-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UaF8XLJiGml4xxDscmuasx2D3SBz9BvS3fU6NxYGbe6f/G38+hqXh1cPRIlBhf7f 5GskLl0DUxlmET8lIfYi5g== 0000930661-98-001779.txt : 19980817 0000930661-98-001779.hdr.sgml : 19980817 ACCESSION NUMBER: 0000930661-98-001779 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BANCFIRST CORP /OK/ CENTRAL INDEX KEY: 0000760498 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 731221379 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-14384 FILM NUMBER: 98688335 BUSINESS ADDRESS: STREET 1: 101 N BROADWAY STE 200 STREET 2: D CITY: OKLAHOMA CITY STATE: OK ZIP: 73102-8401 BUSINESS PHONE: 4052701000 MAIL ADDRESS: STREET 1: 101 NORTH BROADWAY STREET 2: STE 200 CITY: OKLAHOMA CITY STATE: OK ZIP: 73102-8401 FORMER COMPANY: FORMER CONFORMED NAME: UNITED COMMUNITY CORP DATE OF NAME CHANGE: 19890401 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM_________________________to________________________ 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) (Zip Code) (405) 270-1086 (Registrant's telephone number, including area code) - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) 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 July 31, 1998 there were 6,779,219 shares of the registrant's Common Stock outstanding. 1 PART I-- FINANCIAL INFORMATION BANCFIRST CORPORATION CONSOLIDATED BALANCE SHEET (Dollars in thousands)
JUNE 30, DECEMBER 31, ----------------------------- 1998 1997 1997 ------------ ------------ ----------- ASSETS Cash and due from banks $ 118,693 $ 86,192 $ 76,662 Interest-bearing deposits with banks 51 76 147 Securities (market value: $417,896, $328,343 and $334,465, respectively) 417,196 327,919 333,746 Federal funds sold 14,000 54,000 44,715 Loans: Total loans (net of unearned interest) 990,441 847,807 913,916 Allowance for possible loan losses (13,705) (12,384) (12,991) ------------ ------------ ----------- Loans, net 976,736 835,423 900,925 Premises and equipment, net 38,698 36,353 36,617 Other real estate owned 793 1,604 1,162 Intangible assets, net 21,336 13,423 12,553 Accrued interest receivable 14,913 12,358 11,357 Other assets 16,441 25,060 22,415 ------------ ------------ ----------- Total assets $ 1,618,857 $ 1,392,408 $ 1,440,299 ============ ============ =========== LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Noninterest-bearing $ 329,247 $ 253,484 $ 284,318 Interest-bearing 1,085,380 970,231 974,091 ------------ ------------ ----------- Total deposits 1,414,627 1,223,715 1,258,409 Short-term borrowings 22,087 3,349 7,946 Long-term borrowings 7,685 6,567 7,051 9.65% Capital Securities 25,000 25,000 25,000 Accrued interest payable 6,378 5,462 6,612 Other liabilities 4,720 3,385 3,956 ------------ ------------ ----------- Total liabilities 1,480,497 1,267,478 1,308,974 ------------ ------------ ----------- Commitments and contingent liabilities Stockholders' equity: Common stock 6,778 6,764 6,760 Capital surplus 40,937 39,916 40,720 Retained earnings 89,108 77,880 82,487 Accumulated other comprehensive income 1,537 570 1,558 Treasury stock - (200) (200) ------------ ------------ ----------- Total stockholders' equity 138,360 124,930 131,325 ------------ ------------ ----------- Total liabilities and stockholders' equity $ 1,618,857 $ 1,392,408 $ 1,440,299 ============ ============ ===========
See accompanying notes to consolidated financial statements. 2 BANCFIRST CORPORATION CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME (Dollars in thousands, except per share data)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, ------------------------------ ------------------------------ 1998 1997 1998 1997 ------------- -------------- -------------- ------------- INTEREST INCOME Loans, including fees $ 23,231 $ 20,336 $ 45,413 $ 39,617 Interest-bearing deposits with banks 2 (18) 4 1 Securities: Taxable 6,231 4,936 11,354 9,874 Tax-exempt 158 169 470 344 Federal funds sold 1,029 567 1,593 975 ------------- -------------- -------------- ------------- Total interest income 30,651 25,990 58,834 50,811 ------------- -------------- -------------- ------------- INTEREST EXPENSE Deposits 12,394 9,981 23,292 19,502 Short-term borrowings 364 155 545 204 Long-term borrowings 110 339 217 808 9.65% Capital Securities 612 373 1,226 373 ------------- -------------- -------------- ------------- Total interest expense 13,480 10,848 25,280 20,887 ------------- -------------- -------------- ------------- Net interest income 17,171 15,142 33,554 29,924 Provision for possible loan losses 482 186 1,059 282 ------------- -------------- -------------- ------------- Net interest income after provision for possible loan losses 16,689 14,956 32,495 29,642 ------------- -------------- -------------- ------------- NONINTEREST INCOME Service charges on deposits 3,123 2,643 5,882 5,291 Securities transactions - - - - Other 1,840 1,373 3,633 2,725 ------------- -------------- -------------- ------------- Total noninterest income 4,963 4,016 9,515 8,016 ------------- -------------- -------------- ------------- NONINTEREST EXPENSE Salaries and employee benefits 8,585 7,309 16,535 14,202 Occupancy and fixed assets expense, net 843 793 1,665 1,614 Depreciation 927 798 1,797 1,558 Amortization 647 568 1,210 1,112 Data processing services 372 328 751 698 Net (income) expense from other real estate owned (173) 38 (150) 100 Other 3,505 2,904 6,462 5,663 ------------- -------------- -------------- ------------- Total noninterest expense 14,706 12,738 28,270 24,947 ------------- -------------- -------------- ------------- Income before taxes 6,946 6,234 13,740 12,711 Income tax expense (2,789) (2,330) (5,341) (4,765) ------------- -------------- -------------- ------------- Net income 4,157 3,904 8,399 7,946 Other comprehensive income, net of tax: Unrealized gains (losses) on securities (205) 894 (21) (176) ------------- -------------- -------------- ------------- Comprehensive income $ 3,952 $ 4,798 $ 8,378 $ 7,770 ============= ============== ============== ============= NET INCOME PER COMMON SHARE Basic $ 0.62 $ 0.58 $ 1.24 $ 1.17 ============= ============== ============== ============= Diluted $ 0.60 $ 0.56 $ 1.20 $ 1.13 ============= ============== ============== =============
See accompanying notes to consolidated financial statements. 3 BANCFIRST CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (DOLLARS IN THOUSANDS)
SIX MONTHS ENDED JUNE 30, ------------------------ 1998 1997 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES $ 8,400 $ 7,674 -------- -------- INVESTING ACTIVITIES Cash and due from banks provided (used) from acquisitions 66,168 (5,008) Purchases of securities: Held for investment (8,986) (5,073) Available for sale (110,396) (47,425) Maturities of securities: Held for investment 10,792 5,199 Available for sale 25,369 32,344 Proceeds from sales of securities: Held for investment 245 - Available for sale - 252 Net (increase) decrease in federal funds sold 30,715 (5,515) Purchases of loans (5,341) (2,613) Proceeds from sales of loans 66,221 60,930 Net other increase in loans (107,661) (95,475) Purchases of premises and equipment (2,969) (2,339) Proceeds from sales of other real estate owned and repossessed assets 1,040 831 Other, net (216) 1,130 -------- -------- Net cash used for investing activities (35,019) (62,762) -------- -------- FINANCING ACTIVITIES Net increase (decrease) in demand, transaction and savings deposits 29,519 (3,580) Net increase in certificates of deposit 25,603 40,311 Net increase (decrease) in short-term borrowings 16,071 (1,995) Net decrease in long-term borrowings (1,296) (69) Issuance of 9.65% Capital Securities - 25,000 Issuance of common stock 234 220 Purchase and retirement of common stock - (1,499) Cash dividends paid (1,577) (1,274) -------- -------- Net cash provided by financing activities 68,554 57,114 -------- -------- Net increase in cash and due from banks 41,935 2,026 Cash and due from banks at the beginning of the period 76,809 84,242 -------- -------- Cash and due from banks at the end of the period $118,744 $ 86,268 ======== ======== SUPPLEMENTAL DISCLOSURE Cash paid during the period for interest $ 25,514 $ 19,712 ======== ======== Cash paid during the period for income taxes $ 5,023 $ 5,219 ======== ========
See accompanying notes to consolidated financial statements. 4 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, BFC Capital Trust I, BancFirst and its subsidiaries BancFirst Investment Corporation, Lenders Collection Corporation and Express Financial Corporation (formerly National Express Corporation), and The Security Bank & Trust Company. 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, 1997, the date of the most recent annual report. Certain amounts in the 1997 financial statements have been reclassified to conform to the 1998 presentation. As discussed in note (2), the Company completed a merger with Lawton Security Bancshares, Inc. ("Lawton Security Bancshares") in May 1998. The merger was accounted for as a pooling of interests. Accordingly, the consolidated financial information has been restated to combine the consolidated accounts of Lawton Security Bancshares with the consolidated accounts of the Company for all periods presented. The preparation of financial statements in conformity with generally accepted accounting principles inherently involves the use of estimates and assumptions that affect the amounts reported in the financial statements and the related disclosures. Such estimates and assumptions may change over time and actual amounts may differ from those reported. (2) MERGERS, ACQUISITIONS AND DISPOSALS In December 1996, the Company's money order subsidiary, Express Financial Corporation (formerly National Express Corporation) entered into an agreement for the sale of its business. Under the terms of the agreement, Express Financial Corporation received cash of $600 in January 1997, and may receive additional payments of up to $500 over a two-year period based upon specified levels of business retained by the purchaser. The business and intangible assets of Express Financial Corporation were transferred to the purchaser in January and February 1997. The purchaser did not assume any liabilities of Express Financial Corporation. The sale was accounted for as a disposal of a segment of business. Consequently, the expected net gain from the disposal will be recognized in the Company's consolidated statement of income when the final proceeds are received. The operations of Express Financial Corporation were not material in relation to the consolidated operations of the Company. In March 1998, the first additional payment from the sale of $243 was received. The final payment is due in January 1999. The following assets and liabilities of Express Financial Corporation are included in the Company's consolidated balance sheet: 5
June 30, December 31, ---------------------------- 1998 1997 1997 ------------- ------------ ------------ Cash and due from BancFirst $ 1,089 $ 2,160 $ 2,290 Interest-bearing deposit with BancFirst 3,674 3,674 3,674 Securities held for investment 2,277 775 508 Premises and equipment, net 5 7 6 Intangible assets, net - - - Receivables from money order sales, net (55) 159 283 Other assets 5 13 9 ------- ------- ------- Total assets $ 6,995 $ 6,788 $ 6,770 ======= ======= ======= Outstanding money orders $ 1,606 $ 1,786 $ 1,693 Other liabilities - 7 16 ------- ------- ------- Total liabilities $ 1,606 $ 1,793 $ 1,709 ======= ======= =======
In March 1998, BancFirst completed the purchase 13 branches from NationsBank, N.A and concurrently sold three of the branches to another Oklahoma financial institution. The purchase and sale resulted in BancFirst purchasing loans and other assets of approximately $32,800, assuming deposits of approximately $132,100 and paying a premium on deposits of approximately $9,100. The transaction was accounted for as a purchase. Accordingly, the effects of the purchase are included in the Company's consolidated financial statements from the date of the purchase forward. In April 1998, BancFirst entered into agreements to sell four additional branches to other Oklahoma financial institutions on substantially the same terms as BancFirst's purchase of the branches from NationsBank, N.A. These branches have loans and other assets of approximately $11,000 and deposits of approximately $59,100. The sale of one of the branches was completed in June. The sales of the other three branches are expected to be completed in July and August of 1998. In May 1998, the Company completed a merger with Lawton Security Bancshares, which had approximately $92,000 in total assets. The merger was effected through the exchange of 414,790 shares of BancFirst Corporation common stock for all of the Lawton Security Bancshares common stock outstanding, and was accounted for as a pooling of interests. Accordingly, for periods reported subsequent to the completion of the merger, the consolidated accounts of Lawton Security Bancshares have been combined with the accounts of the Company and are included in the Company's consolidated financial statements for all periods presented. In May 1998, the Company entered into a merger agreement with AmQuest Financial Corp. ("AmQuest") of Duncan, Oklahoma. The merger is expected to be completed in October 1998 and would be effected through the exchange of a maximum of 2,625,000 shares of BancFirst Corporation common stock for all of the AmQuest common stock outstanding, with AmQuest being merged into the Company. AmQuest has approximately $568,000 in total assets and operates two subsidiary banks, AmQuest Bank, N.A. and Exchange National Bank & Trust Company. The merger is subject to shareholder and regulatory approvals and will be accounted for as a pooling of interests. Accordingly, for periods reported subsequent to the completion of the merger, the consolidated accounts of AmQuest will be combined with the accounts of the Company and will be included in the Company's consolidated financial statements for all periods presented. In July 1998, the Company entered into an agreement to acquire Kingfisher Bancorp, Inc. which has total assets of approximately $91,000. The acquisition is for cash and is expected to be completed in the fourth quarter of 1998. The transaction will be accounted for as a purchase. Accordingly, the effects of the purchase will be included in the Company's consolidated financial statements from the date of the purchase forward. The acquisition is not expected to have a material effect on the results of operations of the Company for 1998. 6 (3) SECURITIES The table below summarizes securities held for investment and securities available for sale.
JUNE 30, DECEMBER 31, -------------------------------- 1998 1997 1997 -------------- --------------- --------------- Held for investment, at cost (market value: $53,051, $55,988 and $54,908, respectively) $ 52,351 $ 55,564 $ 54,189 Available for sale, at market value 364,845 272,355 279,557 --------- --------- --------- Total securities $ 417,196 $ 327,919 $ 333,746 ========= ========= =========
(4) COMPREHENSIVE INCOME The Company adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" effective January 1, 1998. This Statement establishes standards for reporting and display of comprehensive income and its components (revenues, expenses, gains and losses) in a full set of general- purpose financial statements. The only component of comprehensive income reported by the Company is the unrealized gain or loss on securities available for sale. The amount of this unrealized gain or loss, net of tax, has been presented in the statement of income for each period as a component of other comprehensive income. Below is a summary of the tax effects of this unrealized gain or loss.
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, --------------------------- ---------------------------- 1998 1997 1998 1997 ------------ ------------ ------------ ------------- Unrealized gain (loss) during the period: Before-tax amount $ (317) $ 1,384 $ (63) $ (263) Tax expense 112 (490) 42 87 ------- -------- ------ ------ Net-of-tax amount $ (205) $ 894 $ (21) $ (176) ======= ======== ====== =======
The amount of unrealized gain or loss included in accumulated other comprehensive income is summarized below.
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, --------------------------- ---------------------------- 1998 1997 1998 1997 ------------ ------------ ------------ ------------- Unrealized gain (loss) on securities: Beginning balance $ 1,742 $ (324) $ 1,558 $ 746 Current period change (205) 894 (21) (176) ------- ------ ------- ----- Ending balance $ 1,537 $ 570 $ 1,537 $ 570 ======= ====== ======= =====
7 (5) NET INCOME PER COMMON SHARE Basic and diluted net income per common share are calculated as follows:
INCOME SHARES PER SHARE (NUMERATOR) (DENOMINATOR) AMOUNT ------------------ ------------------ --------------- THREE MONTHS ENDED JUNE 30, 1998 BASIC: Income available to common stockholders $ 4,157 6,760,714 $ 0.62 ====== Effect of stock options - 226,559 ------- --------- DILUTED: Income available to common stockholders plus assumed exercises of stock options $ 4,157 6,987,273 $ 0.60 ======= ========= ====== THREE MONTHS ENDED JUNE 30, 1997 BASIC: Income available to common stockholders $ 3,904 6,752,734 $ 0.58 ====== Effect of stock options - 244,758 ------- --------- DILUTED: Income available to common stockholders plus assumed exercises of stock options $ 3,904 6,997,492 $ 0.56 ======= ========= ====== SIX MONTHS ENDED JUNE 30, 1998 BASIC: Income available to common stockholders $ 8,399 6,774,035 $ 1.24 ====== Effect of stock options - 236,198 ------- --------- DILUTED: Income available to common stockholders plus assumed exercises of stock options $ 8,399 7,010,233 $ 1.20 ======= ========= ====== SIX MONTHS ENDED JUNE 30, 1997 BASIC: Income available to common stockholders $ 7,946 6,763,942 $ 1.17 ====== Effect of stock options - 260,881 ------- --------- DILUTED: Income available to common stockholders plus assumed exercises of stock options $ 7,946 7,024,822 $ 1.13 ======= ========= ======
8 Below is the number and average exercise prices of options that were excluded from the computation of diluted net income per share for each period because the options' exercise prices were greater than the average market price of the common shares. Average Exercise Shares Price ------------ ------------- Three Months Ended June 30, 1998 - $ - Three Months Ended June 30, 1997 - $ - Six Months Ended June 30, 1998 - $ - Six Months Ended June 30, 1997 - $ - (6) STOCK REPURCHASE PROGRAM In April 1998, the Company terminated its Stock Repurchase Program. No repurchases were made under the program during 1998. 9 BANCFIRST CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SUMMARY The Company reported net income of $4.16 million for the quarter ended June 30, 1998, compared to net income of $3.9 million for the same quarter of 1997. Diluted net income per share was $0.60 for the second quarter of 1998, compared to $0.56 per share for the second quarter of 1997. Net income for the first six months of 1998 was $8.4 million, compared to $7.77 million for the same period of 1997. Diluted net income per share was $1.20 and $1.13, respectively. Total assets were $1.62 billion, an increase of $179 million from December 31, 1997 and $226 million from June 30, 1997. The growth since year-end 1997 and the second quarter of 1997 was due to the acquisition of ten branches from NationsBank, N.A. and internal growth. Stockholders' equity rose to $138 million, an increase of $7.04 million compared to December 31, 1997 and $13.4 million compared to June 30, 1997. RESULTS OF OPERATIONS SECOND QUARTER Net interest income increased for the second quarter of 1998 by $2.03 million, or 13.4%, as compared to the same quarter of 1997, primarily as a result of earning asset growth. Average net earning assets increased $98.4 million, or 42.8%, compared to the second quarter of 1997, while net interest spread was 3.66% for the quarter, compared to 4.21% for the second quarter of 1997. Net interest margin on a taxable equivalent basis was 4.71% for the second quarter of 1998, compared to 5.07% for the same quarter of 1997. The Company provided $482,000 for possible loan losses for the quarter, compared to $186,000 for the second quarter of 1997, reflecting slightly higher net charge-offs and loan growth in 1998. Net loan charge-offs were $184,000 for the second quarter of 1998, compared to $159,000 for the second quarter of 1997. The net charge-offs in both periods represent an annualized rate of only 0.08% of total loans. Noninterest income increased $947,000, or 23.6%, compared to the second quarter of 1997 due to higher service charges on deposits and other income, such as trust fees and income from the origination and sale of residential mortgages. Noninterest expense increased $1.97 million, or 15.5%, due partly to branch acquisitions, but also as a result of increased staffing and other costs of expanding the Company's management and operational infrastructure. Income tax expense increased $458,000 compared to the second quarter of 1997. The effective tax rate on income before taxes was 40%, up from 37% in 1997, due partially to certain minor adjustments to deferred taxes for 1998 and the absence of tax benefits recognized in 1997 from the exercise of stock options. YEAR-TO-DATE Net interest income for the first six months of 1998 increased by $3.63 million, or 12.1%, as compared to the same period of 1997, primarily as a result of earning asset growth. Average net earning assets increased $61.5 million, or 26.6%, compared to the first half of 1997, while net interest spread was 3.93% for the year to date, compared to 4.23% for the first six months of 1997. Net interest margin on a taxable equivalent basis was 4.88% for the first half of 1998, compared to 5.10% for the same period of 1997. The Company provided $1.06 million for possible loan losses for the year to date, compared to $282,000 for the first six months of 1997, reflecting higher net charge-offs and loan growth in 1998. Net loan charge-offs were $637,000 for 1998, compared to $274,000 for the first half of 1997. The net charge-offs in 1998 represent an annualized rate of only 10 0.13% of total loans, compared to 0.07% for 1997. Noninterest income increased $1.5 million, or 18.7%, compared to the first six months of 1997 due to higher service charges on deposits and other income, such as trust fees and income from the origination and sale of residential mortgages. Noninterest expense increased $3.32 million, or 13.3%, due partly to branch acquisitions, but also as a result of increased staffing and other costs of expanding the Company's management and operational infrastructure. Income tax expense increased $576,000 for the first half of 1998 compared to the same period in 1997. The effective tax rate on income before taxes was 39%, up from 37% in 1997, due partially to the absence of tax benefits recognized in 1997 from the exercise of stock options. FINANCIAL POSITION Total securities increased $83.5 million compared to December 31, 1997 and $89.3 million compared to June 30, 1997, primarily due to cash received for the assumption of net liabilities for the branches acquired from NationsBank, N.A. The net unrealized gain on securities available for sale was $2.36 million at the end of the second quarter of 1998, compared to a gain of $2.43 million at December 31 and a gain of $915,000 at June 30, 1997. The average taxable equivalent yield on the securities portfolio for the second quarter decreased to 6.15% from 6.36% for the same quarter of 1997. Total loans increased $76.5 million from December 31, 1997 and $143 million from June 30, 1997, due to $30 million of loans acquired with the NationsBank branches and internal growth. The allowance for possible loan losses increased $714,000 from year-end 1997 and $1.32 million from the second quarter of 1997. The allowance as a percentage of total loans was 1.38%, 1.42% and 1.46% at June 30, 1998, December 31, 1997 and June 30, 1997, respectively. The allowance to nonperforming and restructured loans ratios at the same dates were 263.56%, 258.29% and 225.78%, respectively. Nonperforming and restructured assets totaled $6.26 million, compared to $6.53 million at year-end 1997 and $7.28 million at June 30, 1997. Although the ratio of nonperforming and restructured assets to total assets is only 0.39%, it is reasonable to expect nonperforming loans and loan losses to rise over time to historical norms as a result of economic and credit cycles. Total deposits increased $156 million as compared to December 31, 1997 and $191 million compared to June 30, 1997. The increases reflect the acquisition of the NationsBank branches, which added approximately $132 million in deposits, and internal growth. The Company's deposit base continues to be comprised substantially of core deposits, with large denomination certificates of deposit being only 12.2% of total deposits at June 30, 1998. Short-term borrowings increased $14.1 million from December 31, 1997 and $18.7 million from June 30, 1997 as a result of an increase in the Company's correspondent banking business. Fluctuations in short-term borrowings are a function of federal funds purchased from correspondent banks, customer demand for repurchase agreements and liquidity needs of the bank. Long-term borrowings increased $634,000 from year-end 1997 and $1.12 million from the second quarter of 1997 due to additional Federal Home Loan Bank borrowings. Stockholders' equity rose to $138 million from $131 million at year-end 1997 and $125 million at June 30, 1997. These increases were primarily the result of accumulated earnings. In April 1998, the Company terminated its Stock Repurchase Program. No repurchases were made under the program during 1998. Average stockholders' equity to average assets for the quarter was 8.3%, compared to 8.9% for the same quarter of 1997. The Company's leverage ratio and total risk-based capital ratio were 8.79% and 15.3%, respectively, at June 30, 1998, well in excess of the regulatory minimums. 11 BANCFIRST CORPORATION SELECTED CONSOLIDATED FINANCIAL STATISTICS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED SIX MONTHS ENDED PERFORMANCE STATISTICS JUNE 30, JUNE 30, -------------------------------- -------------------------------- 1998 1997 1998 1997 --------------- -------------- --------------- -------------- Net income per share - basic $ 0.62 $ 0.58 $ 1.24 $ 1.17 Net income per share - diluted 0.60 0.56 1.20 1.13 Cash dividends per share 0.12 0.10 0.24 0.20 Return on average assets 1.01% 1.15% 1.08% 1.19% Return on average stockholders' equity 12.19 12.93 12.50 13.29 Efficiency ratio 66.44 66.49 65.64 65.75
BALANCE SHEET AND ASSET QUALITY JUNE 30, DECEMBER 31, -------------------------------- STATISTICS 1998 1997 1997 -------------- --------------- -------------- Book value per share $ 20.41 $ 18.47 $ 19.43 Tangible book value per share 17.27 16.49 17.57 Average loans to deposits (year-to-date) 69.91% 70.35% 70.90% Nonperforming and restructured assets to total assets 0.39 0.52 0.45 Allowance for possible loan losses to total loans 1.38 1.46 1.42 Allowance for possible loan losses to nonperforming and restructured loans 263.56 225.78 258.29
CONSOLIDATED AVERAGE BALANCE SHEETS THREE MONTHS ENDED JUNE30, ------------------------------------------------------------------- AND INTEREST MARGIN ANALYSIS 1998 1997 -------------------------------- -------------------------------- TAXABLE EQUIVALENT BASIS AVERAGE AVERAGE AVERAGE YIELD/ AVERAGE YIELD/ BALANCE RATE BALANCE RATE --------------- -------------- --------------- -------------- Earning assets: Loans $ 982,079 9.52% $ 843,534 9.71% Securities 421,598 6.15 326,651 6.36 Federal funds sold 72,959 5.66 40,461 5.63 ----------- ----------- Total earning assets 1,476,636 8.37 1,210,646 8.67 ----------- ----------- Nonearning assets: Cash and due from banks 91,736 81,138 Interest recievable and other assets 93,904 81,834 Allowance for possible loan losses (13,468) (12,381) ----------- ----------- Total nonearning assets 172,172 150,591 ----------- ----------- Total assets $ 1,648,808 $ 1,361,237 ============ =========== Interest-bearing liabilities: Interest-bearing deposits $ 1,091,359 4.55% $ 940,116 4.28% Short-term borrowings 25,145 5.81 9,272 6.72 Long-term borrowings 7,061 6.23 6,581 6.11 9.65% Capital Securities 25,000 9.82 25,000 9.82 ----------- ----------- Total interest-bearing liabilities 1,148,565 4.71 980,969 4.46 ----------- ----------- Interest-free funds: Noninterest-bearing deposits 352,488 248,980 Interest payable and other liabilities 10,949 10,162 Stockholders' equity 136,806 121,126 ----------- ----------- Total interest-free funds 500,243 380,268 ----------- ----------- Total liabilities and stockholders' equity $ 1,648,808 $ 1,361,237 =========== =========== Net interest spread 3.66% 4.21% ====== ======= Net interest margin 4.71% 5.07% ====== =======
12 PART II - OTHER INFORMATION ITEM 2. CHANGES IN SECURITIES On May 1, 1998, the Company issued 414,794 shares of its Common Stock in connection with the acquisition of Lawton Security Bancshares, Inc. The acquisition was effected as a stock merger, in a transaction exempt from registration under Section 4 (2) of the Securities Act of 1933 (the "Securities Act"). Each of the stockholders of Lawton Security Bancshares, Inc. receiving Common Stock in the merger was an "accredited investor," as such term is defined under the Securities Act. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS At the Company's Annual Meeting of Stockholders held on June 15, 1998, the following matters were voted upon, with the votes indicated: NUMBER OF SHARES ----------------------------- DESCRIPTION OF PROPOSAL VOTED FOR WITHHELD --------- -------- PROPOSAL NO. 1-Election of Directors CLASS 1 DIRECTORS C. L. Craig, Jr. 5,012,427 13,951 John T. Hannah 5,020,527 5,851 J. Clifford Hudson 5,011,700 14,678 J. Ralph McCalmont 5,015,077 11,301 Joe T. Shockley, Jr. 5,015,077 11,301 CLASS 2 DIRECTORS Robert A. Gregory 5,015,077 11,301 Jim Daniel 5,012,427 13,951 J. R. Hutchens, Jr. 5,023,877 2,501 Paul B. Odom, Jr. 5,021,077 5,301 H. E. Rainbolt 5,014,427 11,951 CLASS 3 DIRECTORS Marion C. Bauman 5,001,127 25,251 K. Gordon Greer 5,015,077 11,301 William O. Johnstone 5,011,827 14,551 Melvin Moran 5,023,877 2,501 David E. Rainbolt 5,015,077 11,301
NUMBER OF SHARES -------------------------------------------- VOTED VOTED FOR AGAINST ABSTAINED --------- ------- --------- PROPOSAL NO. 2-Consideration of an amendment of the 3,815,370 850,148 3,186 Company's Certificate of Incorporation to provide for the classification of the Company's Board of Directors into three classes of directors serving staggered terms.
13
NUMBER OF SHARES -------------------------------------------- VOTED VOTED FOR AGAINST ABSTAINED --------- ------- --------- PROPOSAL NO. 3-Consideration of an amendment of the 4,199,808 462,697 6,199 Company's Certificate of Incorporation to provide that stockholders may adopt, amend or repeal the Bylaws of the Company only by the affirmative vote of at least 66 2/3% of the then-outstanding capital stock entitled to vote for the election of directors. PROPOSAL NO. 4-Consideration of an amendment of the 3,780,958 462,038 425,708 Company's Certificate of Incorporation to provide that the provisions of the Certificate of Incorporation contemplated by Proposal No. 2 and Proposal No. 3 above may only be amended by the affirmative vote of at least 66 2/3% of the then-outstanding capital stock entitled to vote for the election of directors PROPOSAL NO. 5-Consideration of an amendment of the 3,850,596 364,161 454,885 Company's Certificate of Incorporation to provide for certain minimum price and procedural requirements in connection with certain business combinations PROPOSAL NO. 6-Consideration of an amendment to the 4,647,110 346,000 32,868 BancFirst Corporation Stock Option Plan (the "Plan") to (i) increase the aggregate number of shares of the Company's Common Stock which may be issued upon the exercise of options granted under the Plan from 650,000 to 850,000; and (ii) provide for administration of the Plan as permitted by recent amendments to Rule 16b-3 (the "Rule 16b-3 Amendments") issued by the Commission under Section 16(b) of the Exchange Act. PROPOSAL NO. 7-Proposal to ratify the appointment of Coopers 5,021,349 1,069 3,560 & Lybrand, L.L.P. as the independent auditors of the Company for the ensuing year.
ITEM 5. OTHER INFORMATION In May 1998, the Company entered into a merger agreement with AmQuest Financial Corp. ("AmQuest") of Duncan, Oklahoma. The merger is expected to be completed in October 1998 and would be effected through the exchange of a maximum of 2,625,000 shares of BancFirst Corporation common stock for all of the AmQuest common stock outstanding. The authorized common stock of the Company would be increased and the shares for the exchange would be issued from the authorized and unissued shares of the Company. AmQuest would be merged into BancFirst Corporation, which would be the surviving company. A Form S-4 Registration Statement has been filed to register the transaction. The terms of the merger were negotiated through AmQuest's financial advisor and with AmQuest's senior management and principal stockholders. During the negotiations, the Company's management considered a number of factors relating to AmQuest, including its historical and projected earnings, its asset quality, fair values of certain of its assets, its level of capital, and potential efficiencies that might be achieved after the merger. AmQuest has approximately $568,000 in total assets and operates two subsidiary banks, AmQuest Bank, N.A. and Exchange National Bank & Trust Company. These AmQuest subsidiaries would become wholly-owned subsidiaries of BancFirst Corporation. The merger is subject to shareholder and regulatory approvals and will be accounted for as a pooling of interests. 14 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits EXHIBIT NUMBER EXHIBIT ----------- ------------------------------------------------------------- 2.1 Purchase and Assumption Agreement between NationsBank, N.A. and BancFirst dated September 26, 1997 (filed as exhibit 2.4 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1997 and incorporated herein by reference). 2.2 Merger Agreement dated May 6, 1998 between BancFirst Corporation and AmQuest Financial Corp. (filed as Exhibit 2.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1998 and incorporated herein by reference). 2.3 Letter Agreement dated August 5, 1998 between BancFirst Corporation and AmQuest Financial Corp. (filed as Exhibit 2.2 to the Company's Registration Statement on Form S-4, File No. 333- 59913 and incorporated herein by reference). 2.4 Letter Agreement dated August 7, 1998 between BancFirst Corporation and AmQuest Financial Corp. (filed as Exhibit 2.3 to the Company's Registration Statement on Form S-4, File No. 333- 59913 and incorporated herein by reference). 3.1 Amended and Restated Certificate of Incorporation (filed as Exhibit No. 1 to the Company's Form 8-A/A filed July 23, 1998 and incorporated herein by reference). 3.2 Amended By-Laws (filed as Exhibit 3.2 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1992 and incorporated herein by reference). 4.1 Amended and Restated Declaration of Trust of BFC Capital Trust I dated as of February 4, 1997 (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K dated February 4, 1997 and incorporated herein by reference.) 4.2 Indenture dated as of February 4, 1997 (filed as Exhibit 4.2 to the Company's Current Report on Form 8-K dated February 4, 1997 and incorporated herein by reference.) 4.3 Series A Capital Securities Guarantee Agreement dated as of February 4, 1997 (filed as Exhibit 4.3 to the Company's Current Report on Form 8-K dated February 4, 1997 and incorporated herein by reference.) 27.1* Financial Data Schedule. - ------------------------------------------------------------------------------- *Filed herewith (b) No reports on Form 8-K have been filed by the Company during the quarter ended June 30, 1998. 15 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. BANCFIRST CORPORATION --------------------- (Registrant) Date August 14, 1998 /s/Randy P. Foraker --------------- --------------------------------------- (Signature) Randy P. Foraker Senior Vice President and Controller; Assistant Secretary/Treasurer (Principal Accounting Officer) EX-27 2 FINANCIAL DATA SCHEDULE
9 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE INTERIM FINANCIAL STATEMENTS OF THE REGISTRANT FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS DEC-31-1998 JAN-01-1998 JUN-30-1998 118,693 51 14,000 0 364,845 52,351 53,051 990,441 13,705 1,618,857 1,414,627 22,087 11,098 32,685 0 0 6,778 131,582 1,618,857 45,413 11,824 1,597 58,834 23,292 25,280 33,554 1,059 0 28,270 13,740 8,399 0 0 8,399 1.24 1.20 4.82 3,674 1,104 422 14,815 12,991 842 205 13,705 13,705 0 12,174
-----END PRIVACY-ENHANCED MESSAGE-----