BANCFIRST CORP /OK/ - Quarter Report: 2018 June (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2018

☐	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 ☒ No ☐.

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐ (Do not check if a smaller reporting company)	Smaller reporting company	☐

Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of July 31, 2018 there were 32,737,715 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,
		2018			2017
	(unaudited)			(see Note 1)
ASSETS
Cash and due from banks	$	188,483		$	216,104
Interest-bearing deposits with banks		1,579,577			1,541,771
Federal funds sold		22,798			700
Securities (fair value: $462,880 and $470,006, respectively)		462,871			469,995
Loans held for sale		9,553			6,173
Loans (net of unearned interest)		5,007,518			4,721,995
Allowance for loan losses		(52,200	)		(51,666	)
Loans, net of allowance for loan losses		4,955,318			4,670,329
Premises and equipment, net		146,710			134,088
Other real estate owned		3,616			4,136
Intangible assets, net		18,012			11,082
Goodwill		79,733			54,042
Accrued interest receivable and other assets		156,292			144,736
Total assets	$	7,622,963		$	7,253,156

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing	$	2,661,316		$	2,550,150
Interest-bearing		4,030,858			3,864,895
Total deposits		6,692,174			6,415,045
Short-term borrowings		2,500			900
Accrued interest payable and other liabilities		34,318			29,623
Junior subordinated debentures		31,959			31,959
Total liabilities		6,760,951			6,477,527

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, 40,000,000 shares authorized; shares issued and outstanding: 32,731,215 and 31,894,563, respectively		32,731			31,895
Capital surplus		148,494			107,481
Retained earnings		684,425			638,580
Accumulated other comprehensive loss, net of income tax of $(1,243) and $(795), respectively		(3,638	)		(2,327	)
Total stockholders' equity		862,012			775,629
Total liabilities and stockholders' equity	$	7,622,963		$	7,253,156

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

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,
		2018			2017			2018			2017
INTEREST INCOME
Loans, including fees	$	65,604		$	54,763		$	128,523		$	108,398
Securities:
Taxable		1,956			1,906			3,854			3,667
Tax-exempt		162			178			333			365
Federal funds sold		95			1			199			1
Interest-bearing deposits with banks		7,325			4,425			13,107			7,865
Total interest income		75,142			61,273			146,016			120,296
INTEREST EXPENSE
Deposits		9,710			4,300			16,979			8,025
Short-term borrowings		8			4			43			7
Junior subordinated debentures		544			530			1,079			1,057
Total interest expense		10,262			4,834			18,101			9,089
Net interest income		64,880			56,439			127,915			111,207
Provision for loan losses		1,225			1,841			1,539			1,913
Net interest income after provision for loan losses		63,655			54,598			126,376			109,294
NONINTEREST INCOME
Trust revenue		3,396			2,894			6,525			5,846
Service charges on deposits		17,537			16,448			34,190			32,226
Securities transactions (includes accumulated other comprehensive income reclassifications of $0, $(142), $0 and $(142), respectively)		115			(330	)		101			(330	)
Income from sales of loans		802			816			1,453			1,448
Insurance commissions		3,927			3,728			9,126			8,291
Cash management		3,381			2,799			6,402			5,553
Gain (loss) on sale of other assets		127			(25	)		153			(49	)
Other		1,152			1,653			2,597			3,083
Total noninterest income		30,437			27,983			60,547			56,068
NONINTEREST EXPENSE
Salaries and employee benefits		34,776			31,547			68,966			62,201
Occupancy, net		3,396			2,992			6,798			5,966
Depreciation		2,429			2,392			4,839			4,812
Amortization of intangible assets		759			547			1,492			1,094
Data processing services		1,195			1,097			2,398			2,292
Net expense from other real estate owned		19			202			45			252
Marketing and business promotion		1,649			1,559			4,001			3,774
Deposit insurance		640			542			1,259			1,130
Other		9,393			8,075			20,348			17,020
Total noninterest expense		54,256			48,953			110,146			98,541
Income before taxes		39,836			33,628			76,777			66,821
Income tax expense		9,250			10,446			16,571			21,589
Net income	$	30,586		$	23,182		$	60,206		$	45,232
NET INCOME PER COMMON SHARE
Basic	$	0.93		$	0.73		$	1.84		$	1.43
Diluted	$	0.91		$	0.71		$	1.80		$	1.39
OTHER COMPREHENSIVE (LOSS)/INCOME
Unrealized (losses)/gains on securities, net of tax of $179, $(280), $653 and $(167), respectively		(541	)		443			(1,929	)		265
Reclassification adjustment for losses included in net income, net of tax of $0, $(55), $0 and $(55), respectively		—			87			—			87
Other comprehensive (losses)/gains, net of tax of $179, $(335), $448 and $(222), respectively		(541	)		530			(1,929	)		352
Comprehensive income	$	30,045		$	23,712		$	58,277		$	45,584

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

BANCFIRST CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(Dollars in thousands)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
COMMON STOCK
Issued at beginning of period	$	32,708		$	31,782		$	31,895		$	31,622
Shares issued for stock options		23			36			103			196
Shares issued for acquisitions		—			—			733			—
Issued at end of period	$	32,731		$	31,818		$	32,731		$	31,818
CAPITAL SURPLUS
Balance at beginning of period	$	147,762		$	102,605		$	107,481		$	101,730
Common stock issued for stock options		410			2,592			1,620			3,245
Common stock issued for acquisitions		—			—			38,765			—
Stock-based compensation arrangements		322			243			628			465
Balance at end of period	$	148,494		$	105,440		$	148,494		$	105,440
RETAINED EARNINGS
Balance at beginning of period	$	660,723		$	593,631		$	638,580		$	577,648
Net income		30,586			23,182			60,206			45,232
Cumulative effect of change in accounting principle		—			—			(618	)		—
Dividends on common stock ($0.21, $0.19, $0.42 and $0.38 per share, respectively)		(6,884	)		(6,055	)		(13,743	)		(12,122	)
Balance at end of period	$	684,425		$	610,758		$	684,425		$	610,758
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized gains on securities:
Balance at beginning of period	$	(3,097	)	$	(84	)	$	(2,327	)	$	94
Net change		(541	)		530			(1,929	)		352
Cumulative effect of change in accounting principle		—			—			618			—
Balance at end of period	$	(3,638	)	$	446		$	(3,638	)	$	446
Total stockholders’ equity	$	862,012		$	748,462		$	862,012		$	748,462

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

BANCFIRST CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOW

(Unaudited)

(Dollars in thousands)

	Six Months Ended
	June 30,
	2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	60,206		$	45,232
Adjustments to reconcile to net cash provided by operating activities:
Provision for loan losses		1,539			1,913
Depreciation and amortization		6,331			5,906
Net amortization of securities premiums and discounts		(77	)		(103	)
Realized securities (gains)/losses		(101	)		330
Gain on sales of loans		(1,453	)		(1,448	)
Cash receipts from the sale of loans originated for sale		95,713			97,146
Cash disbursements for loans originated for sale		(97,676	)		(95,477	)
Deferred income tax benefit		(604	)		(723	)
(Gain)/loss on other assets		(156	)		62
Increase in interest receivable		(2,618	)		(1,107	)
Increase in interest payable		575			126
Amortization of stock-based compensation arrangements		628			465
Excess tax benefit from stock-based compensation arrangements		(898	)		(1,784	)
Other, net		(5,678	)		3,234
Net cash provided by operating activities	$	55,731		$	53,772
INVESTING ACTIVITIES
Net cash received from acquisitions, net of cash paid	$	6,248		$ —
Net decrease in federal funds sold		750			700
Purchases of held for investment securities		(225	)		(220	)
Purchases of available for sale securities		(60,604	)		(42,006	)
Proceeds from maturities, calls and paydowns of held for investment securities		509			644
Proceeds from maturities, calls and paydowns of available for sale securities		59,235			60,360
Proceeds from sales of available for sale securities		1,467		—
Purchase of equity securities		(1,709	)	—
Proceeds from paydowns and sales of equity securities		1,080		—
Net change in loans		24,177			(181,851	)
Purchases of premises, equipment and computer software		(16,631	)		(6,568	)
Proceeds from the sale of other real estate owned and other assets		3,231			2,088
Net cash provided by/(used in) investing activities		17,528			(166,853	)
FINANCING ACTIVITIES
Net change in deposits		(52,831	)		(12,375	)
Net increase in short-term borrowings		1,600			500
Issuance of common stock in connection with stock options, net		1,723			3,441
Cash dividends paid		(13,566	)		(12,046	)
Net cash used in financing activities		(63,074	)		(20,480	)
Net increase/(decrease) in cash, due from banks and interest-bearing deposits		10,185			(133,561	)
Cash, due from banks and interest-bearing deposits at the beginning of the period		1,757,875			1,850,461
Cash, due from banks and interest-bearing deposits at the end of the period	$	1,768,060		$	1,716,900
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest	$	17,525		$	8,963
Cash paid during the period for income taxes	$	16,150		$	20,450
Noncash investing and financing activities:
Stock issued in acquisitions	$	39,498		$	—
Cash consideration for acquisitions	$	24,722		$	—
Fair value of assets acquired in acquisitions	$	377,320		$	—
Liabilities assumed in acquisitions	$	338,860		$	—
Unpaid common stock dividends declared	$	6,870		$	6,045

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

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, 2017.

Basis of Presentation

The accompanying unaudited interim consolidated financial statements include the accounts of BancFirst Corporation, First Bank of Chandler, Council Oak Partners, LLC, BancFirst Insurance Services, Inc., BancFirst Risk and Insurance Company 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, 2017, 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, 2017, 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

Standards Adopted During Current Period:

In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-2, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. ASU 2018-2 allows a reclassification from accumulated other comprehensive income (loss) to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. ASU 2018-2 is effective for fiscal years beginning after December 15, 2018 with early adoption permitted. The Company elected to early adopt the provisions of ASU 2018-2 and the amount to reclassify was immaterial to the Company’s financial statements. The Company’s policy is to release material stranded tax effects on a specific identification basis.

In May 2017, the FASB issued ASU No. 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting.” The amendments in this update provide guidance about types of changes to the terms of conditions of share-based payment awards that would require an entity to apply modification accounting under ASC 718. ASU 2017-09 was adopted on January 1, 2018 and did not have a significant impact on the Company’s financial statements and no prior periods were adjusted.

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” ASU 2017-04 removes the second step of goodwill testing. ASU 2017-04 is effective for fiscal years beginning after December 31, 2019 with early adoption permitted. The Company elected to early adopt ASU 2017-4 and it did not have a significant impact on the Company’s financial statements.

In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of a business. ASU 2017-01 was adopted on January 1, 2018 and did not have a significant impact on the Company’s financial statements.

In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory.” ASU 2016-16 provides guidance stating that an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. ASU 2016-16 was adopted on January 1, 2018 and did not have a significant impact on the Company’s financial statements and no prior periods were adjusted.

In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” ASU 2016-15 is intended to reduce the diversity in practice around how certain transactions are classified within the statement of cash flows. ASU 2016-15 was adopted on January 1, 2018 and did not have a significant impact on the Company’s financial statements.

In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments – Overall (Subtopic 825-10).” ASU 2016-01 requires all equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in the fair value recognized through net income. The adoption of the guidance resulted in a $618,000 decrease to retained earnings and a $618,000 increase to accumulated other comprehensive income. Additional income of $41,200 was recorded in the consolidated statement of comprehensive income during 2018 as a result of changes to the accounting for equity investments. Further, the Company’s securities disclosures in Note (3) have been revised to exclude equity investments in 2018 and fair value disclosures in Note (9) have incorporated the revised disclosure requirements for financial investments. ASU 2016-01 also emphasizes the existing requirement to use exit prices to measure fair value for disclosure purposes and clarifies that entities should not make use of a practicability exception in determining the fair value of loans. Accordingly, we refined the calculation used to determine the disclosed fair value of the Company’s loans held for investment as part of adopting this standard. The refined calculation did not have a significant impact on the Company’s fair value disclosures. ASU 2016-01 was adopted on January 1, 2018 and did not have a significant impact on the Company’s financial statements.

In January 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customer (Topic 606).” ASU 2014-09 implements a comprehensive new revenue recognition standard that will supersede substantially all existing revenue recognition guidance. The new standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in a manner that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The guidance does not apply to revenue associated with financial instruments, including loans and securities that are accounted for under other GAAP, which comprises a significant portion of the Company’s revenue stream. ASU 2014-09 was adopted on January 1, 2018 and did not have a significant impact on the Company’s financial statements.

Standards Not Yet Adopted:

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU 2016-13 requires enhanced disclosures related to the significant estimates and judgements used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, ASU 2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. ASU 2016-13 will be effective for the Company on January 1, 2020. The Company is currently evaluating the potential impact of ASU 2016-13 on its financial statements. In that regard, the Company has formed a task force under the direction of its Chief Financial Officer. The Company is currently developing an implementation plan to include assessment of process, portfolio segmentation, model development, system requirements and the identification of data and resource need, among other things.

In February 2016, the FASB issued ASU No. 2016-02, “Leases - (Topic 842).” ASU 2016-02 requires that lessees recognize on the balance sheet the assets and liabilities for the rights and obligations created by leases. The amendments are effective for annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2018. Early adoption is permitted. Adoption of ASU 2016-02 is not expected to have a significant effect on the Company’s financial statements.

(2) RECENT DEVELOPMENTS, INCLUDING MERGERS AND ACQUISITIONS

On January 11, 2018, the Company acquired First Wagoner Corp. and its subsidiary bank, First Bank & Trust Company, with locations in Carney, Grove, Ketchum, Luther, Tulsa and Wagoner. First Bank & Trust Company had approximately $290 million in total assets, $247 million in loans, $251 million in deposits and $36 million in equity capital. First Bank & Trust Company operated as a subsidiary of BancFirst Corporation until it was merged into BancFirst on February 16, 2018. As a result of the acquisition, the Company recorded a core deposit intangible of approximately $6.3 million and goodwill of approximately $19.1 million. These fair value estimates are considered preliminary and are subject to change for up to one year after the closing date of the acquisition as additional information becomes available. The effect of this acquisition was included in the consolidated financial statements of the Company from the date of acquisition forward. The acquisition did not have a material effect on the Company’s consolidated financial statements. The acquisition of First Wagoner Corp. and its subsidiary bank, First Bank & Trust Company complements the Company’s community banking strategy by adding five communities to its banking network in Oklahoma.

On January 11, 2018, the Company acquired First Chandler Corp. and its subsidiary bank, First Bank of Chandler, with two locations in Chandler. First Bank of Chandler had approximately $88 million in total assets, $66 million in loans, $79 million in deposits and $11 million in equity capital. The bank will operate as First Bank of Chandler until it is merged into BancFirst, which is expected to be during the third quarter of 2018. As a result of the acquisition, the Company recorded a core deposit intangible of approximately $2.2 million and goodwill of approximately $6.6 million. These fair value estimates are considered preliminary and are subject to change for up to one year after the closing date of the acquisition as additional information becomes available. The effect of this acquisition was included in the consolidated financial statements of the Company from the date of acquisition forward. The acquisition did not have a material effect on the Company’s consolidated financial statements. The acquisition of First Chandler Corp. and its subsidiary bank, First Bank of Chandler complements the Company’s community banking strategy by increasing its banking network in Oklahoma.

On July 31, 2017, the Company completed a two-for-one stock split of the Company’s outstanding shares of common stock. The stock was payable in the form of a dividend on or about July 31, 2017 to shareholders of record of the outstanding common stock as of the close of business record date of July 17, 2017. Stockholders received one additional share for each share held on that date. This was the second stock split for the Company since going public. All share and per share amounts in these consolidated financial statements and related notes have been retroactively adjusted to reflect this stock split for all periods presented.

(3)	SECURITIES

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

	June 30, 2018		December 31, 2017
	(Dollars in thousands)
Held for investment, at cost (fair value: $2,017 and $2,303, respectively)	$	2,008	$	2,292
Available for sale, at fair value		460,863		467,703
Total	$	462,871	$	469,995

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, 2018	(Dollars in thousands)
Mortgage backed securities (1)	$	158	$	6	$	—		$	164
States and political subdivisions		1,350		3		—			1,353
Other securities		500		—		—			500
Total	$	2,008	$	9	$	—		$	2,017
December 31, 2017
Mortgage backed securities (1)	$	187	$	10	$	—		$	197
States and political subdivisions		1,605		3		(2	)		1,606
Other securities		500		—		—			500
Total	$	2,292	$	13	$	(2	)	$	2,303

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, 2018	(Dollars in thousands)
U.S. treasuries	$	324,661	$	108	$	(4,574	)	$	320,195
U.S. federal agencies		84,649		2		(222	)		84,429
Mortgage backed securities (1)		16,828		137		(559	)		16,406
States and political subdivisions		39,606		347		(120	)		39,833
Total	$	465,744	$	594	$	(5,475	)	$	460,863
December 31, 2017
U.S. treasuries	$	314,905	$	—	$	(2,103	)	$	312,802
U.S. federal agencies		89,098		82		(329	)		88,851
Mortgage backed securities (1)		18,358		204		(586	)		17,976
States and political subdivisions		41,937		554		(121	)		42,370
Equity securities (2)		6,527		71		(894	)		5,704
Total	$	470,825	$	911	$	(4,033	)	$	467,703

(1)

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

(2)

Consisted of equity securities that are included in other assets in 2018.

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, 2018				December 31, 2017
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
	(Dollars in thousands)
Held for Investment
Contractual maturity of debt securities:
Within one year	$	975	$	978	$	1,036	$	1,034
After one year but within five years		428		428		623		627
After five years but within ten years		599		605		625		633
After ten years		6		6		8		9
Total	$	2,008	$	2,017	$	2,292	$	2,303
Available for Sale
Contractual maturity of debt securities:
Within one year	$	114,086	$	113,828	$	113,225	$	112,974
After one year but within five years		296,057		291,843		289,038		287,058
After five years but within ten years		6,129		6,306		6,222		6,500
After ten years		49,472		48,886		55,813		55,467
Total debt securities		465,744		460,863		464,298		461,999
Equity securities		—		—		6,527		5,704
Total	$	465,744	$	460,863	$	470,825	$	467,703

The following table is a summary of the Company’s book value of securities that were pledged as collateral for public funds on deposit, repurchase agreements and for other purposes as required or permitted by law:

	June 30, 2018		December 31, 2017
	(Dollars in thousands)
Book value of pledged securities	$	439,030	$	440,069

(4)	LOANS AND ALLOWANCE FOR LOAN LOSSES

The following is a schedule of loans outstanding by category:

	June 30, 2018					December 31, 2017
	Amount		Percent			Amount		Percent
	(Dollars in thousands)
Commercial and financial:
Commercial and industrial	$	1,083,958		21.65	%	$	995,207		21.08	%
Oil & gas production and equipment		95,777		1.91			95,574		2.02
Agriculture		130,961		2.62			141,249		2.99
State and political subdivisions:
Taxable		65,745		1.31			73,827		1.56
Tax-exempt		54,400		1.09			48,626		1.03
Real estate:
Construction		456,062		9.11			437,277		9.26
Farmland		215,835		4.31			195,162		4.13
One to four family residences		978,196		19.53			875,766		18.55
Multifamily residential properties		66,488		1.33			46,030		0.98
Commercial		1,514,304		30.24			1,487,927		31.51
Consumer		309,011		6.17			284,373		6.02
Other (not classified above)		36,781		0.73			40,977		0.87
Total loans	$	5,007,518		100.00	%	$	4,721,995		100.00	%

The Company’s loans are mostly to customers within Oklahoma and over 60% of the loans are secured by real estate. Credit risk on loans is managed through limits on amounts loaned to individual and related borrowers, underwriting standards and loan monitoring procedures. The amounts and types of collateral obtained, if any, to secure loans are based upon the Company’s underwriting standards and management’s credit evaluation. Collateral varies, but may include real estate, equipment, accounts receivable, inventory, livestock and securities. The Company’s interest in collateral is secured through filing mortgages and liens, and in some cases, by possession of the collateral.

The Company’s commercial and industrial loan category includes a small percentage of loans to companies that provide ancillary services to the oil and gas industry, such as transportation, preparation contractors and equipment manufacturers. The balance of these loans was approximately $79 million at June 30, 2018 and approximately $81 million at December 31, 2017.

Accounting policies related to appraisals, nonaccruals and charge-offs are disclosed in Note (1) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

Nonperforming and Restructured Assets

The following is a summary of nonperforming and restructured assets:

	June 30,		December 31,
	2018		2017
	(Dollars in thousands)
Past due 90 days or more and still accruing	$	2,916	$	2,893
Nonaccrual		30,149		31,943
Restructured		14,527		4,720
Total nonperforming and restructured loans		47,592		39,556
Other real estate owned and repossessed assets		3,847		4,424
Total nonperforming and restructured assets	$	51,439	$	43,980

Had nonaccrual loans performed in accordance with their original contractual terms, the Company would have recognized additional interest income of approximately $1.1 million for the six months ended June 30, 2018 and approximately $886,000 for the six months ended June 30, 2017.

The Company charges interest on principal balances outstanding on restructured loans during deferral periods. The current and future financial effects of the recorded balance of loans considered to be restructured were not considered to be material.

Loans are segregated into classes based upon the nature of the collateral and the borrower. These classes are used to estimate the allowance for loan losses. The following table is a summary of amounts included in nonaccrual loans, segregated by class of loans. Residential real estate refers to one-to-four family real estate.

	June 30, 2018		December 31, 2017
	(Dollars in thousands)
Real estate:
Non-residential real estate owner occupied	$	1,225	$	1,108
Non-residential real estate other		8,892		9,809
Residential real estate permanent mortgage		978		781
Residential real estate all other		5,121		3,980
Commercial and financial:
Non-consumer non-real estate		7,357		7,785
Consumer non-real estate		362		250
Other loans		525		5,596
Acquired loans		5,689		2,634
Total	$	30,149	$	31,943

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. The following table presents an age analysis of past due loans, segregated by class of loans:

	Age Analysis of Past Due Loans
	30-59 Days Past Due		60-89 Days Past Due		90 Days and Greater		Total Past Due Loans		Current Loans		Total Loans		Accruing Loans 90 Days or More Past Due
	(Dollars in thousands)
As of June 30, 2018
Real estate:
Non-residential real estate owner occupied	$	547	$	824	$	968	$	2,339	$	637,279	$	639,618	$	118
Non-residential real estate other		475		56		1,755		2,286		1,127,444		1,129,730		171
Residential real estate permanent mortgage		4,333		644		1,219		6,196		323,487		329,683		852
Residential real estate all other		2,414		754		2,649		5,817		788,538		794,355		1,129
Commercial and financial:
Non-consumer non-real estate		1,768		1,659		2,650		6,077		1,298,337		1,304,414		198
Consumer non-real estate		1,549		359		421		2,329		298,798		301,127		331
Other loans		412		237		324		973		136,378		137,351		—
Acquired loans		3,248		681		2,550		6,479		364,761		371,240		117
Total	$	14,746	$	5,214	$	12,536	$	32,496	$	4,975,022	$	5,007,518	$	2,916
As of December 31, 2017
Real estate:
Non-residential real estate owner occupied	$	998	$	68	$	977	$	2,043	$	639,575	$	641,618	$	84
Non-residential real estate other		2,905		271		2,112		5,288		1,121,303		1,126,591		432
Residential real estate permanent mortgage		2,211		403		977		3,591		326,743		330,334		584
Residential real estate all other		1,739		749		1,377		3,865		781,790		785,655		973
Commercial and financial:
Non-consumer non-real estate		2,210		706		1,785		4,701		1,279,704		1,284,405		403
Consumer non-real estate		2,085		670		293		3,048		285,872		288,920		194
Other loans		506		103		3,916		4,525		139,920		144,445		—
Acquired loans		753		192		713		1,658		118,369		120,027		223
Total	$	13,407	$	3,162	$	12,150	$	28,719	$	4,693,276	$	4,721,995	$	2,893

Impaired Loans

Loans are considered impaired when, based on current information and events, it is probable the Company will be unable to collect the full amount of scheduled principal and interest payments in accordance with the original contractual terms of the loan agreement. If a loan is impaired, a specific valuation allowance may be allocated, if necessary, so that the loan is reported, net of

allowance for loss, at the present value of future cash flows using the loan’s existing rate, or the fair value of collateral if repayment is expected solely from the collateral.

The following table presents impaired loans, segregated by class of loans. During the period ended June 30, 2018 no material amount of interest income was recognized on impaired loans subsequent to their classification as impaired. During the period ended June 30, 2017, $2.3 million of interest income was recognized on impaired loans subsequent to their classification as impaired.

	Impaired Loans
	Unpaid Principal Balance		Recorded Investment with Allowance		Related Allowance		Average Recorded Investment
	(Dollars in thousands)
As of June 30, 2018
Real estate:
Non-residential real estate owner occupied	$	7,718	$	7,636	$	301	$	7,387
Non-residential real estate other		9,881		9,633		521		9,730
Residential real estate permanent mortgage		2,252		2,047		155		1,819
Residential real estate all other		7,724		7,417		2,445		6,920
Commercial and financial:
Non-consumer non-real estate		20,876		13,639		2,662		13,048
Consumer non-real estate		794		755		136		780
Other loans		760		525		55		1,084
Acquired loans		11,065		8,075		4		6,870
Total	$	61,070	$	49,727	$	6,279	$	47,638

As of December 31, 2017
Real estate:
Non-residential real estate owner occupied	$	2,011	$	1,945	$	141	$	1,858
Non-residential real estate other		10,323		10,240		496		3,975
Residential real estate permanent mortgage		1,745		1,542		146		1,440
Residential real estate all other		5,837		5,549		2,135		5,258
Commercial and financial:
Non-consumer non-real estate		18,101		11,158		2,412		11,131
Consumer non-real estate		545		514		127		541
Other loans		6,092		5,595		178		7,439
Acquired loans		4,737		3,145		12		3,539
Total	$	49,391	$	39,688	$	5,647	$	35,181

Credit Risk Monitoring and Loan Grading

The Company considers various factors to monitor the credit risk in the loan portfolio including volume and severity of loan delinquencies, nonaccrual loans, internal grading of loans, historical loan loss experience and economic conditions.

An internal risk grading system is used to indicate the credit risk of loans. The loan grades used by the Company are for internal risk identification purposes and do not directly correlate to regulatory classification categories or any financial reporting definitions.

The general characteristics of the risk grades are disclosed in Note (5) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

The following table presents internal loan grading by class of loans:

	Internal Loan Grading
	Grade
		1		2		3		4		5	Total
	(Dollars in thousands)
As of June 30, 2018
Real estate:
Non-residential real estate owner occupied	$	492,984	$	126,220	$	18,995	$	1,419	$	—	$	639,618
Non-residential real estate other		929,230		181,759		9,701		9,040		—		1,129,730
Residential real estate permanent mortgage		282,347		37,534		7,350		2,452		—		329,683
Residential real estate all other		622,575		154,192		10,681		6,907		—		794,355
Commercial and financial:
Non-consumer non-real estate		1,029,512		249,253		18,716		6,933		—		1,304,414
Consumer non-real estate		278,585		20,078		1,675		789		—		301,127
Other loans		131,903		5,054		336		58		—		137,351
Acquired loans		215,415		117,064		32,547		6,214		—		371,240
Total	$	3,982,551	$	891,154	$	100,001	$	33,812	$	—	$	5,007,518

As of December 31, 2017
Real estate:
Non-residential real estate owner occupied	$	520,641	$	105,696	$	13,852	$	1,429	$	—	$	641,618
Non-residential real estate other		931,295		178,282		14,290		2,724		—		1,126,591
Residential real estate permanent mortgage		289,200		33,033		6,352		1,749		—		330,334
Residential real estate all other		621,401		149,201		9,418		5,635		—		785,655
Commercial and financial:
Non-consumer non-real estate		1,018,172		234,884		24,322		6,997		30		1,284,405
Consumer non-real estate		268,826		17,499		2,038		557		—		288,920
Other loans		136,617		5,668		1,203		957		—		144,445
Acquired loans		65,685		34,418		17,113		2,811		—		120,027
Total	$	3,851,837	$	758,681	$	88,588	$	22,859	$	30	$	4,721,995

Allowance for Loan Losses Methodology

The allowance for loan losses (“ALL”) methodology is disclosed in Note (5) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

The following table details activity in the ALL by class of loans for the period presented. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

	ALL
	Balance at beginning of period		Charge- offs			Recoveries		Net charge-offs			Provisions charged to operations			Balance at end of period
	(Dollars in thousands)
Three Months Ended June 30, 2018
Real estate:
Non-residential real estate owner occupied	$	6,650	$	—		$	—	$	—		$	(224	)	$	6,426
Non-residential real estate other		10,548		—			—		—			157			10,705
Residential real estate permanent mortgage		3,281		(6	)		23		17			9			3,307
Residential real estate all other		9,831		(151	)		3		(148	)		440			10,123
Commercial and financial:
Non-consumer non-real estate		14,785		(153	)		10		(143	)		427			15,069
Consumer non-real estate		2,699		(194	)		44		(150	)		290			2,839
Other loans		2,336		(2	)		12		10			(18	)		2,328
Acquired loans		1,420		(166	)		5		(161	)		144			1,403
Total	$	51,550	$	(672	)	$	97	$	(575	)	$	1,225		$	52,200


Six Months Ended June 30, 2018
Real estate:
Non-residential real estate owner occupied	$	6,195	$	(19	)	$	1	$	(18	)	$	249		$	6,426
Non-residential real estate other		10,519		(1	)		39		38			148			10,705
Residential real estate permanent mortgage		3,226		(62	)		26		(36	)		117			3,307
Residential real estate all other		9,672		(241	)		6		(235	)		686			10,123
Commercial and financial:
Non-consumer non-real estate		15,334		(309	)		23		(286	)		21			15,069
Consumer non-real estate		2,793		(444	)		124		(320	)		366			2,839
Other loans		2,481		(2	)		24		22			(175	)		2,328
Acquired loans		1,446		(193	)		23		(170	)		127			1,403
Total	$	51,666	$	(1,271	)	$	266	$	(1,005	)	$	1,539		$	52,200

	ALL
	Balance at beginning of period		Charge- offs			Recoveries		Net charge-offs			Provisions charged to operations			Balance at end of period
	(Dollars in thousands)
Three Months Ended June 30, 2017
Real estate:
Non-residential real estate owner occupied	$	5,562	$	(40	)	$	3	$	(37	)	$	160		$	5,685
Non-residential real estate other		10,788		(25	)		1		(24	)		(284	)		10,480
Residential real estate permanent mortgage		3,130		(36	)		10		(26	)		44			3,148
Residential real estate all other		8,659		(16	)		6		(10	)		263			8,912
Commercial and financial:
Non-consumer non-real estate		12,810		(471	)		61		(410	)		1,243			13,643
Consumer non-real estate		2,725		(234	)		32		(202	)		183			2,706
Other loans		2,958		(56	)		1		(55	)		103			3,006
Acquired loans		1,289		(1	)		8		7			129			1,425
Total	$	47,921	$	(879	)	$	122	$	(757	)	$	1,841		$	49,005


Six Months Ended June 30, 2017
Real estate:
Non-residential real estate owner occupied	$	5,602	$	(72	)	$	4	$	(68	)	$	151		$	5,685
Non-residential real estate other		10,793		(26	)		2		(24	)		(289	)		10,480
Residential real estate permanent mortgage		3,129		(156	)		11		(145	)		164			3,148
Residential real estate all other		8,622		(73	)		17		(56	)		346			8,912
Commercial and financial:
Non-consumer non-real estate		12,421		(677	)		979		302			920			13,643
Consumer non-real estate		2,804		(468	)		83		(385	)		287			2,706
Other loans		4,045		(1,274	)		5		(1,269	)		230			3,006
Acquired loans		1,277		(14	)		58		44			104			1,425
Total	$	48,693	$	(2,760	)	$	1,159	$	(1,601	)	$	1,913		$	49,005

The following table details the amount of ALL by class of loans for the period presented, detailed on the basis of the impairment methodology used by the Company.

	ALL
	June 30, 2018				December 31, 2017

	Individually evaluated for impairment		Collectively evaluated for impairment		Individually evaluated for impairment		Collectively evaluated for impairment
	(Dollars in thousands)
Real estate:
Non-residential real estate owner occupied.	$	841	$	5,585	$	656	$	5,539
Non-residential real estate other		908		9,797		751		9,768
Residential real estate permanent mortgage		560		2,747		483		2,743
Residential real estate all other		3,138		6,985		2,761		6,911
Commercial and financial:
Non-consumer non-real estate		4,076		10,993		4,651		10,683
Consumer non-real estate		349		2,490		429		2,364
Other loans		52		2,276		133		2,348
Acquired loans		—		1,403		12		1,434
Total	$	9,924	$	42,276	$	9,876	$	41,790

The following table details the loans outstanding by class of loans for the period presented, on the basis of the impairment methodology used by the Company.

	Loans
	June 30, 2018						December 31, 2017
	Individually evaluated for impairment		Collectively evaluated for impairment		Loans acquired with deteriorated credit quality		Individually evaluated for impairment		Collectively evaluated for impairment		Loans acquired with deteriorated credit quality
	(Dollars in thousands)
Real estate:
Non-residential real estate owner occupied	$	20,414	$	619,204	$	—	$	15,281	$	626,337	$	—
Non-residential real estate other		18,741		1,110,989		—		17,013		1,109,578		—
Residential real estate permanent mortgage		9,802		319,881		—		8,100		322,234		—
Residential real estate all other		17,588		776,767		—		15,052		770,603		—
Commercial and financial:
Non-consumer non-real estate		25,649		1,278,765		—		31,349		1,253,056		—
Consumer non-real estate		2,692		298,435		—		2,600		286,320		—
Other loans		302		137,049		—		764		143,681		—
Acquired loans		31,009		332,479		7,752		14,464		100,106		5,457
Total	$	126,197	$	4,873,569	$	7,752	$	104,623	$	4,611,915	$	5,457

Transfers from Loans

Transfers from loans to other real estate owned and repossessed assets are non-cash transactions, and are not included in the statements of cash flow.

Transfers from loans to other real estate owned and repossessed assets during the periods presented, are summarized as follows:

	Six Months Ended June 30,
	2018		2017
	(Dollars in thousands)
Other real estate owned	$	1,123	$	1,513
Repossessed assets		550		612
Total	$	1,673	$	2,125

(5)	INTANGIBLE ASSETS

The following is a summary of intangible assets:

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(Dollars in thousands)
As of June 30, 2018
Core deposit intangibles	$	25,906	$	(9,769	)	$	16,137
Customer relationship intangibles		5,699		(3,941	)		1,758
Mortgage servicing intangibles		413		(296	)		117
Total	$	32,018	$	(14,006	)	$	18,012
As of December 31, 2017
Core deposit intangibles	$	17,447	$	(8,451	)	$	8,996
Customer relationship intangibles		5,699		(3,767	)		1,932
Mortgage servicing intangibles		439		(285	)		154
Total	$	23,585	$	(12,503	)	$	11,082

The following is a summary of goodwill by business segment:

					Other		Executive,
	Metropolitan		Community		Financial		Operations
	Banks		Banks		Services		& Support		Consolidated
	(Dollars in thousands)
Six month ended June 30, 2018
Balance at beginning of period	$	8,078	$	40,050	$	5,464	$	450	$	54,042
Acquisitions		5,689		20,002		—		—		25,691
Balance at end of period	$	13,767	$	60,052	$	5,464	$	450	$	79,733

Additional information for intangible assets can be found in Note (7) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

(6)	STOCK-BASED COMPENSATION

The Company adopted a nonqualified incentive stock option plan (the “BancFirst ISOP”) in May 1986. The Company has amended the BancFirst ISOP since 1986 to increase the number of shares to be issued under the plan to 6,400,000 shares. At June 30, 2018, there were 310,470 shares available for future grants. The BancFirst ISOP will terminate on December 31, 2019, if not extended. The options vest and are exercisable beginning four years from the date of grant at the rate of 25% per year for four years. Options expire at the end of fifteen years from the date of grant. Options outstanding as of June 30, 2018 will become exercisable through the year 2025. The option price must be no less than 100% of the fair value of the stock relating to such option at the date of grant.

In June 1999, the Company adopted the BancFirst Corporation Non-Employee Directors’ Stock Option Plan (the “BancFirst Directors’ Stock Option Plan”). Each non-employee director is granted an option for 10,000 shares. The Company has amended the BancFirst Directors’ Stock Option Plan since 1999 to increase the number of shares to be issued under the plan to 520,000 shares. At June 30, 2018, there were 50,000 shares available for future grants. The BancFirst Directors’ Stock Option Plan will terminate on December 31, 2019, if not extended. The options vest and are exercisable beginning one year from the date of grant at the rate of 25% per year for four years, and expire at the end of fifteen years from the date of grant. Options outstanding as of June 30, 2018 will become exercisable through the year 2022. The option price must be no less than 100% of the fair value of the stock relating to such option at the date of grant.

The Company currently uses newly issued shares for stock option exercises, but reserves the right to use shares purchased under the Company’s Stock Repurchase Program (the “SRP”) in the future.

The following table is a summary of the activity under both the BancFirst ISOP and the BancFirst Directors’ Stock Option Plan:

						Wgtd. Avg.
				Wgtd. Avg.		Remaining	Aggregate
				Exercise		Contractual	Intrinsic
	Options			Price		Term	Value
	(Dollars in thousands, except option data)
Six Months Ended June 30, 2018
Outstanding at December 31, 2017		1,273,625		$	25.90
Options granted		34,500			54.68
Options exercised		(99,950	)		16.45
Options canceled, forfeited, or expired		(5,000	)		48.02
Outstanding at June 30, 2018		1,203,175			27.41	9.83 Yrs	$	38,244
Exercisable at June 30, 2018		542,925			21.17	7.32 Yrs	$	20,648

The following table has additional information regarding options granted and options exercised under both the BancFirst ISOP and the BancFirst Directors’ Stock Option Plan:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
	(Dollars in thousands except per share data)
Weighted average grant-date fair value per share of options granted	$	14.12	$	10.96	$	13.98	$	10.96
Total intrinsic value of options exercised		967		1,032		3,827		5,645
Cash received from options exercised		411		647		1,644		3,257
Tax benefit realized from options exercised		246		399		975		2,183

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model and is based on certain assumptions including risk-free rate of return, dividend yield, stock price volatility and the expected term. The fair value of each option is expensed over its vesting period.

The following table is a summary of the Company’s recorded stock-based compensation expense:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
	(Dollars in thousands)
Stock-based compensation expense	$	322	$	243	$	628	$	465
Tax benefit		82		109		160		180
Stock-based compensation expense, net of tax	$	240	$	134	$	468	$	285

The Company will continue to amortize the unearned stock-based compensation expense over the remaining vesting period of approximately seven years. The following table shows the unearned stock-based compensation expense:

	June 30, 2018
	(Dollars in thousands)
Unearned stock-based compensation expense	$	3,216

The following table shows the assumptions used for computing stock-based compensation expense under the fair value method on options granted during the periods presented:

	Six Months Ended June 30,
	2018	2017
Risk-free interest rate	2.55 to 2.92%	2.15 to 2.38%
Dividend yield	2.00%	2.00%
Stock price volatility	23.05 to 23.29%	22.57 to 23.13%
Expected term	10 Yrs	10 Yrs

The risk-free interest rate is determined by reference to the spot zero-coupon rate for the U.S. Treasury security with a maturity similar to the expected term of the options. The dividend yield is the expected yield for the expected term. The stock price volatility is estimated from the recent historical volatility of the Company’s stock. The expected term is estimated from the historical option exercise experience. The Company accounts for forfeitures as they occur.

In May 1999, the Company adopted the BancFirst Corporation Directors’ Deferred Stock Compensation Plan (the “BancFirst Deferred Stock Compensation Plan”). The Company has amended the BancFirst Deferred Stock Compensation Plan since 1999 to increase the number of shares to be issued under the plan to 222,220 shares. The BancFirst Deferred Stock Compensation Plan will terminate on December 31, 2019, if not extended. Under the plan, directors and members of the community advisory boards of the Company and its subsidiaries may defer up to 100% of their board fees. They are credited for each deferral with a number of stock units based on the current market price of the Company’s stock, which accumulate in an account until such time as the director or community board member terminates serving as a board member. Shares of common stock of the Company are then distributed to the terminating director or community board member based upon the number of stock units accumulated in his or her account. There were 3,891 and 9,918 shares of common stock distributed from the BancFirst Deferred Stock Compensation Plan during the six months ended June 30, 2018 and June 30, 2017, respectively.

A summary of the accumulated stock units is as follows:

	June 30,		December 31,
	2018		2017
Accumulated stock units		139,114		138,768
Average price	$	23.87	$	22.84

(7)	STOCKHOLDERS’ EQUITY

In November 1999, the Company adopted a Stock Repurchase Program (the “SRP”). The SRP may be used as a means to increase earnings per share and return on equity, to purchase treasury stock for the exercise of stock options or for distributions under the Deferred Stock Compensation Plan, to provide liquidity for optionees to dispose of stock from exercises of their stock options, and to provide liquidity for stockholders wishing to sell their stock. All shares repurchased under the SRP have been retired and not held as treasury stock. The timing, price and amount of stock repurchases under the SRP may be determined by management and approved by the Company’s Executive Committee.

The following table is a summary of the shares under the program:

	Six Months Ended June 30,
	2018		2017
Number of shares repurchased		—		—
Average price of shares repurchased	$	—	$	—
Shares remaining to be repurchased		300,000		300,000

The Company and BancFirst are subject to risk-based capital guidelines issued by the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation (“FDIC”). These guidelines are used to evaluate capital adequacy and involve both quantitative and qualitative evaluations of the Company’s and BancFirst’s assets, liabilities and certain off-balance-sheet items calculated under regulatory practices. Failure to meet the minimum capital requirements can initiate certain mandatory or discretionary actions by the regulatory agencies that could have a direct material effect on the Company’s financial statements. Management believes that as of June 30, 2018, the Company and BancFirst met all capital adequacy requirements to which they are subject. The actual and required capital amounts and ratios are shown in the following table:

				Required							To Be Well
				For Capital				With			Capitalized Under
				Adequacy				Capital Conservation			Prompt Corrective
	Actual			Purposes				Buffer			Action Provisions
	Amount		Ratio	Amount		Ratio		Amount		Ratio	Amount		Ratio
	(Dollars in thousands)
As of June 30, 2018:
Total Capital
(to Risk Weighted Assets)-
BancFirst Corporation	$	851,222	15.80%	$	430,907		8.00%	$	424,174	9.875%	N/A		N/A
BancFirst		731,628	13.75%		425,551		8.00%		525,290	9.875%	$	531,939		10.00%
Common Equity Tier 1 Capital
(to Risk Weighted Assets)-
BancFirst Corporation	$	768,022	14.26%	$	242,385		4.50%	$	343,379	6.375%	N/A		N/A
BancFirst		659,428	12.40%		239,373		4.50%		339,111	6.375%	$	345,760		6.50%
Tier 1 Capital
(to Risk Weighted Assets)-
BancFirst Corporation	$	799,022	14.83%	$	323,180		6.00%	$	531,901	7.875%	N/A		N/A
BancFirst		679,428	12.77%		319,163		6.00%		418,902	7.875%	$	425,551		8.00%
Tier 1 Capital
(to Total Assets)-
BancFirst Corporation	$	799,022	10.67%	$	299,443		4.00%	N/A		N/A	N/A		N/A
BancFirst		679,428	9.18%		295,894		4.00%	N/A		N/A	$	369,868		5.00%

As of June 30, 2018, the most recent notification from the Federal Reserve Bank of Kansas City and the FDIC categorized BancFirst as “well capitalized” under the regulatory framework from prompt corrective action. The Company’s trust preferred securities have continued to be included in Tier 1 capital as the Company’s total assets do not exceed $15 billion. There are no conditions or events since the most recent notifications of BancFirst’s capital category that management believes would materially change its category under capital requirements existing as of the report date.

Basel III Capital Rules

Under the Basel III Capital Rules, in order to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers, a banking organization must hold a capital conservation buffer composed of CET1 capital above its minimum risk-based capital requirements. The implementation of the capital conservation buffer began on January 1, 2016 at the 0.625% level and will be phased in over a four-year period (increasing by that amount on each subsequent January 1, until it reaches 2.5% on January 1, 2019). Management believes that, as of June 30, 2018, the Company and BancFirst would meet all capital adequacy requirements under the Basel III Capital Rules on a fully phased-in basis as if such requirements were currently in effect.

(8)	NET INCOME PER COMMON SHARE

Basic and diluted net income per common share based on weighted-average shares outstanding are calculated as follows:

	Income (Numerator)		Shares (Denominator)		Per Share Amount
	(Dollars in thousands, except per share data)
Three Months Ended June 30, 2018
Basic
Income available to common stockholders	$	30,586		32,716,350	$	0.93
Dilutive effect of stock options		—		742,207
Diluted
Income available to common stockholders plus assumed exercises of stock options	$	30,586		33,458,557	$	0.91
Three Months Ended June 30, 2017
Basic
Income available to common stockholders	$	23,182		31,807,610	$	0.73
Dilutive effect of stock options		—		715,766
Diluted
Income available to common stockholders plus assumed exercises of stock options	$	23,182		32,523,376	$	0.71
Six Months Ended June 30, 2018
Basic
Income available to common stockholders	$	60,206		32,645,693	$	1.84
Dilutive effect of stock options		—		744,269
Diluted
Income available to common stockholders plus assumed exercises of stock options	$	60,206		33,389,962	$	1.80
Six Months Ended June 30, 2017
Basic
Income available to common stockholders	$	45,232		31,768,828	$	1.43
Dilutive effect of stock options		—		731,162
Diluted
Income available to common stockholders plus assumed exercises of stock options	$	45,232		32,499,990	$	1.39

The following table shows the number of options that were excluded from the computation of diluted net income per common share for each period because the options’ exercise prices were greater than the average market price of the common shares:

	Shares
Three Months Ended June 30, 2018		85,802
Three Months Ended June 30, 2017		39,010
Six Months Ended June 30, 2018		117,696
Six Months Ended June 30, 2017		19,614

(9)	FAIR VALUE MEASUREMENTS

Accounting standards define fair value as the price that would be received to sell an asset or the price paid to transfer a liability in the principal or most advantageous market available to the entity in an orderly transaction between market participants on the measurement date.

FASB ASC Topic 820 establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

•

Level 1 Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

•

Level 2 Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset and liability, either directly or indirectly, for substantially the full term of the financial instrument.

•

Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category includes certain impaired loans, repossessed assets, other real estate owned, goodwill and other intangible assets.

Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis

A description of the valuation methodologies and key inputs used to measure financial assets and financial liabilities at fair value on a recurring basis, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to the following categories of the Company’s financial assets and financial liabilities.

Securities Available for Sale

Securities classified as available for sale are reported at fair value. U.S. Treasuries are valued using Level 1 inputs. Other securities available for sale including U.S. federal agencies, registered mortgage backed securities and state and political subdivisions are valued using prices from an independent pricing service utilizing Level 2 data. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. The Company also invests in private label mortgage backed securities for which observable information is not readily available. These securities are reported at fair value utilizing Level 3 inputs. For these securities, management determines the fair value based on replacement cost, the income approach or information provided by outside consultants or lead investors.

The Company reviews the prices for Level 1 and Level 2 securities supplied by the independent pricing service for reasonableness and to ensure such prices are aligned with traditional pricing matrices. In general, the Company does not purchase investment portfolio securities that are esoteric or that have complicated structures. The Company’s portfolio primarily consists of traditional investments including U.S. Treasury obligations, federal agency mortgage pass-through securities, general obligation municipal bonds and a small amount of municipal revenue bonds. Pricing for such instruments is fairly generic and is easily obtained. For in-state bond issues that have relatively low issue sizes and liquidity, the Company utilizes the same parameters for pricing mentioned in the preceding paragraph adjusted for the specific issue. Periodically, the Company will validate prices supplied by the independent pricing service by comparison to prices obtained from third party sources.

Equity Securities

The Company invests in equity securities without readily determinable fair values and utilizes Level 3 inputs. Beginning January 1, 2018, upon adoption of ASU 2016-01, these securities are reported at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The realized and unrealized gains and losses are reported as securities transactions in the noninterest income section of the consolidated statements of comprehensive income. For periods prior to January 1, 2018, equity securities were classified as available-for-sale and stated at fair value with unrealized gains and losses reported as a separate component of accumulated other comprehensive income (loss), net of tax.

Derivatives

Derivatives are reported at fair value utilizing Level 2 inputs. The Company obtains dealer and market quotations to value its oil and gas swaps and options. The Company utilizes dealer quotes and observable market data inputs to substantiate internal valuation models.

Loans Held For Sale

The Company originates mortgage loans to be sold. At the time of origination, the acquiring bank has already been determined and the terms of the loan, including interest rate, have already been set by the acquiring bank, allowing the Company to originate the loan at fair value. Mortgage loans are generally sold within 30 days of origination. Loans held for sale are valued using Level 2 inputs. Gains or losses recognized upon the sale of the loans are determined on a specific identification basis.

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of the periods presented, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(Dollars in thousands)
June 30, 2018
Securities available for sale:
U.S. Treasury	$	320,195	$	—	$	—	$	320,195
U.S. federal agencies		—		84,429		—		84,429
Mortgage-backed securities		—		2,963		13,443		16,406
States and political subdivisions		—		39,833		—		39,833
Equity securities		—		—		6,435		6,435
Derivative assets		—		372		—		372
Derivative liabilities		—		341		—		341
Loans held for sale		—		9,553		—		9,553

December 31, 2017
Securities available for sale:
U.S. Treasury	$	312,802	$	—	$	—	$	312,802
U.S. federal agencies		—		88,851		—		88,851
Mortgage-backed securities		—		3,509		14,467		17,976
States and political subdivisions		—		42,370		—		42,370
Equity securities		—		—		5,704		5,704
Derivative assets		—		295		—		295
Derivative liabilities		—		261		—		261
Loans held for sale		—		6,173		—		6,173

The changes in Level 3 assets measured at estimated fair value on a recurring basis during the periods presented were as follows:

	Six Months Ended June 30,			Twelve Months Ended December 31,
	2018			2017
	(Dollars in thousands)
Balance at the beginning of the year	$	20,171		$	21,385
Purchases		1,709			1,668
Settlements		(2,058	)		(722	)
Sales		(73	)		(5,412	)
Gains included in earnings		108			4,060
Total unrealized losses		21			(808	)
Balance at the end of the period	$	19,878		$	20,171

The Company’s policy is to recognize transfers in and transfers out of Levels 1, 2 and 3 as of the end of the reporting period. During the six months ended June 30, 2018 and 2017, the Company did not transfer any securities between levels in the fair value hierarchy.

Financial Assets and Financial Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). These financial assets and financial liabilities are reported at fair value utilizing Level 3 inputs.

Impaired loans are reported at the fair value of the underlying collateral if repayment is dependent on liquidation of the collateral. In no case does the fair value of an impaired loan exceed the fair value of the underlying collateral. The impaired loans are adjusted to fair value through a specific allocation of the allowance for loan losses or a direct charge-down of the loan.

Repossessed assets, upon initial recognition, are measured and adjusted to fair value through a charge-off to the allowance for possible loan losses based upon the fair value of the repossessed asset.

Other real estate owned is revalued at fair value subsequent to initial recognition, with any losses recognized in net expense from other real estate owned.

The following table summarizes assets measured at fair value on a nonrecurring basis. The fair value represents end of period values, which approximate fair value measurements that occurred on various measurement dates throughout the period:

	Total Fair Value
	Level 3
	(Dollars in thousands)
As of and for the Year-to-date Period Ended June 30, 2018
Impaired loans (less specific allowance)	$	43,448
Repossessed assets		221
Other real estate owned		1,355

As of and for the Year-to-date Period Ended December 31, 2017
Impaired loans (less specific allowance)	$	34,041
Repossessed assets		288
Other real estate owned		1,995

Estimated Fair Value of Financial Instruments

The Company is required under current authoritative accounting guidance to disclose the estimated fair value of their financial instruments that are not recorded at fair value. For the Company, as for most financial institutions, substantially all of its assets and liabilities are considered financial instruments. A financial instrument is defined as cash, evidence of an ownership interest in an entity or a contract that creates a contractual obligation or right to deliver or receive cash or another financial instrument from a second entity. The following methods and assumptions were used to estimate the fair value of each class of financial instruments:

Cash and Cash Equivalents Include: Cash and Due from Banks, Federal Funds Sold and Interest-Bearing Deposits

The carrying amount of these short-term instruments is a reasonable estimate of fair value.

Securities Held for Investment

For securities held for investment, which are generally traded in secondary markets, fair values are based on quoted market prices or dealer quotes, if available. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities making adjustments for credit or liquidity if applicable.

Loans

To determine the fair value of loans, the Company uses an exit price calculation, which takes into account factors such as liquidity, credit and the nonperformance risk of loans. For certain homogeneous categories of loans, such as some residential mortgages, fair values are estimated using the quoted market prices for securities backed by similar loans, adjusted for differences in loan characteristics. The fair values of other types of loans are estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

Deposits

The fair values of transaction and savings accounts are the amounts payable on demand at the reporting date. The fair values of fixed-maturity certificates of deposit are estimated using the rates currently offered for deposits of similar remaining maturities.

Short-term Borrowings

The amounts payable on these short-term instruments are reasonable estimates of fair value.

Junior Subordinated Debentures

The fair values of junior subordinated debentures are estimated using the rates that would be charged for junior subordinated debentures of similar remaining maturities.

Loan Commitments and Letters of Credit

The fair values of commitments are estimated using the fees currently charged to enter into similar agreements, taking into account the terms of the agreements. The fair values of letters of credit are based on fees currently charged for similar agreements.

The estimated fair values of the Company’s financial instruments that are reported at amortized cost in the Company’s consolidated balance sheets, segregated by the level of valuation inputs within the fair value hierarchy utilized to measure fair value, are as follows:

	June 30,				December 31,
	2018				2017
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(Dollars in thousands)
FINANCIAL ASSETS
Level 2 inputs:
Cash and cash equivalents	$	1,790,858	$	1,790,858	$	1,758,575	$	1,758,575
Securities held for investment		1,508		1,517		1,792		1,803
Level 3 inputs:
Securities held for investment		500		500		500		500
Loans, net of allowance for loan losses		4,955,318		4,926,113		4,670,329		4,663,608
FINANCIAL LIABILITIES
Level 2 inputs:
Deposits		6,692,174		6,792,664		6,415,045		6,490,309
Short-term borrowings		2,500		2,500		900		900
Junior subordinated debentures		31,959		35,604		31,959		34,661
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS
Loan commitments				1,992				1,839
Letters of credit				412				428

Non-financial Assets and Non-financial Liabilities Measured at Fair Value

The Company has no non-financial assets or non-financial liabilities measured at fair value on a recurring basis. Certain non-financial assets and non-financial liabilities measured at fair value on a nonrecurring basis include intangible assets (excluding mortgage service rights, which are valued periodically) and other non-financial long-lived assets measured at fair value and adjusted for impairment. These items are evaluated at least annually for impairment. The overall levels of non-financial assets and non-financial liabilities measured at fair value on a nonrecurring basis were not considered to be significant to the Company at June 30, 2018 or December 31, 2017.

(10)SEGMENT INFORMATION

The Company evaluates its performance with an internal profitability measurement system that measures the profitability of its business units on a pre-tax basis. The four principal business units are metropolitan banks, community banks, other financial services and executive, operations and support. Metropolitan and community banks offer traditional banking products such as commercial and retail lending and a full line of deposit accounts. Metropolitan banks consist of banking locations in the metropolitan Oklahoma City and Tulsa areas. Community banks consist of banking locations in communities throughout Oklahoma. Other financial services are specialty product business units including guaranteed small business lending, residential mortgage lending, trust services, securities brokerage, electronic banking and insurance. The executive, operations and support groups represent executive management, operational support and corporate functions that are not allocated to the other business units.

The results of operations and selected financial information for the four business units are as follows:

	Metropolitan Banks		Community Banks		Other Financial Services		Executive, Operations & Support			Eliminations			Consolidated
	(Dollars in thousands)
Three Months Ended June 30, 2018
Net interest income (expense)	$	21,084	$	42,068	$	1,358	$	370		$	—		$	64,880
Noninterest income		4,184		14,832		8,896		33,609			(31,084	)		30,437
Income before taxes		14,883		27,942		4,028		23,622			(30,639	)		39,836

Three Months Ended June 30, 2017
Net interest income (expense)	$	17,832	$	37,047	$	1,698	$	(138	)	$	—		$	56,439
Noninterest income		3,945		13,660		7,456		25,644			(22,722	)		27,983
Income before taxes		11,784		24,509		3,119		16,720			(22,504	)		33,628

Six Months Ended June 30, 2018
Net interest income (expense)	$	41,388	$	83,450	$	2,833	$	244		$	—		$	127,915
Noninterest income		8,125		28,785		18,520		65,803			(60,686	)		60,547
Income before taxes		29,619		54,290		9,071		43,537			(59,740	)		76,777

Six Months Ended June 30, 2017
Net interest income (expense)	$	36,352	$	72,170	$	3,193	$	(508	)	$	—		$	111,207
Noninterest income		7,767		26,937		15,766		50,116			(44,518	)		56,068
Income before taxes		24,858		47,228		6,764		32,231			(44,260	)		66,821

Total Assets:
June 30, 2018	$	2,741,192	$	4,894,018	$	79,503	$	843,347		$	(935,097	)	$	7,622,963
December 31, 2017		2,552,024		4,544,196		117,332		885,590			(845,986	)		7,253,156

The financial information for each business unit is presented on the basis used internally by management to evaluate performance and allocate resources. The Company utilizes a transfer pricing system to allocate the benefit or cost of funds provided or used by the various business units. Certain services provided by the support group to other business units, such as item processing, are allocated at rates approximating the cost of providing the services. Eliminations are adjustments to consolidate the business units and companies. Capital expenditures are generally charged to the business unit using the asset.

(11) SUBSEQUENT EVENT

The Company entered into a non-binding contract to purchase the Cotter Ranch Tower in Oklahoma City for its corporate headquarters. The contract price is $21.0 million subject to final bankruptcy court approval, which is expected to be announced on or around August 15, 2018.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis presents factors that the Company believes are relevant to an assessment and understanding of the Company’s consolidated financial position and results of operations. This discussion and analysis should be read in conjunction with the Company’s December 31, 2017 consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 and the Company’s consolidated financial statements and the related Notes included in Item 1.

FORWARD LOOKING STATEMENTS

The Company may make forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 with respect to earnings, credit quality, corporate objectives, interest rates and other financial and business matters. Forward-looking statements include estimates and give management’s current expectations or forecasts of future events. The Company cautions readers that these forward-looking statements are subject to numerous assumptions, risks and uncertainties, including economic conditions; the performance of financial markets and interest rates; legislative and regulatory actions and reforms; competition; as well as other factors, all of which change over time. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statements of plans, objectives and expectations, including those relating to products or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Words such as “believes”, “anticipates”, “expects”, “intends”, “targeted”, “continue”, “remain”, “will”, “should”, “may” and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

•

Local, regional, national and international economic conditions and the impact they may have on the Company and its customers and the Company’s assessment of that impact.

•

Changes in the mix of loan geographies, sectors and types or the level of non-performing assets and charge-offs.

•

Inflation, interest rate, crude oil price, securities market and monetary fluctuations.

•

The effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which the Company must comply.

•

Impairment of the Company’s goodwill or other intangible assets.

•

Changes in consumer spending, borrowing and savings habits.

•

Changes in the financial performance and/or condition of the Company’s borrowers.

•

Technological changes.

•

Acquisitions and integration of acquired businesses.

•

The effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters.

•

The Company’s success at managing the risks involved in the foregoing items.

Actual results may differ materially from forward-looking statements.

SUMMARY

BancFirst Corporation’s net income for the second quarter of 2018 was $30.6 million, compared to $23.2 million for the second quarter of 2017. Diluted net income per common share was $0.91 and $0.71 for the second quarter of 2018 and 2017, respectively.

Net income was $60.2 million, or $1.80 diluted earnings per share, for the six months ended June 30, 2018, compared to net income of $45.2 million, or $1.39 diluted earnings per share, for the six months ended June, 30, 2017. On January 11, 2018 the Company completed the acquisitions of two Oklahoma banking corporations. Consequently the six months ended June 30, 2018 included one-time acquisition related expenses of approximately $2.1 million, which reduced diluted earnings per share by approximately 5 cents in the first quarter. Net income for the six months ended June 30, 2017 included the effects of favorable resolutions of two problem loans which resulted in principal recovery of $894,000 and unaccrued interest income of $2.3 million.

The Company’s net interest income for the second quarter of 2018 increased to $64.9 million, compared to $56.4 million for the second quarter of 2017. The net interest margin for the quarter was 3.70%, compared to 3.43% a year ago. The increase in margin was primarily due to the increase in the federal funds rate throughout 2017 and 2018 and the two acquisitions in the first quarter of 2018. The Company’s provision for loan losses for the second quarter of 2018 was $1.2 million, compared to $1.8 million a year ago. Net charge-offs for the quarter were only 0.01% of average loans, compared to 0.02% for the second quarter of 2017. Noninterest income for the quarter totaled $30.4 million, compared to $28.0 million last year. Noninterest expense for the quarter totaled $54.3 million, compared to $49.0 million last year. The increase in noninterest expenses was due to salary increases in 2018 and the two acquisitions. The Company’s effective tax rate was 23.2% compared to 31.1% for the second quarter of 2017. The decrease in the effective tax rate compared to the second quarter of 2017 was due to the change in tax rates from the Tax Cuts and Jobs Act and exercising of stock options during the quarter.

At June 30, 2018, the Company’s total assets were $7.6 billion, an increase of $369.8 million from December 31, 2017. The increase in total assets was primarily related to the acquisitions during the first quarter. Securities of $462.9 million were down slightly from December 31, 2017, primarily due to Accounting Standards Update No. 2016-01, which revised securities to exclude equity investments in 2018. Loans totaled $5.0 billion, a modest increase from March 31, 2018. Loan growth for the 6 months ended June 30, 2018 was primarily from acquired loans. Deposits totaled $6.7 billion, an increase of $277.1 million from the December 31, 2017 total, which was primarily related to the acquisitions. The Company’s total stockholders’ equity was $862.0 million, an increase of $86.4 million over December 31, 2017.

Asset quality remained strong during the second quarter of 2018. Nonperforming and restructured assets were 0.67% of total assets at June 30, 2018 compared to 0.61% at December 31, 2017. The allowance to total loans was 1.04%, compared to 1.09% at year-end 2017. The allowance to nonperforming and restructured loans was 109.7% compared to 130.6% at year-end 2017.

On January 11, 2018, the Company completed the previously announced acquisitions of two Oklahoma banking corporations. First Wagoner Corporation and its subsidiary bank, First Bank & Trust Company, and First Chandler Corp. and its subsidiary bank, First Bank of Chandler, had combined total assets of approximately $378 million. The Company exchanged a combination of cash and stock for these transactions.

FUTURE APPLICATION OF ACCOUNTING STANDARDS

See Note (1) of the Notes to Consolidated Financial Statements for a discussion of recently issued accounting pronouncements.

SEGMENT INFORMATION

See Note (10) of the Notes to Consolidated Financial Statements for disclosures regarding business segments.

RESULTS OF OPERATIONS

Selected income statement data and other selected data for the comparable periods were as follows:

BANCFIRST CORPORATION

SELECTED CONSOLIDATED FINANCIAL DATA

(Unaudited)

(Dollars in thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Income Statement Data
Net interest income	$	64,880		$	56,439		$	127,915		$	111,207
Provision for loan losses		1,225			1,841			1,539			1,913
Securities transactions		115			(330	)		101			(330	)
Total noninterest income		30,437			27,983			60,547			56,068
Salaries and employee benefits		34,776			31,547			68,966			62,201
Total noninterest expense		54,256			48,953			110,146			98,541
Net income		30,586			23,182			60,206			45,232
Per Common Share Data
Net income – basic	$	0.93		$	0.73		$	1.84		$	1.43
Net income – diluted		0.91			0.71			1.80			1.39
Cash dividends		0.21			0.19			0.42			0.38
Performance Data
Return on average assets		1.62	%		1.31	%		1.61	%		1.29	%
Return on average stockholders’ equity		14.41			12.52			14.50			12.44
Cash dividend payout ratio		22.58			26.03			22.83			26.67
Net interest spread		3.28			3.21			3.31			3.20
Net interest margin		3.70			3.43			3.68			3.41
Efficiency ratio		56.92			57.99			58.44			58.91
Net charge-offs to average loans		0.01			0.02			0.02			0.04

Net Interest Income

For the three months ended June 30, 2018, net interest income, which is the Company’s principal source of operating revenue, increased 15.0% compared to the three months ended June 30, 2017. Net interest margin, which is shown in the preceding table, is the ratio of taxable-equivalent net interest income to average earning assets for the period. The increase in the margin was primarily due to the increase in the federal funds rate throughout 2017 and 2018 and the two acquisitions in the first quarter of 2018.

Net interest income for the six months ended June 30, 2018 increased 15.0% compared to the six months ended June 30, 2017. The net interest margin for the year-to-date increased compared to the same period of the previous year, as shown in the preceding table. The increase in the margin was primarily due to the increase in the federal funds rate throughout 2017 and 2018 and the two acquisitions in the first quarter of 2018.

Provision for Loan Losses

The Company’s provision for loan loss for the second quarter of 2018 was $1.2 million compared to $1.8 million a year ago. The Company establishes an allowance as an estimate of the probable inherent losses in the loan portfolio at the balance sheet date. Management believes the allowance for loan losses is appropriate based upon management’s best estimate of probable losses that have been incurred within the existing loan portfolio. Should any of the factors considered by management in evaluating the appropriate level of the allowance for loan losses change, the Company’s estimate of probable loan losses could also change, which could affect the amount of future provisions for loan losses. Net loan charge-offs were $575,000 for the second quarter of 2018, compared to $757,000 for the second quarter of 2017. The rate of net charge-offs to average total loans, as presented in the preceding table, continues to be at a very low level.

For the six months ended June 30, 2018, the Company’s provision for loan losses was $1.5 million compared to $1.9 million for the six months ended June 30, 2017. Net loan charge-offs were $1.0 million, compared to $1.6 million for the same period of the prior year.

Noninterest Income

Noninterest income totaled $30.4 million for the second quarter of 2018 compared to $28.0 million for the second quarter of 2017. Noninterest income included increases in trust revenue, insurance commissions, debit card usage fees and non-sufficient funds fees. The Company had fees from debit card usage totaling $7.4 million and $6.6 million during the three month periods ended June 30, 2018 and 2017, respectively. This represents 24.3% and 23.7% of the Company’s noninterest income for the three month periods ended June 30, 2018 and 2017, respectively. In addition, the Company has non-sufficient funds fees totaling $7.5 million and $7.0 million for the three month periods ended June 30, 2018 and 2017, respectively. This represents 24.8% and 25.1% of the Company’s noninterest income for the three month periods ended June 30, 2018 and 2017, respectively.

Noninterest income for the six months ended June 30, 2018 totaled $60.5 million compared to $56.1 million for the six months ended June 30, 2017. Noninterest income included increases in trust revenue, insurance commissions, debit card usage fees and non-sufficient funds fees. Fees from debit card usage totaled $14.2 million and $12.9 million during the six months ended June 30, 2018 and 2017, respectively. This represents 23.5% and 22.9% of the Company’s noninterest income for the six month periods ended June 30, 2018 and 2017, respectively. In addition, the Company had non-sufficient fund fees totaling $14.8 million and $13.9 million during the six months ended June 30, 2018 and 2017, respectively. This represents 24.4% and 24.8% of the Company’s noninterest income for the six month periods ended June 30, 2018 and 2017, respectively.

Noninterest Expense

For the three months ended June 30, 2018, noninterest expense totaled $54.3 million, compared to $49.0 million for the three months ended June 30, 2017. The increase in noninterest expense for the second quarter of 2018 was due to salary increases in 2018 and the two acquisitions.

For the six months ended June 30, 2018, noninterest expense totaled $110.1 million compared to $98.5 million for the six months ended June 30, 2017. The increase in noninterest expense for year-to-date 2018 was primarily due to salary increases in 2018 and the two acquisitions which included one-time acquisition related expenses of approximately $2.1 million.

Income Taxes

The Company’s effective tax rate on income before taxes was 23.2% for the second quarter of 2018, compared to 31.1% for the second quarter of 2017. The decrease in the effective tax rate was due to the change in tax rates from the Tax Cuts and Jobs Act and exercising of stock options during the period.

The Company’s effective tax rate on income before taxes was 21.6% for the first six months of 2018, compared to 32.3% for the first six months of 2017. The decrease in the effective tax rate was due to the change in tax rates from the Tax Cuts and Jobs Act and exercising of stock options during the period.

FINANCIAL POSITION

BANCFIRST CORPORATION

SELECTED CONSOLIDATED FINANCIAL DATA

(Dollars in thousands, except per share data)

	June 30,			December 31,
	2018			2017
	(unaudited)
Balance Sheet Data
Total assets	$	7,622,963		$	7,253,156
Total loans (net of unearned interest)		5,017,071			4,728,168
Allowance for loan losses		52,200			51,666
Securities		462,871			469,995
Deposits		6,692,174			6,415,045
Stockholders' equity		862,012			775,629
Book value per share		26.34			24.32
Tangible book value per share (non-GAAP)(1)		23.35			22.28
Average loans to deposits (year-to-date)		74.89	%		72.22	%
Average earning assets to total assets (year-to-date)		93.12			93.41
Average stockholders’ equity to average assets (year-to-date)		11.09			10.56
Asset Quality Ratios
Nonperforming and restructured loans to total loans		0.95	%		0.84	%
Nonperforming and restructured assets to total assets		0.67			0.61
Allowance for loan losses to total loans		1.04			1.09
Allowance for loan losses to nonperforming and restructured loans		109.68			130.62
Reconciliation of Tangible Book Value per Common Share (non-GAAP)(2)
Stockholders' equity	$	862,012		$	775,629
Less goodwill		79,733			54,042
Less intangible assets, net		18,012			11,082
Tangible stockholders' equity (non-GAAP)	$	764,267		$	710,505
Common shares outstanding		32,731,215			31,894,563
Tangible book value per share (non-GAAP)	$	23.35		$	22.28

(1)

Refer to the “Reconciliation of Tangible Book Value per Common Share (non-GAAP)” Table

(2)

Tangible book value per common share is stockholders’ equity less goodwill and intangible assets, net, divided by common shares outstanding. This amount is a non-GAAP financial measure but has been included as it is considered to be a critical metric with which to analyze and evaluate the financial condition and capital strength of the Company. This measure should not be considered a substitute for operating results determined in accordance with GAAP.

Cash, Federal Funds Sold and Interest-Bearing Deposits with Banks

The aggregate of cash and due from banks, interest-bearing deposits with banks and federal funds sold increased slightly by $32.3 million or 1.8% to $1.8 billion, from December 31, 2017 to June 30, 2018.

Securities

At June 30, 2018, total securities decreased $7.1 million, or 1.5% compared to December 31, 2017, primarily due to Accounting Standards Update No. 2016-01 which revised securities to exclude equity investments in 2018. The size of the Company’s securities portfolio is determined by the Company’s liquidity and asset/liability management. The net unrealized loss on securities available for sale, before taxes, was $4.9 million at June 30, 2018, compared to $3.1 million at December 31, 2017. These unrealized losses are included in the Company’s stockholders’ equity as accumulated other comprehensive income, net of income tax, in the amounts of $3.6 and $2.3 million, respectively.

Loans (Including Acquired Loans)

At June 30, 2018, loans totaled $5.0 billion, an increase of $288.9 million from December 31, 2017. Loan growth for the six months ended June 30, 2018 was primarily from acquired loans.

Allowance for Loan Losses/Fair Value Adjustments on Acquired Loans

At June 30, 2018, the allowance for loan losses to total loans represented 1.04% of total loans, compared to 1.09% at December 31, 2017.

The fair value adjustment on acquired loans consists of an interest rate component to adjust the effective rates on the loans to market rates and a credit component to adjust for estimated credit exposures in the acquired loans. The interest rate component was $2.2 million at June 30, 2018 and zero at December 31, 2017. The credit component of the adjustment was $8.8 million at June 30, 2018 and $1.2 million at December 31, 2017 while the acquired loans outstanding were $371.2 million and $120.0 million, respectively.

Nonperforming and Restructured Assets

Nonperforming and restructured assets totaled $51.4 million at June 30, 2018, compared to $44.0 million at December 31, 2017. The Company’s level of nonperforming and restructured assets has continued to be relatively low.

Nonaccrual loans totaled $30.1 million at June 30, 2018, compared to $31.9 million at the end of 2017. The Company’s nonaccrual loans are primarily commercial and real estate loans. Nonaccrual loans negatively impact the Company’s net interest margin. A loan is placed on nonaccrual status when, in the opinion of management, the future collectability of interest or principal or both is in serious doubt. Interest income is recognized on certain of these loans on a cash basis if the full collection of the remaining principal balance is reasonably expected. Otherwise, interest income is not recognized until the principal balance is fully collected. Had nonaccrual loans performed in accordance with their original contractual terms, the Company would have recognized additional interest income of approximately $1.1 million for the six months ended June 30, 2018 and $886,000 for the six months ended June 30, 2017. Only a small amount of this interest is expected to be ultimately collected.

Restructured loans totaled $14.5 million at June 30, 2018, compared to $4.7 million at the end of 2017. The increase in restructured loans was due primarily to a few commercial loans identified as troubled debt restructurings during the period and the restructured loans from the two acquisitions. The Company charges interest on principal balances outstanding during deferral periods. As a result, the current and future financial effects of the recorded balance of loans considered to be troubled debt restructurings whose terms were modified during the period were not considered to be material.

Other real estate owned and repossessed assets totaled $3.8 million at June 30, 2018, compared to $4.4 million at December 31, 2017.

Potential problem loans are performing loans to borrowers with a weakened financial condition, or which are experiencing unfavorable trends in their financial condition, which causes management to have concerns as to the ability of such borrowers to comply with the existing repayment terms. The Company had approximately $7.2 million of these loans at June 30, 2018, compared to $7.7 million at December 31, 2017. Potential problem loans are not included in nonperforming and restructured loans. In general, these loans are adequately collateralized and have no specific identifiable probable loss. Loans which are considered to have identifiable probable loss potential are placed on nonaccrual status, are allocated a specific allowance for loss or are directly charged-down, and are reported as nonperforming.

Liquidity and Funding

Deposits

At June 30, 2018, deposits totaled $6.7 billion, an increase of $277.1 million from the December 31, 2017 total, which was primarily related to the acquisitions during the first quarter of 2018. The Company’s core deposits provide it with a stable, low-cost funding source. The Company’s core deposits as a percentage of total deposits were 98.0% at June 30, 2018 compared to 98.1% at December 31, 2017. Noninterest-bearing deposits to total deposits were 39.8% at both June 30, 2018 and December 31, 2017.

Short-Term Borrowings

Short-term borrowings, consisting primarily of federal funds purchased and repurchase agreements are another source of funds for the Company. The level of these borrowings is determined by various factors, including customer demand and the Company’s ability to earn a favorable spread on the funds obtained. Short-term borrowings were $2.5 million at June 30, 2018, compared to $900,000 at December 31, 2017.

Long-Term Borrowings

The Company has a line of credit from the Federal Home Loan Bank (“FHLB”) of Topeka, Kansas to use for liquidity or to match-fund certain long-term fixed-rate loans. The Company’s assets, including residential first mortgages of $764.8 million, are

pledged as collateral for the borrowings under the line of credit. As of June 30, 2018 and December 31, 2017, the Company had no advances outstanding under the line of credit from FHLB. In addition, the Company has a revolving line of credit with another financial institution with the ability to draw up to $10.0 million with no advances outstanding. This line of credit has a variable rate based on prime rate minus 25 basis points and matures in 2020.

There have not been any other material changes from the liquidity and funding discussion included in Management’s Discussion and Analysis in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

Capital Resources

Stockholders’ equity totaled $862.0 million at June 30, 2018, compared to $775.6 million at December 31, 2017. In addition to net income of $60.2 million, other changes in stockholders’ equity during the three months ended June 30, 2018 included $41.2 million related to common stock issuances and $628,000 related to stock-based compensation, that were partially offset by $13.7 million in dividends and a $1.9 million decrease in other comprehensive income. The Company’s leverage ratio and total risk-based capital ratios at June 30, 2018, were well in excess of the regulatory requirements.

See Note (7) of the Notes to Consolidated Financial Statements for a discussion of capital ratio requirements.

CONTRACTUAL OBLIGATIONS

There have not been any material changes in the resources required for scheduled repayments of contractual obligations from the table of Contractual Cash Obligations included in Management’s Discussion and Analysis which was included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

BANCFIRST CORPORATION

CONSOLIDATED AVERAGE BALANCE SHEETS AND INTEREST MARGIN ANALYSIS

(Unaudited)

Taxable Equivalent Basis (Dollars in thousands)

	Three Months Ended June 30,
	2018								2017
				Interest		Average						Interest		Average
	Average			Income/		Yield/			Average			Income/		Yield/
	Balance			Expense		Rate			Balance			Expense		Rate
ASSETS
Earning assets:
Loans (1)	$	4,959,604		$	65,750		5.32	%	$	4,504,890		$	54,980		4.90	%
Securities – taxable		440,420			1,956		1.78			426,396			1,906		1.79
Securities – tax exempt		28,060			206		2.94			32,135			275		3.44
Federal funds sold and interest-bearing deposits with banks		1,633,030			7,420		1.82			1,676,871			4,426		1.06
Total earning assets		7,061,114			75,332		4.28			6,640,292			61,587		3.72
Nonearning assets:
Cash and due from banks		185,547								175,372
Interest receivable and other assets		389,845								338,798
Allowance for loan losses		(51,802	)							(48,285	)
Total nonearning assets		523,590								465,885
Total assets	$	7,584,704							$	7,106,177
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing liabilities:
Transaction deposits	$	820,681		$	602		0.29	%	$	793,265		$	213		0.11	%
Savings deposits		2,502,282			7,189		1.15			2,272,227			2,778		0.49
Time deposits		754,710			1,919		1.02			681,797			1,309		0.77
Short-term borrowings		2,030			8		1.55			1,582			4		0.91
Junior subordinated debentures		31,959			544		6.83			31,959			530		6.65
Total interest-bearing liabilities		4,111,662			10,262		1.00			3,780,830			4,834		0.51
Interest-free funds:
Noninterest-bearing deposits		2,590,698								2,556,003
Interest payable and other liabilities		29,752								26,383
Stockholders’ equity		851,592								742,961
Total interest free funds		3,472,042								3,325,347
Total liabilities and stockholders’ equity	$	7,583,704							$	7,106,177
Net interest income				$	65,070							$	56,753
Net interest spread							3.28	%							3.21	%
Effect of interest free funds							0.42	%							0.22	%
Net interest margin							3.70	%							3.43	%

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

BANCFIRST CORPORATION

CONSOLIDATED AVERAGE BALANCE SHEETS AND INTEREST MARGIN ANALYSIS

(Unaudited)

Taxable Equivalent Basis (Dollars in thousands)

	Six Months Ended June 30,
	2018								2017
				Interest		Average						Interest		Average
	Average			Income/		Yield/			Average			Income/		Yield/
	Balance			Expense		Rate			Balance			Expense		Rate
ASSETS
Earning assets:
Loans (1)	$	4,976,658		$	128,805		5.22	%	$	4,453,087		$	108,813		4.93	%
Securities – taxable		439,638			3,854		1.77			430,772			3,667		1.72
Securities – tax exempt		28,748			422		2.96			32,710			562		3.46
Federal funds sold and interest-bearing deposits with banks		1,585,267			13,306		1.69			1,700,677			7,866		0.93
Total earning assets		7,030,311			146,387		4.20			6,617,246			120,908		3.68
Nonearning assets:
Cash and due from banks		185,045								174,356
Interest receivable and other assets		386,210								337,963
Allowance for loan losses		(52,138	)							(48,368	)
Total nonearning assets		519,117								463,951
Total assets	$	7,549,428							$	7,081,197
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing liabilities:
Transaction deposits	$	815,284		$	996		0.25	%	$	794,497		$	424		0.11	%
Savings deposits		2,476,998			12,295		1.00			2,268,095			5,075		0.45
Time deposits		766,197			3,688		0.97			683,675			2,526		0.75
Short-term borrowings		4,996			43		1.74			1,725			7		0.87
Junior subordinated debentures		31,959			1,079		6.81			31,959			1,057		6.67
Total interest-bearing liabilities		4,095,434			18,101		0.89			3,779,951			9,089		0.48
Interest-free funds:
Noninterest-bearing deposits		2,586,470								2,543,015
Interest payable and other liabilities		30,215								25,137
Stockholders’ equity		837,309								733,094
Total interest free funds		3,453,994								3,301,246
Total liabilities and stockholders’ equity	$	7,549,428							$	7,081,197
Net interest income				$	128,286							$	111,819
Net interest spread							3.31	%							3.20	%
Effect of interest free funds							0.37	%							0.21	%
Net interest margin							3.68	%							3.41	%

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no significant changes in the Registrant’s disclosures regarding market risk since December 31, 2017, the date of its most recent annual report to stockholders.

Item 4. Controls and Procedures.

The Company’s Chief Executive Officer, Chief Financial Officer and its Disclosure Committee, which includes the Company’s Executive Chairman, Chief Risk Officer, Chief Internal Auditor, Chief Asset Quality Officer, Controller, General Counsel and Vice President of Corporate Finance, have evaluated, as of the last day of the period covered by this report, the Company’s disclosure controls and procedures. Based on their evaluation they concluded that the disclosure controls and procedures of the Company are effective to ensure that information required to be disclosed by the Company in the reports filed or submitted by it under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms.

No changes were made to the Company’s internal control over financial reporting during the period covered by this report that materially affected, or are likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

The Company has been named as a defendant in various legal actions arising from the conduct of its normal business activities. Although the amount of any liability that could arise with respect to these actions cannot be accurately predicted, in the opinion of the Company, any such liability will not have a material adverse effect on the consolidated financial statements of the Company.

Item 1A. Risk Factors.

As of June 30, 2018, there have been no material changes from the risk factors previously disclosed in Part I, Item 1A, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit Number		Exhibit
3.1		Second Amended and Restated Certificate of Incorporation of BancFirst Corporation (filed as Exhibit 1 to the Company’s 8-A/A filed July 24, 1998 and incorporated herein by reference).

3.2		Certificate of Amendment of the Second Amended and Restated Certificate of Incorporation of BancFirst Corporation dated June 15, 2004 (filed as Exhibit 3.5 to the Company’s Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2004 and incorporated herein by reference).

3.3		Amended and Restated By-Laws of BancFirst Corporation (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K dated March 30, 2015 and incorporated herein by reference).

3.4		Certificate of Amendment of the Second Amended and Restated Certificate of Incorporation of BancFirst Corporation dated May 23, 2013 (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K dated May 29, 2013 and incorporated herein by reference).

3.5		Certificate of Amendment of the Third Amended and Restated Certificate of Incorporation of BancFirst Corporation dated May 31, 2017 (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K dated May 31, 2017 and incorporated herein by reference).

4.1		Instruments defining the rights of securities holders (see Exhibits 3.1, 3.2, 3.3 and 3.4 above).

4.2		Form of Amended and Restated Trust Agreement relating to the 7.20% Cumulative Trust Preferred Securities of BFC Capital Trust II (filed as Exhibit 4.5 to the Company’s registration statement on Form S-3/A, File No. 333-112488 dated February 23, 2004, and incorporated herein by reference).

4.3		Form of 7.20% Cumulative Trust Preferred Security Certificate for BFC Capital Trust II (filed as Exhibit D to Exhibit 4.5 to the Company’s registration statement on Form S-3/A, File No. 333-112488 dated February 23, 2004, and incorporated herein by reference).

4.4		Form of Indenture relating to the 7.20% Junior Subordinated Deferrable Interest Debentures of BancFirst Corporation issued to BFC Capital Trust II (filed as Exhibit 4.1 to the Company’s registration statement on Form S-3, File No. 333-112488 dated February 4, 2004, and incorporated herein by reference).

4.5		Form of Certificate of 7.20% Junior Subordinated Deferrable Interest Debenture of BancFirst Corporation (filed as Exhibit 4.2 to the Company’s registration statement on Form S-3, File No. 333-112488 dated February 4, 2004, and incorporated herein by reference).

4.6		Form of Guarantee of BancFirst Corporation relating to the 7.20% Cumulative Trust Preferred Securities of BFC Capital Trust II (filed as Exhibit 4.7 to the Company’s registration statement on Form S-3/A, File No. 333-112488 dated February 23, 2004, and incorporated herein by reference).

4.7		Form of Guarantee Agreement by and between CSB Bancshares, Inc. and Wilmington Trust Company (filed as Exhibit 4.7 to the Company’s Quarterly Report on Form 10-Q for the Quarter ended September 30, 2015 and incorporated herein by reference).

4.8		Form of Indenture relating to the Floating Rate Junior Subordinated Deferrable Interest Debentures of CSB Bancshares, Inc., issued to Wilmington Trust Company (filed as Exhibit 4.8 to the Company’s Quarterly Report on Form 10-Q for the Quarter ended September 30, 2015 and incorporated herein by reference).

4.9		Form of First Supplemental Indenture relating to the Floating Rate Junior Subordinated Deferrable Interest Debentures by and between Wilmington Trust Company and BancFirst Corporation (filed as Exhibit 4.9 to the Company’s Quarterly Report on Form 10-Q for the Quarter ended September 30, 2015 and incorporated herein by reference).

10.1		BancFirst Corporation Employee Stock Ownership and Trust Agreement adopted effective January 1, 2015 (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2015 and incorporated herein by reference).
10.2		Amendment Number One to the BancFirst Corporation Employee Stock Ownership Plan (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 26, 2018 and incorporated herein by reference).

10.3		Fifth Amended and Restated BancFirst Corporation Directors’ Stock Option Plan (filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2016 and incorporated herein by reference).

Exhibit Number		Exhibit
10.4		Fifth Amended and Restated BancFirst Corporation Directors’ Deferred Stock Compensation Plan (filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2016 and incorporated herein by reference).

10.5		Fourteenth Amended and Restated BancFirst Corporation Stock Option Plan (filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2016 and incorporated herein by reference).
10.6		Adoption Agreement for the BancFirst Corporation Thrift Plan adopted April 21, 2016 effective January 1, 2016. (filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2016 and incorporated herein by reference).
10.7		Amendment Number One to the BancFirst Corporation Thrift Plan. (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K dated February 26, 2018 and incorporated herein by reference).
31.1*		Chief Executive Officer’s Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a).

31.2*		Chief Financial Officer’s Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a).

32*		CEO’s & CFO’s Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*		XBRL Instance Document

101.SCH*		XBRL Taxonomy Extension Schema

101.CAL*		XBRL Taxonomy Extension Calculation Linkbase

101.DEF*		XBRL Taxonomy Extension Definition Linkbase

101.LAB*		XBRL Taxonomy Extension Label Linkbase

101.PRE*		XBRL Taxonomy Extension Presentation Linkbase

*	Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		BANCFIRST CORPORATION
		(Registrant)

Date: August 9, 2018		/s/ David Harlow
		David Harlow
		President
		Chief Executive Officer
		(Principal Executive Officer)

Date: August 9, 2018		/s/ Kevin Lawrence
		Kevin Lawrence
		Executive Vice President
		Chief Financial Officer
		(Principal Financial Officer)