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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x

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

For the quarterly period ended June 30, 2015

OR

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                         to

Commission File Number 0-14384

 

BancFirst Corporation

(Exact name of registrant as specified in charter)

 

 

Oklahoma

 

73-1221379

(State or other Jurisdiction of

 

(I.R.S. Employer

incorporation or organization)

 

Identification No.)

 

101 N. Broadway, Oklahoma City, Oklahoma

 

73102-8405

(Address of principal executive offices)

 

(Zip Code)

(405) 270-1086

(Registrant’s telephone number, including area code)

N/A

(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  o.

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  x    No  o.

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

o

Accelerated filer

x

 

 

 

 

Non-accelerated filer

o  (Do not check if a smaller reporting company)

Smaller reporting company

o

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

As of July 31, 2015 there were 15,580,827 shares of the registrant’s Common Stock outstanding.

 

 

 

 


PART I – FINANCIAL INFORMATION

 

 

Item 1. Financial Statements.

BANCFIRST CORPORATION

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

 

 

 

June 30,

 

 

December 31,

 

 

 

 

2015

 

 

 

2014

 

 

 

(unaudited)

 

 

(see Note 1)

 

ASSETS

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

179,190

 

 

$

203,545

 

Interest-bearing deposits with banks

 

 

1,638,038

 

 

 

1,710,350

 

Securities (fair value: $537,387 and $524,861, respectively)

 

 

537,319

 

 

 

524,783

 

Loans held for sale

 

 

13,587

 

 

 

9,433

 

Loans (net of unearned interest)

 

 

3,858,332

 

 

 

3,851,398

 

Allowance for loan losses

 

 

(42,621

)

 

 

(40,889

)

Loans, net of allowance for loan losses

 

 

3,815,711

 

 

 

3,810,509

 

Premises and equipment, net

 

 

120,880

 

 

 

121,341

 

Other real estate owned

 

 

7,357

 

 

 

7,859

 

Intangible assets, net

 

 

9,681

 

 

 

10,635

 

Goodwill

 

 

44,594

 

 

 

44,962

 

Accrued interest receivable and other assets

 

 

132,541

 

 

 

131,555

 

Total assets

 

$

6,498,898

 

 

$

6,574,972

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

2,321,206

 

 

$

2,411,066

 

Interest-bearing

 

 

3,487,015

 

 

 

3,493,638

 

Total deposits

 

 

5,808,221

 

 

 

5,904,704

 

Short-term borrowings

 

 

2,075

 

 

 

3,982

 

Accrued interest payable and other liabilities

 

 

27,554

 

 

 

30,168

 

Junior subordinated debentures

 

 

26,804

 

 

 

26,804

 

Total liabilities

 

 

5,864,654

 

 

 

5,965,658

 

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: 15,562,298 and 15,504,513, respectively

 

 

15,562

 

 

 

15,504

 

Capital surplus

 

 

99,202

 

 

 

96,841

 

Retained earnings

 

 

517,028

 

 

 

492,776

 

Accumulated other comprehensive income, net of income tax of $1,547,

and $2,644, respectively

 

 

2,452

 

 

 

4,193

 

Total stockholders' equity

 

 

634,244

 

 

 

609,314

 

Total liabilities and stockholders' equity

 

$

6,498,898

 

 

$

6,574,972

 

 

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

 

2


BANCFIRST CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(Dollars in thousands, except per share data)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

 

2015

 

 

 

2014

 

 

 

2015

 

 

 

2014

 

INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

46,490

 

 

$

45,855

 

 

$

92,439

 

 

$

88,504

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

1,458

 

 

 

1,502

 

 

 

2,857

 

 

 

2,807

 

Tax-exempt

 

 

235

 

 

 

273

 

 

 

481

 

 

 

553

 

Federal funds sold

 

 

 

 

 

 

 

 

 

 

 

1

 

Interest-bearing deposits with banks

 

 

1,066

 

 

 

1,096

 

 

 

2,128

 

 

 

2,190

 

Total interest income

 

 

49,249

 

 

 

48,726

 

 

 

97,905

 

 

 

94,055

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

2,542

 

 

 

2,733

 

 

 

5,080

 

 

 

5,522

 

Short-term borrowings

 

 

1

 

 

 

5

 

 

 

2

 

 

 

7

 

Long-term borrowings

 

 

 

 

 

7

 

 

 

 

 

 

25

 

Junior subordinated debentures

 

 

491

 

 

 

492

 

 

 

982

 

 

 

983

 

Total interest expense

 

 

3,034

 

 

 

3,237

 

 

 

6,064

 

 

 

6,537

 

Net interest income

 

 

46,215

 

 

 

45,489

 

 

 

91,841

 

 

 

87,518

 

Provision for loan losses

 

 

1,271

 

 

 

3,129

 

 

 

2,605

 

 

 

4,347

 

Net interest income after provision for loan losses

 

 

44,944

 

 

 

42,360

 

 

 

89,236

 

 

 

83,171

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trust revenue

 

 

2,200

 

 

 

2,315

 

 

 

4,542

 

 

 

4,466

 

Service charges on deposits

 

 

14,312

 

 

 

14,360

 

 

 

27,664

 

 

 

27,818

 

Securities transactions

 

 

5,392

 

 

 

85

 

 

 

7,121

 

 

 

535

 

Income from sales of loans

 

 

549

 

 

 

467

 

 

 

989

 

 

 

818

 

Insurance commissions

 

 

3,120

 

 

 

3,262

 

 

 

7,188

 

 

 

7,228

 

Cash management

 

 

1,886

 

 

 

1,703

 

 

 

3,705

 

 

 

3,288

 

Gain on sale of other assets

 

 

41

 

 

 

3

 

 

 

81

 

 

 

8

 

Other

 

 

1,215

 

 

 

1,416

 

 

 

2,721

 

 

 

3,012

 

Total noninterest income

 

 

28,715

 

 

 

23,611

 

 

 

54,011

 

 

 

47,173

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

27,886

 

 

 

27,478

 

 

 

55,399

 

 

 

53,416

 

Occupancy, net

 

 

2,700

 

 

 

2,784

 

 

 

5,535

 

 

 

5,573

 

Depreciation

 

 

2,449

 

 

 

2,375

 

 

 

4,913

 

 

 

4,724

 

Amortization of intangible assets

 

 

445

 

 

 

458

 

 

 

889

 

 

 

866

 

Data processing services

 

 

1,179

 

 

 

1,185

 

 

 

2,296

 

 

 

2,355

 

Net expense from other real estate owned

 

 

(184

)

 

 

(406

)

 

 

130

 

 

 

144

 

Marketing and business promotion

 

 

1,401

 

 

 

1,661

 

 

 

3,080

 

 

 

3,377

 

Deposit insurance

 

 

836

 

 

 

873

 

 

 

1,662

 

 

 

1,646

 

Other

 

 

8,717

 

 

 

9,449

 

 

 

16,448

 

 

 

17,592

 

Total noninterest expense

 

 

45,429

 

 

 

45,857

 

 

 

90,352

 

 

 

89,693

 

Income before taxes

 

 

28,230

 

 

 

20,114

 

 

 

52,895

 

 

 

40,651

 

Income tax expense

 

 

(9,677

)

 

 

(5,426

)

 

 

(18,083

)

 

 

(11,306

)

Net income

 

$

18,553

 

 

$

14,688

 

 

$

34,812

 

 

$

29,345

 

NET INCOME PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.19

 

 

$

0.94

 

 

$

2.24

 

 

$

1.90

 

Diluted

 

$

1.17

 

 

$

0.92

 

 

$

2.20

 

 

$

1.86

 

OTHER COMPREHENSIVE INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains (losses) on securities, net of tax of $261, $(618), $(439) and $(1,021), respectively

 

 

(417

)

 

 

980

 

 

 

694

 

 

 

1,045

 

Reclassification adjustment for gains included in net income, net of tax of $1,302, $14, $1,536 and $34, respectively

 

 

(2,063

)

 

 

(22

)

 

 

(2,435

)

 

 

(54

)

Other comprehensive gain (loss), net of tax of $1,563, $(604), $1,097 and $(987), respectively

 

 

(2,480

)

 

 

958

 

 

 

(1,741

)

 

 

991

 

Comprehensive income

 

$

16,073

 

 

$

15,646

 

 

$

33,071

 

 

$

30,336

 

 

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

3


BANCFIRST CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(Dollars in thousands)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

COMMON STOCK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued at beginning of period

 

$

15,512

 

 

$

15,364

 

 

$

15,504

 

 

$

15,334

 

Shares issued

 

 

50

 

 

 

35

 

 

 

58

 

 

 

65

 

Issued at end of period

 

$

15,562

 

 

$

15,399

 

 

$

15,562

 

 

$

15,399

 

CAPITAL SURPLUS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

97,477

 

 

$

89,951

 

 

$

96,841

 

 

$

88,803

 

Common stock issued

 

 

1,080

 

 

 

742

 

 

 

1,316

 

 

 

1,620

 

Tax effect of stock options

 

 

355

 

 

 

325

 

 

 

291

 

 

 

248

 

Stock-based compensation arrangements

 

 

290

 

 

 

429

 

 

 

754

 

 

 

776

 

Balance at end of period

 

$

99,202

 

 

$

91,447

 

 

$

99,202

 

 

$

91,447

 

RETAINED EARNINGS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

503,758

 

 

$

458,857

 

 

$

492,776

 

 

$

448,953

 

Net income

 

 

18,553

 

 

 

14,688

 

 

 

34,812

 

 

 

29,345

 

Dividends on common stock

 

 

(5,283

)

 

 

(4,784

)

 

 

(10,560

)

 

 

(9,537

)

Balance at end of period

 

$

517,028

 

 

$

468,761

 

 

$

517,028

 

 

$

468,761

 

ACCUMULATED OTHER COMPREHENSIVE INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains on securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

4,932

 

 

$

3,940

 

 

$

4,193

 

 

$

3,907

 

Net change

 

 

(2,480

)

 

 

958

 

 

 

(1,741

)

 

 

991

 

Balance at end of period

 

$

2,452

 

 

$

4,898

 

 

$

2,452

 

 

$

4,898

 

Total stockholders’ equity

 

$

634,244

 

 

$

580,505

 

 

$

634,244

 

 

$

580,505

 

 

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

 

4


BANCFIRST CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOW

(Unaudited)

(Dollars in thousands)

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2015

 

 

2014

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Net income

 

$

34,812

 

 

$

29,345

 

Adjustments to reconcile to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Provision for loan losses

 

 

2,605

 

 

 

4,347

 

Depreciation and amortization

 

 

5,802

 

 

 

5,590

 

Net amortization of securities premiums and discounts

 

 

445

 

 

 

512

 

Realized securities gains

 

 

(7,121

)

 

 

(535

)

Gain on sales of loans

 

 

(989

)

 

 

(818

)

Cash receipts from the sale of loans originated for sale

 

 

84,029

 

 

 

71,074

 

Cash disbursements for loans originated for sale

 

 

(87,635

)

 

 

(73,306

)

Deferred income tax benefit

 

 

(1,464

)

 

 

(2,943

)

Gain on other assets

 

 

(65

)

 

 

(535

)

Increase in interest receivable

 

 

(740

)

 

 

(411

)

Decrease in interest payable

 

 

(14

)

 

 

(316

)

Amortization of stock-based compensation arrangements

 

 

754

 

 

 

776

 

Other, net

 

 

343

 

 

 

(1,619

)

Net cash provided by operating activities

 

$

30,762

 

 

$

31,161

 

INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Net decrease in federal funds sold

 

 

 

 

4,619

 

Net cash and due from banks received from acquisitions

 

 

 

 

174,283

 

Purchases of available for sale securities

 

 

(30,923

)

 

 

(203,890

)

Proceeds from maturities, calls and paydowns of held for investment securities

 

 

670

 

 

 

2,689

 

Proceeds from maturities, calls and paydowns of available for sale securities

 

 

12,979

 

 

 

163,472

 

Proceeds from sales of available for sale securities

 

 

8,576

 

 

 

1,951

 

Net change in loans

 

 

(10,312

)

 

 

(166,388

)

Purchases of premises, equipment and computer software

 

 

(4,797

)

 

 

(5,783

)

Proceeds from the sale of other assets

 

 

3,647

 

 

 

3,322

 

Net cash used in investing activities

 

 

(20,160

)

 

 

(25,725

)

FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Net change in deposits

 

 

(96,483

)

 

 

260

 

Net (decrease)/increase in short-term borrowings

 

 

(1,907

)

 

 

7,727

 

Paydown of long-term borrowings

 

 

 

 

(6,938

)

Issuance of common stock, net

 

 

1,665

 

 

 

1,933

 

Cash dividends paid

 

 

(10,544

)

 

 

(9,516

)

Net cash used in financing activities

 

 

(107,269

)

 

 

(6,534

)

Net decrease in cash, due from banks and interest-bearing deposits

 

 

(96,667

)

 

 

(1,098

)

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

 

 

1,913,895

 

 

 

1,857,535

 

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

 

$

1,817,228

 

 

$

1,856,437

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

 

 

 

 

 

 

 

 

Cash paid during the period for interest

 

$

6,078

 

 

$

6,853

 

Cash paid during the period for income taxes

 

$

17,230

 

 

$

13,770

 

Noncash investing and financing activities:

 

 

 

 

 

 

 

 

Unpaid common stock dividends declared

 

$

5,281

 

 

$

4,765

 

 

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

 

5


BANCFIRST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

(1)

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting and reporting policies of BancFirst Corporation and its subsidiaries (the “Company”) conform to accounting principles generally accepted in the United State of America (U.S. GAAP) and general practice within the banking industry. A summary of significant accounting policies can be found in Note (1) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

Basis of Presentation

The accompanying unaudited interim consolidated financial statements include the accounts of BancFirst Corporation, Council Oak Partners, LLC, BancFirst Insurance Services, Inc. and BancFirst and its subsidiaries. The principal operating subsidiaries of BancFirst are Council Oak Investment Corporation, Council Oak Real Estate, Inc. and BancFirst Agency, 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 unaudited interim consolidated financial statements.

The accompanying unaudited interim consolidated financial statements and notes are presented in accordance with the instructions for Form 10-Q. The information contained in the financial statements and footnotes included in BancFirst Corporation’s Annual Report on Form 10-K for the year ended December 31, 2014, should be referred to in connection with these unaudited interim consolidated financial statements. Operating results for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year or any future period.

The unaudited interim consolidated 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, 2014, the date of the most recent annual report.

Reclassifications

Certain items in prior financial statements have been reclassified to conform to the current presentation. Such reclassifications had no effect on previously reported cash flows, stockholders’ equity or comprehensive income.

Use of Estimates in the Preparation of Financial Statements

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, the fair value of financial instruments and the valuation of intangibles. Such estimates and assumptions may change over time and actual amounts realized may differ from those reported.

Recent Accounting Pronouncements

In February 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-02, “Consolidation (Topic 810) – Amendments to the Consolidation Analysis.” ASU 2015-02 implements changes to both the variable interest consolidation model and the voting interest consolidation model. ASU 2015-02 (i) eliminates certain criteria that must be met when determining when fees paid to a decision maker or service provider do not represent a variable interest, (ii) amends the criteria for determining whether a limited partnership is a variable interest entity and (iii)  eliminates the presumption that a general partner controls a limited partnership in the voting model. The amendments are effective for annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2015. Adoption of ASU 2015-02 is not expected to have a significant effect on the Company’s financial statements.

In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements – Going Concern (Topic 205-40).”  ASU 2014-15 provides guidance on management’s responsibility in evaluating whether there is substantial doubt about the Company’s ability to continue as a going concern and related footnote disclosures. For each reporting period, management will be required to evaluate whether there are conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date the financial statements are issued.  The amendments are effective for annual periods, and

6


interim reporting periods within those annual periods, beginning after December 15, 2016. Early adoption is permitted. Adoption of ASU 2014-15 is not expected to have a significant effect on the Company’s financial statements.

In January 2014, the FASB issued Accounting Standards Update ASU No. 2014-04, “Receivables: Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (Topic 310-40).”  ASU 2014-04 clarifies that an in-substance repossession or foreclosure occurs upon either the creditor obtaining legal title to the residential real estate property or the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. The amendments were effective for annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2014. Adoption of ASU 2014-04 did not have a significant effect on the Company’s financial statements.

In January 2014, the FASB issued ASU No. 2014-01, “Accounting for Investments in Affordable Housing Projects (Topic 323).”  ASU 2014-01 revises the necessary criteria that need to be met in order for an entity to account for investments in affordable housing projects net of the provision for income taxes. It also changes the method of recognition from an effective amortization approach to a proportional amortization approach. Additional disclosures were also set forth in this update. The amendments were effective for annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2014. The amendments were required to be applied retrospectively to all periods presented. Early adoption was permitted and adoption of the standard was optional. Adoption of ASU 2014-01 did not have a material impact on the Company's financial statements.

 

 

(2)

RECENT DEVELOPMENTS, INCLUDING MERGERS AND ACQUISITIONS

 

In January 2015, Council Oak Investment Corporation, a wholly-owned subsidiary of BancFirst, recognized a pretax gain of approximately $1.7 million on one of its investments.

 

In June 2015, Council Oak Partners, LLC, a wholly-owned subsidiary of the Company, recognized a pretax gain of approximately $5.3 million on one of its investments.

 

On July 14, 2015, the Company announced it had entered into an agreement to acquire CSB Bancshares Inc. and its subsidiary bank, Bank of Commerce, with locations in Yukon, Mustang, and El Reno, Oklahoma. See Note (12) Subsequent Event.  

  

 

(3)

SECURITIES

The following table summarizes securities held for investment and securities available for sale:

 

 

 

June 30, 2015

 

 

December 31, 2014

 

 

 

(Dollars in thousands)

 

Held for investment, at cost (fair value: $7,991 and $8,671, respectively)

 

$

7,923

 

 

$

8,593

 

Available for sale, at fair value

 

 

529,396

 

 

 

516,190

 

Total

 

$

537,319

 

 

$

524,783

 

The following table summarizes the amortized cost and estimated fair values of securities held for investment:

 

 

 

 

 

 

 

Amortized

Cost

 

 

Gross

Unrealized

Gains

 

 

Gross

Unrealized

Losses

 

 

Estimated

Fair

Value

 

June 30, 2015

 

(Dollars in thousands)

 

Mortgage backed securities (1)

 

$

406

 

 

$

26

 

 

$

 

 

$

432

 

States and political subdivisions

 

 

7,517

 

 

 

42

 

 

 

 

 

 

7,559

 

Total

 

$

7,923

 

 

$

68

 

 

$

 

 

$

7,991

 

December 31, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage backed securities (1)

 

$

471

 

 

$

34

 

 

$

 

 

$

505

 

States and political subdivisions

 

 

8,122

 

 

 

44

 

 

 

 

 

 

8,166

 

Total

 

$

8,593

 

 

$

78

 

 

$

 

 

$

8,671

 

7


The following table summarizes the amortized cost and estimated fair values of securities available for sale:

 

 

 

 

 

 

 

Amortized

Cost

 

 

Gross

Unrealized

Gains

 

 

Gross

Unrealized

Losses

 

 

Estimated

Fair

Value

 

June 30, 2015

 

(Dollars in thousands)

 

U.S. treasuries

 

$

279,414

 

 

$

1,571

 

 

$

 

 

$

280,985

 

U.S. federal agencies

 

 

165,090

 

 

 

1,055

 

 

 

(28

)

 

 

166,117

 

Mortgage backed securities (1)

 

 

23,793

 

 

 

526

 

 

 

(549

)

 

 

23,770

 

States and political subdivisions

 

 

47,560

 

 

 

1,457

 

 

 

(40

)

 

 

48,977

 

Other securities (2)

 

 

9,540

 

 

 

204

 

 

 

(197

)

 

 

9,547

 

Total

 

$

525,397

 

 

$

4,813

 

 

$

(814

)

 

$

529,396

 

December 31, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasuries

 

$

248,767

 

 

$

404

 

 

$

(178

)

 

$

248,993

 

U.S. federal agencies

 

 

171,641

 

 

 

983

 

 

 

(175

)

 

 

172,449

 

Mortgage backed securities (1)

 

 

26,441

 

 

 

602

 

 

 

(586

)

 

 

26,457

 

States and political subdivisions

 

 

51,706

 

 

 

1,716

 

 

 

(49

)

 

 

53,373

 

Other securities (2)

 

 

10,798

 

 

 

4,252

 

 

 

(132

)

 

 

14,918

 

Total

 

$

509,353

 

 

$

7,957

 

 

$

(1,120

)

 

$

516,190

 

 

(1)

Primarily consists of FHLMC, FNMA, GNMA and mortgage backed securities through U.S. agencies.

(2)

Primarily consists of equity securities.

 

The unrealized gains decreased in 2015 primarily due to the reclassification of an unrealized gain on one investment of $3.3 million from other comprehensive income to a realized gain by Council Oak Partners, LLC, a wholly-owned subsidiary of the Company. The realized gain is reported as securities transactions within the noninterest income section of the consolidated statement of comprehensive income.

 

 

The maturities of securities held for investment and available for sale are summarized in the following table using contractual maturities. Actual maturities may differ from contractual maturities due to obligations that are called or prepaid. For purposes of the maturity table, mortgage-backed securities, which are not due at a single maturity date, have been presented at their contractual maturity.

 

 

 

June 30, 2015

 

 

December 31, 2014

 

 

 

Amortized

Cost

 

 

Estimated

Fair

Value

 

 

Amortized

Cost

 

 

Estimated

Fair

Value

 

 

 

(Dollars in thousands)

 

Held for Investment