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BANCFIRST CORP /OK/ - Quarter Report: 2009 September (Form 10-Q)

FORM 10-Q

FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2009

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

73102-8405

(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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (sec. 232-405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨.    No  x.

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   ¨  (Do not check if a smaller reporting company)    Smaller reporting company   ¨

Indicate 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 October 31, 2009 there were 15,302,891 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)

 

     September 30,     December 31,
2008
 
     2009     2008    

ASSETS

      

Cash and due from banks

   $ 104,224      $ 239,926      $ 126,227   

Interest-bearing deposits with banks

     911,015        5,735        326,874   

Federal funds sold

     —          200,350        1,000   

Securities (market value: $392,532, $462,850, and $456,075 respectively)

     391,627        462,595        455,568   

Loans:

      

Total loans (net of unearned interest)

     2,713,169        2,730,409        2,757,854   

Allowance for loan losses

     (36,016     (33,862     (34,290
                        

Loans, net

     2,677,153        2,696,547        2,723,564   

Premises and equipment, net

     90,659        89,792        91,411   

Other real estate owned

     10,211        3,276        3,782   

Intangible assets, net

     6,867        7,425        7,508   

Goodwill

     34,327        34,327        34,327   

Accrued interest receivable

     22,056        23,900        24,398   

Other assets

     73,964        61,645        72,545   
                        

Total assets

   $ 4,322,103      $ 3,825,518      $ 3,867,204   
                        

LIABILITIES AND STOCKHOLDERS’ EQUITY

      

Deposits:

      

Noninterest-bearing

   $ 1,081,441      $ 989,581      $ 1,025,749   

Interest-bearing

     2,750,382        2,371,652        2,351,859   
                        

Total deposits

     3,831,823        3,361,233        3,377,608   

Short-term borrowings

     1,100        15,404        12,884   

Accrued interest payable

     4,300        6,176        5,827   

Other liabilities

     32,438        18,253        30,290   

Junior subordinated debentures

     26,804        26,804        26,804   
                        

Total liabilities

     3,896,465        3,427,870        3,453,413   
                        

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: 15,302,891, 15,242,061 and 15,281,141 respectively

     15,303        15,242        15,281   

Capital surplus

     69,242        66,458        67,975   

Retained earnings

     328,379        311,155        315,858   

Accumulated other comprehensive income (loss), net of income tax of $(6,846), $(2,581) and $(7,903), respectively

     12,714        4,793        14,677   
                        

Total stockholders’ equity

     425,638        397,648        413,791   
                        

Total liabilities and stockholders’ equity

   $ 4,322,103      $ 3,825,518      $ 3,867,204   
                        

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
September 30,
    Nine Months Ended
September 30,
 
     2009     2008     2009     2008  

INTEREST INCOME

        

Loans, including fees

   $ 37,699      $ 42,744      $ 114,434      $ 130,415   

Securities:

        

Taxable

     3,267        3,949        10,357        12,639   

Tax-exempt

     330        386        1,068        1,044   

Federal funds sold

     1        1,898        1        7,246   

Interest-bearing deposits with banks

     702        34        1,598        110   
                                

Total interest income

     41,999        49,011        127,458        151,454   
                                

INTEREST EXPENSE

        

Deposits

     8,556        13,164        28,722        44,146   

Short-term borrowings

     —          105        11        413   

Long-term borrowings

     —          —          —          9   

Junior subordinated debentures

     491        491        1,474        1,474   
                                

Total interest expense

     9,047        13,760        30,207        46,042   
                                

Net interest income

     32,952        35,251        97,251        105,412   

Provision for loan losses

     998        2,270        9,214        7,589   
                                

Net interest income after provision for loan losses

     31,954        32,981        88,037        97,823   
                                

NONINTEREST INCOME

        

Trust revenue

     1,632        1,617        4,354        4,481   

Service charges on deposits

     9,551        8,545        27,287        24,440   

Securities transactions

     20        776        322        6,925   

Income from sales of loans

     775        747        2,157        1,799   

Insurance commissions and premiums

     1,889        1,924        5,423        5,454   

Cash management services

     2,251        2,872        7,504        7,994   

Gain (loss) on sale of other assets

     (9     (27     151        2,984   

Other

     930        1,330        3,506        4,278   
                                

Total noninterest income

     17,039        17,784        50,704        58,355   
                                

NONINTEREST EXPENSE

        

Salaries and employee benefits

     19,938        20,038        59,951        60,593   

Occupancy and fixed assets expense, net

     2,004        2,324        6,211        6,519   

Depreciation

     1,943        1,947        5,555        5,605   

Amortization of intangible assets

     210        225        669        674   

Data processing services

     924        872        2,709        2,366   

Net (income) expense from other real estate owned

     164        (55     373        (71

Marketing and business promotion

     1,229        1,470        3,844        4,320   

Other

     9,069        7,486        25,916        20,825   
                                

Total noninterest expense

     35,481        34,307        105,228        100,831   
                                

Income before taxes

     13,512        16,458        33,513        55,347   

Income tax expense

     4,122        5,500        10,738        19,058   
                                

Net income

     9,390        10,958        22,775        36,289   

Other comprehensive income, net of tax:

        

Unrealized gains (losses) on securities

     228        509        (2,172     (6,657

Reclassification adjustment for gains (losses) included in net income

     13        504        209        4,501   
                                

Comprehensive income

   $ 9,631      $ 11,971      $ 20,812      $ 34,133   
                                

NET INCOME PER COMMON SHARE

        

Basic

   $ 0.61      $ 0.72      $ 1.49      $ 2.39   
                                

Diluted

   $ 0.60      $ 0.70      $ 1.46      $ 2.33   
                                

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

 

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BANCFIRST CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(Dollars in thousands, except per share data)

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2009     2008     2009     2008  

COMMON STOCK

        

Issued at beginning of period

   $ 15,302      $ 15,187      $ 15,281      $ 15,217   

Shares issued

     1        55        22        65   

Shares acquired and canceled

     —          —          —          (40
                                

Issued at end of period

   $ 15,303      $ 15,242      $ 15,303      $ 15,242   
                                

CAPITAL SURPLUS

        

Balance at beginning of period

   $ 68,919      $ 64,672      $ 67,975      $ 63,917   

Common stock issued

     24        981        349        1,132   

Tax effect of stock options

     56        494        144        490   

Stock options expense

     243        311        774        919   
                                

Balance at end of period

   $ 69,242      $ 66,458      $ 69,242      $ 66,458   
                                

RETAINED EARNINGS

        

Balance at beginning of period

   $ 322,508      $ 303,542      $ 315,858      $ 285,879   

Net income

     9,390        10,958        22,775        36,289   

Dividends on common stock

     (3,519     (3,345     (10,254     (9,420

Common stock acquired and canceled

     —          —          —          (1,593
                                

Balance at end of period

   $ 328,379      $ 311,155      $ 328,379      $ 311,155   
                                

ACCUMULATED OTHER COMPREHENSIVE INCOME

        

Unrealized gains on securities:

        

Balance at beginning of period

   $ 12,473      $ 3,780      $ 14,677      $ 6,949   

Net change

     241        1,013        (1,963     (2,156
                                

Balance at end of period

   $ 12,714      $ 4,793      $ 12,714      $ 4,793   
                                

Total stockholders’ equity

   $ 425,638      $ 397,648      $ 425,638      $ 397,648   
                                

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)

 

     Nine Months Ended
September 30,
 
     2009     2008  

CASH FLOWS FROM OPERATING ACTIVITIES

   $ 38,686      $ 43,951   
                

INVESTING ACTIVITIES

    

Purchases of securities:

    

Held for investment

     (1,285     (14,035

Available for sale

     (31,533     (203,460

Maturities of securities:

    

Held for investment

     7,014        4,583   

Available for sale

     78,375        131,069   

Proceeds from sales and calls of securities:

    

Held for investment

     20        42   

Available for sale

     6,554        89,428   

Net decrease in federal funds sold

     1,000        198,650   

Purchases of loans

     (25,473     (35,740

Proceeds from sales of loans

     99,725        41,924   

Net other increase in loans

     (44,254     (253,222

Purchases of premises, equipment and other

     (5,403     (8,311

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

     5,248        5,613   
                

Net cash provided/(used) in investing activities

     89,988        (43,459
                

FINANCING ACTIVITIES

    

Net increase in demand, transaction and savings deposits

     388,433        34,161   

Net increase in certificates of deposits

     65,782        38,568   

Net decrease in short-term borrowings

     (11,784     (14,997

Net decrease in long-term borrowings

     —          (606

Issuance of common stock

     1,287        2,606   

Acquisition of common stock

     —          (1,633

Cash dividends paid

     (10,254     (9,420
                

Net cash provided by financing activities

     433,464        48,679   
                

Net increase in cash and due from banks

     562,138        49,171   

Cash and due from banks at the beginning of the period

     453,101        196,490   
                

Cash and due from banks at the end of the period

   $ 1,015,239      $ 245,661   
                

SUPPLEMENTAL DISCLOSURE

    

Cash paid during the period for interest

   $ 31,734      $ 47,697   
                

Cash paid during the period for income taxes

   $ 10,900      $ 19,759   
                

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.

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, 2008, 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

In June 2009, the FASB issued FAS No. 168 (“FAS 168”), “The FASB Accounting Standards Codification (“ASC”) and the Hierarchy of Generally Accepted Accounting Principles, a Replacement of FASB Statement No. 162” which replaces FAS No. 162 (“FAS 162”) “The Hierarchy of Generally Accepted Accounting Principles”. FAS 168 establishes the FASB Accounting Standards Codification (the “Codification”) as the source of authoritative accounting principles recognized by the FASB to be applied by non-governmental entities in the preparation of financial statements in conformity with generally accepted accounting principles. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative guidance for SEC registrants. All guidance contained in the Codification carries an equal level of authority. All non-grandfathered, non-SEC accounting literature not included in the Codification is superseded and deemed non-authoritative. FAS 168 was effective for the Company’s financial statements for periods ending after September 15, 2009. FAS 168 was subsequently incorporated into FASB ASC Topic 105, reported as FASB Accounting Standards Update 2009-01, and did not have a significant impact on the Company’s financial statements.

In May 2009, the FASB issued FAS No. 165 (“FAS 165”), “Subsequent Events” to provide authoritative accounting guidance on management’s assessment of subsequent events. FAS 165 incorporates existing U.S. auditing literature and clarifies that management is responsible for evaluating, as of each reporting period, events or transactions that occur after the balance sheet date through the date that the financial statements are issued or are available to be issued. FAS 165 is effective for the Company as of June 30, 2009. The adoption of FAS 165 did not have a significant impact on the Company’s financial statements. The Company evaluated its September 30, 2009 financial statements for subsequent events through November 9, 2009, the filing date of this report. The Company is not aware of any subsequent events which would require recognition or disclosure in the financial statements. FAS 165 was subsequently incorporated into FASB ASC Topic 855.

In April 2009, the FASB issued three FASB Staff Positions (“FSP”):

 

 

FAS No. 115-2 and FAS No. 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments” amends the other-than-temporary impairment guidance under U.S. GAAP for debt securities to make the guidance more operational and improve the presentation and disclosure in the financial statements. The FSP specifies that if a company does not have the intent to sell a debt security prior to recovery and it is more likely than not that it will not have to sell the debt security prior to recovery, the security

 

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would not be considered other-than-temporarily impaired unless there is a credit loss. The credit loss component of an other-than-temporarily impaired debt security must be determined based on the company’s best estimate of cash flows expected to be collected. FAS No. 115-2 and FAS No. 124-2 were subsequently incorporated into FASB ASC Topic 320.

 

 

FAS No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That are Not Orderly” provides additional guidance for estimating fair value in accordance with FAS No. 157, “Fair Value Measurements,” when the volume and level of activity for the asset and liability have significantly decreased and for identifying circumstances that indicate a transaction is not orderly. FAS 157 does not prescribe a methodology for making significant adjustments to transactions or quoted prices when estimating fair value in these situations but this FSP states that a change in valuation technique or the use of multiple valuation techniques may be appropriate. FAS No. 157-4 was subsequently incorporated into FASB ASC Topic 820.

 

 

FAS No. 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments” requires companies to provide the same fair value of financial instruments disclosures presently required on an annual basis on a quarterly interim basis. FAS No. 107-1 and APB 28-1 were subsequently incorporated into FASB ASC Topic 820.

These three FSP’s were effective for the interim and annual periods ending after June 15, 2009 and subsequent incorporation in FASB ASC topics did not have a significant impact on the Company’s financial statements.

In March 2008, the FASB issued FAS No. 161 (“FAS 161”), “Disclosures About Derivative Instruments and Hedging Activities, an Amendment of FASB Statement No. 133” which amends FAS 133, “Accounting for Derivative Instruments and Hedging Activities.” FAS 161 amended and expanded 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 was effective for the Company on January 1, 2009, subsequently incorporated into FASB ASC Topic 815, and did not have a significant impact on the Company’s financial statements.

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 (including contingent liabilities), 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 was effective for our fiscal year beginning January 1, 2009, subsequently incorporated into FASB ASC Topic 805, and is not expected to have a material effect on the recently announced acquisition.

In September 2006, the FASB issued FAS No. 157, “Fair Value Measurements” (“FAS 157”), which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements (see Note 15 – Fair Value Measurements). The Company adopted the provisions of FAS 157 on January 1, 2008 for financial assets and financial liabilities. In accordance with Financial Accounting Standards Board Staff Position (FSP) No. SFAS 157-2, “Effective Date of FASB Statement No. 157,” the Company delayed the application of FAS 157 for non-financial assets and non-financial liabilities to January 1, 2009. The provisions of SFAS 157-2 which was subsequently incorporated into FASB ASC Topic 820 and did not have a significant impact on the Company’s financial statements.

 

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(3) RECENT DEVELOPMENTS: MERGERS, ACQUISITIONS AND DISPOSALS

On October 2, 2009 the Company announced it entered into an agreement to purchase First Jones Bancorporation and its subsidiary bank, First State Bank, Jones, Oklahoma. First State Bank had $40 million in total assets and equity capital of $4.6 million. The transaction is subject to regulatory approval and is expected to be completed before year end 2009.

On May 22, 2009 the FDIC imposed a Special Assessment on member financial institutions that was based on June 30, 2009 assets less tier one capital. The amount of $1.9 million was accrued in the second quarter and paid on September 30, 2009.

In November 2008, the Company announced it would not accept funds from the U.S. Treasury’s Capital Purchase Program due to current capital levels that exceeded well-capitalized guidelines and the potential for additional governmental regulation related to the program. Also, the Company did not elect to participate in the Debt Guarantee Program for newly issued senior unsecured debt. The Company did elect to participate in the Transaction Account Guarantee Program for extended coverage on non-interest bearing transaction deposit accounts.

 

(4) SECURITIES

The following table summarizes securities held for investment and securities available for sale (dollars in thousands):

 

     September 30,    December 31,
2008
     2009    2008   

Held for investment, at cost (market value: $29,622, $34,932 and $34,975, respectively)

   $ 28,717    $ 34,677    $ 34,468

Available for sale, at market value

     362,910      427,918      421,100
                    

Total

   $ 391,627    $ 462,595    $ 455,568
                    

The following table summarizes the maturity of securities (dollars in thousands):

 

     September 30,    December 31,
2008
     2009    2008   

Contractual maturity of debt securities:

        

Within one year

   $ 89,728    $ 127,664    $ 116,396

After one year but within five years

     276,019      291,632      289,849

After five years

     14,580      27,830      32,978
                    

Total debt securities

     380,327      447,126      439,223

Equity securities

     11,300      15,469      16,345
                    

Total

   $ 391,627    $ 462,595    $ 455,568
                    

The Company held 214, 209 and 205 debt securities available for sale that had unrealized gains as of September 30, 2009 and 2008 and December 31, 2008, respectively. These securities had a market value totaling $340.6 million, $196.5 million and $404.6 million, respectively, and unrealized gains totaling $17.0 million, $6.0 million and $19.4 million, respectively. The Company also held 7, 55 and 48 debt securities available for sale that had unrealized losses, respectively. These securities had a market value totaling $11.3 million, $217.5 million and $1.7 million and unrealized losses totaling $68,000, $1.1 million and $14,000, respectively. The Company has both the intent and ability to hold these debt securities until the unrealized losses are recovered.

 

8


(5) LOANS AND ALLOWANCE FOR LOAN LOSSES

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

 

     September 30,     December 31,  
     2009     2008     2008  
     Amount    Percent     Amount    Percent     Amount    Percent  

Commercial and industrial

   $ 503,584    18.56   $ 536,953    19.67   $ 513,647    18.63

Oil & gas production & equipment

     91,275    3.37        77,289    2.83        84,770    3.07   

Agriculture

     73,879    2.72        76,007    2.79        86,752    3.15   

State and political subdivisions:

               

Taxable

     9,842    0.36        5,635    0.21        5,595    0.20   

Tax-exempt

     9,031    0.33        8,412    0.31        8,292    0.30   

Real Estate:

               

Construction

     206,793    7.62        249,453    9.14        246,269    8.93   

Farmland

     86,543    3.19        94,027    3.44        92,050    3.34   

One to four family residences

     563,982    20.79        537,717    19.69        543,183    19.70   

Multifamily residential properties

     32,190    1.19        38,670    1.42        45,250    1.64   

Commercial

     757,311    27.91        761,050    27.87        768,562    27.87   

Consumer

     349,080    12.87        320,057    11.72        335,938    12.18   

Other

     29,659    1.09        25,139    0.91        27,546    0.99   
                                       

Total loans

   $ 2,713,169    100.00   $ 2,730,409    100.00   $ 2,757,854    100.00
                                       

Loans held for sale (included above)

   $ 86,450      $ 10,872      $ 5,136   
                           

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, vehicles, equipment, accounts receivable, inventory and securities. The Company’s interest in collateral is secured through filing mortgages and liens, and in some cases, by possession of the collateral.

Loans held for sale as of September 30, 2009 include $77.6 million of guaranteed student loans due to a change in the intention of management based on structural changes in the Student Loan Program. Student loans are classified as consumer loans in the preceding table and valued at the lower of cost or market.

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. Given the current environment of instability in the economy at large, it is reasonably possible that a material change could occur in the estimated allowance for loan losses in the near term.

 

9


Changes in the allowance for loan losses are summarized as follows (dollars in thousands):

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2009     2008     2009     2008  

Balance at beginning of period

   $ 39,334      $ 33,512      $ 34,290      $ 29,127   
                                

Charge-offs

     (4,449     (2,083     (7,935     (3,337

Recoveries

     133        163        447        483   
                                

Net charge-offs

     (4,316     (1,920     (7,488     (2,854
                                

Provisions charged to operations

     998        2,270        9,214        7,589   
                                

Balance at end of period

   $ 36,016      $ 33,862      $ 36,016      $ 33,862   
                                

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

 

     Three Months Ended
September 30,
   Nine Months Ended
September 30,
     2009    2008    2009    2008

Commercial, financial and other

   $ 3,886    $ 1,357    $ 5,420    $ 1,401

Real estate – construction

     66      313      225      324

Real estate – mortgage

     180      130      1,315      736

Consumer

     184      120      528      393
                           

Total

   $ 4,316    $ 1,920    $ 7,488    $ 2,854
                           

 

(6) NONPERFORMING AND RESTRUCTURED ASSETS

The following table is a summary of nonperforming and restructured assets (dollars in thousands):

 

     September 30,     December 31,
2008
 
     2009     2008    

Past due over 90 days and still accruing

   $ 9,941      $ 892      $ 1,346   

Nonaccrual

     37,319        20,229        21,359   

Restructured

     561        940        1,022   
                        

Total nonperforming and restructured loans

     47,821        22,061        23,727   

Other real estate owned and repossessed assets

     10,587        3,423        3,997   
                        

Total nonperforming and restructured assets

   $ 58,408      $ 25,484      $ 27,724   
                        

Nonperforming and restructured loans to total loans

     1.76     0.81     0.86
                        

Nonperforming and restructured assets to total assets

     1.35     0.67     0.72
                        

 

(7) INTANGIBLE ASSETS AND GOODWILL

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

 

     September 30,     December 31,
2008
 
     2009     2008    
     Gross
Carrying
Amount
   Accumulated
Amortization
    Gross
Carrying
Amount
   Accumulated
Amortization
    Gross
Carrying
Amount
   Accumulated
Amortization
 

Core deposit intangibles

   $ 6,722    $ (3,390   $ 6,722    $ (2,717   $ 6,722    $ (2,886

Customer relationship intangibles

     4,441      (906     4,081      (661     4,392      (720
                                             

Total

   $ 11,163    $ (4,296   $ 10,803    $ (3,378   $ 11,114    $ (3,606
                                             

 

10


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

 

Amortization:

  

Three months ended September 30, 2009

   $ 210

Three months ended September 30, 2008

     225

Nine months ended September 30, 2009

     669

Nine months ended September 30, 2008

     674

Year ended December 31, 2008

     902

Estimated Amortization

  

Year ending December 31:

  

2009

   $ 919

2010

     919

2011

     919

2012

     907

2013

     765

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

 

     Metropolitan
Banks
   Community
Banks
   Other
Financial
Services
   Executive,
Operations
& Support
   Eliminations    Consolidated

Three and Nine Months Ended September 30, 2009 and 2008 and the Year Ended December 31, 2008

Balance at beginning and end of period

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

 

(8) COMMITMENTS AND CONTINGENT LIABILITIES

During the third quarter of 2009, the Company was advised by the State of Oklahoma of a demand for payment of $2.3 million related to an embezzlement conducted by an employee of the state who deposited stolen checks into an account at BancFirst that was opened under false pretenses. Counsel for the Company believes it has several meritorious defenses to the claims asserted although resolution of the matter may not occur for several years. Management does not anticipate any material loss from the demand.

 

(9) 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 in the following table (dollars in thousands):

 

     Minimum
Required
    September 30,     December 31,
2008
 
       2009     2008    

Tier 1 capital

     $ 397,706      $ 377,080      $ 383,255   

Total capital

     $ 433,722      $ 412,071      $ 418,710   

Risk-adjusted assets

     $ 2,916,529      $ 3,039,855      $ 3,038,538   

Leverage ratio

   3.00     9.29     9.97     10.02

Tier 1 capital ratio

   4.00     13.64     12.40     12.61

Total capital ratio

   8.00     14.87     13.56     13.78

As of September 30, 2009 and 2008, and December 31, 2008, 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.

 

11


(10) 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 September 30, 2009 there were 560,000 shares remaining that could be repurchased under the SRP. The following table is a summary of the shares repurchased under the program.

 

     Three Months Ended
September 30,
   Nine Months Ended
September 30,
     2009    2008    2009    2008

Number of shares repurchased

   —      —      —        40,000

Average price of shares repurchased

   —      —      —      $ 40.70

 

(11) SHARE-BASED COMPENSATION

BancFirst Corporation adopted a nonqualified incentive stock option plan (the “BancFirst ISOP”) in May 1986. The Company amended the BancFirst ISOP to increase the number of shares to be issued under the plan to 2,500,000 shares in May 2006 and to 2,650,000 shares in May 2009. At September 30, 2009, 157,460 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 expire at the end of fifteen years from the date of grant. Options outstanding as of September 30, 2009 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. 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 in May 2006 and to 205,000 shares in May 2009. At September 30, 2009, 50,000 shares are available for future grants. The options are 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 September 30, 2009 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.

The following table 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):

 

     Nine Months Ended September 30, 2009
     Options     Wgtd. Avg.
Exercise Price
   Wgtd. Avg.
Remaining
Contractual Term
   Aggregate
Intrinsic
Value

Outstanding at January 1, 2009

   1,092,453      $ 27.80      

Options granted

   92,200        35.58      

Options exercised

   (11,750     22.26      

Options cancelled

   (7,500     43.37      
                    

Outstanding at September 30, 2009

   1,165,403        28.38    8.73    $ 9,970
                    

Exercisable at September 30, 2009

   683,639        20.35    7.06    $ 11,334
                    

 

12


The following table 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
September 30,
   Nine Months Ended
September 30,
     2009    2008    2009    2008

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

   $ 21.93    N/A    $ 21.93    $ 20.24

Total intrinsic value of options exercised

     20    1,589      218      1,828

Cash received from options exercised

     25    1,035      262      1,196

Tax benefit realized from options exercised

     8    615      85      707

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 September 30, 2009 and 2008, the Company recorded share-based employee compensation expense of approximately $149,000 and $184,000, respectively, net of tax and approximately $475,000 and $550,000 for the nine months ended September 30, 2009 and 2008, respectively.

The Company will continue to amortize the remaining fair value of these stock options of approximately $3.2 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:

 

     2009     2008  

Risk-free interest rate

   3.64   3.85

Dividend yield

   1.50   1.50

Stock price volatility

   63.28   38.37

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.

 

(12) 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. The following table is a summary of the tax effects of this unrealized gain or loss (dollars in thousands):

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2009     2008     2009     2008  

Unrealized gain (loss) during the period:

        

Before-tax amount

   $ 350      $ 782      $ (3,342   $ (10,241

Tax (expense) benefit

     (122     (273     1,170        3,584   
                                

Net-of-tax amount

     228      $ 509      $ (2,172   $ (6,657
                                

The amount of unrealized gain or loss included, net of tax, in accumulated other comprehensive income is summarized in the following table (dollars in thousands):

 

13


     Three Months Ended
September 30,
   Nine Months Ended
September 30,
 
     2009    2008    2009     2008  

Unrealized gain (loss) on securities:

          

Beginning balance

   $ 12,473    $ 3,780    $ 14,677      $ 6,949   

Current period change

     228      509      (2,172     (6,657

Reclassification adjustment for gains (losses) included in net income

     13      504      209        4,501   
                              

Ending balance

   $ 12,714    $ 4,793    $ 12,714      $ 4,793   
                              

 

(13) NET INCOME PER COMMON SHARE

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

 

Three Months Ended September 30, 2009         

Basic

        

Income available to common stockholders

   $ 9,390    15,302,199    $ 0.61
            

Effect of stock options

     —      283,756   
              

Diluted

        

Income available to common stockholders plus assumed exercises of stock options

   $ 9,390    15,585,955    $ 0.60
                  
Three Months Ended September 30, 2008         

Basic

        

Income available to common stockholders

   $ 10,958    15,217,546    $ 0.72
            

Effect of stock options

     —      371,669   
              

Diluted

        

Income available to common stockholders plus assumed exercises of stock options

   $ 10,958    15,589,215    $ 0.70
                  
Nine Months Ended September 30, 2009         

Basic

        

Income available to common stockholders

   $ 22,775    15,297,342    $ 1.49
            

Effect of stock options

     —      293,809   
              

Diluted

        

Income available to common stockholders plus assumed exercises of stock options

   $ 22,775    15,591,151    $ 1.46
                  
Nine Months Ended September 30, 2008         

Basic

        

Income available to common stockholders

   $ 36,289    15,203,836    $ 2.39
            

Effect of stock options

     —      363,959   
              

Diluted

        

Income available to common stockholders plus assumed exercises of stock options

   $ 36,289    15,567,795    $ 2.33
                  

The following table shows 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 September 30, 2009

   405,150    $ 35.79

Three Months Ended September 30, 2008

   212,500    $ 46.57

Nine Months Ended September 30, 2009

   285,063    $ 37.47

Nine Months Ended September 30, 2008

   254,193    $ 45.74

 

14


(14) 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 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
    Eliminations     Consolidated

Three Months Ended:

               

September 30, 2009

               

Net interest income (expense)

   $ 10,233    $ 21,948    $ 1,860    $ (1,089   $ —        $ 32,952

Noninterest income

     2,617      8,677      5,131      10,417        (9,803     17,039

Income before taxes

     4,219      12,023      2,810      4,124        (9,664     13,512

September 30, 2008

               

Net interest income (expense)

   $ 10,721    $ 23,233    $ 1,781    $ (484   $ —        $ 35,251

Noninterest income

     2,486      8,627      6,113      11,625        (11,067     17,784

Income before taxes

     5,595      13,548      3,383      4,860        (10,928     16,458

Nine Months Ended:

               

September 30, 2009

               

Net interest income (expense)

   $ 29,217    $ 65,244    $ 5,623    $ (2,833   $ —        $ 97,251

Noninterest income

     8,132      25,670      14,774      25,994        (23,866     50,704

Income before taxes

     10,658      35,769      7,788      2,949        (23,651     33,513

September 30, 2008

               

Net interest income (expense)

   $ 32,026    $ 71,085    $ 5,151    $ (2,850   $ —        $ 105,412

Noninterest income

     7,199      24,698      15,404      48,091        (37,037     58,355

Income before taxes

     17,857      39,990      7,141      27,200        (36,841     55,347

Total Assets:

               

September 30, 2009

   $ 1,402,690    $ 2,650,800    $ 241,422    $ 514,112      $ (486,921   $ 4,322,103

September 30, 2008

   $ 1,241,749    $ 2,387,628    $ 210,333    $ 451,832      $ (466,024   $ 3,825,518

December 31, 2008

   $ 1,256,685    $ 2,449,916    $ 218,984    $ 421,842      $ (480,223   $ 3,867,204

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.

 

15


(15) FAIR VALUE MEASUREMENTS

ASC Topic 820 (formerly 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.

 

 

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

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 and market quotations to value its oil and gas swaps/options. The Company utilizes dealer quotes and observable market data inputs to substantiate internal valuation models.

Loans Held For Sale

The Company originates mortgage and student loans to be sold. At the time of origination, the acquiring bank or governmental agency 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 30 days of origination and student loans are generally sold within one year. Loans held for sale are carried at lower of cost or market. Gains or losses recognized upon the sale of the loans are determined on a specific identification basis.

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of September 30, 2009, 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

   $ —      $ 351,610    $ 11,300    $ 362,910

Derivative Assets

     —        9,898      —        9,898

Derivative Liabilities

     —        7,848      —        7,848

Loans Held For Sale

     —        86,450      —        86,450

 

16


The changes in Level 3 assets measured at estimated fair value on a recurring basis during the nine months ended September 30, 2009 were as follows:

 

     Securities
Available for
Sale
 

Balance – January 1, 2009

   $ 16,345   

Purchases and sales, net

     (4,426

Total unrealized losses

     (619
        

Balance – September 30, 2009

   $ 11,300   
        

 

(16) 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. These derivatives are not designated as hedged instruments and are recorded on the Company’s consolidated balance sheet at fair value.

The Company utilizes dealer quotations and observable market data inputs to substantiate internal valuation models. 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):

 

          September 30,     December 31,  
          2009     2008     2008  
Oil and natural gas swaps and options    Notional Units    Notional
Amount
    Estimated
Fair Value
    Notional
Amount
    Estimated
Fair Value
    Notional
Amount
    Estimated
Fair Value
 

Oil

               

Derivative Assets

   Barrels    (216   $ 5,456      126      $ (1,035   273      $ 11,230   

Derivative Liabilities

   Barrels    216        (4,905   (126     1,227      (273     (10,750

Natural Gas

               

Derivative Assets

   MMBTUs    (4,527     4,442      2,456        2,615      (6,746   $ 6,379   

Derivative Liabilities

   MMBTUs    4,527        (2,943   (2,456     (2,192   6,746        (5,547

Total Fair Value

   Included in             

Derivative Assets

   Other Assets        9,898          1,580          17,609   

Derivative Liabilities

   Other Liabilities        7,848          965          16,297   

The Company recognized income related to the activity, which was included in Other Income and summarized in the following table (dollars in thousands):

 

     Three Months Ended
September 30,
   Nine Months Ended
September 30,
     2009    2008    2009    2008

Derivative Income

   $ 121    $ 62    $ 572    $ 456
                           

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

 

17


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 counterparties of approximately $7.9 million at September 30, 2009 and $15.4 million at December 31, 2008. Conversely, the Company had exposure to bank customers of approximately $1.6 million at September 30, 2008.

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 its 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 third quarter of 2009 was $9.4 million compared to $11.0 million for the third quarter of 2008. Diluted net income per share was $0.60 and $0.70 for the third quarter of 2009 and 2008, respectively. For the first nine months of 2009, net income was $22.8 million, compared to $36.3 million for the first nine months of 2008. Diluted net income per share for the first nine months of 2009 was $1.46 compared to $2.33 for the first nine months of 2008. The results for 2009 and 2008 include several one-time items that are more fully described below.

Total assets at September 30, 2009 were $4.3 billion, up $455 million from December 31, 2008 and up $497 million from a year ago. Total loans were $2.71 billion, virtually unchanged from December 31, 2008 and September 30, 2008. Total deposits were $3.8 billion, up $454 million from December 31, 2008 and up $471 million from September 30, 2008. Stockholders’ equity was $426 million, or 9.9% of total assets, at September 30, 2009, up $12 million from December 31, 2008 and $28 million from September 30, 2008. The Company’s liquidity remains strong as its average loan to deposit ratio was 76.3% at quarter end and core deposits represented 93.0% of total deposits. The Company had no brokered deposits and no Federal Home Loan Bank borrowings.

On October 2, 2009 the Company announced it entered into an agreement to purchase First Jones Bancorporation and its subsidiary bank, First State Bank, Jones, Oklahoma. First State Bank had $40 million in total assets and equity capital of $4.6 million. The transaction is subject to regulatory approval and is expected to be completed before year end 2009.

On May 22, 2009 the FDIC imposed a Special Assessment on member financial institutions that was based on June 30, 2009 assets less tier one capital. The amount of $1.9 million was accrued in the second quarter and paid on September 30, 2009.

In November 2008, the Company announced it would not accept funds from the U.S. Treasury’s Capital Purchase Program due to current capital levels that exceeded well-capitalized guidelines and the potential for additional governmental regulation related to the program. Also, the Company did not elect to participate in the Debt Guarantee Program for newly issued senior unsecured debt. The Company did elect to participate in the Transaction Account Guarantee Program for extended coverage on non-interest bearing transaction deposit accounts.

In June 2008, the Company recorded a $1.2 million pre-tax gain from the sale of an asset. 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 transactions 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 gain related to these transactions, net of the interest income differential, was approximately $3.3 million 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.

Beginning in 2008 and into 2009, the national economy has seen declining home sales and values, a generally declining dollar, volatile commodity prices, increasing unemployment and unstable financial markets. These events have caused credit and liquidity issues throughout the country and has resulted in an increase in credit losses at many U.S. banks. While the Oklahoma economy initially performed better than the national average, the state has felt the impact of the national recession primarily from lower commodity prices and lower tax revenues. Consequently, it is reasonable to expect nonperforming loans and loan losses of the Company to increase. Also, in light of the low interest rate environment and competitive pressures for deposits, the Company’s

 

19


interest rate margin will likely stay compressed until interest rates rise, and it is likely to experience slower loan growth.

The FDIC increased deposit insurance premiums in 2009 and made a Special Assessment in the second quarter of 2009. These increases caused the Company’s noninterest expense to increase in 2009. The Company opted to participate in the deposit insurance guarantee for noninterest bearing deposits in excess of $250,000. This program is at a cost of 10 basis points on those account balances in excess of $250,000 and is in effect until June 30, 2010. If the FDIC imposes the mandatory three-year prepayment of insurance premiums, the payment is expected to be between $20 and $21 million. Although the prepayment does not change the amount of FDIC insurance expense over the prepayment period, the early payment may cause a marginal decline in net interest income.

It appears likely that current proposed legislation may centralize student lending in a governmental agency which would result in an end to the student loan programs provided by the Company.

RESULTS OF OPERATIONS

Third Quarter

Net interest income totaled $33.0 million, a decrease of $2.3 million, or 6.5%, compared to the third quarter of 2008. The Company’s net interest margin (on a taxable equivalent basis) was 3.27% compared to 4.03% for the same period a year ago. The lower interest rate environment combined with an increase in earning assets with a higher concentration in overnight funds has caused the Company’s net interest margin to decline.

The Company’s provision for loan losses was $998,000 compared to $2.3 million during the same period a year ago. Net loan charge-offs were $4.3 million for the third quarter of 2009, compared to $1.9 million for the third quarter of 2008. One charge-off of a commercial loan which had been fully provided for accounted for $3.5 million of the total for the quarter. The net charge-offs represent a rate of 0.63% of average total loans for the third quarter of 2009 compared to 0.32% for the same period in 2008.

Noninterest income was $17.0 million for the quarter compared to $17.8 million for the same quarter a year ago. The decrease was due primarily to lower cash management revenues resulting from lower investment sweep balances. Noninterest expense of $35.5 million was up 3.4% from the operating expenses a year ago driven primarily by higher FDIC insurance premiums. The Company’s effective tax rate was 30.5% for the quarter compared to 33.4% a year ago. The decrease is a result of additional tax credits realized in 2009.

Year-To-Date

Net interest income for the nine months ended September 30, 2009 was $97.3 million, a decrease of $8.2 million from the same period in 2008. The net interest margin in 2009 decreased to 3.45% from 4.11% for the first nine months of 2008. The lower interest rate environment combined with an increase in earning assets with a higher concentration in overnight funds has caused the Company’s net interest margin to decline.

The Company provided a $9.2 million provision for loan losses in the first nine months of 2009, compared to $7.6 million for the same period of 2008. The loan provision was driven primarily by the identification of certain commercial credits that were internally downgraded by management. Net loan charge-offs were $7.5 million for the first nine months of 2009, compared to $2.9 million for the first nine months of 2008. The net charge-offs represent an annualized rate of 0.36% of average total loans for the first nine months of 2009 compared to 0.15% for the first nine months of 2008.

Noninterest income for the nine months of 2009 decreased $7.7 million compared to the same period for 2008. Noninterest income during the first nine months of 2008 included nonrecurring items totaling $9.1 million before taxes including pretax gains of approximately $1.8 million from the Company’s interest in the Visa initial public offering, $6.1 million on the sale of securities, and $1.2 million on the sale of an asset. Core noninterest income was up in 2009 due to increases in commercial deposit fees and sales of mortgage loans and student loans offset by lower cash management fees. Noninterest expense increased $4.4 million compared to the first nine months of 2008 due primarily to higher FDIC insurance premiums. Income tax expense decreased $8.3 million compared to the first nine months of 2008 due to lower profitability and a lower effective tax rate. The effective tax rate on income before taxes was 32.0%, compared to 34.4% for the first nine months of 2008. The decrease is a result of additional tax credits realized in 2009.

 

20


FINANCIAL POSITION

The aggregate of cash and due from banks, interest-bearing deposits with banks, and federal funds sold as of September 30, 2009 increased $561 million from December 31, 2008 and increased $569 million from September 30, 2008. The increase was due primarily to sweep account customers moving from outside money market funds to bank deposits and to a lesser extent from growth in deposits.

Total securities decreased $64 million compared to December 31, 2008 and $71 million compared to September 30, 2008. 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 and to meet possible liquidity needs. The net unrealized gain on securities available for sale, before taxes, was $19.6 million at the end of the third quarter of 2009, compared to an unrealized gain of $22.6 million at December 31, 2008, and an unrealized gain of $7.4 million at September 30, 2008. The average taxable equivalent yield on the securities portfolio was 3.76%, 3.94% and 4.18% at September 30, 2009, December 31, 2008 and September 30, 2008, respectively.

Total loans decreased $45 million from December 31, 2008 and decreased $17 million from September 30, 2008. The decrease from year end and quarter end 2008 was due to student loan sales. Due to changes in the Student Loan Program, the Company will generally sell student loans originated within one year. The allowance for loan losses increased $1.7 million from year-end 2008 and $2.1 million from the third quarter of 2008. The allowance as a percentage of total loans was 1.33%, 1.24% and 1.24% at September 30, 2009, December 31, 2008 and September 30, 2008, respectively. The allowance to nonperforming and restructured loans at the same dates was 75.3%, 144.5% and 153.5%, respectively. The allowance to nonperforming and restructured loans was largely impacted by the relatively high percentage of highly collateralized loans.

Nonperforming and restructured loans totaled $47.8 million at September 30, 2009, compared to $23.7 million at December 31, 2008 and $22.1 million at September 30, 2008. The ratio of nonperforming and restructured loans to total loans for the same periods was 1.76%, 0.86% and 0.81%, respectively. The level of nonperforming loans and loan losses may rise over time as a result of economic and credit cycles.

Potential problem loans are performing loans to borrowers with a weakened financial condition, or which are experiencing unfavorable trends in their financial condition, which causes management to have concerns as to the ability of such borrowers to comply with the existing repayment terms. The Company had approximately $72.3 million of these loans at September 30, 2009 compared to $66.8 million at December 31, 2008 and $70.6 million at September 30, 2008. These loans are not included in nonperforming and restructured assets. In general, these loans are adequately collateralized and have no identifiable loss potential. Loans which are considered to have identifiable loss potential are placed on nonaccrual status, are allocated a specific allowance for loss or are directly charged-down, and are reported as nonperforming. The Company’s nonaccrual loans are primarily commercial and real estate loans.

Total deposits increased $454 million compared to December 31, 2008, and $471 million compared to September 30, 2008 due primarily to customers moving funds out of money market investments and into interest bearing deposits at the bank. The Company’s deposit base continues to be comprised substantially of core deposits, with large denomination certificates of deposit being only 10.7% of total deposits at September 30, 2009, up slightly compared to 10.1% at December 31, 2008 and September 30, 2008. The Company does not utilize brokered deposits.

Short-term borrowings decreased $11.8 million from December 31, 2008, and $14.3 million from September 30, 2008. 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.

The Company does not have any borrowings from the Federal Home Loan Bank or other sources at September 30, 2009.

Stockholders’ equity was $425.6 million at September 30, 2009 which was an increase of $11.8 million from year-end 2008 and an increase of $28.0 million from the third quarter of 2008 due to accumulated earnings. Average stockholders’ equity to average assets for the third quarter of 2009 was 10.26%, compared to 10.28% for the third quarter of 2008. The Company’s leverage ratio and total risk-based capital ratio were 9.29% and 14.87%, respectively, at September 30, 2009, 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 (14) 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
September 30,
    Nine Months Ended
September 30,
 
     2009     2008     2009     2008  

Per Common Share Data

        

Net income – basic

   $ 0.61      $ 0.72      $ 1.49      $ 2.39   

Net income – diluted

     0.60        0.70        1.46        2.33   

Cash dividends

     0.23        0.22        0.67        0.62   

Performance Data

        

Return on average assets

     0.86     1.13     0.74     1.28

Return on average stockholders’ equity

     8.77        11.04        7.22        12.47   

Cash dividend payout ratio

     37.70        30.56        44.97        25.94   

Net interest spread

     2.78        3.34        2.89        3.35   

Net interest margin

     3.27        4.03        3.45        4.11   

Efficiency ratio

     70.97        64.69        71.12        61.57   

Net charge-offs

     0.63        0.32        0.36        0.15   
           September 30,     December 31,
2008
 
           2009     2008    

Balance Sheet Data

        

Book value per share

     $ 27.81      $ 26.09      $ 27.08   

Tangible book value per share

       25.12        23.35        24.34   

Average loans to deposits (year-to-date)

       76.34     77.66     78.82

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

       92.40        91.09        91.23   

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

       10.26        10.28        10.35   

Asset Quality Ratios

        

Nonperforming and restructured loans to total loans

       1.76     0.81     0.86

Nonperforming and restructured assets to total assets

       1.35        0.67        0.72   

Allowance for loan losses to total loans

       1.33        1.24        1.24   

Allowance for loan losses to nonperforming and restructured loans

       75.31        153.50        144.52   

 

23


BANCFIRST CORPORATION

CONSOLIDATED AVERAGE BALANCE SHEETS AND INTEREST MARGIN ANALYSES

(Unaudited)

Taxable Equivalent Basis (Dollars in thousands)

 

     Three Months Ended September 30,  
     2009     2008  
     Average
Balance
    Interest
Income/
Expense
   Average
Yield/
Rate
    Average
Balance
    Interest
Income/
Expense
   Average
Yield/
Rate
 

ASSETS

              

Earning assets:

              

Loans (1)

   $ 2,709,421      $ 37,783    5.53   $ 2,652,458      $ 42,822    6.41

Securities – taxable

     363,763        3,267    3.56        407,465        3,950    3.85   

Securities – tax exempt

     36,102        508    5.58        41,689        594    5.65   

Federal funds sold

     921,711        702    0.30        398,197        1,932    1.92   
                                  

Total earning assets

     4,030,997        42,260    4.16        3,499,809        49,298    5.59   
                                  

Nonearning assets:

              

Cash and due from banks

     107,829             145,734        

Interest receivable and other assets

     236,238             229,689        

Allowance for loan losses

     (39,370          (33,456     
                          

Total nonearning assets

     304,697             341,967        
                          

Total assets

   $ 4,335,694           $ 3,841,776        
                          

LIABILITIES AND STOCKHOLDERS EQUITY

              

Interest-bearing liabilities:

              

Transaction deposits

   $ 375,863      $ 352    0.37   $ 429,837      $ 537    0.50

Savings deposits

     1,291,694        3,419    1.05        1,112,228        5,767    2.06   

Time deposits

     910,662        4,785    2.08        838,672        6,860    3.25   

Short-term borrowings

     634        —      —          21,721        105    1.92   

Long-term borrowings

     —          —      —          30        —      —     

Junior subordinated debentures

     26,804        491    7.27        26,803        491    7.27   
                                  

Total interest-bearing liabilities

     2,605,657        9,047    1.38        2,429,291        13,760    2.25   
                                  

Interest-free funds:

              

Noninterest-bearing deposits

     1,271,062             983,074        

Interest payable and other liabilities

     34,401             35,621        

Stockholders’ equity

     424,574             393,790        
                          

Total interest free funds

     1,730,037             1,412,485        
                          

Total liabilities and stockholders’ equity

   $ 4,335,694           $ 3,841,776        
                          

Net interest income

     $ 33,213        $ 35,538   
                      

Net interest spread

        2.78        3.34
                      

Net interest margin

        3.27        4.03
                      

 

(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)

 

     Nine Months Ended September 30,  
     2009     2008  
     Average
Balance
    Interest
Income/
Expense
   Average
Yield/
Rate
    Average
Balance
    Interest
Income/
Expense
   Average
Yield/
Rate
 

ASSETS

              

Earning assets:

              

Loans (1)

   $ 2,765,665      $ 114,678    5.54   $ 2,566,497      $ 130,658    6.78

Securities – taxable

     387,814        10,357    3.57        417,612        12,639    4.03   

Securities – tax exempt

     38,829        1,644    5.66        36,369        1,607    5.89   

Federal funds sold

     603,363        1,598    0.35        417,016        7,356    2.35   
                                  

Total earning assets

     3,795,671        128,277    4.52        3,437,494        152,260    5.90   
                                  

Nonearning assets:

              

Cash and due from banks

     114,888             141,633        

Interest receivable and other assets

     234,247             225,719        

Allowance for loan losses

     (36,784          (31,205     
                          

Total nonearning assets

     312,351             336,147        
                          

Total assets

   $ 4,108,022           $ 3,773,641        
                          

LIABILITIES AND STOCKHOLDERS’ EQUITY

              

Interest-bearing liabilities:

              

Transaction deposits

   $ 375,011      $ 893    0.32   $ 423,833      $ 1,704    0.54

Savings deposits

     1,187,452        12,154    1.37        1,102,171        19,374    2.34   

Time deposits

     888,159        15,675    2.36        832,274        23,068    3.69   

Short-term borrowings

     3,483        11    0.42        23,007        413    2.39   

Long-term borrowings

     —          —      —          291        9    4.12   

Junior subordinated debentures

     26,804        1,474    7.35        26,716        1,474    7.35   
                                  

Total interest-bearing liabilities

     2,480,909        30,207    1.63        2,408,292        46,042    2.55   
                                  

Interest-free funds:

              

Noninterest-bearing deposits

     1,172,024             946,322        

Interest payable and other liabilities

     33,616             31,277        

Stockholders’ equity

     421,473             387,750        
                          

Total interest free funds

     1,627,113             1,365,349        
                          

Total liabilities and stockholders’ equity

   $ 4,108,022           $ 3,773,641        
                          

Net interest income

     $ 98,070        $ 106,218   
                      

Net interest spread

        2.89        3.35
                      

Net interest margin

        3.45        4.11
                      

 

(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, 2008, 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, 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 third fiscal quarter of 2009 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.

 

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 Article XVI, Section 1 and Article XVII, Section 1 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   Rights Agreement, dated as of February 25, 1999, between BancFirst Corporation and BancFirst, as Rights Agent, including as 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 4.1 to the Company’s 8-K dated January 28, 2009 and incorporated herein by reference).
  4.3   Amendment No. 1 to Rights Agreement, dated as of February 25, 1999, between BancFirst Corporation and BancFirst, as Rights Agent (filed as Exhibit 4.2 to the Company’s 8-K dated January 28, 2009 and incorporated herein by reference).
  4.4   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 Form S-3, File No. 333-112488, and incorporated herein by reference).
  4.5   Form of 7.20% Cumulative Trust Preferred Security Certificate for BFC Capital Trust II (included as Exhibit D to Exhibit 4.8).
  4.6   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).

 

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Exhibit

Number

  

Exhibit

  4.7    Form of Certificate of 7.20% Junior Subordinated Deferrable Interest Debentures of BancFirst Corporation (included in Section 2.2 and Section 2.3 of Exhibit 4.10).
  4.8    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).
  4.9    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, 2008 and incorporated herein by reference).
10.1    Ninth Amended and Restated BancFirst Corporation Stock Option Plan (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2009 and incorporated herein by reference).
10.2    Amended and Restated BancFirst Corporation Employee Stock Ownership Plan and Trust Agreement adopted January 1, 2007 (filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2008 and incorporated herein by reference).
10.3    Amended and Restated BancFirst Corporation Thrift Plan adopted January 1, 2007 (filed as Exhibit 10.3 to the Company’s Quarterly 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    Second Amended and Restated BancFirst Corporation Non-Employee Directors’ Stock Option Plan (filed as Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2009 and incorporated herein by reference).
10.8    Third Amended and Restated BancFirst Corporation Directors’ Deferred Stock Compensation Plan (filed as Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2009 and incorporated herein by reference).
10.9    Amendment to the Amended and Restated BancFirst Corporation Employee Stock Ownership Plan and Trust Agreement adopted June 25, 2009 (filed as Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2009 and incorporated herein by reference).
10.10    Amendment to the Amended and Restated BancFirst Corporation Thrift Plan adopted June 25, 2009 (filed as Exhibit 10.10 to the Company’s Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2009 and incorporated herein by reference).

 

28


Exhibit

Number

 

Exhibit

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.

 

  * 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 November 9, 2009    

/s/ Joe T. Shockley, Jr.

                    (Signature)
    Joe T. Shockley, Jr.
   

Executive Vice President

Chief Financial Officer

 

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