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BANCFIRST CORP /OK/ - Quarter Report: 2009 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, 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 July 31, 2009 there were 15,301,641 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,
2008
 
     2009     2008    

ASSETS

      

Cash and due from banks

   $ 111,277      $ 162,045      $ 126,227   

Interest-bearing deposits with banks

     796,035        5,325        326,874   

Federal funds sold

     2,200        400,000        1,000   

Securities (market value: $418,468, $448,568, and $456,075, respectively)

     417,738        448,350        455,568   

Loans:

      

Total loans (net of unearned interest)

     2,738,238        2,608,913        2,757,854   

Allowance for loan losses

     (39,334     (33,512     (34,290
                        

Loans, net

     2,698,904        2,575,401        2,723,564   

Premises and equipment, net

     91,390        89,483        91,411   

Other real estate owned

     11,190        1,975        3,782   

Intangible assets, net

     7,085        7,649        7,508   

Goodwill

     34,327        34,327        34,327   

Accrued interest receivable

     25,323        25,670        24,398   

Other assets

     73,856        89,606        72,545   
                        

Total assets

   $ 4,269,325      $ 3,839,831      $ 3,867,204   
                        

LIABILITIES AND STOCKHOLDERS’ EQUITY

      

Deposits:

      

Noninterest-bearing

   $ 1,085,234      $ 1,016,882      $ 1,025,749   

Interest-bearing

     2,697,588        2,350,497        2,351,859   
                        

Total deposits

     3,782,822        3,367,379        3,377,608   

Short-term borrowings

     500        14,366        12,884   

Accrued interest payable

     4,740        6,759        5,827   

Other liabilities

     35,257        37,243        30,290   

Long-term borrowings

     —          99        —     

Junior subordinated debentures

     26,804        26,804        26,804   
                        

Total liabilities

     3,850,123        3,452,650        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: 15,301,641, 15,186,632 and 15,281,141, respectively

     15,302        15,187        15,281   

Capital surplus

     68,919        64,672        67,975   

Retained earnings

     322,508        303,542        315,858   

Accumulated other comprehensive income, net of income tax of $(6,716), $(2,035) and $(7,903), respectively

     12,473        3,780        14,677   
                        

Total stockholders’ equity

     419,202        387,181        413,791   
                        

Total liabilities and stockholders’ equity

   $ 4,269,325      $ 3,839,831      $ 3,867,204   
                        

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

 

2


BANCFIRST CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except per share data)

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2009     2008     2009     2008  

INTEREST INCOME

        

Loans, including fees

   $ 38,467      $ 42,507      $ 76,735      $ 87,671   

Securities:

        

Taxable

     3,464        4,133        7,090        8,690   

Tax-exempt

     357        319        738        658   

Federal funds sold

     —          2,208        —          5,348   

Interest-bearing deposits with banks

     537        32        896        76   
                                

Total interest income

     42,825        49,199        85,459        102,443   
                                

INTEREST EXPENSE

        

Deposits

     9,786        13,807        20,166        30,982   

Short-term borrowings

     1        124        11        308   

Long-term borrowings

     —          2        —          9   

Junior subordinated debentures

     492        492        983        983   
                                

Total interest expense

     10,279        14,425        21,160        32,282   
                                

Net interest income

     32,546        34,774        64,299        70,161   

Provision for loan losses

     4,851        3,539        8,216        5,319   
                                

Net interest income after provision for loan losses

     27,695        31,235        56,083        64,842   
                                

NONINTEREST INCOME

        

Trust revenue

     1,407        1,436        2,722        2,864   

Service charges on deposits

     9,168        8,376        17,736        15,895   

Securities transactions

     (37     6,121        302        6,149   

Income from sales of loans

     1,057        483        1,382        1,052   

Insurance commissions and premiums

     1,600        1,629        3,534        3,530   

Cash management services

     2,565        2,589        5,253        5,122   

Gain on sale of other assets

     145        1,189        160        3,011   

Other

     1,138        1,507        2,576        2,948   
                                

Total noninterest income

     17,043        23,330        33,665        40,571   
                                

NONINTEREST EXPENSE

        

Salaries and employee benefits

     19,896        20,366        40,013        40,555   

Occupancy and fixed assets expense, net

     1,997        2,119        4,207        4,195   

Depreciation

     1,841        1,903        3,612        3,658   

Amortization of intangible assets

     229        224        459        449   

Data processing services

     880        758        1,785        1,494   

Net expense from other real estate owned

     102        (8     209        (16

Marketing and business promotion

     1,163        1,571        2,615        2,850   

Other

     9,110        6,663        16,847        13,339   
                                

Total noninterest expense

     35,218        33,596        69,747        66,524   
                                

Income before taxes

     9,520        20,969        20,001        38,889   

Income tax expense

     (3,260     (7,232     (6,616     (13,558
                                

Net income

     6,260        13,737        13,385        25,331   

Other comprehensive income, net of tax:

        

Unrealized losses on securities

     (917     (21,628     (3,692     (11,023

Reclassification adjustment for gains included in net income

     296        11,548        1,488        7,854   
                                

Comprehensive income

   $ 5,639      $ 3,657      $ 11,181      $ 22,162   
                                

NET INCOME PER COMMON SHARE

        

Basic

   $ 0.41      $ 0.91      $ 0.88      $ 1.67   
                                

Diluted

   $ 0.40      $ 0.89      $ 0.86      $ 1.63   
                                

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,
 
     2009     2008     2009     2008  

COMMON STOCK

        

Issued at beginning of period

   $ 15,292      $ 15,183      $ 15,281      $ 15,217   

Shares issued

     10        4        21        10   

Shares acquired and canceled

     —          —          —          (40
                                

Issued at end of period

   $ 15,302      $ 15,187      $ 15,302      $ 15,187   
                                

CAPITAL SURPLUS

        

Balance at beginning of period

   $ 68,380      $ 64,297      $ 67,975      $ 63,917   

Common stock issued

     218        375        325        755   

Tax effect of stock options

     56        —          89        —     

Stock options expense

     265        —          530        —     
                                

Balance at end of period

   $ 68,919      $ 64,672      $ 68,919      $ 64,672   
                                

RETAINED EARNINGS

        

Balance at beginning of period

   $ 319,615      $ 292,837      $ 315,858      $ 285,879   

Net income

     6,260        13,737        13,385        25,331   

Dividends on common stock

     (3,367     (3,032     (6,735     (6,075

Common stock acquired and canceled

     —          —          —          (1,593
                                

Balance at end of period

   $ 322,508      $ 303,542      $ 322,508      $ 303,542   
                                

ACCUMULATED OTHER COMPREHENSIVE INCOME

        

Unrealized gains on securities:

        

Balance at beginning of period

   $ 13,093      $ 13,860      $ 14,677      $ 6,949   

Net change

     (620     (10,080     (2,204     (3,169
                                

Balance at end of period

   $ 12,473      $ 3,780      $ 12,473      $ 3,780   
                                

Total stockholders’ equity

   $ 419,202      $ 387,181      $ 419,202      $ 387,181   
                                

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,
 
     2009     2008  

CASH FLOWS FROM OPERATING ACTIVITIES

   $ 23,355      $ 20,556   
                

INVESTING ACTIVITIES

    

Purchases of securities:

    

Held for investment

     —          (2,445

Available for sale

     (20,160     (136,666

Maturities of securities:

    

Held for investment

     4,689        3,150   

Available for sale

     42,442        67,598   

Proceeds from sales and calls of securities:

    

Held for investment

     15        38   

Available for sale

     6,267        88,502   

Net increase in federal funds sold

     (1,200     (1,000

Purchases of loans

     (23,622     (12,290

Proceeds from sales of loans

     53,160        21,459   

Net other increase in loans

     (17,366     (132,473

Purchases of premises, equipment and other

     (3,948     (5,664

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

     3,518        4,724   
                

Net cash provided/(used) by investing activities

     43,795        (105,067
                

FINANCING ACTIVITIES

    

Net increase in demand, transaction and savings deposits

     308,759        45,807   

Net increase in certificates of deposits

     96,454        33,068   

Net decrease in short-term borrowings

     (12,384     (16,034

Net decrease in long-term borrowings

     —          (507

Issuance of common stock

     966        765   

Acquisition of common stock

     —          (1,633

Cash dividends paid

     (6,734     (6,075
                

Net cash provided by financing activities

     387,061        55,391   
                

Net increase/(decrease) in cash, due from banks and interest bearing deposits

     454,211        (29,120

Cash, due from banks and interest bearing deposits at the beginning of the period

     453,101        196,490   
                

Cash, due from banks and interest bearing deposits at the end of the period

   $ 907,312      $ 167,370   
                

SUPPLEMENTAL DISCLOSURE

    

Cash paid during the period for interest

   $ 22,246      $ 33,534   
                

Cash paid during the period for income taxes

   $ 3,800      $ 11,300   
                

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 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 will be effective for the Company’s financial statements for periods ending after September 15, 2009. FAS 168 is not expected 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 June 30, 2009 financial statements for subsequent events through August 10, 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.

In March 2008, the FASB issued 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 was effective for the Company on January 1, 2009 and did not have a significant impact on the Company’s financial statements.

 

6


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 was effective for our fiscal year beginning January 1, 2009. The Company has evaluated the effect that the adoption of FAS 141R will have on future acquisitions; however, there have been no transactions in 2009 for this accounting standard to apply.

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 14 – 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 did not have a significant impact on the Company’s financial statements.

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 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. 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. 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.

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

 

(3) RECENT DEVELOPMENTS: MERGERS, ACQUISITIONS AND DISPOSALS

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 payable on September 30, 2009.

On November 18, 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.

 

7


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.

 

(4) SECURITIES

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

 

     June 30,    December 31,
2008
     2009    2008   

Held for investment, at cost (market value; $30,494, $24,744 and $34,975, respectively)

   $ 29,764    $ 24,526    $ 34,468

Available for sale, at market value

     387,974      423,824      421,100
                    

Total

   $ 417,738    $ 448,350    $ 455,568
                    

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

 

     June 30,    December 31,
2008
     2009    2008   

Contractual maturity of debt securities:

        

Within one year

   $ 91,189    $ 123,999    $ 116,396

After one year but within five years

     289,185      280,579      289,849

After five years

     26,528      28,814      32,978
                    

Total debt securities

     406,902      433,392      439,223

Equity securities

     10,836      14,958      16,345
                    

Total

   $ 417,738    $ 448,350    $ 455,568
                    

The Company held 220, 209 and 205 debt securities available for sale that had unrealized gains as of June 30, 2009 and 2008 and December 31, 2008, respectively. These securities had a market value totaling $377 million, $281.8 million and $404.6 million, respectively, and unrealized gains totaling $16.6 million, $4.8 million and $19.4 million, respectively. The Company also held 6, 62 and 48 debt securities available for sale that had unrealized losses, respectively. These securities had a market value totaling $553,000, $128.5 million and $1.7 million and unrealized losses totaling $6,000, $2.1 million and $14,000, 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.

 

8


(5) LOANS AND ALLOWANCE FOR LOAN LOSSES

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

 

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

Commercial and industrial

   $ 523,667    19.13   $ 520,868    19.97   $ 513,647    18.63

Oil & gas production & equipment

     91,285    3.33        90,739    3.48        84,770    3.07   

Agriculture

     79,225    2.89        77,980    2.99        86,752    3.15   

State and political subdivisions:

               

Taxable

     7,425    0.27        5,776    0.22        5,595    0.20   

Tax-exempt

     8,988    0.33        8,490    0.33        8,292    0.30   

Real Estate:

               

Construction

     217,159    7.93        235,909    9.04        246,269    8.93   

Farmland

     88,190    3.22        90,197    3.46        92,050    3.34   

One to four family residences

     558,085    20.38        530,413    20.33        543,183    19.70   

Multifamily residential properties

     48,640    1.78        37,707    1.45        45,250    1.64   

Commercial

     755,615    27.60        706,539    27.08        768,562    27.87   

Consumer

     331,055    12.09        284,949    10.92        335,938    12.18   

Other

     28,904    1.05        19,346    0.73        27,546    0.99   
                                       

Total loans

   $ 2,738,238    100.00   $ 2,608,913    100.00   $ 2,757,854    100.00
                                       

Loans held for sale (included above)

   $ 79,849      $ 9,721      $ 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, 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.

Loans held for sale as of June 30, 2009 include $68.5 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.

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

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2009     2008     2009     2008  

Balance at beginning of period

   $ 36,765      $ 30,193      $ 34,290      $ 29,127   
                                

Charge-offs

     (2,419     (355     (3,487     (1,254

Recoveries

     137        135        315        320   
                                

Net charge-offs

     (2,282     (220     (3,172     (934
                                

Provisions charged to operations

     4,851        3,539        8,216        5,319   
                                

Balance at end of period

   $ 39,334      $ 33,512      $ 39,334      $ 33,512   
                                

 

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,
     2009    2008    2009    2008

Commercial, financial and other

   $ 1,158    $ 12    $ 1,535    $ 44

Real estate – construction

     24      3      159      11

Real estate – mortgage

     911      93      1,135      606

Consumer

     190      112      344      273
                           

Total

   $ 2,283    $ 220    $ 3,173    $ 934
                           

 

(6) NONPERFORMING AND RESTRUCTURED ASSETS

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

 

     June 30,     December 31,
2008
 
     2009     2008    

Past due over 90 days and still accruing

   $ 21,530      $ 2,043      $ 1,346   

Nonaccrual

     24,186        11,070        21,359   

Restructured

     357        833        1,022   
                        

Total nonperforming and restructured loans

     46,073        13,946        23,727   

Other real estate owned and repossessed assets

     11,543        2,311        3,997   
                        

Total nonperforming and restructured assets

   $ 57,616      $ 16,257      $ 27,724   
                        

Nonperforming and restructured loans to total loans

     1.68     0.53     0.86
                        

Nonperforming and restructured assets to total assets

     1.35     0.42     0.72
                        

The amount of the nonperforming and restructured assets is based upon the current performance of the assets. The future performance of the assets in past due over 90 days and still accruing could possibly change to performing status given favorable restructuring results.

 

(7) INTANGIBLE ASSETS AND GOODWILL

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

 

     June 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    $ (3,223   $ 6,722    $ (2,550   $ 6,722    $ (2,886

Customer relationship intangibles

     4,429      (843     4,081      (604     4,392      (720
                                             

Total

   $ 11,151    $ (4,066   $ 10,803    $ (3,154   $ 11,114    $ (3,606
                                             

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

 

Amortization:

  

Three months ended June 30, 2009

   $ 229

Three months ended June 30, 2008

     224

Six months ended June 30, 2009

     459

Six months ended June 30, 2008

     449

Year ended December 31, 2008

     902

 

10


Estimated Amortization

  

Year ending December 31:

  

2009

   $ 916

2010

     916

2011

     916

2012

     904

2013

     762

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 Six Months Ended June 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) 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 as follows (dollars in thousands):

 

     Minimum
Required
    June 30,     December 31,
2008
 
       2009     2008    

Tier 1 capital

     $ 391,294      $ 367,399      $ 383,255   

Total capital

     $ 428,597      $ 402,040      $ 418,710   

Risk-adjusted assets

     $ 2,982,198      $ 2,992,477      $ 3,038,538   

Leverage ratio

   3.00     9.26     9.67     10.02

Tier 1 capital ratio

   4.00     13.12     12.28     12.61

Total capital ratio

   8.00     14.37     13.44     13.78

As of June 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.

 

(9) STOCK REPURCHASE PLAN

In November 1999, the Company adopted a 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, 2009 there were 560,000 shares remaining that could be repurchased under the SRP. The following is a summary of the shares repurchased under the program:

 

11


     Three Months Ended
June 30,
   Six Months Ended
June 30,
     2009    2008    2009    2008

Number of shares repurchased

   —      —      —        40,000

Average price of shares repurchased

   —      —      —      $ 40.70

 

(10) 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 June 30, 2009, 244,660 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 June 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 June 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 June 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 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, 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

   —          —        

Options exercised

   (10,500     22.53      

Options cancelled

   (2,500     42.60      
              

Outstanding at June 30, 2009

   1,079,453        27.82    8.47    $ 7,296
                    

Exercisable at June 30, 2009

   662,514        20.05    7.23    $ 9,624
                    

The following 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,
     2009    2008    2009    2008

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

   $ —      $ 19.62    $ —      $ 20.24

Total intrinsic value of options exercised

     181      75      199      239

Cash received from options exercised

     228      49      237      161

Tax benefit realized from options exercised

     70      29      77      92

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.

 

12


For the three months ended June 30, 2009 and 2008, the Company recorded share-based employee compensation expense, net of tax, of approximately $163,000 and $192,000, respectively; and approximately $325,000 and $367,000 for the six months ended June 30, 2009 and 2008, respectively.

The Company will continue to amortize the remaining fair value of these stock options of approximately $3.3 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

   2.64   3.57

Dividend yield

   1.50   1.50

Stock price volatility

   74.84   38.68

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.

 

(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. The following 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,
 
     2009     2008     2009     2008  

Unrealized gain (loss) during the period:

        

Before-tax amount

   $ (917   $ (21,628   $ (3,692   $ (11,023

Tax (expense) benefit

     320        7,569        1,292        3,857   
                                

Net-of-tax amount

   $ (597   $ (14,059   $ (2,400   $ (7,166
                                

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

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2009     2008     2009     2008  

Unrealized gain (loss) on securities:

        

Beginning balance

   $ 13,094      $ 13,860      $ 14,677      $ 6,949   

Current period change

     (597     (14,059     (2,400     (7,166

Reclassification adjustment for gains (losses) included in net income

     (24     3,979        196        3,997   
                                

Ending balance

   $ 12,473      $ 3,780      $ 12,473      $ 3,780   
                                

 

13


(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, 2009

Basic—Income available to common stockholders

   $ 6,260    15,298,075    $ 0.41
            

Effect of stock options

     —      306,204   
              

Diluted—Income available to common stockholders plus assumed exercises of stock options

   $ 6,260    15,604,279    $ 0.40
                  

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
                  

Six Months Ended June 30, 2009

Basic—Income available to common stockholders

   $ 13,385    15,294,873    $ 0.88
            

Effect of stock options

     —      297,527   
              

Diluted—Income available to common stockholders plus assumed exercises of stock options

   $ 13,385    15,592,400    $ 0.86
                  

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
                  

The following table contains 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, 2009

   266,000    $ 39.73

Three Months Ended June 30, 2008

   264,929    $ 44.59

Six Months Ended June 30, 2009

   266,704    $ 38.37

Six Months Ended June 30, 2008

   267,016    $ 43.95

 

(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 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.

 

14


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:

               

June 30, 2009

               

Net interest income (expense)

   $ 9,739    $ 21,959    $ 1,917    $ (1,069   $ —        $ 32,546

Noninterest income

     2,647      8,695      4,848      7,428        (6,575     17,043

Income before taxes

     2,011      12,169      2,987      (1,105     (6,542     9,520

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

Six Months Ended:

               

June 30, 2009

               

Net interest income (expense)

   $ 18,984    $ 43,296    $ 3,763    $ (1,744   $ —        $ 64,299

Noninterest income

     5,515      16,993      9,643      15,577        (14,063     33,665

Income before taxes

     6,439      23,746      4,978      (1,175     (13,987     20,001

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

Total Assets:

               

June 30, 2009

   $ 1,380,136    $ 2,651,317    $ 209,279    $ 514,822      $ (486,229   $ 4,269,325

June 30, 2008

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

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, therefore, 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

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.

 

15


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 loans to be sold in the secondary market. 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 the 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 June 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

   $ —      $ 377,138    $ 10,836    $ 387,974

Derivative Assets

     —        12,571      —        12,571

Derivative Liabilities

     —        10,509      —        10,509

Loans Held For Sale

     —        79,849      —        79,849

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

     Securities
Available for
Sale
 

Balance – January 1, 2008

   $ 16,345   

Purchases and sales, net

     (4,911

Total unrealized losses

     (598
        

Balance – December 31, 2008

   $ 10,836   
        

 

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

 

16


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):

 

          June 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

               

Customer

   Barrels    449      $ (5,162   128      $ 9,203      395      $ (11,159

Counterparty

   Barrels    (449     5,788      (128     (9,028   (395     11,396   

Natural Gas

               

Customer

   MMBTUs    13,550        (3,846   3,480        11,303      8,310      $ (2,918

Counterparty

   MMBTUs    (13,550     5,282      (3,480     (10,983   (8,310     3,994   

The following table summarizes the Company’s notional amounts and gross fair values of oil and gas derivative positions outstanding for the period indicated (notional amounts and dollars in thousands):

 

          June 30,
2009
 
         
Commodity Derivatives    Notional Units    Notional
Amount
    Estimated
Fair Value
 

Oil

       

Derivative Assets

   Barrels    (404   $ 6,123   

Derivative Liabilities

   Barrels    404        (5,498

Natural Gas

       

Derivative Assets

   MMBTUs    (10,100     6,448   

Derivative Liabilities

   MMBTUs    10,100        (5,011

Total Fair Value

   Included in     

Derivative Assets

   Other Assets        12,571   

Derivative Liabilities

   Other Liabilities        (10,509

The Company recognized $79,000 income in the second quarter and $451,000 income for the first six months related to the activity, which was included in Other Income.

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.

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 $11.1 million at June 30, 2009 and $15.4 million at December 31, 2008. Conversely, the Company had exposure to bank customers of approximately $20.5 million at June 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.

 

17


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 2009 was $6.3 million compared to $13.7 million for the second quarter of 2008. Diluted net income per share was $0.40 and $0.89 for the second quarter of 2009 and 2008, respectively. For the first six months of 2009, net income was $13.4 million, compared to $25.3 million for the first six months of 2008. Diluted net income per share for the first six months of 2009 was $0.86 compared to $1.63 for the first six months of 2008.

Total assets at June 30, 2009 were $4.3 billion, up $402 million from December 31, 2008 and up $429 million from a year ago. Total loans were $2.74 billion, down $20 million from December 31, 2008 and up $129 million from June 30, 2008. Total deposits were $3.8 billion, up $405 million from December 31, 2008 and up $416 million from June 30, 2008. Stockholders’ equity was $419 million at June 30, 2009, up $5.4 million from December 31, 2008 and up $32.0 million compared to June 30, 2008. The Company’s liquidity remains strong as its average loan to deposit ratio was 79.7% at quarter end and core deposits represented 88.6% of total deposits. The Company had no brokered deposits and no Federal Home Loan Bank borrowings. Stockholder’s equity was $419 million at June 30, 2009 which was 9.8% of total assets.

On November 18, 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 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, net of the interest income differential, 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.

Beginning in 2008 and into 2009, the national economy has seen declining home sales and values, declining 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 declining interest rates and competitive pressures for deposits, the Company’s interest rate margin will likely compress further, and it is likely to experience slower loan growth. The FDIC increased deposit insurance premiums in 2009 and has made a Special Assessment in the second quarter of 2009. These increases will cause 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.

 

18


RESULTS OF OPERATIONS

Second Quarter

Net interest income totaled $32.5 million, a decrease of $2.2 million, or 6.4%, compared to the second quarter of 2008. The Company’s net interest margin (on a taxable equivalent basis) was 3.44% compared to 4.08% 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 $4.9 million compared to $3.5 million 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. Although it is possible a majority of the loans in question could be rehabilitated to performing status, provisions were made consistent with the Company’s loan reserve methodology. Net loan charge-offs were $2.3 million for the second quarter of 2009, compared to $220,000 for the second quarter of 2008. The net charge-offs represent a rate of 0.33% of average total loans for the second quarter of 2009 compared to 0.03% for the same period in 2008.

Noninterest income was $17.0 million compared to recurring operating noninterest income of $16.0 million for the same period a year ago, an increase of 6.3%, due to commercial deposit fees and increases in income from the sale of mortgage loans and student loans. Noninterest income for the second quarter of 2008 was adjusted for 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. Noninterest expense totaled $35.2 million versus $33.6 million for the second quarter of 2008, which included the FDIC Special Assessment of $1.9 million and higher deposit insurance premiums of $1.1 million. Apart from the Special Assessment and higher premiums, noninterest expense was down 3.9% compared to the previous year. The Company’s effective tax rate was 34.2% for the second quarter of 2009, compared to 34.5% for the second quarter of 2008. The decrease is a result of additional tax credits realized in 2009.

Year-To-Date

Net interest income for the six months ended June 30, 2009 was $64.3 million, a decrease of $5.9 million from the same period in 2008. The net interest margin in 2009 decreased to 3.56% from 4.16% for the first six 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’s loan loss provision was $8.2 million in the first six months of 2009, compared to $5.3 million for the same period of 2008. The loan provision was driven primarily by the identification of a small number of commercial credits that were internally downgraded by management. Net loan charge-offs were $3.2 million for the first six months of 2009, compared to $934,000 for the first six months of 2008. The net charge-offs represent an annualized rate of 0.23% of average total loans for the first six months of 2009 compared to 0.07% for the first six months of 2008.

Core noninterest income for the six months of 2009 increased $2.2 million compared to the same period for 2008. 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 in 2009 due to increases in commercial deposit fees and sales of mortgage loans and student loans. Noninterest expense increased $3.2 million compared to the first half of 2008 which included the FDIC Special Assessment of $1.9 million and higher deposit insurance premiums of $1.8 million. Apart from the Special Assessment and higher premiums, noninterest expense was down $500,000 compared to the previous year. The effective tax rate on income before taxes was 33.1%, compared to 34.9% for the first six months of 2008. The decrease is a result of additional tax credits realized in 2009.

 

19


FINANCIAL POSITION

The aggregate of cash and due from banks, interest-bearing deposits with banks, and federal funds sold as of June 30, 2009 increased $455 million from December 31, 2008 and increased $342 million from June 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 $38 million compared to December 31, 2008 and $31 million compared to June 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 $19.1 million at the end of the second quarter of 2009, compared to an unrealized gain of $22.0 million at December 31, 2008, and an unrealized gain of $5.2 million at June 30, 2008. The average taxable equivalent yield on the securities portfolio was 3.74%, 3.94% and 4.15% at June 30, 2009, December 31, 2008 and June 30, 2008, respectively

Total loans decreased $20 million from December 31, 2008 and increased $129 million from June 30, 2008. The increase compared to the second quarter of 2008 was due primarily to commercial, real estate and student loans. The decrease from year end 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 $5.0 million from year-end 2008 and $5.8 million from the second quarter of 2008. The allowance as a percentage of total loans was 1.44%, 1.24% and 1.28% at June 30, 2009, December 31, 2008 and June 30, 2008, respectively. The allowance to nonperforming and restructured loans at the same dates was 84.0%, 144.5% and 240.3%, respectively.

Nonperforming and restructured loans totaled $46.8 million at June 30, 2009, compared to $23.7 million at December 31, 2008 and $13.9 million at June 30, 2008. During the second quarter of 2009, the Company transferred a commercial real estate property consisting of undeveloped land into Other Real Estate Owned. The property was recorded at net realizable value. The ratios of nonperforming and restructured loans to total loans for the same periods were 1.71%, 0.86% and 0.53%, respectively. The level of nonperforming loans and loan losses may rise over time as a result of economic and credit cycles.

Total deposits increased $405 million compared to December 31, 2008, and $416 million compared to June 30, 2008 due to customers moving funds out of off-balance sheet money market accounts 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 11.4% of total deposits at June 30, 2009, compared to 10.0% at December 31, 2008 and June 30, 2008. Noninterest bearing deposits to total deposits were 28.7% at June 30, 2009, compared to 30.4% at December 31, 2008 and 30.2% at June 30, 2008.

Short-term borrowings decreased $12.4 million from December 31, 2008, and $13.9 million from June 30, 2008 to $500,000. 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 $99,000 from the second quarter of 2008 to zero. The Company does not have any borrowings from the Federal Home Loan Bank at June 30, 2009.

Stockholders’ equity was $419 million at June 30, 2009 which was an increase of $5.4 million from year-end 2008 and an increase of $32 million from the second quarter of 2008 due to accumulated earnings. Average stockholders’ equity to average assets for the second quarter of 2009 was 10.5%, compared to 10.4% at year-end 2008, and 10.3% for the second quarter of 2008. The Company’s leverage ratio and total risk-based capital ratio were 9.26% and 14.37%, respectively, at June 30, 2009, well in excess of the regulatory minimums.

FUTURE APPLICATION OF ACCOUNTING STANDARDS

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

 

20


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.

 

21


BANCFIRST CORPORATION

SELECTED CONSOLIDATED FINANCIAL DATA

(Unaudited)

(Dollars in thousands, except per share data)

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2009     2008     2009     2008  

Per Common Share Data

        

Net income – basic

   $ 0.41      $ 0.91      $ 0.88      $ 1.67   

Net income – diluted

     0.40        0.89        0.86        1.63   

Cash dividends

     0.22        0.20        0.44        0.40   

Performance Data

        

Return on average assets

     0.61     1.46     0.68     1.36

Return on average stockholders’ equity

     5.95        14.14        6.43        13.21   

Cash dividend payout ratio

     53.66        21.98        50.00        23.95   

Net interest spread

     2.86        3.37        2.95        3.36   

Net interest margin

     3.44        4.08        3.56        4.16   

Efficiency ratio

     71.02        57.82        71.20        60.08   

Net charge-offs

     0.33        0.03        0.23        0.07   

 

     June 30,     December 31,
2008
 
     2009     2008    

Balance Sheet Data

      

Book value per share

   $ 27.40      $ 25.49      $ 27.08   

Tangible book value per share

     24.69        22.73        24.34   

Average loans to deposits (year-to-date)

     79.67     77.05     78.82

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

     92.08        91.09        91.23   

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

     10.52        10.29        10.35   

Asset Quality Ratios

      

Nonperforming and restructured loans to total loans

     1.68     0.53     0.86

Nonperforming and restructured assets to total assets

     1.35        0.42        0.72   

Allowance for loan losses to total loans

     1.44        1.28        1.24   

Allowance for loan losses to nonperforming and restructured loans

     83.99        240.30        144.52   

 

22


BANCFIRST CORPORATION

CONSOLIDATED AVERAGE BALANCE SHEETS AND INTEREST MARGIN ANALYSES

(Unaudited)

Taxable Equivalent Basis (Dollars in thousands)

 

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

ASSETS

              

Earning assets:

              

Loans (1)

   $ 2,787,199      $ 38,551    5.55   $ 2,552,864      $ 42,587    6.69

Securities – taxable

     391,268        3,464    3.55        414,047        4,132    4.00   

Securities – tax exempt

     38,926        549    5.66        32,735        491    6.02   

Interest bearing deposits w/ banks & FFS

     610,372        537    0.35        437,327        2,241    2.06   
                                  

Total earning assets

   $ 3,827,765      $ 43,101    4.52   $ 3,436,973      $ 49,451    5.77
                                  

Nonearning assets:

              

Cash and due from banks

     109,223             143,999        

Interest receivable and other assets

     232,990             230,307        

Allowance for loan losses

     (36,376          (30,740     
                          

Total nonearning assets

     305,837             343,566        
                          

Total assets

   $ 4,133,602           $ 3,780,539        
                          

LIABILITIES AND STOCKHOLDERS EQUITY

              

Interest-bearing liabilities:

              

Transaction deposits

   $ 392,130      $ 315    0.32   $ 431,579      $ 525    0.49

Savings deposits

     1,166,063        4,136    1.42        1,098,194        5,696    2.08   

Time deposits

     903,331        5,336    2.37        833,248        7,587    3.65   

Short-term borrowings

     1,190        1    0.34        23,670        124    2.10   

Long-term borrowings

     —          —      —          323        2    2.48   

Junior subordinated debentures

     26,804        491    7.35        26,805        491    7.35   
                                  

Total interest-bearing liabilities

   $ 2,489,518      $ 10,279    1.66   $ 2,413,819      $ 14,425    2.40
                                  

Interest-free funds:

              

Noninterest-bearing deposits

     1,188,547             944,433        

Interest payable and other liabilities

     33,569             32,706        

Stockholders’ equity

     421,968             389,581        
                          

Total interest free funds

     1,644,084             1,366,720        
                          

Total liabilities and stockholders’ equity

   $ 4,133,602           $ 3,780,539        
                          

Net interest income

     $ 32,822        $ 35,026   
                      

Net interest spread

        2.86        3.37
                      

Net interest margin

        3.44        4.08
                      

 

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

 

23


BANCFIRST CORPORATION

CONSOLIDATED AVERAGE BALANCE SHEETS AND INTEREST MARGIN ANALYSES

(Unaudited)

Taxable Equivalent Basis (Dollars in thousands)

 

     Six Months Ended June 30,  
     2009     2008  
     Average
Balance
    Interest
Income/
Expense
   Average
Yield/
Rate
    Average
Balance
    Interest
Income/
Expense
   Average
Yield/
Rate
 

ASSETS

              

Earning assets:

              

Loans (1)

   $ 2,794,253      $ 76,895    5.55   $ 2,523,044      $ 87,836    6.98

Securities – taxable

     400,039        7,090    3.57        422,741        8,690    4.12   

Securities – tax exempt

     40,215        1,136    5.70        33,680        1,013    6.03   

Interest bearing deposits w/ banks & FFS

     441,551        897    0.41        426,529        5,424    2.55   
                                  

Total earning assets

   $ 3,676,058      $ 86,018    4.72   $ 3,405,994      $ 102,963    6.06
                                  

Nonearning assets:

              

Cash and due from banks

   $ 118,476             139,560        

Interest receivable and other assets

     233,234             223,712        

Allowance for loan losses

     (35,469          (30,067     
                          

Total nonearning assets

     316,241             333,205        
                          

Total assets

   $ 3,992,299           $ 3,739,199        
                          

LIABILITIES AND STOCKHOLDERS EQUITY

              

Interest-bearing liabilities:

              

Transaction deposits

   $ 374,578      $ 541    0.29   $ 420,798      $ 1,167    0.56

Savings deposits

     1,134,467        8,735    1.55        1,097,087        13,606    2.49   

Time deposits

     876,721        10,890    2.50        829,040        16,209    3.92   

Short-term borrowings

     4,931        11    0.45        23,657        308    2.61   

Long-term borrowings

     —          —      —          423        9    4.27   

Junior subordinated debentures

     26,804        983    7.40        26,672        983    7.39   
                                  

Total interest-bearing liabilities

   $ 2,417,501      $ 21,160    1.77   $ 2,397,677      $ 32,282    2.70
                                  

Interest-free funds:

              

Noninterest-bearing deposits

     1,121,684             927,744        

Interest payable and other liabilities

     33,217             29,081        

Stockholders’ equity

     419,897             384,697        
                          

Total interest free funds

     1,574,798             1,341,522        
                          
              

Total liabilities and stockholders’ equity

   $ 3,992,299           $ 3,739,199        
                          

Net interest income

     $ 64,858        $ 70,681   
                      

Net interest spread

        2.95        3.36
                      

Net interest margin

        3.56        4.16
                      

 

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

 

24


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, 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 second 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.

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 28, 2009, 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 Class I Directors

        

James R. Daniel

   12,074,564    2,602,934    587,709

Tom H. McCasland, III

   12,474,533    2,202,965    587,709

Paul B. Odom, Jr.

   12,409,746    2,267,752    587,709

H.E. Rainbolt

   12,125,213    2,552,285    587,709

Michael K. Wallace

   12,149,024    2,528,474    587,709

G. Rainey Williams, Jr.

   12,474,533    2,202,965    587,709
     Voted for    Against/
Withheld
   Broker
non-votes

Proposal No. 2-Approval of amendment to the BancFirst Corporation Stock Option Plan

   10,604,286    2,509,000    587,709

Proposal No. 3-Approval of amendment to the BancFirst Corporation Non-Employee Director’s Stock Option Plan

   10,616,832    2,498,984    587,709

Proposal No. 4-Approval of amendment to the BancFirst Corporation Director’s Deferred Stock Compensation Plan

   12,910,445    203,382    587,709

Proposal No. 5- Ratification of Grant Thornton LLP as independent registered public accounting firm

   14,637,675    85,683    587,709

 

25


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 From 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 Debenture 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.
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.
10.8*    Third Amended and Restated BancFirst Corporation Directors’ Deferred Stock Compensation Plan.
10.9*    Amendment to the Amended and Restated BancFirst Corporation Employee Stock Ownership Plan and Trust Agreement adopted June 25, 2009.
10.10*    Amendment to the Amended and Restated BancFirst Corporation Thrift Plan adopted June 25, 2009.
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.

 

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Exhibit
Number

  

Exhibit

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 August 10, 2009  

/s/ Joe T. Shockley, Jr.

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

 

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