulatory minimum 8%) 15.67 16.5816.14 15.92 16.67
Three Months Ended
JuneTHREE MONTHS ENDED
SEPTEMBER 30,
--------------------------------------------------------------------------------------------------------------
1995 1994
----------------------- --------------------------------------------------------------------------------------
AVERAGE AVERAGE
AVERAGE BALANCES AND NET INTEREST MARGIN AVERAGE YIELD/ AVERAGE YIELD/
ANALYSIS (TAXABLE EQUIVALENT BASIS): BALANCE RATE BALANCE RATE
--------- ------- --------- --------
AVERAGE BALANCES AND NET INTEREST Average Average
MARGIN ANALYSIS Average Yield Average yield/
(TAXABLE EQUIVALENT BASIS): Balance Rate Balance Rate
--------- ------- -------- -------
Loans $580,739 10.15% $490,112 9.19%$ 595,089 10.09% $ 499,703 9.42%
Investment securities 251,876 6.15 238,799 5.56249,596 6.07 239,563 5.62
Federal funds sold 26,546 6.01 35,873 3.9124,729 5.83 31,473 4.54
--------- -----------------
Total earning assets 859,161 8.85 764,784 7.81869,414 8.81 770,739 8.04
Nonearning assets 114,093 105,068111,036 104,466
--------- -----------------
Total assets $973,254 $869,852
========= =========$ 980,450 $ 875,205
--------- ---------
--------- ---------
Interest-bearing deposits $694,496 4.55% $619,680 3.21%$ 696,845 4.44% $ 621,714 3.39%
Short-term borrowings 479 5.43 523 3.701,659 5.02 415 4.78
--------- ---------
Total interest-bearing liabilities 694,976 4.56 620,203 3.22698,504 4.45 622,129 3.40
Demand deposits 183,759 162,035183,676 167,199
Other noninterest-bearing liabilities 6,500 8,4305,908 5,316
Stockholders' equity 88,019 79,18392,362 80,561
--------- ---------
Total liabilities and stockholders' equity 973,254 $869,852
========= =========$ 980,450 $ 875,205
--------- ---------
--------- ---------
Net interest spread 4.29% 4.59%4.36% 4.64%
Net interest margin 5.17% 5.20%5.24% 5.29%
810
PART II. OTHER INFORMATION
---------------------------
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
BancFirst Corporation held its Annual Meeting of Shareholders on May 25,
1995. A proposal to re-elect the board of directors in its entirety was
passed with 5,205,618 affirmative votes and 3,788 negative votes cast. The
directors re-elected were Leslie E. Greathouse, John T. Hannah, J. R.
Hutchens, Jr., J. Ralph McCalmont, Melvin Moran, David E. Rainbolt and H. E.
Rainbolt. Also, a proposal to ratify Price Waterhouse as independent
auditors for 1995 was passed with 5,205,905 affirmative votes and 4,865
negative votes.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
EXHIBIT
NUMBER EXHIBIT
----------- ------------------------------------------------------------ -------- -------------------------------------------------------------------
2.1 Agreement and Plan of Reorganization dated October 28, 1994 among
BancFirst, State National Bank, Marlow, Oklahoma, and certain
shareholders of State National Bank (filed as Exhibit 2.4 to the
Company's Report on Form 10-Q for the quarter ended September 30,
1994 and incorporated herein by reference).
2.2* Agreement and Plan of Reorganization dated September 16, 1995 between
BancFirst and City Bankshares, Inc.
2.3* Agreement dated September 16, 1995 between BancFirst and
William O. Johnstone.
27.1* Financial Data Schedule.
---------------
*Filed- --------
* Filed herewith
(b) The followingNo reports on Form 8-K have been filed by the Company during the quarter
ended JuneSeptember 30, 1995.
DATE OF REPORT ITEMS REPORTED
------------------- ---------------------------------------------------------
March 24, 1995 Consummation of merger with State National Bank of
Marlow, Oklahoma.
Financial statements filed:
- Audited financial statements of State National Bank for
the year ended December 31, 1994
- Unaudited Pro Forma Consolidated Condensed Financial
Statements for the year ended December 31, 1994
April 12, 1995 Adoption of Stock Repurchase Program.
911
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
August 14,November 10, 1995 BANCFIRST CORPORATION
---------------------
(Registrant)
/s/Randy Foraker
-------------------------------------------------------------------------
Randy P. Foraker
Sr. Vice President, Controller
and Secretary/Treasurer
(Principal Accounting Officer)
1012