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BANCFIRST CORP /OK/ - Quarter Report: 2008 June (Form 10-Q)

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, 2008

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

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

101 N. Broadway, 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  ¨.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ¨    Accelerated filer  x     Non-accelerated filer  ¨

Indicated by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of July 31, 2008 there were 15,204,786 shares of the registrant’s Common Stock outstanding.

 

 

 


PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements.

BANCFIRST CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands, except per share data)

 

     June 30,     December 31,
2007
 
     2008     2007    

ASSETS

      

Cash and due from banks

   $ 162,045     $ 139,858     $ 194,103  

Interest-bearing deposits with banks

     5,325       2,343       2,387  

Federal funds sold

     400,000       461,000       399,000  

Securities (market value: $448,568, $459,130, and $467,921, respectively)

     448,350       459,271       467,719  

Loans:

      

Total loans (net of unearned interest)

     2,608,913       2,345,838       2,487,099  

Allowance for loan losses

     (33,512 )     (27,568 )     (29,127 )
                        

Loans, net

     2,575,401       2,318,270       2,457,972  

Premises and equipment, net

     89,483       85,012       88,110  

Other real estate owned

     1,975       926       1,300  

Intangible assets, net

     7,649       8,560       8,099  

Goodwill

     34,327       34,285       34,327  

Accrued interest receivable

     25,670       26,354       26,093  

Other assets

     89,606       65,987       63,896  
                        

Total assets

   $ 3,839,831     $ 3,601,866     $ 3,743,006  
                        

LIABILITIES AND STOCKHOLDERS’ EQUITY

      

Deposits:

      

Noninterest-bearing

   $ 1,016,882     $ 915,057     $ 966,214  

Interest-bearing

     2,350,497       2,236,496       2,322,290  
                        

Total deposits

     3,367,379       3,151,553       3,288,504  

Short-term borrowings

     14,366       35,858       30,400  

Accrued interest payable

     6,759       7,562       7,831  

Other liabilities

     37,243       14,478       16,899  

Long-term borrowings

     99       1,064       606  

Junior subordinated debentures

     26,804       26,804       26,804  
                        

Total liabilities

     3,452,650       3,237,319       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: 15,186,632, 15,724,536 and 15,217,230, respectively

     15,187       15,725       15,217  

Capital surplus

     64,672       62,291       63,917  

Retained earnings

     303,542       287,515       285,879  

Accumulated other comprehensive income (loss), net of income tax of $(2,036), $530 and $(3,742), respectively

     3,780       (984 )     6,949  
                        

Total stockholders’ equity

     387,181       364,547       371,962  
                        

Total liabilities and stockholders’ equity

   $ 3,839,831     $ 3,601,866     $ 3,743,006  
                        

The accompanying notes are an integral part of these consolidated financial statements.

 

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BANCFIRST CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except per share data)

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2008     2007     2008     2007  

INTEREST INCOME

 

Loans, including fees

   $ 42,507     $ 47,216     $ 87,671     $ 93,731  

Securities:

        

Taxable

     4,133       4,688       8,690       9,088  

Tax-exempt

     319       344       658       705  

Federal funds sold

     2,208       6,039       5,348       10,864  

Interest-bearing deposits with banks

     32       29       76       65  
                                

Total interest income

     49,199       58,316       102,443       114,453  
                                

INTEREST EXPENSE

        

Deposits

     13,807       19,817       30,982       38,497  

Short-term borrowings

     124       551       308       949  

Long-term borrowings

     2       19       9       39  

Junior subordinated debentures

     492       492       983       1,157  
                                

Total interest expense

     14,425       20,879       32,282       40,642  
                                

Net interest income

     34,774       37,437       70,161       73,811  

Provision for loan losses

     3,539       132       5,319       101  
                                

Net interest income after provision for loan losses

     31,235       37,305       64,842       73,710  
                                

NONINTEREST INCOME

        

Trust revenue

     1,436       1,413       2,864       2,871  

Service charges on deposits

     8,376       7,432       15,895       14,042  

Securities transactions

     6,121       339       6,149       566  

Income from sales of loans

     483       480       1,052       1,220  

Insurance commissions and premiums

     1,629       1,703       3,530       2,942  

Cash management services

     2,589       2,300       5,122       4,444  

Gain on sale of other assets

     1,189       10       3,011       17  

Other

     1,507       1,558       2,948       3,015  
                                

Total noninterest income

     23,330       15,235       40,571       29,117  
                                

NONINTEREST EXPENSE

        

Salaries and employee benefits

     20,366       18,937       40,555       37,727  

Occupancy and fixed assets expense, net

     2,119       2,047       4,195       4,125  

Depreciation

     1,903       1,761       3,658       3,570  

Amortization of intangible assets

     224       255       449       507  

Data processing services

     758       655       1,494       1,319  

Net expense from other real estate owned

     (8 )     104       (16 )     15  

Marketing and business promotion

     1,571       1,578       2,850       3,159  

Early extinguishment of debt

     —         —         —         1,894  

Other

     6,663       6,281       13,339       12,723  
                                

Total noninterest expense

     33,596       31,618       66,524       65,039  
                                

Income before taxes

     20,969       20,922       38,889       37,788  

Income tax expense

     (7,232 )     (7,520 )     (13,558 )     (13,263 )
                                

Net income

     13,737       13,402       25,331       24,525  

Other comprehensive income, net of tax:

        

Unrealized gains (losses) on securities

     (14,059 )     (2,149 )     (7,166 )     (1,452 )

Reclassification adjustment for gains (losses) included in net income

     3,979       220       3,997       368  
                                

Comprehensive income

   $ 3,657     $ 11,473     $ 22,162     $ 23,441  
                                

NET INCOME PER COMMON SHARE

        

Basic

   $ 0.91     $ 0.85     $ 1.67     $ 1.56  
                                

Diluted

   $ 0.89     $ 0.83     $ 1.63     $ 1.52  
                                

The accompanying notes are an integral part of these consolidated financial statements.

 

3


BANCFIRST CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(Dollars in thousands, except per share data)

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2008     2007     2008     2007  

COMMON STOCK

        

Issued at beginning of period

   $ 15,183     $ 15,722     $ 15,217     $ 15,764  

Shares issued

     4       3       10       14  

Shares acquired and canceled

     —         —         (40 )     (53 )
                                

Issued at end of period

   $ 15,187     $ 15,725     $ 15,187     $ 15,725  
                                

CAPITAL SURPLUS

        

Balance at beginning of period

   $ 64,297     $ 61,868     $ 63,917     $ 61,418  

Common stock issued

     375       423       755       873  
                                

Balance at end of period

   $ 64,672     $ 62,291     $ 64,672     $ 62,291  
                                

RETAINED EARNINGS

        

Balance at beginning of period

   $ 292,837     $ 276,943     $ 285,879     $ 271,073  

Net income

     13,737       13,402       25,331       24,525  

Dividends on common stock

     (3,032 )     (2,830 )     (6,075 )     (5,670 )

Common stock acquired and canceled

     —         —         (1,593 )     (2,413 )
                                

Balance at end of period

   $ 303,542     $ 287,515     $ 303,542     $ 287,515  
                                

ACCUMULATED OTHER COMPREHENSIVE INCOME

        

Unrealized gains on securities:

        

Balance at beginning of period

   $ 13,860     $ 945     $ 6,949     $ 100  

Net change

     (10,080 )     (1,929 )     (3,169 )     (1,084 )
                                

Balance at end of period

   $ 3,780     $ (984 )   $ 3,780     $ (984 )
                                

Total stockholders’ equity

   $ 387,181     $ 364,547     $ 387,181     $ 364,547  
                                

The accompanying notes are an integral part of these consolidated financial statements.

 

4


BANCFIRST CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

 

     Six Months Ended
June 30,
 
     2008     2007  

CASH FLOWS FROM OPERATING ACTIVITIES

   $ 20,556     $ 29,506  
                

INVESTING ACTIVITIES

    

Net cash and due from banks used for acquisitions and dispositions

     —         (3,991 )

Purchases of securities:

    

Held for investment

     (2,445 )     (3,773 )

Available for sale

     (136,666 )     (80,168 )

Maturities of securities:

    

Held for investment

     3,150       4,705  

Available for sale

     67,598       49,569  

Proceeds from sales and calls of securities:

    

Held for investment

     38       614  

Available for sale

     88,502       966  

Net increase in federal funds sold

     (1,000 )     (126,000 )

Purchase of life insurance

     —         (15,000 )

Purchases of loans

     (12,290 )     (2,606 )

Proceeds from sales of loans

     21,459       28,998  

Net other increase in loans

     (132,473 )     (48,017 )

Purchases of premises, equipment and other

     (5,664 )     (7,062 )

Proceeds from the sale of other real estate owned, repossessed assets and other

     4,724       4,067  
                

Net cash used in investing activities

     (105,067 )     (197,698 )
                

FINANCING ACTIVITIES

    

Net increase in demand, transaction and savings deposits

     45,807       148,554  

Net increase in certificates of deposits

     33,068       28,694  

Net increase (decrease) in short-term borrowings

     (16,034 )     12,606  

Net decrease in long-term borrowings

     (507 )     (275 )

Prepayment of junior subordinated debentures

     —         (26,894 )

Issuance of common stock

     765       887  

Acquisition of common stock

     (1,633 )     (2,466 )

Cash dividends paid

     (6,075 )     (5,670 )
                

Net cash provided by financing activities

     55,391       155,436  
                

Net decrease in cash and due from banks

     (29,120 )     (12,756 )

Cash and due from banks at the beginning of the period

     196,490       154,957  
                

Cash and due from banks at the end of the period

   $ 167,370     $ 142,201  
                

SUPPLEMENTAL DISCLOSURE

    

Cash paid during the period for interest

   $ 33,534     $ 41,068  
                

Cash paid during the period for income taxes

   $ 11,300     $ 11,951  
                

The accompanying notes are an integral part of these consolidated financial statements.

 

5


BANCFIRST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

(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. Certain amounts for 2007 have been reclassified to conform to the 2008 presentation.

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 will be effective 60 days following the Securities Exchange Commission’s approval of the Public Company Accounting Oversight Board’s amendment to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles”. The implementation of FAS 162 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.

FAS No. 157, “Fair Value Measurements” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements (see Note 14 – Fair Value Measurements).

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

 

6


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, $1.9 million or $1.2 million after taxes in the first quarter of 2007. 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 acquisition forward. The acquisition did not have a material effect on the results of operations of the Company for 2007 or the first six months of 2008.

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.

 

7


(4) SECURITIES

The table below summarizes securities held for investment and securities available for sale (dollars in thousands).

 

     June 30,    December 31,
2007
     2008    2007   

Held for investment, at cost (market value; $24,744, $24,696 and $25,472, respectively)

   $ 24,526    $ 24,837    $ 25,270

Available for sale, at market value

     423,824      434,434      442,449
                    

Total

   $ 448,350    $ 459,271    $ 467,719
                    

The table below summarizes the maturity of securities (dollars in thousands).

 

     June 30,    December 31,
2007
     2008    2007   

Contractual maturity of debt securities:

        

Within one year

   $ 123,999    $ 120,713    $ 174,544

After one year but within five years

     280,579      256,206      222,322

After five years

     28,814      68,574      56,871
                    

Total debt securities

     433,392      445,493      453,737

Equity securities

     14,958      13,778      13,982
                    

Total

   $ 448,350    $ 459,271    $ 467,719
                    

The Company held 209, 133 and 230 debt securities available for sale that had unrealized gains as of June 30, 2008 and 2007 and December 31, 2007, respectively. These securities had a market value totaling $281.8 million, $69.9 million and $270.6 million, respectively, and unrealized gains totaling $4.8 million, $299,000 and $8.4 million, respectively. The Company also held 62, 185 and 74 debt securities available for sale that had unrealized losses, respectively. These securities had a market value totaling $128.5 million, $327.5 million and $160.1 million and unrealized losses totaling $2.1 million, $5.4 million and $699,000, respectively. These unrealized losses occurred due to increases in interest rates and spreads and not as a result of a decline in credit quality. The Company has both the intent and ability to hold these debt securities until the unrealized losses are recovered.

 

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(5) LOANS AND ALLOWANCE FOR LOAN LOSSES

The following is a schedule of loans outstanding by category (dollars in thousands):

 

     June 30,     December 31,
2007
 
     2008     2007    
     Amount    Percent     Amount    Percent     Amount    Percent  

Commercial and industrial

   $ 520,868    19.97 %   $ 447,817    19.09 %   $ 493,860    19.86 %

Oil & gas production & equipment

     90,739    3.48       85,975    3.67       92,759    3.73  

Agriculture

     77,980    2.99       73,834    3.15       87,035    3.50  

State and political subdivisions:

               

Taxable

     5,776    0.22       5,384    0.23       5,972    0.24  

Tax-exempt

     8,490    0.33       9,135    0.39       8,937    0.36  

Real Estate:

               

Construction

     235,909    9.04       206,743    8.81       222,820    8.96  

Farmland

     90,197    3.46       86,380    3.68       95,137    3.82  

One to four family residences

     530,413    20.33       514,428    21.93       513,969    20.67  

Multifamily residential properties

     37,707    1.45       17,755    0.76       20,248    0.81  

Commercial

     706,539    27.08       618,812    26.38       653,066    26.26  

Consumer

     284,949    10.92       255,500    10.89       270,735    10.89  

Other

     19,346    0.73       24,075    1.02       22,561    0.90  
                                       

Total loans

   $ 2,608,913    100.00 %   $ 2,345,838    100.00 %   $ 2,487,099    100.00 %
                                       

Loans held for sale (included above)

   $ 9,721      $ 10,340      $ 8,320   
                           

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, if any, 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 (dollars in thousands):

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2008     2007     2008     2007  

Balance at beginning of period

   $ 30,193     $ 27,493     $ 29,127     $ 27,700  
                                

Charge-offs

     (355 )     (226 )     (1,254 )     (714 )

Recoveries

     135       169       320       481  
                                

Net charge-offs

     (220 )     (57 )     (934 )     (233 )
                                

Provisions charged to operations

     3,539       132       5,319       101  
                                

Balance at end of period

   $ 33,512     $ 27,568     $ 33,512     $ 27,568  
                                

 

9


The net charge-offs (recoveries) by category are summarized as follows (dollars in thousands):

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2008    2007     2008    2007  

Commercial, financial and other

   $ 12    $ (39 )   $ 44    $ (50 )

Real estate – construction

     3      (1 )     11      (24 )

Real estate – mortgage

     93      19       606      9  

Consumer

     112      78       273      298  
                              

Total

   $ 220    $ 57     $ 934    $ 233  
                              

 

(6) NONPERFORMING AND RESTRUCTURED ASSETS

Below is a summary of nonperforming and restructured assets (dollars in thousands):

 

     June 30,     December 31,
2007
 
     2008     2007    

Past due over 90 days and still accruing

   $ 2,043     $ 1,276     $ 823  

Nonaccrual

     11,070       13,372       11,568  

Restructured

     833       912       1,121  
                        

Total nonperforming and restructured loans

     13,946       15,560       13,512  

Other real estate owned and repossessed assets

     2,311       1,098       1,568  
                        

Total nonperforming and restructured assets

   $ 16,257     $ 16,658     $ 15,080  
                        

Nonperforming and restructured loans to total loans

     0.53 %     0.66 %     0.54 %
                        

Nonperforming and restructured assets to total assets

     0.42 %     0.46 %     0.40 %
                        

 

(7) INTANGIBLE ASSETS AND GOODWILL

The following is a summary of intangible assets (dollars in thousands):

 

     June 30,     December 31,
2007
 
     2008     2007    
     Gross
Carrying
Amount
   Accumulated
Amortization
    Gross
Carrying
Amount
   Accumulated
Amortization
    Gross
Carrying
Amount
   Accumulated
Amortization
 

Core deposit intangibles

   $ 6,722    $ (2,550 )   $ 7,280    $ (2,424 )   $ 6,722    $ (2,213 )

Customer relationship intangibles

     4,081      (604 )     4,081      (377 )     4,081      (491 )
                                             

Total

   $ 10,803    $ (3,154 )   $ 11,361    $ (2,801 )   $ 10,803    $ (2,704 )
                                             

 

10


Amortization of intangible assets and estimated amortization of intangible assets are as follows (dollars in thousands):

 

Amortization:

  

Three months ended June 30, 2008

   $ 224

Three months ended June 30, 2007

     255

Six months ended June 30, 2008

     449

Six months ended June 30, 2007

     507

Year ended December 31, 2007

     968

Estimated Amortization

  

Year ending December 31:

  

2008

   $ 908

2009

     908

2010

     908

2011

     908

2012

     908

The following is a summary of goodwill by business segment (dollars in thousands):

 

     Metropolitan
Banks
   Community
Banks
   Other
Financial
Services
   Executive,
Operations
& Support
   Elimin-
ations
   Consol-
idated

Three Months Ended

                 

June 30, 2008

                 

Balance at beginning and end of period

   $ 6,150    $ 23,295    $ 4,258    $ 624    $ —      $ 34,327
                                         

June 30, 2007

                 

Balance at beginning of period

   $ 6,150    $ 23,253    $ 2,485    $ 624      —      $ 32,512

Acquisitions

     —        —        1,773      —        —        1,773
                                         

Balance at end of period

   $ 6,150    $ 23,253    $ 4,258    $ 624      —      $ 34,285
                                         

Six Months Ended

                 

June 30, 2008

                 

Balance at beginning and end of period

   $ 6,150    $ 23,295    $ 4,258    $ 624    $ —      $ 34,327
                                         

June 30, 2007

                 

Balance at beginning of period

   $ 6,150    $ 23,253    $ 2,485    $ 624      —      $ 32,512

Acquisitions

     —        —        1,773      —        —        1,773
                                         

Balance at end of period

   $ 6,150    $ 23,253    $ 4,258    $ 624      —      $ 34,285
                                         

Year Ended

                 

December 31, 2007

                 

Balance at beginning of period

   $ 6,150    $ 23,253    $ 2,485    $ 624    $ —      $ 32,512

Acquisitions

     —        —        1,773      —        —        1,773

Adjustments

     —        42      —        —        —        42
                                         

Balance at end of period

   $ 6,150    $ 23,295    $ 4,258    $ 624    $ —      $ 34,327
                                         

 

11


(8) 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 (dollars in thousands).

 

     Minimum
Required
    June 30,     December 31,
2007
 
       2008     2007    

Tier 1 capital

     $ 367,399     $ 348,663     $ 348,564  

Total capital

     $ 402,040     $ 377,602     $ 378,755  

Risk-adjusted assets

     $ 2,992,477     $ 2,690,441     $ 2,826,072  

Leverage ratio

   3.00 %     9.67 %     9.80 %     9.42 %

Tier 1 capital ratio

   4.00 %     12.28 %     12.96 %     12.33 %

Total capital ratio

   8.00 %     13.44 %     14.03 %     13.40 %

As of June 30, 2008 and 2007, and December 31, 2007, BancFirst was considered to be “well capitalized”. There are no conditions or events since the most recent notification of BancFirst’s capital category that management believes would change its category.

 

(9) 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 2002, and September 2007 to increase the shares authorized to be purchased by 555,832 shares, 364,530 shares and 366,948 shares, respectively. The SRP may be used as a means to increase earnings per share and return on equity, to purchase treasury stock for the exercise of stock options or for distributions under the Deferred Stock Compensation Plan, to provide liquidity for optionees to dispose of stock from exercises of their stock options, and to provide liquidity for shareholders wishing to sell their stock. The timing, price and amount of stock repurchases under the SRP may be determined by management and approved by the Company’s Executive Committee. At June 30, 2008 there were 560,000 shares remaining that could be repurchased under the SRP. Below is a summary of the shares repurchased under the program.

 

     Three Months Ended
June 30,
   Six Months Ended
June 30,
     2008    2007    2008    2007

Number of shares repurchased

   —      —        40,000      53,000

Average price of shares repurchased

   —      —      $ 40.70    $ 46.47

 

(10) SHARE-BASED COMPENSATION

BancFirst Corporation adopted a nonqualified incentive stock option plan (the “BancFirst ISOP”) in May 1986. In May 2006, the Company amended the BancFirst ISOP to increase the number of shares to be issued under the plan to 2,500,000 shares. At June 30, 2008, 83,410 shares are available for future grants. The BancFirst ISOP will terminate December 31, 2011. The options are exercisable beginning four years from the date of grant at the rate of 25% per year for four years. Options granted prior to 1996 expire at the end of eleven years from the date of the grant. Options granted after January 1, 1996 expire at the end of fifteen years from the date of grant. Options outstanding as of June 30, 2008 will become exercisable through the year 2015. The option price must be no less than 100% of the fair market value of the stock relating to such option at the date of grant.

In June 1999, the Company adopted the BancFirst Corporation Non-Employee Directors’ Stock Option Plan (the “BancFirst Directors’ Stock Option Plan”). Each non-employee director is granted an option for 10,000 shares. In May 2006, the Company amended the BancFirst Directors’ Stock Option Plan to increase the number of shares to be issued under the plan to 180,000 shares. At June 30, 2008, 25,000 shares are available for future grants. The options are

 

12


exercisable beginning one year from the date of grant at the rate of 25% per year for four years, and expire at the end of fifteen years from the date of grant. Options outstanding as of June 30, 2008 will become exercisable through the year 2012. The option price must be no less than 100% of the fair value of the stock relating to such option at the date of grant.

Below is a summary of the activity under both the BancFirst ISOP and the BancFirst Directors’ Stock Option Plan (dollars in thousands, except per share data):

 

     Six Months Ended June 30, 2008
     Options     Wgtd. Avg.
Exercise Price
   Wgtd. Avg.
Remaining
Contractual Term
   Aggregate
Intrinsic
Value

Outstanding at January 1, 2008

   1,203,817     $ 26.75      

Options granted

   10,000       45.39      

Options exercised

   (9,000 )     17.88      
              

Outstanding at June 30, 2008

   1,204,817       26.97    9.21    $ 19,075
                    

Exercisable at June 30, 2008

   650,239       18.02    7.38    $ 15,861
                    

Below is additional information regarding options granted and options exercised under both the BancFirst ISOP and the BancFirst Directors’ Stock Option Plan (dollars in thousands, except per share data):

 

     Three Months Ended
June 30,
   Six Months Ended
June 30,
     2008    2007    2008    2007

Weighted average grant-date fair value per share of options granted

   $ 19.62    $ 16.50    $ 20.24    $ 17.57

Total intrinsic value of options exercised

     75      42      239      388

Cash received from options exercised

     49      34      161      160

Tax benefit realized from options exercised

     29      16      92      150

Effective January 1, 2006 the Company adopted, on a modified prospective basis, the fair value provisions of FAS 123R. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model and is based on certain assumptions including risk-free rate of return, dividend yield, stock price volatility, and the expected term. The fair value of each option is expensed over its vesting period.

For the three months ended June 30, 2008 and 2007, the Company recorded share-based employee compensation expense of approximately $192,000 and $199,000 respectively, net of tax and approximately $367,000 and $373,000 for the six months ended June 30, 2008 and 2007, respectively.

The Company will continue to amortize the remaining fair value of these stock options of approximately $3.6 million, net of tax, over the remaining vesting period of approximately seven years. Share-based employee compensation expense under the fair value method was measured using the following assumptions for the options granted:

 

     2008     2007  

Risk-free interest rate

   3.57 %   4.73 %

Dividend yield

   1.50 %   1.50 %

Stock price volatility

   38.68 %   25.85 %

Expected term

   10 Yrs     10 Yrs  

The risk-free interest rate is determined by reference to the spot zero-coupon rate for the U.S. Treasury security with a maturity similar to the expected term of the options. The dividend yield is the expected yield for the expected term. The stock price volatility is estimated from the recent historical volatility of the Company’s stock. The expected term is estimated from the historical option exercise experience.

 

13


(11) COMPREHENSIVE INCOME

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 (dollars in thousands).

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2008     2007     2008     2007  

Unrealized gain (loss) during the period:

        

Before-tax amount

   $ (21,628 )   $ (3,307 )   $ (11,023 )   $ (2,234 )

Tax (expense) benefit

     7,569       1,158       3,857       782  
                                

Net-of-tax amount

   $ (14,059 )   $ (2,149 )   $ (7,166 )   $ (1,452 )
                                

The amount of unrealized gain or loss included, net of tax, in accumulated other comprehensive income is summarized below (dollars in thousands).

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2008     2007     2008     2007  

Unrealized gain (loss) on securities:

        

Beginning balance

   $ 13,860     $ 945     $ 6,949     $ 100  

Current period change

     (14,059 )     (2,149 )     (7,166 )     (1,452 )

Reclassification adjustment for gains (losses) included in net income

     3,979       220       3,997       368  
                                

Ending balance

   $ 3,780     $ (984 )   $ 3,780     $ (984 )
                                

 

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(12) NET INCOME PER COMMON SHARE

Basic and diluted net income per common share are calculated as follows (dollars in thousands, except per share data):

 

     Income
(Numerator)
   Shares
(Denominator)
   Per Share
Amount
Three Months Ended June 30, 2008         
Basic         

Income available to common stockholders

   $ 13,737    15,185,763    $ 0.91
            

Effect of stock options

     —      362,924   
              

Diluted

        

Income available to common stockholders plus assumed exercises of stock options

   $ 13,737    15,548,687    $ 0.89
                  
Three Months Ended June 30, 2007         
Basic         

Income available to common stockholders

   $ 13,402    15,723,483    $ 0.85
            

Effect of stock options

     —      333,285   
              

Diluted

        

Income available to common stockholders plus assumed exercises of stock options

   $ 13,402    16,056,768    $ 0.83
                  
Six Months Ended June 30, 2008         
Basic         

Income available to common stockholders

   $ 25,331    15,196,906    $ 1.67
            

Effect of stock options

     —      359,067   
              

Diluted

        

Income available to common stockholders plus assumed exercises of stock options

   $ 25,331    15,555,973    $ 1.63
                  
Six Months Ended June 30, 2007         

Basic

        

Income available to common stockholders

   $ 24,525    15,751,110    $ 1.56
            

Effect of stock options

     —      349,110   
              

Diluted

        

Income available to common stockholders plus assumed exercises of stock options

   $ 24,525    16,100,220    $ 1.52
                  

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.

 

     Shares    Average
Exercise
Price

Three Months Ended June 30, 2008

   264,929    $ 44.59

Three Months Ended June 30, 2007

   237,016    $ 46.20

Six Months Ended June 30, 2008

   267,016    $ 43.95

Six Months Ended June 30, 2007

   208,276    $ 46.18

 

(13) SEGMENT INFORMATION

The Company evaluates its performance with an internal profitability measurement system that measures the profitability of its business units on a pre-tax basis. The four principal business units are metropolitan banks, community banks, other financial services, and executive, operations and support. Metropolitan and community banks offer traditional banking products such as commercial and retail lending, and a full line of deposit accounts. Metropolitan banks consist of banking locations in the metropolitan Oklahoma City and Tulsa areas. Community banks consist of

 

15


banking locations in communities throughout Oklahoma. Other financial services are specialty product business units including guaranteed small business lending, guaranteed student lending, residential mortgage lending, trust services, securities brokerage, electronic banking and insurance. The executive, operations and support groups represent executive management, operational support and corporate functions that are not allocated to the other business units.

The results of operations and selected financial information for the four business units are as follows (dollars in thousands):

 

     Metropolitan
Banks
   Community
Banks
   Other
Financial
Services
   Executive,
Operations
& Support
    Elimin-
ations
    Consol-
idated
Three Months Ended:                

June 30, 2008

               

Net interest income (expense)

   $ 10,449    $ 24,385    $ 1,665    $ (1,725 )   $ —       $ 34,774

Noninterest income

     2,453      8,316      4,551      21,963       (13,953 )     23,330

Income before taxes

     5,532      13,510      1,839      14,024       (13,936 )     20,969

June 30, 2007

               

Net interest income (expense)

   $ 11,583    $ 24,207    $ 2,094    $ (432 )   $ (15 )   $ 37,437

Noninterest income

     2,115      7,622      4,739      14,910       (14,151 )     15,235

Income before taxes

     7,543      15,377      3,007      9,179       (14,184 )     20,922

Six Months Ended:

               

June 30, 2008

               

Net interest income (expense)

   $ 21,305    $ 47,852    $ 3,370    $ (2,366 )   $ —       $ 70,161

Noninterest income

     4,713      16,071      9,291      36,466       (25,970 )     40,571

Income before taxes

     12,262      26,442      3,758      22,340       (25,913 )     38,889

June 30, 2007

               

Net interest income (expense)

   $ 22,731    $ 47,703    $ 4,002    $ (596 )   $ (29 )   $ 73,811

Noninterest income

     4,006      14,557      9,143      28,678       (27,267 )     29,117

Income before taxes

     14,527      29,802      5,609      15,114       (27,264 )     37,788

Total Assets:

               

June 30, 2008

   $ 1,225,138    $ 2,422,997    $ 154,266    $ 504,536     $ (467,106 )   $ 3,839,831

June 30, 2007

   $ 1,126,799    $ 2,290,303    $ 156,130    $ 468,299     $ (439,665 )   $ 3,601,866

December 31, 2007

   $ 1,123,148    $ 2,390,420    $ 206,060    $ 478,823     $ (455,445 )   $ 3,743,006

The financial information for each business unit is presented on the basis used internally by management to evaluate performance and allocate resources. The Company utilizes a transfer pricing system to allocate the benefit or cost of funds provided or used by the various business units. Certain revenues related to other financial services are allocated to the banks whose customers receive the services and, therefor, are not reflected in the income for other financial services. Certain services provided by the support group to other business units, such as item processing, are allocated at rates approximating the cost of providing the services. Eliminations are adjustments to consolidate the business units and companies.

 

(14) FAIR VALUE MEASUREMENTS

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.

FAS 157 establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

 

•        Level 1 Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

 

16


•            Level 2 Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset and liability, either directly or indirectly, for substantially the full term of the financial instrument.

 

•            Level 3 Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to all of the Company’s financial assets and financial liabilities carried at fair value effective January 1, 2008.

Securities Available for Sale

U.S. Treasury Bills are reported at fair value utilizing Level 1 inputs. Other securities classified as available for sale are reported at fair value utilizing Level 2 inputs. For these securities, the Company obtains fair value information from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. The Company also invests in equity securities classified as available for sale for which observable information is not readily available. These securities are reported at fair value utilizing Level 3 inputs. For these securities, management determines the fair value based on replacement cost, the income approach or information provided by outside consultants or lead investors.

Derivatives

Derivatives are reported at fair value utilizing Level 2 inputs. The Company obtains dealer quotations to value its oil and gas swaps/options. The Company utilizes internal valuation models with observable market data inputs to estimate fair values.

Loans Held For Sale

The Company originates mortgage loans to be sold in the secondary market. At the time of origination, the acquiring bank has already been determined and the terms of the loan, including interest rate, have already been set by the acquiring bank, allowing the Company to originate the loan at fair value. Mortgage loans are generally sold within 45 days of origination and gains or losses recognized upon the sale of the loans are determined on a specific identification basis.

Impaired Loans

Certain impaired loans are reported at the fair value of the underlying collateral if repayment is expected solely from the collateral. Collateral values are estimated using Level 3 inputs based on customized discounting criteria and are considered in the calculation of the allowance for loan loss reserves.

 

17


The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of June 30, 2008, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (dollars in thousands):

 

     Level 1 Inputs    Level 2 Inputs    Level 3 Inputs    Total Fair Value

Securities Available for Sale

   $ —      $ 414,668    $ 9,156    $ 423,824

Derivative Assets

     —        20,505      —        20,505

Derivative Liabilities

     —        20,011      —        20,011

Loans Held For Sale

     —        9,721      —        9,721

 

(15) DERIVATIVE FINANCIAL INSTRUMENTS

The Company enters into oil and gas swaps and options contracts to accommodate the business needs of its customers. Upon the origination of an oil or gas swap or option contract with a customer, the Company simultaneously enters into an offsetting contract with a counterparty to mitigate the exposure to fluctuations in oil and gas prices.

The Company obtains dealer quotations to value its oil and gas derivative positions. The notional amounts and estimated fair values of oil and gas derivative positions outstanding are presented in the following table (notional amounts and dollars in thousands):

 

          June 30, 2008     June 30, 2007     December 31, 2007  
     Notional
Units
   Notional
Amount
    Estimated
Fair Value
    Notional
Amount
    Estimated
Fair Value
    Notional
Amount
    Estimated
Fair Value
 

Oil and gas swaps and options

               

Oil

               

Customer

   Barrels    (128 )   $ 9,203     —       $ —       (148 )   $ 2,410  

Counterparty

   Barrels    128       (9,028 )   —         —       148       (2,362 )

Natural Gas

               

Customer

   MMBTUs    (3,480 )     11,303     (2,040 )     (587 )   (2,570 )     (662 )

Counterparty

   MMBTUs    3,480       (10,983 )   2,040       671     2,570       789  

The Company’s credit exposure on oil and gas swaps and options varies based on the current market prices of oil and natural gas. Changes in the Company’s credit exposure will be offset by equal and opposite changes in the hedged position. The net positive fair value of the contracts is the profit derived from the activity and is unaffected by market price movements.

Customer credit exposure is managed by strict position limits and is primarily offset by first liens on production while the remainder is offset by cash. Counterparty credit exposure is managed by selecting highly rated counterparties (rated A- or better by Standard and Poor’s) and monitoring market information.

The Company had credit exposure relating to oil and gas swaps and options with bank customers of approximately $20.5 million at June 30, 2008 and $1.7 million at December 31, 2007. Conversely, the Company had exposure to bank counterparties of approximately $700,000 at June 30, 2007.

The Company entered into a $30 million five year guaranty with a counterparty on June 4, 2008 for the timely payment of the obligations of the subsidiary Bank related to the settlement of oil and gas positions.

 

18


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

BANCFIRST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SUMMARY

Net income for the second quarter of 2008 was $13.7 million compared to $13.4 million for the second quarter of 2007. Diluted net income per share was $0.89 and $0.83 for the second quarter of 2008 and 2007, respectively. For the first six months of 2008, net income was $25.3 million, compared to $24.5 million for the first six months of 2007. Diluted net income per share for the first six months of 2008 was $1.63 compared to $1.52 for the first six months of 2007.

Total assets at June 30, 2008 were $3.8 billion, up $96.8 million from December 31, 2007 and up $238.0 million from a year ago. Total loans increased to $2.61 billion, up $121.8 million from December 31, 2007 and up $263.1 million from June 30, 2007. Total deposits were $3.4 billion, up $78.9 million from December 31, 2007 and up $215.8 million from June 30, 2007. Stockholders’ equity was $387 million at June 30, 2008, up $15.2 million from December 31, 2007 and up $22.6 million compared to June 30, 2007. The Company’s liquidity remains strong as its average loan to deposit ratio was 77.2% at quarter end and core deposits represented 91.2% of total deposits. The Company had no brokered deposits and less than $100,000 of Federal Home Loan Bank borrowings. Stockholder’s equity was $387 million at June 30, 2008 which was 10.2% of total 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 or $0.24 per diluted earnings per share for the second quarter, and $3.3 million or $0.21 per diluted earnings per share for the year.

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.

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 acquisition forward. The acquisition did not have a material effect on the results of operations of the Company for 2007 or the first six months of 2008.

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 in the first quarter of 2007. The loss reflects the premium paid and the acceleration of the unamortized issuance costs.

RESULTS OF OPERATIONS

Second Quarter

Net interest income totaled $34.8 million, a decrease of $2.6 million, or 7.0%, compared to the second quarter of 2007. The Company’s net interest margin (on a taxable equivalent basis) was 4.08% compared to 4.68% for the same period a year ago. The lower interest rate environment in 2008 compared to the first six months of 2007 as a result of Federal Reserve rate cuts has caused the Company’s net interest margin to decline.

 

19


The Company’s provision for loan losses was $3.5 million compared to $132,000 during the same period a year ago. The loan provision was driven primarily by the identification of a small number of commercial credits that were internally downgraded by management and to a lesser extent from the growth in the loan portfolio. Net loan charge-offs were $220,000 for the second quarter of 2008, compared to $57,000 for the second quarter of 2007. The net charge-offs represent a rate of 0.03% of average total loans for the second quarter of 2008 compared to 0.01% for the same period in 2007.

During the second quarter, the Company completed an $80 million sale of securities that resulted in a pre-tax securities gain of $6.1 million and also recognized a $1.2 million pre-tax gain on the sale of an asset which were included in noninterest income. Recurring operating noninterest income was $16.0 million compared to $15.2 million for the same period a year ago, an increase of 5.3% due to growth in deposit accounts, and cash management and treasury services. Noninterest expense totaled $33.6 million versus $31.6 million for the second quarter of 2007, an increase of $2 million, or 6.3%. The increase is due to the Company’s overall growth, including expansion of the Company’s insurance agency. The Company’s effective tax rate was 34.5% for the second quarter of 2008, compared to 35.9% for the second quarter of 2007. The decrease is a result of additional tax credits realized in 2008.

Year-To-Date

Net interest income for the six months ended June 30, 2008 was $70.2 million, a decrease of $3.7 million from the same period in 2007. The net interest margin in 2008 decreased to 4.16% from 4.72% for the first six months of 2007. The lower interest rate environment in 2008 compared to the first six months of 2007 as a result of Federal Reserve rate cuts has caused the Company’s net interest margin to decline.

The Company provided a $5.32 million provision for loan losses in the first six months of 2008, compared to $101,000 for the same period of 2007. The loan provision was driven primarily by the identification of a small number of commercial credits that were internally downgraded by management and to a lesser extent from the growth in the loan portfolio. Net loan charge-offs were $934,000 for the first six months of 2008, compared to $233,000 for the first six months of 2007. The net charge-offs represent an annualized rate of 0.07% of average total loans for the first six months of 2008 compared to 0.02% for the first six months of 2007.

Noninterest income for the six months of 2008 increased $11.5 million compared to the same period for 2007. Noninterest income during the first six months of 2008 included a one-time gain of approximately $1.8 million, before taxes, from the Company’s interest in the Visa initial public offering, a $6.1 million gain on the sale of securities, and a $1.2 million gain on the sale of an asset. Core noninterest income was up $2.4 million due to growth in deposit accounts, and cash management and treasury services. Noninterest expense increased $1.5 million compared to the first half of 2007. Last year’s expenses included a $1.9 million charge for the early redemption of the junior subordinated debentures. The increase in the core operating expenses over a year ago was attributable to the increase in salaries and benefits due to the Company’s growth, and expenses of an insurance agency acquired in the second quarter of 2007. Income tax expense increased $295,000 compared to the first six months of 2007. The effective tax rate on income before taxes was 34.9%, compared to 35.1% for the first six months of 2007. The decrease is a result of additional tax credits realized in 2008.

 

20


In recent months certain events in the national economy have caused credit and liquidity issues, declining home sales, rising oil and gas prices and a declining dollar resulting in an increase in credit losses at many U.S. banks. The deterioration in the economy has led to mixed reviews on whether or not the nation has entered into a recession. While the Oklahoma economy is currently performing better than the national average, it would be reasonable to expect that the state would eventually feel the impact of a national recession. If that were the case, it is reasonable to expect that loan losses of the Company would increase.

FINANCIAL POSITION

The aggregate of cash and due from banks, interest-bearing deposits with banks, and federal funds sold as of June 30, 2008 increased $277.0 million from December 31, 2007 but decreased $35.8 million from June 30, 2007. The increase from year-end was mainly from deposit growth in early 2008. The decrease from the previous year mainly resulted from a decrease in federal funds sold to help fund loan growth.

Total securities decreased $19.4 million compared to December 31, 2007 and $10.9 million compared to June 30, 2007. The size of the Company’s securities portfolio is a function of liquidity management and excess funds available for investment. The Company has maintained a very liquid securities portfolio to provide funds for loan growth. The net unrealized gain on securities available for sale, before taxes, was $5.8 million at the end of the second quarter of 2008, compared to an unrealized gain of $10.7 million at December 31, 2007 and an unrealized gain of $2.1 million at June 30, 2007. The decrease in unrealized gains from year-end to June 30, 2008 was due in part to the realization of securities gains resulting from the $80 million sale of securities previously discussed. The average taxable equivalent yield on the securities portfolio for the second quarter of 2008 decreased to 4.15% from 4.76% for the same quarter of 2007.

Total loans increased $121.8 million from December 31, 2007 and increased $263.1 million from June 30, 2007. The increase compared to year end and second quarter 2007 was due to internal loan growth. The allowance for loan losses increased $4.4 million from year-end 2007 and $5.9 million from the second quarter of 2007. The allowance as a percentage of total loans was 1.28%, 1.17% and 1.18% at June 30, 2008, December 31, 2007 and June 30, 2007, respectively. The allowance to nonperforming and restructured loans at the same dates was 240.30%, 215.57% and 177.18%, respectively.

Nonperforming and restructured loans totaled $13.9 million at June 30, 2008, compared to $13.5 million at December 31, 2007 and $15.6 million at June 30, 2007. The ratio of nonperforming and restructured loans to total loans for the same periods was 0.53%, 0.54% and 0.66%, respectively. The level of nonperforming loans and loan losses may rise over time as a result of economic and credit cycles.

Total deposits increased $78.9 million compared to December 31, 2007, and $215.8 million compared to June 30, 2007 due to internal growth. The Company’s deposit base continues to be comprised substantially of core deposits, with large denomination certificates of deposit being only 10.0% of total deposits at June 30, 2008, compared to 9.2% at December 31, 2007 and 8.8% at June 30, 2007. Noninterest bearing deposits to total deposits were 30.2% at June 30, 2008, compared to 29.4% at December 31, 2007 and 29.0% at June 30, 2007.

Short-term borrowings decreased $16.0 million from December 31, 2007, and $21.5 million from June 30, 2007. 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 decreased $507,000 from year-end 2007 and $965,000 from the second quarter of 2007. The decrease since the second quarter and year end of 2007 was due to scheduled principal payments and early payoff of the note payable related to the acquisition of Armor Assurance Company.

Stockholders’ equity was $387.2 million at June 30, 2008 which was an increase of $15.2 million from year-end 2007 and an increase of $22.6 million from the second quarter of 2007 due to accumulated earnings. Average stockholders’ equity to average assets for the second quarter of 2008 was 10.29%, compared to 10.14% for the second quarter of 2007. The Company’s leverage ratio and total risk-based capital ratio were 9.67% and 13.44%, respectively, at June 30, 2008, well in excess of the regulatory minimums.

 

21


FUTURE APPLICATION OF ACCOUNTING STANDARDS

See note (2) of the Notes to Consolidated Financial Statements for a discussion of recently issued accounting pronouncements.

SEGMENT INFORMATION

See note (13) of the Notes to Consolidated Financial Statements for disclosures regarding business segments.

FORWARD LOOKING STATEMENTS

The Company may make forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 with respect to earnings, credit quality, corporate objectives, interest rates and other financial and business matters. Forward-looking statements include estimates and give management’s current expectations or forecasts of future events. The Company cautions readers that these forward-looking statements are subject to numerous assumptions, risks and uncertainties, including economic conditions, the performance of financial markets and interest rates; legislative and regulatory actions and reforms; competition; as well as other factors, all of which change over time. Actual results may differ materially from forward-looking statements.

 

22


BANCFIRST CORPORATION

SELECTED CONSOLIDATED FINANCIAL DATA

(Unaudited)

(Dollars in thousands, except per share data)

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2008     2007     2008     2007  

Per Common Share Data

        

Net income – basic

   $ 0.91     $ 0.85     $ 1.67     $ 1.56  

Net income – diluted

     0.89       0.83       1.63       1.52  

Cash dividends

     0.20       0.18       0.40       0.36  

Performance Data

        

Return on average assets

     1.46 %     1.51 %     1.36 %     1.41 %

Return on average stockholders’ equity

     14.14       14.93       13.21       13.90  

Cash dividend payout ratio

     21.98       21.18       23.95       23.08  

Net interest spread

     3.37       3.62       3.36       3.67  

Net interest margin

     4.08       4.68       4.16       4.72  

Efficiency ratio

     57.82       60.03       60.08       63.19  

Net charge-offs

     0.03       0.01       0.07       0.02  
           June 30,     December 31,
2007
 
           2008     2007    

Balance Sheet Data

        

Book value per share

     $ 25.49     $ 23.18     $ 24.44  

Tangible book value per share

       22.73       20.46       21.66  

Average loans to deposits (year-to-date)

       77.05 %     76.23 %     76.04 %

Average earning assets to total assets (year-to-date)

       91.09       90.75       90.86  

Average stockholders’ equity to average assets (year-to-date)

       10.29       10.14       10.18  

Asset Quality Ratios

        

Nonperforming and restructured loans to total loans

       0.53 %     0.66 %     0.54 %

Nonperforming and restructured assets to total assets

       0.42       0.46       0.40  

Allowance for loan losses to total loans

       1.28       1.18       1.17  

Allowance for loan losses to nonperforming and restructured loans

       240.30       177.18       215.57  

 

23


BANCFIRST CORPORATION

CONSOLIDATED AVERAGE BALANCE SHEETS AND INTEREST MARGIN ANALYSES

(Unaudited)

Taxable Equivalent Basis (Dollars in thousands)

 

     Three Months Ended June 30,  
     2008     2007  
     Average
Balance
    Interest
Income/
Expense
   Average
Yield/
Rate
    Average
Balance
    Interest
Income/
Expense
   Average
Yield/
Rate
 

ASSETS

              

Earning assets:

              

Loans (1)

   $ 2,552,864     $ 42,587    6.69 %   $ 2,333,455     $ 47,302    8.13 %

Securities – taxable

     414,047       4,132    4.00       400,811       4,688    4.69  

Securities – taxable exempt

     32,735       491    6.02       36,443       530    5.83  

Federal funds sold

     437,327       2,241    2.06       462,048       6,068    5.27  
                                  

Total earning assets

     3,436,973       49,451    5.77       3,232,757       58,588    7.27  
                                  

Nonearning assets:

              

Cash and due from banks

     143,999            144,695       

Interest receivable and other assets

     230,307            212,790       

Allowance for loan losses

     (30,740 )          (27,550 )     
                          

Total nonearning assets

     343,566            329,935       
                          

Total assets

   $ 3,780,539          $ 3,562,692       
                          

LIABILITIES AND STOCKHOLDERS EQUITY

              

Interest-bearing liabilities:

              

Transaction deposits

   $ 431,579     $ 525    0.49 %   $ 397,553     $ 728    0.73 %

Savings deposits

     1,098,194       5,696    2.08       1,044,205       10,146    3.90  

Time deposits

     833,248       7,587    3.65       783,520       8,944    4.58  

Short-term borrowings

     23,670       124    2.10       43,610       551    5.07  

Long-term borrowings

     323       2    2.48       1,022       19    7.46  

Junior subordinated debentures

     26,805       491    7.35       26,804       491    7.35  
                                  

Total interest-bearing liabilities

     2,413,819       14,425    2.40       2,296,714       20,879    3.65  
                                  

Interest-free funds:

              

Noninterest-bearing deposits

     944,433            885,271       

Interest payable and other liabilities

     32,706            20,674       

Stockholders’ equity

     389,581            360,033       
                          

Total interest free funds

     1,366,720            1,265,978       
                          

Total liabilities and stockholders’ equity

   $ 3,780,539          $ 3,562,692       
                          

Net interest income

     $ 35,026        $ 37,709   
                      

Net interest spread

        3.37 %        3.62 %
                      

Net interest margin

        4.08 %        4.68 %
                      

 

(1) Nonaccrual loans are included in the average loan balances and any interest on such nonaccrual loans is recognized on a cash basis.

 

24


BANCFIRST CORPORATION

CONSOLIDATED AVERAGE BALANCE SHEETS AND INTEREST MARGIN ANALYSES

(Unaudited)

Taxable Equivalent Basis (Dollars in thousands)

 

     Six Months Ended June 30,  
     2008     2007  
     Average
Balance
    Interest
Income/
Expense
   Average
Yield/
Rate
    Average
Balance
    Interest
Income/
Expense
   Average
Yield/
Rate
 

ASSETS

              

Earning assets:

              

Loans (1)

   $ 2,523,044     $ 87,836    6.98 %   $ 2,336,054     $ 93,932    8.11 %

Securities – taxable

     422,741       8,690    4.12       395,170       9,088    4.64  

Securities – taxable exempt

     33,680       1,013    6.03       35,802       1,084    6.11  

Federal funds sold

     426,529       5,424    2.55       416,274       10,929    5.29  
                                  

Total earning assets

     3,405,994       102,963    6.06       3,183,300       115,033    7.29  
                                  

Nonearning assets:

              

Cash and due from banks

     139,560            143,088       

Interest receivable and other assets

     223,712            208,855       

Allowance for loan losses

     (30,067 )          (27,600 )     
                          

Total nonearning assets

     333,205            324,343       
                          

Total assets

   $ 3,739,199          $ 3,507,643       
                          

LIABILITIES AND STOCKHOLDERS EQUITY

              

Interest-bearing liabilities:

              

Transaction deposits

   $ 420,798     $ 1,167    0.56 %   $ 408,671     $ 1,580    0.78 %

Savings deposits

     1,097,087       13,606    2.49       1,012,233       19,496    3.88  

Time deposits

     829,040       16,209    3.92       775,095       17,421    4.53  

Short-term borrowings

     23,657       308    2.61       37,885       949    5.05  

Long-term borrowings

     423       9    4.27       1,076       39    7.31  

Junior subordinated debentures

     26,672       983    7.39       28,876       1,157    8.08  
                                  

Total interest-bearing liabilities

     2,397,677       32,282    2.70       2,263,836       40,642    3.62  
                                  

Interest-free funds:

              

Noninterest-bearing deposits

     927,744            868,412       

Interest payable and other liabilities

     29,081            19,600       

Stockholders’ equity

     384,697            355,795       
                          

Total interest free funds

     1,341,522            1,243,807       
                          

Total liabilities and stockholders’ equity

   $ 3,739,199          $ 3,507,643       
                          

Net interest income

     $ 70,681        $ 74,391   
                      

Net interest spread

        3.36 %        3.67 %
                      

Net interest margin

        4.16 %        4.72 %
                      

 

(1) Nonaccrual loans are included in the average loan balances and any interest on such nonaccrual loans is recognized on a cash basis.

 

25


Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no significant changes in the Registrant’s disclosures regarding market risk since December 31, 2007, the date of its annual report to stockholders.

 

Item 4. Controls and Procedures.

The Company’s Chief Executive Officer, Chief Financial Officer and Disclosure Committee, which includes the Company’s Chief Risk Officer, Chief Asset Quality Officer, Chief Internal Auditor, Senior Vice President of Corporate Finance and Treasurer, Holding Company Controller, Bank Controller and General Counsel, have evaluated, as of the last day of the period covered by this report, the Company’s disclosure controls and procedures. Based on their evaluation they concluded that the disclosure controls and procedures of the Company are effective to ensure that information required to be disclosed by the Company in the reports filed or submitted by it under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms. No changes were made to the Company’s internal control over financial reporting during the second fiscal quarter of 2008 that materially affected, or are likely to materially affect, the Company’s internal control over financial reporting. There have been no changes in the Company’s internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation.

PART II – OTHER INFORMATION

 

Item 4. Submission of Matters to a Vote of Security Holders.

At the Company’s Annual Meeting of Stockholders held on May 22, 2008, the following matters were voted upon, with the votes indicated below:

 

     Number of Shares

Description of Proposal

   Voted for    Withheld    Broker
non-votes

Proposal No. 1-Election of Directors

        

Class I Directors

        

Dennis L. Brand

   14,092,210    331,763    212,864

C. L. Craig, Jr.

   14,293,646    130,327    212,864

John C. Hugon

   14,339,795    84,178    212,864

J. Ralph McCalmont

   14,327,464    96,509    212,864

Ronald J. Norick

   14,339,795    84,178    212,864

David E. Ragland

   14,339,795    84,178    212,864

Proposal No. 2-Ratification of Grant Thornton LLP as independent registered public accounting firm

   14,351,740    72,233    212,864

 

26


PART II – OTHER INFORMATION

 

Item 6. Exhibits.

 

  (a) Exhibits

 

Exhibit
Number

 

Exhibit

  3.1   Second Amended and Restated Certificate of Incorporation (filed as Exhibit 1 to the Company’s Form 8-A/A filed July 23, 1998 and incorporated herein by reference).
  3.2   Certificate of Amendment of the Second Amended and Restated Certificate of Incorporation of BancFirst Corporation (filed as Exhibit 3.5 to the Company’s Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2004 and incorporated herein by reference).
  3.3   Certificate of Designations of Preferred Stock (filed as Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998 and incorporated herein by reference).
  3.4   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).
  3.5   Amendment to the Second Amended and Restated Certificate of Incorporation (filed as Exhibit 3.5 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2005 and incorporated herein by reference).
  3.6   Resolution of the Board of Directors amending Section XXVII of the Company’s By-Laws (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K dated February 26, 2004 and incorporated herein by reference).
  3.7   Resolution of the Board of Directors amending Section XXVII of the Company’s By-Laws (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K dated February 28, 2008 and incorporated herein by reference).
  4.1   Instruments defining the rights of securities holders (see Exhibits 3.1, 3.2, 3.3 and 3.4 above).
  4.2   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).
  4.3   Form of 9.65% Series B Cumulative Trust Preferred Security Certificates for BFC Capital Trust I (included as Exhibit D to Exhibit 4.2).
  4.4   Indenture dated as of February 4, 1997, relating to the 9.65% Junior Subordinated Deferrable Interest Debentures of BancFirst Corporation issued to BFC Capital Trust I (filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K dated February 4, 1997 and incorporated herein by reference).
  4.5   Form of Certificate of 9.65% Series B Junior Subordinated Deferrable Interest Debenture of BancFirst Corporation (included as Exhibit A to Exhibit 4.4).
  4.6   Form of Series B Guarantee of BancFirst Corporation relating to the 9.65% Series B Cumulative Trust Preferred Securities of BFC Capital Trust I (filed as Exhibit 4.7 to the Company’s registration statement on Form S-4, File No. 333-25599, and incorporated herein by reference).

 

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Exhibit
Number

 

Exhibit

  4.7   Rights Agreement, dated as of February 25, 1999, between BancFirst Corporation and BancFirst, as Rights Agent, including Exhibit A the form of Certificate of Designations of the Company setting forth the terms of the Preferred Stock, as Exhibit B the form of Right Certificate and as Exhibit C the form of Summary of Rights Agreement (filed as Exhibit 1 to the Company’s 8-K dated February 25, 1999 and incorporated herein by reference).
  4.8   Form of Amended and Restated Trust Agreement relating to the 7.20% Cumulative Trust Preferred Securities of BFC Capital Trust II (filed as Exhibit 4.5 to the Company’s registration statement on From S-3, File No. 333-112488, and incorporated herein by reference).
  4.9   Form of 7.20% Cumulative Trust Preferred Security Certificate for BFC Capital Trust II (included as Exhibit D to Exhibit 4.8).
  4.10   Form of Indenture relating to the 7.20% Junior Subordinated Deferrable Interest Debentures of BancFirst Corporation issued to BFC Capital Trust II (filed as Exhibit 4.1 to the Company’s registration statement on Form S-3, File No. 333-112488, and incorporated herein by reference).
  4.11   Form of Certificate of 7.20% Junior Subordinated Deferrable Interest Debenture of BancFirst Corporation (included in Section 2.2 and Section 2.3 of Exhibit 4.10).
  4.12   Form of Guarantee of BancFirst Corporation relating to the 7.20% Cumulative Trust Preferred Securities of BFC Capital Trust II (filed as Exhibit 4.7 to the Company’s registration statement on Form S-3, File No. 333-112488, and incorporated herein by reference).
10.1   Eighth Amended and Restated BancFirst Corporation Stock Option Plan (filed as Exhibit 10.1 to the Company’s Quarter Report on Form 10-Q for the Quarter Ended September 30, 2006 and incorporated herein by reference).
10.2   BancFirst Corporation Employee Stock Ownership Plan and Trust Agreement (filed as Exhibit 10.2 to the Company’s Quarter Report on Form 10-Q for the Quarter Ended March 31, 2008 and incorporated herein by reference).
10.3   BancFirst Corporation Thrift Plan (filed as Exhibit 10.3 to the Company’s Quarter Report on Form 10-Q for the Quarter Ended March 31, 2008 and incorporated herein by reference).
10.4   1988 Incentive Stock Option Plan of Security Corporation as assumed by BancFirst Corporation (filed as Exhibit 4.1 to the Company’s Registration Statement on Form S-8, File No. 333-65129 and incorporated herein by reference).
10.5   1993 Incentive Stock Option Plan of Security Corporation as assumed by BancFirst Corporation (filed as Exhibit 4.2 to the Company’s Registration Statement on Form S-8, File No. 333-65129 and incorporated herein by reference).
10.6   1995 Non-Employee Director Stock Plan of AmQuest Financial Corp. as assumed by BancFirst Corporation (filed as Exhibit 4.3 to the Company’s Registration Statement on Form S-8, File No. 333-65129 and incorporated herein by reference).
10.7   Amended and Restated BancFirst Corporation Non-Employee Directors’ Stock Option Plan (filed as Exhibit 10.6 to the Company’s Quarter Report on Form 10-Q for the Quarter Ended June 30, 2006 and incorporated herein by reference).

 

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Exhibit
Number

 

Exhibit

10.8   Amended and Restated BancFirst Corporation Directors’ Deferred Stock Compensation Plan (filed as Exhibit 10.7 to the Company’s Quarter Report on Form 10-Q for the Quarter Ended June 30, 2006 and incorporated herein by reference).
31.1*   CEO’s Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a).
31.2*   CFO’s Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a).
32.1*   CEO’s Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*   CFO’s Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1   Amended Stock Repurchase Program (filed as Exhibit 99.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007 and incorporated herein by reference).

 

* Filed herewith.

 

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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 8, 2008    

/s/ Joe T. Shockley, Jr.

                    (Signature)
    Joe T. Shockley, Jr.
    Executive Vice President Chief Financial Officer

 

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