<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended September 30, 1996 Commission File Number 0-14384
BANCFIRST CORPORATION
(Exact name of registrant as specified in charter)
OKLAHOMA 73-1221379
(State or other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
101 N. Broadway, Suite 200
Oklahoma City, Oklahoma 73102-8401
(Address of principal executive offices)
(405) 270-1086
(Registrant's area code and telephone number)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No .
--- ---
As of October 31, 1996, there were 6,399,338 shares of Common Stock outstanding.
<PAGE>
FORM 10-Q
CROSS-REFERENCE INDEX
ITEM PART I. FINANCIAL INFORMATION PAGE
- ---- -------------------------------------------------- --------------
1. Financial Statements 1
2. Management's Discussion and Analysis of 6
Financial Condition and Results of Operations
PART II. OTHER INFORMATION
--------------------------------------------------
1. Legal Proceedings Not Applicable
2. Changes in Securities Not Applicable
3. Defaults Upon Senior Securities Not Applicable
4. Submission of Matters to a Vote of Security Holders Not Applicable
5. Other Information Not Applicable
6. Exhibits and Reports on Form 8-K 10
Signatures 11
<PAGE>
PART I. FINANCIAL INFORMATION
------------------------------
<PAGE>
BANCFIRST CORPORATION
CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
<TABLE>
<CAPTION>
SEPTEMBER 30,
--------------------- DECEMBER 31,
1996 1995 1995
---------- -------- ------------
<S> <C> <C> <C>
ASSETS
Cash and due from banks $ 89,288 $ 57,919 $ 85,352
Interest-bearing deposits with banks 1 65 1
Securities 281,971 255,349 263,113
Federal funds sold 10,500 17,368 30,085
Loans:
Total loans (net of unearned interest) 737,356 604,642 625,162
Allowance for possible loan losses (12,006) (10,338) (10,646)
---------- -------- ----------
Loans, net 725,350 594,304 614,516
Premises and equipment, net 33,503 27,729 28,308
Other real estate owned 1,259 2,149 781
Intangible assets, net 14,637 8,195 8,106
Accrued interest receivable 9,975 10,293 10,403
Other assets 20,094 7,858 7,673
---------- -------- ----------
Total assets $1,186,578 $981,229 $1,048,338
========== ======== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing $ 244,282 $173,346 $ 196,597
Interest-bearing 815,350 693,684 726,572
---------- -------- ----------
Total deposits 1,059,632 867,030 923,169
Short-term borrowings 10,665 11,532 18,705
Long-term borrowings 1,448 810 918
Accrued interest payable 4,158 3,434 3,237
Other liabilities 4,184 3,629 3,966
---------- -------- ----------
Total liabilities 1,080,087 886,435 949,995
---------- -------- ----------
Commitments and contingent liabilities
Stockholders' equity:
Common stock 6,243 6,211 6,225
Capital surplus 34,870 34,408 34,769
Retained earnings 65,513 53,293 55,792
Unrealized securities gains (losses),
net of tax (135) 882 1,557
---------- -------- ----------
Total stockholders' equity 106,491 94,794 98,343
---------- -------- ----------
Total liabilities and stockholders'
equity $1,186,578 $981,229 $1,048,338
========== ======== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
1
<PAGE>
BANCFIRST CORPORATION
CONSOLIDATED INCOME STATEMENT
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- -----------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans, including fees $ 18,031 $ 15,060 $ 50,995 $ 42,711
Interest-bearing deposits with banks -- 1 -- 9
Securities:
Taxable 4,214 3,585 12,151 10,184
Tax-exempt 146 151 445 446
Federal funds sold 318 363 1,214 1,226
---------- ---------- ---------- ----------
Total interest income 22,709 19,160 64,805 54,576
---------- ---------- ---------- ----------
INTEREST EXPENSE
Deposits 8,665 7,809 24,849 22,329
Short-term borrowings 20 20 343 58
Long-term borrowings 24 -- 67 --
---------- ---------- ---------- ----------
Total interest expense 8,709 7,829 25,259 22,387
---------- ---------- ---------- ----------
Net interest income 14,000 11,331 39,546 32,189
Provision for possible loan losses 432 150 849 408
---------- ---------- ---------- ----------
Net interest income after provision
for possible loan losses 13,568 11,181 38,697 31,781
---------- ---------- ---------- ----------
NONINTEREST INCOME
Service charges on deposits 2,298 1,987 6,481 5,909
Securities transactions -- 48 180 111
Other 1,468 1,145 4,484 3,153
---------- ---------- ---------- ----------
Total noninterest income 3,766 3,180 11,145 9,173
---------- ---------- ---------- ----------
NONINTEREST EXPENSE
Salaries and employee benefits 6,364 5,141 18,396 14,970
Occupancy and fixed assets expense, net 707 550 1,919 1,475
Depreciation 632 431 1,718 1,374
Amortization 531 397 1,450 1,071
Data processing services 352 284 1,005 878
Net (income) expense from other
real estate owned 12 16 174 50
Other 2,536 1,806 7,163 6,128
---------- ---------- ---------- ----------
Total noninterest expense 11,134 8,625 31,825 25,946
---------- ---------- ---------- ----------
Income before taxes 6,200 5,736 18,017 15,008
Income tax expense (2,283) (2,097) (6,797 (5,594)
---------- ---------- ---------- ----------
Net income $ 3,917 $ 3,639 $ 11,220 $ 9,414
========== ========== ========== ==========
PER SHARE DATA (PRIMARY AND FULLY DILUTED)
Net income $0.61 $0.57 $1.74 $1.47
========== ========== ========== ==========
Average common stock and common
stock equivalents 6,446,714 6,408,592 6,442,218 6,388,743
========== ========== ========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE>
BANCFIRST CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30
--------------------
1996 1995
--------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES $ 4,368 $ 11,614
--------- --------
INVESTING ACTIVITIES
Cash and due from banks used for acquisitions (10,495) (15,542)
Purchases of securities (52,063) (42,263)
Maturities of securities 52,330 57,147
Proceeds from sales of securities 15,709 4,043
Net decrease in federal funds sold 31,013 21,199
Purchases of loans (9,251) (9,383)
Proceeds from sales of loans 81,587 38,102
Net other increase in loans (111,218) (68,233)
Purchases of premises and equipment (3,361) (2,175)
Proceeds from sales of other real estate owned and repossessed assets 968 1,130
Other, net (520) 608
--------- --------
Net cash used by investing activities (5,301) (15,367)
--------- --------
FINANCING ACTIVITIES
Net decrease in demand, transaction and savings deposits (11,272) (17,263)
Net increase in certificates of deposit 25,028 14,786
Net increase (decrease) in short-term borrowings (8,039) 11,415
Net increase in long-term borrowings 530 810
Issuance of common stock 118 305
Purchase and retirement of common stock -- (577)
Cash dividends paid (1,496) (1,303)
--------- --------
Net cash provided by financing activities 4,869 8,173
--------- --------
Net increase in cash and due from banks 3,936 4,420
Cash and due from banks at the beginning of the period 85,353 53,564
--------- --------
Cash and due from banks at the end of the period $ 89,289 $ 57,984
========= ========
SUPPLEMENTAL DISCLOSURE
Cash paid during the period for interest $ 24,338 $ 21,042
========= ========
Cash paid during the period for income taxes $ 6,967 $ 5,439
========= ========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
BANCFIRST CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
(1) GENERAL
The accompanying consolidated financial statements include the
accounts of BancFirst Corporation, BancFirst Investment Corporation,
BancFirst, Lenders Collection Corporation and National Express Corporation.
All significant intercompany accounts and transactions have been eliminated.
Assets held in a fiduciary or agency capacity are not assets of the Company
and, accordingly, are not included in the consolidated financial statements.
The interim financial statements contained herein reflect all
adjustments which are, in the opinion of management, necessary to provide a
fair statement of the financial position and results of operations of the
Company for the interim periods presented. All such adjustments are of a
normal and recurring nature. There have been no significant changes in the
accounting policies of the Company since December 31, 1995, the date of the
most recent annual report. Certain amounts in the 1995 financial statements
have been reclassified to conform with the 1996 presentation.
The preparation of financial statements in conformity with
generally accepted accounting principles inherently involves the use of
estimates and assumptions which affect the amounts reported in the financial
statements and the related disclosures. Such estimates and assumptions may
change over time and actual amounts may differ from those reported.
(2) ACQUISITIONS
In October 1996, the Company acquired all the assets and assumed
all the liabilities of Commerce Bancorporation, Inc. of McLoud, Oklahoma
("Commerce Bancorp"), which had approximately $18,000 in total assets.
Commerce Bancorp was controlled by certain executive officers of the
Company. The acquisition was accomplished through the exchange of 156,508
shares of common stock of the Company for all of the outstanding common
stock of Commerce Bancorp. The minority shares of Commerce Bancorp's
subsidiary bank were purchased for $102. The acquisition was accounted for
as a book value purchase, which is similar to the pooling of interests
method, although the effect of the acquisition is included in the Company's
consolidated financial statements from the date of the acquisition forward.
The acquisition will not have a material effect on the results of operations
of the Company for 1996.
In March 1996, the Company acquired City Bankshares, Inc. of
Oklahoma City, Oklahoma ("City Bankshares"), which had $130,000 in total
assets. The acquisition was for cash of $19,125, with City Bankshares and
its subsidiary, City Bank, being merged into BancFirst. C-Teq, Inc., an 85%
owned data processing subsidiary of City Bankshares, was spun off to the
shareholders of City Bankshares prior to the acquisition. BancFirst also
entered into an agreement with the CEO of City Bankshares whereby BancFirst
paid the CEO $1,250 in exchange for an agreement not to compete with
BancFirst for a period of four years. The acquisition was accounted for as
a purchase. Accordingly, the effect of the acquisition is included in the
Company's consolidated financial statements from the date of the acquisition
forward. A core deposit intangible of $830 and goodwill of $6,876 were
recorded in the acquisition. Pro forma condensed results of operations, as
though City Bankshares had been acquired January 1, 1995, are as follows:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ------------
<S> <C> <C>
Net interest income $40,961 $49,226
Net income $11,130 $13,122
Net income per common share
and common stock equivalent $ 1.73 $ 2.05
</TABLE>
In March 1995, the Company acquired State National Bank of Marlow,
Oklahoma, which had total assets of $101,976. The acquisition was for cash
of $17,485, with an additional $500 placed in escrow pending the resolution
of certain matters. State National Bank was immediately merged into
BancFirst. The acquisition was accounted for as a purchase. Accordingly,
the effect of the transaction is included in the Company's consolidated
financial statements from the date of the acquisition
4
<PAGE>
forward. A core deposit intangible of $406 and goodwill of $810 were
recorded in the acquisition. Subsequent payments from the escrow, if any,
to the former shareholders of State National Bank will increase the goodwill
recorded. Pro forma condensed results of operations, as though State
National Bank had been acquired January 1, 1994, are as follows:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------- ------------
<S> <C> <C>
Net interest income $32,850 $42,160
Net income $ 9,593 $12,296
Net income per common share
and common stock equivalent $ 1.50 $ 1.91
</TABLE>
(2) SECURITIES
The table below summarizes securities held for investment and
securities available for sale.
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
-------------------
1996 1995 1995
-------- -------- --------
<S> <C> <C> <C>
Held for investment, at cost (market value:
$26,154, $42,643 and $42,577, respectively) $ 25,937 $ 42,148 $ 42,005
Available for sale, at market value 256,034 213,201 221,108
-------- -------- --------
Total $281,971 $255,349 $263,113
======== ======== ========
</TABLE>
5
<PAGE>
BANCFIRST CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SUMMARY
The Company reported net income of $3.92 million for the quarter
ended September 30, 1996, compared to net income of $3.64 million for the
third quarter of 1995. The growth in earnings was the combined result of
acquisitions in 1995 and 1996 and internal growth. Earnings per share was
$0.61 for the third quarter of 1996, compared to $0.57 per share for the
third quarter of 1995.
Net income for the first nine months of 1996 was $11.2 million,
compared to $9.41 million for the same period of 1995. Year-to-date
earnings per share was $1.74, compared to $1.47 for the first nine months of
1995.
Total assets increased $138 million from December 31, 1995 and
$206 million from September 30, 1995 due to acquisitions having total assets
aggregating approximately $140 million, and internal growth. Stockholders'
equity rose to $106 million, an increase of $8.15 million compared to
December 31, 1995 and $11.7 million compared to September 30, 1995.
RESULTS OF OPERATIONS
THIRD QUARTER
Net interest income increased for the third quarter of 1996 by
$2.67 million, or 23.6%, as compared to the same quarter of 1995, primarily
as a result of earning asset growth. Net interest spread was 4.55% for the
third quarter of 1996, compared to 4.36% for 1995, while average net earning
assets increased $42.3 million. Net interest margin on a taxable equivalent
basis was 5.41% for the third quarter, compared to 5.24% for the same
quarter of 1995.
The Company provided $432,000 for possible loan losses for the
quarter, compared to $150,000 for the same quarter of 1995. Net loan
charge-offs were $269,000 for the third quarter of 1996, compared to
$134,000 for the third quarter of 1995. The net charge-offs in 1996
represent an annualized rate of only 0.15% of total loans.
Noninterest income increased $586,000, or 18.4%, compared to the
third quarter of 1995 due to income added by acquisitions and from increased
mortgage loan activity. Noninterest expense increased $2.51 million, or
29.1%, due to added operating expenses of the banks acquired in 1995 and
1996, and the $542,000 refund of FDIC insurance premiums received in the
third quarter of 1995.
YEAR-TO-DATE
For the first nine months of 1996, net interest income increased
by $7.36 million, or 22.9%, as compared to the first nine months of 1995,
primarily as a result of earning asset growth. Net interest spread was
4.51% for 1996, compared to 4.36% for 1995, while average net earning assets
increased $33.8 million. Net interest margin on a taxable equivalent basis
was 5.33% for the first nine months, compared to 5.22% for the same period
of 1995.
The Company provided $849,000 for possible loan losses for the
year-to-date, compared to $408,000 in 1995. Net loan charge-offs were
$336,000 for 1996, compared to $162,000 for 1995, representing annualized
rates of only 0.06% and 0.04% of total loans, respectively.
Noninterest income increased $1.97 million, or 21.5%, compared to
the first nine months of 1995 due to income added by acquisitions and from
increased mortgage loan activity. Noninterest expense increased $5.88
million, or 22.7%, due to added operating expenses of the banks acquired in
1995 and 1996.
6
<PAGE>
FINANCIAL POSITION
Total securities increased $18.9 million compared to December 31,
1995 and $26.6 million compared to September 30, 1995, as a net result of
securities added by acquisitions and maturities of securities used to fund
loan growth. The net unrealized loss on securities available for sale was
$204,000 at the end of the third quarter of 1996, compared to a gain of $2.4
million at December 31 and a gain of $1.36 million at September 30, 1995.
The average taxable equivalent yield on the securities portfolio for the
third quarter increased to 6.35% from 6.07% for the same quarter of 1995.
Total loans increased $112 million from December 31, 1995 and $133
million from September 30, 1995 due to both internal loan growth and
acquisitions. The allowance for possible loan losses increased $1.36
million in the first nine months of 1996 due primarily to purchased reserves
from acquisitions. The allowance as a percentage of total loans was 1.63%,
1.70% and 1.71% at September 30, 1996, December 31, 1995 and September 30,
1995, respectively.
Nonperforming and restructured assets increased slightly in the
first nine months of 1996 to $7.72 million from $5.77 million at year-end
1995 due to the nonperforming assets of the bank acquired in 1996. Although
the ratio of nonperforming and restructured assets to total assets is only
0.65%, it is reasonable to expect that over the next several years
nonperforming loans and loan losses will rise to historical norms as a
result of economic and credit cycles.
Total deposits increased $136 million as compared to December 31,
1995 and $193 million compared to September 30, 1995 due to acquisitions and
internal growth. The Company's deposit base continues to be comprised
substantially of core deposits, with large denomination certificates of
deposit being only 10% of total deposits at September 30, 1996.
Short-term borrowings decreased $8.04 million from December 31,
1995 as the net result of the maturity of $15 million in Federal Home Loan
Bank borrowings and an increase in federal funds purchased.
Stockholders' equity rose to $106 million, an increase of $8.15
million compared to year-end 1995 and $11.7 million compared to September
30, 1995. These increases were primarily the result of accumulated
earnings. Average stockholders' equity to average assets dropped slightly
to 8.84% from 9.43% at December 31, 1995 due to an acquisition in March
1996. The Company's regulatory capital ratios all remain well in excess of
the minimum requirements.
7
<PAGE>
BANCFIRST CORPORATION
SELECTED FINANCIAL STATISTICS
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------- ------------------
1996 1995 1996 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
PER COMMON SHARE DATA:
Net income $ 0.61 $ 0.57 $ 1.74 $ 1.47
Cash dividends declared 0.08 0.07 0.24 0.21
Book value at period end 17.06 15.26
Tangible book value at period 14.71 13.94
end
PERFORMANCE RATIOS:
Return on average assets 1.32% 1.48% 1.32% 1.32%
Return on average common equity 14.93 15.76 14.91 14.24
Increase/(decrease) in tangible 18.81 21.47 2.39 22.46
book value (annualized)
Noninterest expense/(net 62.67 59.44 62.78 62.73
interest income + noninterest
income)
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
-----------------
1996 1995 1995
------- ------- -------
<S> <C> <C> <C>
BALANCE SHEET RATIOS:
Average loans to deposits (year to date) 68.45% 66.66% 67.02%
Allowance for possible loan losses to total loans 1.63 1.71 1.70
Allowance for possible loan losses to nonperforming and 189.31 226.41 216.73
restructured loans
Nonperforming and restructured assets to total assets 0.65 0.70 0.55
CAPITAL RATIOS:
Average stockholders' equity to average assets (year to 8.84% 9.30% 9.43%
date)
Leverage ratio (regulatory minimum 3%) 7.85 8.84 8.55
Total risk-based capital ratio (regulatory minimum 8%) 14.23 16.14 16.02
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
-----------------------------------------------
1996 1995
---------------------- --------------------
AVERAGE BALANCES AND NET AVERAGE AVERAGE
INTEREST MARGIN ANALYSIS AVERAGE YIELD/ AVERAGE YIELD/
(TAXABLE EQUIVALENT BASIS): BALANCE RATE BALANCE RATE
------- ------- ------- -------
<S> <C> <C> <C> <C>
Loans $ 737,002 9.76% $595,089 10.09%
Investment securities 278,193 6.35 249,596 6.07
Federal funds sold 23,807 5.51 24,729 5.83
---------- --------
Total earning assets 1,039,002 8.75 869,414 8.81
Nonearning assets 134,804 111,036
---------- --------
Total assets $1,173,806 $980,450
========== ========
Interest-bearing deposits $ 822,622 4.19% $696,845 4.44%
Short-term borrowings 1,708 4.66 1,659 5.02
Long-term borrowings 1,486 6.46 -- --
---------- --------
Total interest-bearing 825,816 4.20 698,504 4.45
liabilities
Demand deposits 236,631 183,676
Other noninterest-bearing 7,301 5,908
liabilities
Stockholders' equity 104,058 92,362
---------- --------
Total liabilities and
stockholders' equity $1,173,806 $980,450
========== ========
Net interest spread 4.55% 4.36%
==== ====
Net interest margin 5.41% 5.24%
==== ====
</TABLE>
8
<PAGE>
PART II. OTHER INFORMATION
---------------------------
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
--------------------------------
(a) Exhibits
EXHIBIT
NUMBER EXHIBIT
- ------- --------------------------------------------------------------------
2.1 Agreement and Plan of Reorganization dated October 28, 1994 among
BancFirst, State National Bank, Marlow, and certain shareholders of
State National Bank (filed as Exhibit 2.4 to the Company's Report on
Form 10-Q for the quarter ended September 30, 1994 and incorporated
herein by reference).
2.2 Agreement and Plan of Reorganization dated September 16, 1995 between
BancFirst and City Bankshares, Inc. (filed as Exhibit 2.2 to the
Company's Report on Form 10-Q for the quarter ended September 30,
1995 and incorporated herein by reference).
2.3 Agreement dated September 16, 1995 between BancFirst and William O.
Johnstone (filed as Exhibit 2.3 to the Company's Report on Form 10-Q
for the quarter ended September 30, 1995 and incorporated herein by
reference).
2.4* Agreement and Plan of Reorganization dated September 26, 1996 between
BancFirst Corporation and Commerce Bancorporation, Inc.
3.0* Certificate of Amendment to the Amended and Restated Certificate of
Incorporation of BancFirst Corporation dated October 25, 1996.
27.1* Financial Data Schedule.
- --------------------------------------------------------------------------------
*Filed herewith
(b) The following reports on Form 8-K have been filed by the Company during the
quarter ended September 30, 1996.
DATE OF
REPORT ITEMS REPORTED
- ------------ ----------------------------------------------------------------
July 1, 1996 Change in Registrant's Certifying Accountant as a result of the
sale of Price Waterhouse LLP's Oklahoma City practice to Coopers
& Lybrand LLP.
10
<PAGE>
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.
November 14, 1996 BANCFIRST CORPORATION
(Registrant)
/s/ Randy Foraker
------------------------------------
Randy P. Foraker
Sr. Vice President, Controller
and Secretary/Treasurer
(Principal Accounting Officer)
11
<PAGE>
EXHIBIT 2.4
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Reorganization Agreement")
is made and entered into the 26th day of September, 1996, by and between
BANCFIRST CORPORATION, an Oklahoma corporation ("BancFirst Corp"), and COMMERCE
BANCORPORATION, INC., an Oklahoma corporation ("Commerce"), which corporations
are also sometimes hereinafter referred to collectively as the "Constituent
Corporations."
W I T N E S S E T H:
WHEREAS, BancFirst Corp is a registered bank holding company duly organized
and existing under the laws of the State of Oklahoma, having an authorized
capital stock consisting of (i) 7,500,000 shares of common stock, par value
$1.00 per share, 6,215,624 of which are currently issued and outstanding, (ii)
900,000 shares of 10% preferred stock, par value $5.00 per share, none of which
are currently issued and outstanding, and (iii) 10,000,000 shares of senior
preferred stock, par value $1.00 per share, none of which are currently issued
and outstanding; and
WHEREAS, Commerce is a registered bank holding company duly organized and
existing under the laws of the State of Oklahoma, having an authorized capital
stock consisting of (i) 45,000 shares of common stock, par $1.00 per share,
22,532.66 of which are currently issued and outstanding; and (ii) 6,500 shares
of 10% cumulative preferred stock, par value $13.25 per share, none of which are
currently issued and outstanding; and
WHEREAS, it is deemed advisable and to the benefit of the Constituent
Corporations and their respective shareholders that the parties adopt a plan of
reorganization (the "Reorganization") in accordance with the provisions of
Section 368 (a)(1)(C) of the Internal Revenue Code of 1986, as amended; and
WHEREAS, pursuant to the Reorganization, BancFirst Corp (i) will issue
certain shares of its common stock to Commerce, (ii) will acquire in exchange
for those shares full right, title, and interest in all of the Company's assets,
including all of the shares of common stock of The Bank of McCloud (the "Bank")
which are owned by Commerce, and (iii) will assume and become directly liable
for all of Commerce's liabilities (as defined in Section 1.02);
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, the parties hereto agree as follows:
1. Purchase and Sale of Commerce' Assets; Assumption of Liabilities.
----------------------------------------------------------------
1.01 The Assets. In exchange for the consideration specified in
----------
Section 2, and
<PAGE>
subject to the terms and conditions provided herein, at the Closing (as
defined in Section 3) Commerce agrees to sell to BancFirst Corp and
BancFirst Corp agrees to purchase all of Commerce' assets (the "Assets") as
they exist at the Closing Date.
1.02 Liabilities. Commerce agrees to assign to BancFirst Corp, and
-----------
BancFirst Corp agrees to assume on the Closing Date and pay and discharge
in due course, all of Commerce' debts, liabilities, obligations and
contracts, matured or unmatured, whether accrued, absolute, contingent or
otherwise, and whether or not reflected or reserved against on the balance
sheets or records of Commerce (the "Liabilities").
2. Issuance of BancFirst Corp Stock.
--------------------------------
2.01 Stock Issuance. At the Closing, in consideration for
--------------
acquisition of the Assets, BancFirst Corp, in addition to assuming the
Liabilities, shall issue to Commerce a total number of shares of BancFirst
Corp common stock which shall be determined by multiplying 6.9335 times the
number of outstanding shares of Commerce common stock).
2.02 No Fractional Shares. If the number of shares of BancFirst Corp
--------------------
common stock determined pursuant to Section 2.01 is a total that includes a
fractional share, then the total number of shares of BancFirst Corp common
stock issuable to Commerce shall be increased to the next full share.
3. Closing.
-------
3.01 Date of Closing. The parties intend that the closing of the
---------------
transactions contemplated hereby (the "Closing") shall take place on the
latter to occur of: (a) the date as of which BancFirst Corp has obtained
all necessary prior written approval of the Federal Reserve Board ("Federal
Reserve") for both (i) the transactions contemplated by the Reorganization
Agreement and (ii) the separate merger of the Bank into BancFirst, and any
mandatory waiting period has expired (or if such date is not a business
day, then the next business day following); (b) the date as of which the
Oklahoma State Banking Board has approved the separate merger of the Bank
into BancFirst; (c) as soon as possible following the first month-end date
as of which Commerce's "Common Equity Capital" (as defined in Section
3.02) equals not less than $1,600,000, or (iv) such later date as the
Constituent Corporations may agree upon. The date of Closing is referred to
herein as the "Closing Date."
3.02 Common Equity Capital. "Common Equity Capital" shall be
---------------------
determined by taking the amount of Commerce's total equity capital
attributable to the holders of its common stock, determined in accordance
with generally accepted accounting principles, as further adjusted to carry
out each of the following adjustments:
(a) Any investment in McLoud Insurance Agency or its assets
shall be reduced to $0;
2
<PAGE>
(b) Any common stock dividend declared or paid by Commerce
between the month-end preceding the Effective Time and the
Effective Time shall be deducted;
(c) Any adjustment to loan loss reserve which otherwise might be
required by generally accepted accounting principles shall be
eliminated, provided that the requirements of Section 5.05
hereof are met; and
(d) Any entries to account for the future benefits payable under
that certain agreement effective January 11, 1995, by and
between Commerce and Donald Bierman shall be added back in
determining Common Equity Capital.
3.03 Actions of Commerce at Closing. At Closing, Commerce shall;
------------------------------
(a) Deliver to BancFirst Corp certificates representing all
shares of Bank Common stock owned by Commerce, duly assigned to
BancFirst Corp or with duly executed assignments separate from
certificates;
(b) Execute, acknowledge and deliver to BancFirst Corp such
deeds, bills of sale, endorsements, assignments, and other
instruments of sale, conveyance, transfer and assignment, as
required or desirable in order to effectively vest in BancFirst
Corp title to any of the other Assets; and
(c) Deliver to BancFirst Corp all files, documents, papers,
agreements, books of account and other records pertaining to the
Assets purchased and liabilities assumed by BancFirst Corp other
than Commerce' corporate minute books.
3.04 Actions of BancFirst Corp at Closing. At Closing, BancFirst
------------------------------------
Corp shall execute and deliver to Commerce one or more undertakings or
other agreements whereby BancFirst Corp assumes and agrees to pay and
discharge in due course the Liabilities of Commerce which BancFirst Corp
has agreed pursuant to Section 1.02 of this Agreement to assume, pay,
discharge, perform and fulfill, in such form as may be reasonably required
by counsel to Commerce.
3.05 Further Assurances. Each of the parties hereto agrees to
------------------
execute and deliver such further agreements, assurances, instruments and
documents at any time reasonably requested by the other party as are
necessary or desirable to consummate the transactions contemplated by this
Agreement.
3
<PAGE>
4. Restrictive Legend. The stock certificates evidencing shares of
------------------
BancFirst Corp common stock issued in the Reorganization will bear the
following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
OR ANY APPLICABLE STATE SECURITIES LAWS. THE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD
OR TRANSFERRED FOR VALUE IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION OF THEM UNDER THE SECURITIES ACT OF 1933,
AND/OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION
OF COUNSEL SATISFACTORY TO COUNSEL FOR THE CORPORATION
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR
ACTS.
5. Commerce's Covenants. Commerce agrees that, prior to the Effective
--------------------
Time:
5.01 Business Operations. Commerce and the Bank shall conduct their
-------------------
respective operations only in the ordinary and usual course of business
consistent with past and current practices. Exclusive of lending and
deposit contracts, neither Commerce nor the Bank will enter into any new
contract, or renew or extend any existing contract, without the prior
consent of BancFirst Corp. Neither Commerce nor the Bank will (a) sell any
assets (except as permitted by Section 5.04), or (b) purchase any fixed
assets at a price of more than $10,000 tn the aggregate.
5.02 Employee Compensation. Except with BancFirst Corp's prior
---------------------
written consent or pursuant to contracts in existence as of the date hereof
and except for normal annual salary increases consistent with past
practices, no increase will be made in the compensation or rate of
compensation payable or to become payable to the officers or employees of
Commerce or the Bank, and no bonus, profit sharing, retirement, insurance,
death, fringe benefit or other extraordinary or indirect compensation shall
accrue, be set aside or be paid to, for or on behalf of any of such
officers or employees other than as required by presently existing pension,
profit sharing, bonus and similar benefit plans as presently constituted,
and no agreement or plan other than those now in effect shall be adopted or
committed for; provided, however, this section shall not limit Commerce's
ability to commit to pay consulting fees for a term ending on or before the
Effective Time.
5.03 Retirement of Preferred Stock. On or prior to the Effective
-----------------------------
Time, Commerce will have retired all of its then outstanding 10% cumulative
preferred stock at a price not to exceed $80,000.
5.04 Duration of Securities. The Bank shall have eliminated from its
----------------------
securities portfolio any securities that, as of the date of the
Reorganization Agreement, have a duration beyond June 1, 1998. Further, the
Bank shall not purchase any securities after the date hereof which have a
duration beyond June 1, 1998.
4
<PAGE>
5.05 Adequacy of Bank's Reserve for Loan Losses. If the Bank's loan
------------------------------------------
loss reserve equals or exceeds 1.5% of the Bank's total loans outstanding
as of the month-end immediately preceding the Effective Time, BancFirst
Corp shall deem the reserve to be adequate. Prior to the month-end
immediately preceding the Effective Time, the Bank may reduce its reserve
for loan losses to an amount not less than 1.5% of total loans outstanding,
crediting any amount in excess of that percentage to income.
6. Accountinq Matters. For accounting purposes the transaction shall
------------------
be treated as a book value purchase transaction. The assets and liabilities
of Commerce at the Closing date shall be taken upon the books of BancFirst
Corp at their respective values as reflected on the books of Commerce.
7. Submission to Shareholders and the Federal Reserve. The
--------------------------------------------------
Reorganization Agreement is subject to obtaining the approval of the
shareholders of Commerce, and shall be submitted to the shareholders of
Commerce at a meeting called for such purpose. Upon approval by the
requisite vote of the shareholders of Commerce and after obtaining all
necessary approval from the Federal Reserve, the Closing shall occur as
soon as practicable thereafter in the manner provided in Section 3.01
hereof.
8. Termination. This Reorganization Agreement may be terminated and
-----------
abandoned at any time prior to the Closing, whether before or after action
thereon by the shareholders of Commerce;
(a) by the mutual consent in writing of the boards of directors
of BancFirst Corp and of Commerce; or
(b) by the board of directors of BancFirst Corp in writing at any
time prior to the Closing if BancFirst Corp determines, in its
sole discretion, that there has been a material adverse change in
the financial condition of Commerce or of the Bank; or
(c) by the board of directors of Commerce in writing at any time
prior to the Closing if Commerce determines, in its sole
discretion, that there has been a material adverse change in the
financial condition of BancFirst Corp or of BancFirst; or
(d) by the board of directors of either of the Constituent
Corporations in writing at any time prior to the Closing if (1) a
material breach shall exist with respect to any written
representation or warranty made by the other Constituent
Corporation in connection with the transactions, or (2) the other
Constituent Corporation, without prior written consent of such
Constituent Corporation, shall take any action prohibited by this
Reorganization Agreement, or (3) in the opinion of the board of
directors of such Constituent Corporation, any consent of any
third party is reasonably necessary to carry out the
transactions, or to prevent a default under any outstanding
obligation
5
<PAGE>
of either Constituent Corporation, and such consent is not
obtainable; or
(e) by the board of directors of BancFirst Corp in writing at any
time prior the Closing if any covenant contained in Section 5 has
been breached by Commerce; or
(f) by the board of directors of either BancFirst Corp or
Commerce in writing if the Closing has not occurred by December
31, 1996.
In any event of the termination and abandonment of this Reorganization
Agreement pursuant to the provisions of this Section 8, the same shall be
of no further force or effect.
9. Waiver, Extension and Amendment. Any of the terms or conditions of
-------.-----------------------
this Reorganization Agreement may be waived at any time, whether before or
after action thereon by the shareholders of BancFirst Corp or Commerce, by
the party which is entitled to the benefits thereof; and this
Reorganization Agreement may be modified or amended at any time, whether
before or after action thereon by the shareholders of BancFirst Corp or
Commerce, by the parties hereto. Any wavier, modification or amendment
shall be in writing.
6
<PAGE>
IN WITNESS WHEREOF BancFirst Corp and Commerce have caused this
Reorganization Agreement to be executed by their duly authorized officers and
their corporate seals to be affixed as of the date first above written.
"BANCFIRST CORP" BANCFIRST CORPORATION
Oklahoma City, Oklahoma
By /s/ David E. Rainbolt
----------------------------------------
David E. Rainbolt, Chief Executive
Officer and President
ATTEST:
/s/ Randy Foraker
- -----------------------------------
Randy Foraker, Secretary
(SEAL)
"COMMERCE" COMMERCE BANCORPORATION, INC.
McCloud, Oklahoma
By /s/ H. E. Rainbolt
----------------------------------------
H. E. Rainbolt, President
ATTEST:
/s/ Leslie E. Greathouse, Secretary
- -----------------------------------
Leslie E. Greathouse, Secretary
(SEAL)
7
<PAGE>
PLAN OF COMPLETE LIQUIDATION AND DISSOLUTION
1. This Plan is intended to accomplish the complete liquidation and
dissolution of Commerce Bancorporation, Inc. ("Commerce"), an Oklahoma
corporation, in the manner stated in this Plan.
2. This Plan shall be adopted when it shall have been approved by the
holders of a majority of the issued and outstanding shares of the common stock
of Commerce.
3. After this Plan has been adopted by the shareholders, and after the
Closing Date of the transactions contemplated by that certain "Agreement and
Plan of Reorganization" (the "Agreement") by and between BancFirst Corporation
and Commerce, Commerce shall cease doing business and shall thereupon distribute
all of its assets, consisting solely of BancFirst Corporation common stock, to
its shareholders, as more specifically provided below.
4. Each holder of shares of Commerce's common stock shall be entitled to
receive in the aggregate in liquidation of all of his shares of common stock
that number of the shares of BancFirst Corporation common stock owned by the
Corporation which shall be determined by multiplying 6.9335 times the number of
shares of Commerce's common stock owned by that holder.
5. If the total number of shares that any shareholder would be entitled to
receive pursuant to Section 4 hereof includes a fractional share, then the total
number of shares to be distributed to that shareholder (excluding R Banking Ltd.
Partnership) shall instead be rounded upward to the next full share. If the
number of shares of BancFirst Corporation common stock owned by Commerce is not
sufficient to satisfy the total required by this section because of the
rounding upward of fractional shares, then the aggregate number of full and
fractional shares required to round other shareholders' shares shall be deducted
from the total number of shares that R Banking Ltd. Partnership would otherwise
be entitled to receive in liquidation pursuant to Section 4 hereof.
6. By the terms of the Agreement, immediately following the Closing
Commerce will have no assets other than BancFirst Corporation common stock, and
will have no remaining liabilities. Accordingly, upon distribution of the
BancFirst Corporation common stock as provided above, Commerce shall be formally
dissolved in accordance with the Oklahoma General Corporation Act.
7. The officers of Commerce are authorized and directed to file a
Certificate of Dissolution with the Secretary of State of the State of Oklahoma
as required by the Oklahoma General Corporation Act.
8. Commerce shall file Form 966 with the Internal Revenue Service, together
with a certified copy of the resolution adopting this Plan by the shareholders
within thirty (30) days after this Plan shall have been adopted.
<PAGE>
9. The officers of Commerce are hereby authorized and directed to perform
all acts necessary to effect the liquidation and dissolution of Commerce
including, without limitation, the execution of all documents, instruments and
records incident to such liquidation.
10. Notwithstanding the foregoing, the board of directors of Commerce may
abandon this Plan of Complete Liquidation and Dissolution without further action
by the shareholders, if the board in its discretion determines that such
abandonment is desirable under the circumstances that then exist.
<PAGE>
EXHIBIT 3.0
CERTIFICATE OF AMENDMENT
TO THE AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
BANCFIRST CORPORATION
TO: THE SECRETARY OF STATE OF THE STATE OF OKLAHOMA
101 State Capitol Building, Oklahoma City, Oklahoma 73105
The undersigned Oklahoma corporation, for the purpose of amending its
Amended and Restated Certificate of Incorporation as provided by Section 1077 of
the Oklahoma General Corporation Act, hereby certifies;
1. Name.
A. The name of the corporation is: BancFirst Corporation.
2. Registered Office.
A. No change, as filed March 5, 1993.
3. Term.
A. No change, as filed March 5, 1993.
4. Purpose.
A. No change, as filed March 5, 1993.
5. Capital Stock.
A. No change, as filed December 30, 1993.
6. That the Amended and Restated Certificate of Incorporation is hereby
amended by:
a. Changing the first paragraph of ARTICLE 5 to read as follows;
"ARTICLE 5
The aggregate number of shares of all classes which the
Corporation shall have authority to allot is 18,400,000. The
<PAGE>
designation of each class, the number of shares of each class,
the par value of each class and the total authorized capital of
the Corporation are as follows:
<TABLE>
<CAPTION>
TOTAL PAR VALUE
CLASS NUMBER OR SHARES PAR VALUE AUTHORIZED
----- ---------------- --------- ---------------
<S> <C> <C> <C>
Senior Preferred Stock 10,000,000 $1.00 $10,000,000
10% Cumulative Preferred Stock 900,000 5.00 4,500,000
Common Stock 7,500,000 1.00 7,500,000
---------- -----------
Total 18,400,000 $22,000,000 "
</TABLE>
7. That at a meeting of the Board of Directors, a resolution was duly adopted
setting forth the foregoing proposed amendment to the Amended and Restated
Certificate of Incorporation of the Corporation, declaring said amendment to be
advisable and calling a meeting of the stockholders of the Corporation for
consideration thereof. That thereafter, pursuant to said resolution of its Board
of Directors, a meeting of the stockholders of the Corporation was duly called
and held, at which meeting the necessary number of shares as required by statute
were voted in favor of the amendment.
SUCH AMENDMENT WAS DULY ADOPTED IN ACCORDANCE WITH Okla. Stat. tit. 18,
(S)1077.
IN WITNESS WHEREOF, the Corporation has caused this Amendment to its Amended
and Restated Certificate of Incorporation to be signed by the President and
attested by its Secretary this 25th day of October, 1996.
BANCFIRST CORPORATION
By: /s/ David E. Rainbolt
----------------------------------
David E. Rainbolt, President
ATTEST:
/s/ Randy P. Foraker
- ----------------------------------
Randy P. Foraker, Secretary
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE INTERIM
FINANCIAL STATEMENTS OF THE REGISTRANT FOR THE NINE MONTHS ENDED SEPTEMBER 30,
1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 89,288
<INT-BEARING-DEPOSITS> 1
<FED-FUNDS-SOLD> 10,500
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 256,034
<INVESTMENTS-CARRYING> 25,937
<INVESTMENTS-MARKET> 26,154
<LOANS> 737,356
<ALLOWANCE> 12,006
<TOTAL-ASSETS> 1,186,578
<DEPOSITS> 1,059,632
<SHORT-TERM> 10,665
<LIABILITIES-OTHER> 8,342
<LONG-TERM> 1,448
0
0
<COMMON> 6,243
<OTHER-SE> 100,248
<TOTAL-LIABILITIES-AND-EQUITY> 1,186,578
<INTEREST-LOAN> 50,995
<INTEREST-INVEST> 12,596
<INTEREST-OTHER> 1,214
<INTEREST-TOTAL> 64,805
<INTEREST-DEPOSIT> 24,849
<INTEREST-EXPENSE> 25,259
<INTEREST-INCOME-NET> 39,546
<LOAN-LOSSES> 849
<SECURITIES-GAINS> 180
<EXPENSE-OTHER> 31,825
<INCOME-PRETAX> 18,017
<INCOME-PRE-EXTRAORDINARY> 11,220
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,220
<EPS-PRIMARY> 1.74
<EPS-DILUTED> 1.74
<YIELD-ACTUAL> 5.26
<LOANS-NON> 4,134
<LOANS-PAST> 1,642
<LOANS-TROUBLED> 661
<LOANS-PROBLEM> 18,885
<ALLOWANCE-OPEN> 10,646
<CHARGE-OFFS> 601
<RECOVERIES> 270
<ALLOWANCE-CLOSE> 12,006
<ALLOWANCE-DOMESTIC> 12,006
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 9,668
</TABLE>
