10-Q 1 banf-10q_20150930.htm 10-Q banf-10q_20150930.htm

 

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 September 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 October 31, 2015 there were 15,597,280 shares of the registrant’s Common Stock outstanding.

 

 

 

 


PART I – FINANCIAL INFORMATION

 

 

Item 1. Financial Statements.

BANCFIRST CORPORATION

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

 

 

 

September 30,

 

 

December 31,

 

 

 

 

2015

 

 

 

2014

 

 

 

(unaudited)

 

 

(see Note 1)

 

ASSETS

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

163,188

 

 

$

203,545

 

Interest-bearing deposits with banks

 

 

1,491,873

 

 

 

1,710,350

 

Securities (fair value: $507,923 and $524,861, respectively)

 

 

507,858

 

 

 

524,783

 

Loans held for sale

 

 

12,406

 

 

 

9,433

 

Loans (net of unearned interest)

 

 

3,959,669

 

 

 

3,851,398

 

Allowance for loan losses

 

 

(40,970

)

 

 

(40,889

)

Loans, net of allowance for loan losses

 

 

3,918,699

 

 

 

3,810,509

 

Premises and equipment, net

 

 

120,659

 

 

 

121,341

 

Other real estate owned

 

 

7,650

 

 

 

7,859

 

Intangible assets, net

 

 

9,203

 

 

 

10,635

 

Goodwill

 

 

44,594

 

 

 

44,962

 

Accrued interest receivable and other assets

 

 

129,966

 

 

 

131,555

 

Total assets

 

$

6,406,096

 

 

$

6,574,972

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

2,244,711

 

 

$

2,411,066

 

Interest-bearing

 

 

3,453,880

 

 

 

3,493,638

 

Total deposits

 

 

5,698,591

 

 

 

5,904,704

 

Short-term borrowings

 

 

3,777

 

 

 

3,982

 

Accrued interest payable and other liabilities

 

 

30,863

 

 

 

30,168

 

Junior subordinated debentures

 

 

26,804

 

 

 

26,804

 

Total liabilities

 

 

5,760,035

 

 

 

5,965,658

 

 

 

 

 

 

 

 

 

 

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: 15,591,530 and 15,504,513, respectively

 

 

15,591

 

 

 

15,504

 

Capital surplus

 

 

100,835

 

 

 

96,841

 

Retained earnings

 

 

527,038

 

 

 

492,776

 

Accumulated other comprehensive income, net of income tax of $1,638

and $2,644, respectively

 

 

2,597

 

 

 

4,193

 

Total stockholders' equity

 

 

646,061

 

 

 

609,314

 

Total liabilities and stockholders' equity

 

$

6,406,096

 

 

$

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

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

 

2015

 

 

 

2014

 

 

 

2015

 

 

 

2014

 

INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

47,342

 

 

$

46,759

 

 

$

139,781

 

 

$

135,263

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

1,291

 

 

 

1,536

 

 

 

4,148

 

 

 

4,343

 

Tax-exempt

 

 

249

 

 

 

262

 

 

 

730

 

 

 

815

 

Federal funds sold

 

 

 

 

 

 

 

 

 

 

 

1

 

Interest-bearing deposits with banks

 

 

1,009

 

 

 

1,112

 

 

 

3,137

 

 

 

3,302

 

Total interest income

 

 

49,891

 

 

 

49,669

 

 

 

147,796

 

 

 

143,724

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

2,522

 

 

 

2,658

 

 

 

7,602

 

 

 

8,180

 

Short-term borrowings

 

 

1

 

 

 

6

 

 

 

3

 

 

 

13

 

Long-term borrowings

 

 

 

 

 

 

 

 

 

 

 

25

 

Junior subordinated debentures

 

 

492

 

 

 

491

 

 

 

1,474

 

 

 

1,474

 

Total interest expense

 

 

3,015

 

 

 

3,155

 

 

 

9,079

 

 

 

9,692

 

Net interest income

 

 

46,876

 

 

 

46,514

 

 

 

138,717

 

 

 

134,032

 

Provision for loan losses

 

 

1,424

 

 

 

(3,115

)

 

 

4,029

 

 

 

1,232

 

Net interest income after provision for loan losses

 

 

45,452

 

 

 

49,629

 

 

 

134,688

 

 

 

132,800

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trust revenue

 

 

2,295

 

 

 

2,380

 

 

 

6,837

 

 

 

6,846

 

Service charges on deposits

 

 

14,910

 

 

 

14,226

 

 

 

42,574

 

 

 

42,044

 

Securities transactions (includes accumulated other comprehensive income reclassifications of $0, $0, $3,912 and $88, respectively)

 

 

 

 

 

284

 

 

 

7,121

 

 

 

819

 

Income from sales of loans

 

 

545

 

 

 

569

 

 

 

1,534

 

 

 

1,387

 

Insurance commissions

 

 

4,427

 

 

 

4,152

 

 

 

11,615

 

 

 

11,380

 

Cash management

 

 

1,906

 

 

 

1,770

 

 

 

5,611

 

 

 

5,058

 

Gain on sale of other assets

 

 

27

 

 

 

242

 

 

 

108

 

 

 

250

 

Other

 

 

1,214

 

 

 

1,315

 

 

 

3,935

 

 

 

4,327

 

Total noninterest income

 

 

25,324

 

 

 

24,938

 

 

 

79,335

 

 

 

72,111

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

28,746

 

 

 

28,153

 

 

 

84,145

 

 

 

81,569

 

Occupancy, net

 

 

3,051

 

 

 

2,920

 

 

 

8,586

 

 

 

8,493

 

Depreciation

 

 

2,488

 

 

 

2,432

 

 

 

7,401

 

 

 

7,156

 

Amortization of intangible assets

 

 

444

 

 

 

444

 

 

 

1,333

 

 

 

1,310

 

Data processing services

 

 

1,132

 

 

 

1,183

 

 

 

3,428

 

 

 

3,538

 

Net expense from other real estate owned

 

 

51

 

 

 

173

 

 

 

181

 

 

 

317

 

Marketing and business promotion

 

 

1,640

 

 

 

1,429

 

 

 

4,720

 

 

 

4,806

 

Deposit insurance

 

 

820

 

 

 

810

 

 

 

2,482

 

 

 

2,456

 

Other

 

 

7,980

 

 

 

9,398

 

 

 

24,428

 

 

 

26,990

 

Total noninterest expense

 

 

46,352

 

 

 

46,942

 

 

 

136,704

 

 

 

136,635

 

Income before taxes

 

 

24,424

 

 

 

27,625

 

 

 

77,319

 

 

 

68,276

 

Income tax expense

 

 

8,794

 

 

 

8,832

 

 

 

26,877

 

 

 

20,138

 

Net income

 

$

15,630

 

 

$

18,793

 

 

$

50,442

 

 

$

48,138

 

NET INCOME PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.01

 

 

$

1.22

 

 

$

3.25

 

 

$

3.12

 

Diluted

 

$

0.98

 

 

$

1.19

 

 

$

3.18

 

 

$

3.05

 

OTHER COMPREHENSIVE INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains (losses) on securities, net of tax of $(91), $210, $(507) and $(811), respectively

 

 

145

 

 

 

(332

)

 

 

803

 

 

 

713

 

Reclassification adjustment for gains included in net income, net of tax of $0, $0, $1,513 and $34, respectively

 

 

 

 

 

 

 

 

(2,399

)

 

 

(54

)

Other comprehensive gain (loss), net of tax of $(91), $210, $1,006 and $(777), respectively

 

 

145

 

 

 

(332

)

 

 

(1,596

)

 

 

659

 

Comprehensive income

 

$

15,775

 

 

$

18,461

 

 

$

48,846

 

 

$

48,797

 

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

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

COMMON STOCK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued at beginning of period

 

$

15,562

 

 

$

15,399

 

 

$

15,504

 

 

$

15,334

 

Shares issued

 

 

29

 

 

 

50

 

 

 

87

 

 

 

115

 

Issued at end of period

 

$

15,591

 

 

$

15,449

 

 

$

15,591

 

 

$

15,449

 

CAPITAL SURPLUS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

99,202

 

 

$

91,447

 

 

$

96,841

 

 

$

88,803

 

Common stock issued

 

 

749

 

 

 

1,554

 

 

 

2,065

 

 

 

3,174

 

Tax effect of stock options

 

 

395

 

 

 

417

 

 

 

686

 

 

 

665

 

Stock-based compensation arrangements

 

 

489

 

 

 

448

 

 

 

1,243

 

 

 

1,224

 

Balance at end of period

 

$

100,835

 

 

$

93,866

 

 

$

100,835

 

 

$

93,866

 

RETAINED EARNINGS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

517,028

 

 

$

468,761

 

 

$

492,776

 

 

$

448,953

 

Net income

 

 

15,630

 

 

 

18,793

 

 

 

50,442

 

 

 

48,138

 

Dividends on common stock ($0.36, $0.34, $1.04 and $0.96 per share, respectively)

 

 

(5,620

)

 

 

(5,252

)

 

 

(16,180

)

 

 

(14,789

)

Balance at end of period

 

$

527,038

 

 

$

482,302

 

 

$

527,038

 

 

$

482,302

 

ACCUMULATED OTHER COMPREHENSIVE INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains on securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

2,452

 

 

$

4,898

 

 

$

4,193

 

 

$

3,907

 

Net change

 

 

145

 

 

 

(332

)

 

 

(1,596

)

 

 

659

 

Balance at end of period

 

$

2,597

 

 

$

4,566

 

 

$

2,597

 

 

$

4,566

 

Total stockholders’ equity

 

$

646,061

 

 

$

596,183

 

 

$

646,061

 

 

$

596,183

 

 

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

 

4


BANCFIRST CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOW

(Unaudited)

(Dollars in thousands)

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2015

 

 

2014

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Net income

 

$

50,442

 

 

$

48,138

 

Adjustments to reconcile to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Provision for loan losses

 

 

4,029

 

 

 

1,232

 

Depreciation and amortization

 

 

8,734

 

 

 

8,466

 

Net amortization of securities premiums and discounts

 

 

747

 

 

 

712

 

Realized securities gains

 

 

(7,121

)

 

 

(819

)

Gain on sales of loans

 

 

(1,534

)

 

 

(1,387

)

Cash receipts from the sale of loans originated for sale

 

 

132,957

 

 

 

114,388

 

Cash disbursements for loans originated for sale

 

 

(134,396

)

 

 

(115,294

)

Deferred income tax benefit

 

 

(1,029

)

 

 

(3,107

)

Gain on other assets

 

 

(76

)

 

 

(714

)

Decrease in interest receivable

 

 

8

 

 

 

381

 

Decrease in interest payable

 

 

(64

)

 

 

(366

)

Amortization of stock-based compensation arrangements

 

 

1,243

 

 

 

1,224

 

Other, net

 

 

4,797

 

 

 

6,957

 

Net cash provided by operating activities

 

$

58,737

 

 

$

59,811

 

INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Net decrease in federal funds sold

 

 

 

 

4,319

 

Net cash and due from banks received from acquisitions

 

 

 

 

174,283

 

Purchases of held for investment securities

 

 

(1,085

)

 

 

Purchases of available for sale securities

 

 

(41,424

)

 

 

(204,979

)

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

 

 

1,344

 

 

 

3,882

 

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

 

 

53,285

 

 

 

197,469

 

Proceeds from sales of available for sale securities

 

 

8,576

 

 

 

2,235

 

Net change in loans

 

 

(113,740

)

 

 

(266,076

)

Purchases of premises, equipment and computer software

 

 

(9,535

)

 

 

(8,541

)

Proceeds from the sale of other assets

 

 

4,324

 

 

 

4,741

 

Net cash used in investing activities

 

 

(98,255

)

 

 

(92,667

)

FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Net change in deposits

 

 

(206,113

)

 

 

19,116

 

Net (decrease)/increase in short-term borrowings

 

 

(205

)

 

 

6,883

 

Paydown of long-term borrowings

 

 

 

 

(6,938

)

Issuance of common stock, net

 

 

2,838

 

 

 

3,954

 

Cash dividends paid

 

 

(15,836

)

 

 

(14,289

)

Net cash (used in) provided by financing activities

 

 

(219,316

)

 

 

8,726

 

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

 

 

(258,834

)

 

 

(24,130

)

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

 

$

1,655,061

 

 

$

1,833,405

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

 

 

 

 

 

 

 

 

Cash paid during the period for interest

 

$

9,142

 

 

$

10,058

 

Cash paid during the period for income taxes

 

$

26,531

 

 

$

21,128

 

Noncash investing and financing activities:

 

 

 

 

 

 

 

 

Unpaid common stock dividends declared

 

$

5,609

 

 

$

5,244

 

 

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.

 

See Note 12 for developments subsequent to September 30, 2015.

 

 

(3)

SECURITIES

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

 

 

 

September 30,

 2015

 

 

December 31, 2014

 

 

 

(Dollars in thousands)

 

Held for investment, at cost (fair value: $8,398 and $8,671, respectively)

 

$

8,333

 

 

$

8,593

 

Available for sale, at fair value

 

 

499,525

 

 

 

516,190

 

Total

 

$

507,858

 

 

$

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

 

September 30, 2015

 

(Dollars in thousands)

 

Mortgage backed securities (1)

 

$

382

 

 

$

30

 

 

$

 

 

$

412

 

States and political subdivisions

 

 

7,951

 

 

 

35

 

 

 

 

 

 

7,986

 

Total

 

$

8,333

 

 

$

65

 

 

$

 

 

$

8,398

 

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

 

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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

 

September 30, 2015

 

(Dollars in thousands)

 

U.S. treasuries

 

$

279,331

 

 

$

1,966

 

 

$

 

 

$

281,297

 

U.S. federal agencies

 

 

133,670

 

 

 

870

 

 

 

(54

)

 

 

134,486

 

Mortgage backed securities (1)

 

 

22,587

 

 

 

500

 

 

 

(557

)

 

 

22,530

 

States and political subdivisions

 

 

49,815

 

 

 

1,552

 

 

 

(41

)

 

 

51,326

 

Other securities (2)

 

 

9,887

 

 

 

197

 

 

 

(198

)

 

 

9,886

 

Total

 

$

495,290

 

 

$

5,085

 

 

$

(850

)

 

$

499,525

 

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.

 

 

 

September 30, 2015

 

 

December 31, 2014

 

 

 

Amortized

Cost

 

 

Estimated

Fair

Value

 

 

Amortized

Cost

 

 

Estimated

Fair

Value

 

 

 

(Dollars in thousands)

 

Held for Investment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contractual maturity of debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Within one year

 

$

4,978

 

 

$

4,985

 

 

$

1,451

 

 

$

1,456

 

After one year but within five years