Edgar Filing: BANCFIRST CORP /OK/

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company

Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2012

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

For the transition period from to

Commission File Number 0-14384

BancFirst Corporation

(Exact name of registrant as specified in charter)


Oklahoma				73-1221379
(State or other Jurisdiction of incorporation or organization)				(I.R.S. Employer Identification No.)

101 N. Broadway, Oklahoma City, Oklahoma				73102-8405
(Address of principal executive offices)				(Zip Code)

(405) 270-1086

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨.

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

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.

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

As of July 31, 2012 there were 15,161,446 shares of the registrant’s Common Stock outstanding.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

BANCFIRST CORPORATION

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share data)


	June 30, 2012			December 31, 2011			June 30, 2011
	(unaudited)			(see Note 1)			(unaudited)
ASSETS
Cash and due from banks	$	146,387		$	163,698		$	153,997
Interest-bearing deposits with banks		1,617,521			1,544,035			1,417,102
Federal funds sold		—			400			100
Securities (market value: $575,404, $615,458, and $580,630,respectively)		575,034			614,977			580,059
Loans:
Total loans (net of unearned interest)		3,065,439			3,013,498			2,861,844
Allowance for loan losses		(37,436	)		(37,656	)		(37,092	)

Loans, net		3,028,003			2,975,842			2,824,752
Premises and equipment, net		113,836			111,355			102,801
Other real estate owned		10,088			16,109			14,991
Intangible assets, net		13,158			14,219			10,857
Goodwill		44,545			44,545			44,593
Accrued interest receivable		17,532			18,662			19,863
Other assets		105,607			104,983			98,330

Total assets	$	5,671,711		$	5,608,825		$	5,267,445

LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Noninterest-bearing	$	1,842,680		$	1,704,996		$	1,509,433
Interest-bearing		3,256,968			3,332,739			3,192,566

Total deposits		5,099,648			5,037,735			4,701,999
Short-term borrowings		6,340			8,274			1,400
Accrued interest payable		2,260			2,710			3,107
Long-term borrowings		11,329			18,476			32,121
Other liabilities		25,769			22,506			29,555
Junior subordinated debentures		26,804			36,083			28,866

Total liabilities		5,172,150			5,125,784			4,797,048

Commitments and contingent liabilities
Stockholders’ equity:
Senior preferred stock, $1.00 par; 10,000,000 shares authorized; none issued		—			—			—
Cumulative preferred stock, $5.00 par; 900,000 shares authorized; none issued		—			—			—
Common stock, $1.00 par, 20,000,000 shares authorized; shares issued and outstanding: 15,153,991, 15,117,430 and 15,273,181, respectively		15,154			15,118			15,273
Capital surplus		79,181			77,462			74,229
Retained earnings		398,267			381,017			371,150
Accumulated other comprehensive income, net of income tax of $3,746, $5,084 and $5,217, respectively		6,959			9,444			9,745

Total stockholders’ equity		499,561			483,041			470,397

Total liabilities and stockholders’ equity	$	5,671,711		$	5,608,825		$	5,267,445

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 June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
INTEREST INCOME
Loans, including fees	$	41,857		$	40,256		$	83,817		$	79,513
Securities:
Taxable		2,087			3,011			4,494			6,637
Tax-exempt		411			602			835			1,232
Federal funds sold		—			20			1			41
Interest-bearing deposits with banks		1,061			886			2,034			1,661

Total interest income		45,416			44,775			91,181			89,084

INTEREST EXPENSE
Deposits		3,883			5,986			8,132			12,231
Short-term borrowings		8			3			16			7
Long-term borrowings		91			255			196			501
Junior subordinated debentures		565			525			1,151			1,050

Total interest expense		4,547			6,769			9,495			13,789

Net interest income		40,869			38,006			81,686			75,295
Provision for loan losses		248			2,013			421			2,801

Net interest income after provision for loan losses		40,621			35,993			81,265			72,494

NONINTEREST INCOME
Trust revenue		1,823			1,631			3,530			3,218
Service charges on deposits		11,031			10,449			21,638			20,201
Securities transactions		226			1,316			4,258			1,324
Income from sales of loans		766			420			1,338			872
Insurance commissions		2,803			2,471			5,796			4,893
Cash management		2,041			1,927			3,980			3,692
Gain (loss) on sale of other assets		323			(5	)		343			4
Other		1,351			1,470			2,918			3,205

Total noninterest income		20,364			19,679			43,801			37,409

NONINTEREST EXPENSE
Salaries and employee benefits		24,830			22,557			49,630			44,369
Occupancy and fixed assets expense, net		2,477			2,411			4,923			4,862
Depreciation		2,226			1,889			4,357			3,793
Amortization of intangible assets		457			377			914			754
Data processing services		1,158			1,168			2,441			2,418
Net expense from other real estate owned		922			775			1,169			(131	)
Marketing and business promotion		1,679			1,653			3,334			3,191
Deposit insurance		724			764			1,443			2,190
Other		8,090			8,016			16,389			14,561

Total noninterest expense		42,563			39,610			84,600			76,007

Income before taxes		18,422			16,062			40,466			33,896
Income tax expense		(6,693	)		(5,947	)		(14,732	)		(12,426	)

Net income	$	11,729		$	10,115		$	25,734		$	21,470

NET INCOME PER COMMON SHARE
Basic	$	0.77		$	0.66		$	1.70		$	1.40

Diluted	$	0.76		$	0.65		$	1.67		$	1.37

OTHER COMPREHENSIVE INCOME
Unrealized gains (losses) on securities, net of tax of $292, $(1,034), $610 and $(959), respectively	$	(541	)	$	1,976		$	(1,132	)	$	1,784
Reclassification adjustment for gains included in net income, net of tax of $5, $293, $728 and $293, respectively		(11	)		(544	)		(1,353	)		(544	)

Other comprehensive income (loss), net of tax of $297, $(741), $1,338 and $(666), respectively		(552	)		1,432			(2,485	)		1,240

Comprehensive income	$	11,177		$	11,547		$	23,249		$	22,710

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

BANCFIRST CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(Dollars in thousands, except per share data)


	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
COMMON STOCK
Issued at beginning of period	$	15,145		$	15,390		$	15,118		$	15,369
Shares issued		16			—			43			21
Shares acquired and canceled		(7	)		(117	)		(7	)		(117	)

Issued at end of period	$	15,154		$	15,273		$	15,154		$	15,273

CAPITAL SURPLUS
Balance at beginning of period	$	78,420		$	73,935		$	77,462		$	73,040
Common stock issued		267			—			722			474
Tax effect of stock options		137			23			199			69
Stock-based compensation arrangements		357			271			798			646

Balance at end of period	$	79,181		$	74,229		$	79,181		$	74,229

RETAINED EARNINGS
Balance at beginning of period	$	390,881		$	369,189		$	381,017		$	361,680
Net income		11,729			10,115			25,734			21,470
Dividends on common stock		(4,094	)		(3,848	)		(8,235	)		(7,694	)
Common stock acquired and canceled		(249	)		(4,306	)		(249	)		(4,306	)

Balance at end of period	$	398,267		$	371,150		$	398,267		$	371,150

ACCUMULATED OTHER COMPREHENSIVE INCOME
Unrealized gains (losses) on securities:
Balance at beginning of period	$	7,511		$	8,313		$	9,444		$	8,505
Net change		(552	)		1,432			(2,485	)		1,240

Balance at end of period	$	6,959		$	9,745		$	6,959		$	9,745

Total stockholders’ equity	$	499,561		$	470,397		$	499,561		$	470,397

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

BANCFIRST CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(Unaudited)

(Dollars in thousands)


	Six Months Ended June 30,
	2012			2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	25,734		$	21,470
Adjustments to reconcile to net cash provided by operating activities:
Provision for loan losses		421			2,801
Depreciation and amortization		5,271			4,547
Net amortization of securities premiums and discounts		782			2,558
Realized securities gains		(4,258	)		(1,324	)
Gain on sales of loans		(1,338	)		(872	)
Cash receipts from the sale of loans originated for sale		103,117			75,562
Cash disbursements for loans originated for sale		(106,365	)		(74,175	)
Deferred income tax benefit		(132	)		(1,309	)
Gains on other assets		(288	)		(1,058	)
Decrease in interest receivable		1,130			2,051
Decrease in interest payable		(450	)		(128	)
Amortization of stock-based compensation arrangements		798			646
Other, net		5,085			4,076

Net cash provided by operating activities		29,507			34,845

INVESTING ACTIVITIES
Net decrease in Federal funds sold		400			41,107
Purchases of securities:
Held for investment		(2,525	)		(6,400	)
Available for sale		(41,330	)		(32,183	)
Maturities of securities:
Held for investment		2,831			2,755
Available for sale		70,033			134,557
Proceeds from sales and calls of securities:
Held for investment		2,417			2
Available for sale		8,129			65,478
Purchases of loans		(17,255	)		(26,847	)
Proceeds from sales of loans		16,872			3,226
Net other increase in loans		(49,192	)		(32,286	)
Purchases of premises, equipment and computer software		(7,015	)		(8,135	)
Proceeds from the sale of other assets		7,213			12,196

Net cash (used in) provided by investing activities		(9,422	)		153,470

FINANCING ACTIVITIES
Net increase in demand, transaction and savings deposits		112,565			215,139
Net decrease in time deposits		(50,652	)		(16,894	)
Net decrease in short-term borrowings		(1,934	)		(5,850	)
Paydown of long-term borrowings		(7,147	)		(2,144	)
Redemption of junior subordinated debentures		(9,279	)		—
Issuance of common stock		964			564
Common stock acquired		(256	)		(4,423	)
Cash dividends paid		(8,171	)		(7,687	)

Net cash provided by financing activities		36,090			178,705

Net increase in cash, due from banks and interest-bearing deposits		56,175			367,020
Cash, due from banks and interest-bearing deposits at the beginning of the period		1,707,733			1,204,079

Cash, due from banks and interest-bearing deposits at the end of the period	$	1,763,908		$	1,571,099

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest	$	9,946		$	13,917

Cash paid during the period for income taxes	$	13,775		$	14,000

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 generally accepted accounting principles and general practice within the banking industry. A summary of significant accounting policies can be found in Footnote (1) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

Basis of Presentation

The accompanying consolidated financial statements include the accounts of BancFirst Corporation, Council Oak Partners, LLC, BancFirst Insurance Services, Inc., and BancFirst and its subsidiaries. The principal operating subsidiaries of BancFirst are Council Oak Investment Corporation, Council Oak Real Estate, Inc., BancFirst Agency, Inc., and BancFirst Community Development Corporation. All significant intercompany accounts and transactions have been eliminated. Assets held in a fiduciary or agency capacity are not assets of the Company and, accordingly, are not included in the consolidated financial statements.

The accompanying 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, 2011, should be referred to in connection with these unaudited interim consolidated financial statements.

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, 2011, the date of the most recent annual report.

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.

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 net income.

Recent Accounting Pronouncements

In December 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-12, “Comprehensive Income (Topic 220)—Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05.” ASU 2011-12 defers changes in ASU 2011-05 that relate to the presentation of reclassification adjustments to allow the FASB time to re-deliberate whether to require presentation of such adjustments on the face of the financial statements to show the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income. ASU 2011-12 allows entities to continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect before ASU 2011-05. All other requirements in ASU 2011-05 are not affected by ASU 2011-12. ASU 2011-12 was effective for annual and interim periods beginning after December 15, 2011. Adoption of ASU 2011-12 did not have a significant effect on the Company’s financial statements.

In November 2011, the FASB issued ASU No. 2011-11, “Balance Sheet (Topic 210)—Disclosure about Offsetting Assets and Liabilities.” ASU 2011-11 is an amendment to require an entity to disclose both net and gross information about offsetting assets and liabilities to enable users of its financial statements to understand the effect of those arrangements. Arrangements include derivatives, sale and repurchase agreements and transactions, securities borrowing and securities lending arrangements. ASU 2011-11 is effective for annual and interim periods beginning on January 1, 2013 and is not expected to have a significant effect on the Company’s financial statements.

In September 2011, the FASB issued ASU No. 2011-08, “Intangibles (Topic 350) – Goodwill and Other.” ASU 2011-08 is an update to simplify how entities test for goodwill impairment. The amendments in the update permit the Company to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If these factors determined that the fair value exceeds the carrying amount then the Company is not required to calculate the fair value of the reporting unit. The Company opted to continue to perform quantitative tests for goodwill impairment and not to perform qualitative tests for goodwill impairment under ASU 2011-08 as of September 30, 2011. Adoption of ASU 2011-08 did not have a significant effect on the Company’s financial statements.

In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income (Topic 220)—Presentation of Comprehensive Income.” ASU 2011-05 is an update to improve the comparability, consistency, and transparency of financial reporting, to increase the prominence of items reported in other comprehensive income, and to facilitate convergence of GAAP and IFRS. The Company adopted ASU 2011-05 as of September 30, 2011, and the standard was applied retrospectively. The adoption of ASU 2011-05 did not have a significant effect on the Company’s financial statements.

In May 2011, the FASB issued ASU No. 2011-04, “Fair Value Measurement (Topic 820)—Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. Generally Accepted Accounting Principles (“GAAP”) and International Financial Reporting Standards (“IFRS”).” ASU 2011-04 is an update to explain how to measure fair value. This amendment does not require additional fair value measurements and is not intended to establish valuation standards or affect valuation practices outside of financial reporting. This amendment was put forth in order to describe many of the requirements in GAAP for measuring fair value and for disclosing information about fair value measurements consistent with IFRS. ASU 2011-04 was effective for the Company on January 1, 2012, and was applied prospectively. Adoption of ASU 2011-04 did not have a significant effect on the Company’s financial statements.

In April 2011, the FASB issued ASU No. 2011-02, “Receivables (Topic 310)—A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring.” ASU 2011-02 clarifies which loan modifications constitute troubled debt restructurings and is intended to assist creditors in determining whether a modification of the terms of a receivable meets the criteria to be considered a troubled debt restructuring, both for purposes of recording an impairment loss and for disclosure of troubled debt restructurings. In evaluating whether a restructuring constitutes a troubled debt restructuring, a creditor must separately conclude, under the guidance clarified by ASU 2011-02, that both of the following exist: (a) the restructuring constitutes a concession; and (b) the debtor is experiencing financial difficulties. ASU 2011-02 was effective for the Company on July 1, 2011, and was applied retrospectively to restructurings occurring on or after January 1, 2011. Adoption of ASU 2011-02 did not have a significant effect on the Company’s financial statements.

(2) RECENT DEVELOPMENTS, INCLUDING MERGERS AND ACQUISITIONS

On January 19, 2012, Council Oak Investment Corporation, a wholly-owned subsidiary of BancFirst, completed the sale of one of its investments that resulted in a pretax gain of approximately $4.5 million. After related expenses and income taxes, the increase in net income approximated $2.6 million or $0.17 per share on a fully diluted basis. The gain was included in first quarter 2012 earnings.

On July 12, 2011, the Company completed the acquisition of FBC Financial Corporation and its subsidiary bank, 1st Bank Oklahoma with banking locations in Claremore, Verdigris, and Inola, Oklahoma. The Company paid a premium of $1.5 million above the equity capital of FBC Financial Corporation. At acquisition, 1st Bank Oklahoma had approximately $217 million in total assets, $116 million in loans, $178 million in deposits and $18 million in equity capital. 1^st Bank Oklahoma operated as a subsidiary of BancFirst Corporation until it was merged into BancFirst on February 17, 2012. The acquisition did not have a material effect on the Company’s consolidated financial statements.

The Federal Reserve enacted a final rule on June 29, 2011 establishing the debit card interchange rate at $0.21 per transaction and five basis points multiplied by the value of the transaction that was effective on October 1, 2011 for banks exceeding $10 billion in assets. Although the rule does not apply directly to the Company, the possible competitive response may have an impact on the Company’s pricing of these services.

(3) SECURITIES

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


	June 30, 2012
	(Dollars in thousands)
Held for investment, at cost (market value: $20,104)	$	19,734
Available for sale, at market value		555,300

Total	$	575,034

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


	June 30, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Market Value
	(Dollars in thousands)
U.S. treasury and other Federal agencies	$	901	$	68	$	—	$	969
States and political subdivisions		18,833		302		—		19,135

Total	$	19,734	$	370	$	—	$	20,104

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


	June 30, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Market Value
	(Dollars in thousands)
U.S. Federal agencies (1)	$	455,175	$	4,512	$	(121	)	$	459,566
Mortgage backed securities		23,869		843		(3	)		24,709
States and political subdivisions		57,540		3,008		(10	)		60,538
Other securities (2)		8,011		2,498		(22	)		10,487

Total	$	544,595	$	10,861	$	(156	)	$	555,300

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

(2)	Primarily consists of equity securities.

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, 2012
	Amortized Cost		Estimated Market Value
	(Dollars in thousands)
Held for Investment
Contractual maturity of debt securities:
Within one year	$	1,583	$	1,602
After one year but within five years		14,679		14,909
After five years but within ten years		2,830		2,889
After ten years		642		704

Total	$	19,734	$	20,104

Available for Sale
Contractual maturity of debt securities:
Within one year	$	85,373	$	86,441
After one year but within five years		323,771		326,413
After five years but within ten years		46,982		49,031
After ten years		80,458		82,928

Total debt securities		536,584		544,813
Equity securities		8,011		10,487

Total	$	544,595	$	555,300

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, 2012
	(Dollars in thousands)
Book value of pledged securities	$	484,329

(4) LOANS AND ALLOWANCE FOR LOAN LOSSES

The following is a schedule of loans outstanding by category:


	June 30, 2012					December 31, 2011					June 30, 2011
	Amount		Percent			Amount		Percent			Amount		Percent
	(Dollars in thousands)
Commercial and industrial	$	515,456		16.82	%	$	547,942		18.19	%	$	551,293		19.26	%
Oil & gas production & equipment		125,228		4.08			115,786		3.84			113,868		3.98
Agriculture		77,882		2.54			86,297		2.86			74,221		2.59
State and political subdivisions:
Taxable		6,520		0.21			6,939		0.23			7,281		0.25
Tax-exempt		13,853		0.45			17,070		0.57			11,920		0.42
Real estate:
Construction		197,168		6.43			207,953		6.90			236,660		8.27
Farmland		111,472		3.64			103,923		3.45			86,285		3.02
One to four family residences		674,577		22.01			655,134		21.74			618,428		21.61
Multifamily residential properties		46,866		1.53			37,734		1.25			34,040		1.19
Commercial		1,036,322		33.81			960,074		31.86			846,684		29.59
Consumer		239,156		7.80			252,331		8.37			255,975		8.94
Other (not classified above)		20,939		0.68			22,315		0.74			25,189		0.88

Total loans	$	3,065,439		100.00	%	$	3,013,498		100.00	%	$	2,861,844		100.00	%

Loans held for sale (included above)	$	16,612				$	12,126				$	11,258

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 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.

Accounting policies related to appraisals, nonaccruals and charge-offs are disclosed in Footnote (5) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

Nonperforming and Restructured Assets

Nonaccrual loans, accruing loans past due 90 days or more, and restructured loans are shown in the table below. Had nonaccrual loans performed in accordance with their original contract terms, the Company would have recognized additional interest income of approximately $654,000 for the six months ended June 30, 2012 and approximately $562,000 for the six months ended June 30, 2011.

At June 30, 2012, troubled debt restructurings were primarily due to the principal deferral restructuring from one customer. This loan was evaluated by management and determined to be well collateralized. Additionally, none of the concessions granted involved a principal reduction or a change from the current market rate of interest. Collateral value will be monitored periodically to evaluate possible impairment. 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 restructured were not considered to be material.

The following is a summary of nonperforming and restructured assets:


	June 30,			December 31,			June 30,
	2012			2011			2011
	(Dollars in thousands)
Past due 90 days or more and still accruing	$	1,403		$	798		$	1,166
Nonaccrual		20,702			21,187			22,469
Restructured		18,089			1,041			344

Total nonperforming and restructured loans		40,194			23,026			23,979
Other real estate owned and repossessed assets		10,223			16,640			15,501

Total nonperforming and restructured assets	$	50,417		$	39,666		$	39,480

Nonperforming and restructured loans to total loans		1.31	%		0.76	%		0.84	%

Nonperforming and restructured assets to total assets		0.89	%		0.71	%		0.75	%

Loans are segregated into classes based upon the nature of the collateral and the borrower. These classes are used to estimate the credit risk component in 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, 2012		June 30, 2011
	(Dollars in thousands)
Non-residential real estate	$	9,711	$	9,235
Residential real estate		4,098		5,860
Non-consumer non-real estate		1,142		1,547
Consumer non-real estate		140		178
Other loans		1,918		4,285
Acquired loans		3,693		1,364

Total	$	20,702	$	22,469

The following table presents an age analysis of past due loans, segregated by class of loans:


	Age Analysis of Past Due Receivables
	30-89 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, 2012
Non-residential real estate	$	2,649	$	2,454	$	5,103	$	1,135,948	$	1,141,051	$	285
Residential real estate		4,240		1,288		5,528		715,621		721,149		478
Non-consumer non-real estate		1,285		244		1,529		695,887		697,416		16
Consumer non-real estate		2,002		183		2,185		198,242		200,427		122
Other loans		1,213		1,654		2,867		153,117		155,984		102
Acquired loans		3,134		1,352		4,486		144,926		149,412		400

Total	$	14,523	$	7,175	$	21,698	$	3,043,741	$	3,065,439	$	1,403

As of June 30, 2011
Non-residential real estate	$	1,720	$	573	$	2,293	$	978,409	$	980,702	$	1
Residential real estate		2,617		2,208		4,825		684,344		689,169		927
Non-consumer non-real estate		1,474		324		1,798		710,640		712,438		6
Consumer non-real estate		1,822		173		1,995		196,583		198,578		116
Other loans		3,489		3,766		7,255		152,982		160,237		89
Acquired loans		908		920		1,828		118,892		120,720		27

Total	$	12,030	$	7,964	$	19,994	$	2,841,850	$	2,861,844	$	1,166

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 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. When it is not deemed necessary to allocate a specific valuation allowance to an impaired loan, the loan nevertheless will have an allowance based on a historically adequate percentage determined for the class of loans.

The following table presents impaired loans, segregated by class of loans. No material amount 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, 2012
Non-residential real estate	$	28,184	$	27,165	$	2,122	$	27,397
Residential real estate		5,839		5,384		1,468		5,547
Non-consumer non-real estate		1,792		1,163		302		1,512
Consumer non-real estate		349		325		59		389
Other loans		2,255		2,020		212		2,158
Acquired loans		13,648		11,522		291		13,263

Total	$	52,067	$	47,579	$	4,454	$	50,266

As of June 30, 2011
Non-residential real estate	$	9,723	$	9,235	$	978	$	10,223
Residential real estate		6,466		5,860		1,520		6,511
Non-consumer non-real estate		1,873		1,547		358		1,806
Consumer non-real estate		211		178		47		212
Other loans		4,418		4,285		193		4,312
Acquired loans		1,529		1,364		92		1,339

Total	$	24,220	$	22,469	$	3,188	$	24,403

Credit Risk Monitoring and Loan Grading

The Company employs several means to monitor the 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.

Loans are subject to an internal risk grading system which indicates the risk and acceptability of that loan. 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 as follows:

Grade 1—Acceptable—Loans graded 1 represent reasonable and satisfactory credit risk which requires normal attention and supervision. Capacity to repay through primary and/or secondary sources is not questioned.

Grade 2—Acceptable—Increased Attention—This category consists of loans that have credit characteristics deserving management’s close attention. These potential weaknesses could result in deterioration of the repayment prospects for the loan or the Bank’s credit position at some future date. Such credit characteristics include loans to highly leveraged borrowers in cyclical industries, adverse financial trends which could potentially weaken repayment capacity, loans that have fundamental structure deficiencies, loans lacking secondary sources of repayment where prudent, and loans with deficiencies in essential documentation, including financial information.

Grade 3—Loans with Problem Potential—This category consists of performing loans which are considered to exhibit problem potential. Loans in this category would generally include, but not be limited to, borrowers with a weakened financial condition or poor performance history, past dues, loans restructured to reduce payments to an amount that is below market standards and/or loans with severe documentation problems. In general, these loans have no identifiable loss potential in the near future, however, the possibility of a loss developing is heightened.

Grade 4—Problem Loans/Assets—Nonperforming—This category consists of nonperforming loans/assets which are considered to be problems. Nonperforming loans are described as being 90 days and over past due and still accruing, and loans that are nonaccrual. The government guaranteed portion of SBA loans is excluded.

Grade 5—Loss Potential—This category consists of loans/assets which are considered to possess loss potential. While the loss may not occur in the current year, management expects that loans/assets in this category will ultimately result in a loss, unless substantial improvement occurs.

Grade 6—Charge Off—This category consists of loans that are considered uncollectible and other assets with little or no value.

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, 2012
Non-residential real estate	$	983,946	$	118,825	$	28,514	$	9,766	$	—	$	1,141,051
Residential real estate		619,115		81,324		15,920		4,790		—		721,149
Non-consumer non-real estate		610,214		78,825		7,211		1,166		—		697,416
Consumer non-real estate		187,768		10,204		2,122		333		—		200,427
Other loans		151,330		2,917		1,027		710		—		155,984
Acquired loans		110,506		27,002		7,898		4,006		—		149,412

Total	$	2,662,879	$	319,097	$	62,692	$	20,771	$	—	$	3,065,439

As of June 30, 2011
Non-residential real estate	$	834,857	$	103,359	$	33,446	$	9,040	$	—	$	980,702
Residential real estate		601,469		68,651		12,970		6,079		—		689,169
Non-consumer non-real estate		638,872		61,481		10,710		1,375		—		712,438
Consumer non-real estate		189,220		6,891		2,172		295		—		198,578
Other loans		153,104		2,463		2,050		2,620		—		160,237
Acquired loans		84,482		26,475		8,398		1,267		98		120,720

Total	$	2,502,004	$	269,320	$	69,746	$	20,676	$	98	$	2,861,844

Allowance for Loan Losses Methodology

The allowance for loan losses (“ALLL”) is determined by a calculation based on segmenting the loans into the following categories: (1) adversely graded loans [Grades 3, 4, and 5] that have a specific reserve allocation; (2) loans without a specific reserve segmented by loans secured by real estate other than 1-4 family residential property, loans secured by 1-4 family residential property, commercial, industrial, and agricultural loans not secured by real estate, consumer purpose loans not secured by real estate, and loans over 60 days past due that are not otherwise Grade 3, 4, or 5; (3) Grade 2 loans; (4) Grade 1 loans; and (5) loans held for sale which are excluded.

The ALLL is calculated as the sum of the following: (1) the total dollar amount of specific reserve allocations; (2) the dollar amount derived by multiplying each segment of adversely graded loans without a specific reserve allocation times its respective reserve factor; (3) the dollar amount derived by multiplying Grade 2 loans and Grade 1 loans (less exclusions) times the respective reserve factor; and (4) other adjustments as deemed appropriate and documented by the Senior Loan Committee or Board of Directors.

The amount of the ALLL is an estimate based upon factors which are subject to rapid change due to changing economic conditions and the economic prospects of borrowers. It is reasonably possible that a material change could occur in the estimated ALLL in the near term.

The following table details activity in the ALLL 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.


ALLL
	Non-Residential Real Estate			Residential Real Estate			Non- Consumer Non-Real Estate			Consumer Non-Real Estate			Other Loans			Acquired Loans			Total
	(Dollars in thousands)
Three Months Ended June 30, 2012
Allowance for credit losses:
Balance at March 31, 2012	$	14,109		$	9,762		$	9,198		$	2,283		$	1,850		$	431		$	37,633

Charge-offs		(7	)		(95	)		(313	)		(77	)		(27	)		(12	)		(531	)
Recoveries		(6	)		13			26			32			12			9			86

Net charge-offs		(13	)		(82	)		(287	)		(45	)		(15	)		(3	)		(445	)

Provisions charged to operations		253			326			(353	)		44			19			(41	)		248

Balance at June 30, 2012	$	14,349		$	10,006		$	8,558		$	2,282		$	1,854		$	387		$	37,436

Six Months Ended June 30, 2012
Allowance for credit losses:
Balance at December 31, 2011	$	13,948		$	9,764		$	9,156		$	2,315		$	1,886		$	587		$	37,656

Charge-offs		(128	)		(131	)		(330	)		(191	)		(207	)		(76	)		(1,063	)
Recoveries		31			109			124			116			31			11			422

Net charge-offs		(97	)		(22	)		(206	)		(75	)		(176	)		(65	)		(641	)

Provisions charged to operations		498			264			(392	)		42			144			(135	)		421

Balance at June 30, 2012	$	14,349		$	10,006		$	8,558		$	2,282		$	1,854		$	387		$	37,436

Ending balances:
Individually evaluated for impairment	$	2,986		$	2,760		$	1,436		$	302		$	196		$	—		$	7,680
Collectively evaluated for impairment		11,363			7,246			7,122			1,980			1,658			387			29,756

Balance at June 30, 2012	$	14,349		$	10,006		$	8,558		$	2,282		$	1,854		$	387		$	37,436

Loans-Ending balances:
Individually evaluated for impairment	$	38,278		$	20,710		$	8,377		$	2,455		$	109		$	—		$	69,929
Collectively evaluated for impairment		1,102,773			700,439			689,039			197,972			155,875			137,508			2,983,606
Loans acquired with deteriorated credit quality		—			—			—			—			—			11,904			11,904

Balance at June 30, 2012	$	1,141,051		$	721,149		$	697,416		$	200,427		$	155,984		$	149,412		$	3,065,439


ALLL
	Non-Residential Real Estate			Residential Real Estate			Non- Consumer Non-Real Estate			Consumer Non-Real Estate			Other Loans			Acquired Loans			Total
	(Dollars in thousands)
Three Months Ended June 30, 2011
Allowance for credit losses:
Balance at March 31, 2011	$	12,979		$	9,612		$	9,165		$	2,258		$	1,699		$	423		$	36,136

Charge-offs		(136	)		(312	)		(179	)		(223	)		(22	)		(302	)		(1,174	)
Recoveries		7			39			29			36			5			1			117

Net charge-offs		(129	)		(273	)		(150	)		(187	)		(17	)		(301	)		(1,057	)

Provisions charged to operations		801			41			319			166			30			656			2,013

Balance at June 30, 2011	$	13,651		$	9,380		$	9,334		$	2,237		$	1,712		$	778		$	37,092

Six Months Ended June 30, 2011
Allowance for credit losses:
Balance at December 31, 2010	$	13,142		$	8,957		$	9,587		$	2,301		$	1 ,758		$	—		$	35,745

Charge-offs		(269	)		(501	)		(184	)		(328	)		(122	)		(331	)		(1,735	)
Recoveries		16			95			84			68			7			11			281

Net charge-offs		(253	)		(406	)		(100	)		(260	)		(115	)		(320	)		(1,454	)

Provisions charged to operations		762			829			(153	)		196			69			1,098			2,801

Balance at June 30, 2011	$	13,651		$	9,380		$	9,334		$	2,237		$	1,712		$	778		$	37,092

Ending balances:
Individually evaluated for impairment	$	3,694		$	2,314		$	2,021		$	297		$	285		$	—		$	8,611
Collectively evaluated for impairment		9,957			7,066			7,313			1,940			1,427			778			28,481

Balance at June 30, 2011	$	13,651		$	9,380		$	9,334		$	2,237		$	1,712		$	778		$	37,092

Loans-Ending balances:
Individually evaluated for impairment	$	42,486		$	19,049		$	12,085		$	2,467		$	413		$	—		$	76,500
Collectively evaluated for impairment		938,216			670,120			700,353			196,111			159,824			110,957			2,775,581
Loans acquired with deteriorated credit quality		—			—			—			—			—			9,763			9,763

Balance at June 30, 2011	$	980,702		$	689,169		$	712,438		$	198,578		$	160,237		$	120,720		$	2,861,844

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,
	2012		2011
	(Dollars in thousands)
Other real estate owned	$	1,284	$	3,145
Repossessed assets		295		913

Total	$	1,579	$	4,058

(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, 2012
Core deposit intangibles	$	14,800	$	(6,402	)	$	8,398
Customer relationship intangibles		5,657		(1,812	)		3,845
Mortgage servicing intangibles		986		(71	)		915

Total	$	21,443	$	(8,285	)	$	13,158

(6) JUNIOR SUBORDINATED DEBENTURES

The following is a summary of the Junior Subordinated Debentures:


	June 30, 2012		December 31, 2011
Issue	Amount		Amount		Rate	Maturity
	(Dollars in thousands)
BFC II	$	26,804	$	26,804	7.20%		03/31/2034
UNST I		—		2,062	3 month LIBOR + 1.65%		03/15/2036
FBCST I		—		7,217	3 month LIBOR + 2.85%		12/17/2033

Total	$	26,804	$	36,083

Refer to Note (11) in BancFirst Corporation’s Annual Report on Form 10-K for the year ended December 31, 2011, for further disclosures related to Junior Subordinated Debentures.

On June 15, 2012, BancFirst Corporation redeemed the Union National Statutory Trust I (“UNST I”) Junior Subordinated Debentures at par value.

On June 18, 2012, BancFirst Corporation redeemed the FBC Financial Corp. Statutory Trust I (“FBCST I”) Junior Subordinated Debentures at par value.

(7) STOCK-BASED COMPENSATION

The Company adopted a nonqualified incentive stock option plan (the “BancFirst ISOP”) in May 1986. The Company amended the BancFirst ISOP to increase the number of shares to be issued under the plan to 2,800,000 shares in May 2011. At June 30, 2012, 64,860 shares were available for future grants. The BancFirst ISOP will terminate on December 31, 2014. The options 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, 2012 will become exercisable through the year 2018. The option price must be no less than 100% of the fair market value of the stock relating to such option at the date of grant.

In June 1999, the Company adopted the BancFirst Corporation Non-Employee Directors’ Stock Option Plan (the “BancFirst Directors’ Stock Option Plan”). Each non-employee director is granted an option for 10,000 shares. The Company amended the BancFirst Directors’ Stock Option Plan to increase the number of shares to be issued under the plan to 205,000 shares in May 2009. At June 30, 2012, 30,000 shares were available for future grants. The options are exercisable beginning one year from the date of grant at the rate of 25% per year for four years, and expire at the end of fifteen years from the date of grant. Options outstanding as of June 30, 2012 will become exercisable through the year 2015. 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 stock to satisfy stock-based exercises, but reserves the right to use treasury stock 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:


	Options			Wgtd. Avg. Exercise Price		Wgtd. Avg. Remaining Contractual Term			Aggregate Intrinsic Value
	(Dollars in thousands, except per share data)
Six Months Ended June 30, 2012
Outstanding at December 31, 2011		1,298,431		$	30.14
Options granted		—			—
Options exercised		(42,133	)		17.13
Options canceled, forfeited, or expired		—			—

Outstanding at June 30, 2012		1,256,298			30.58		8.39	Yr	$	14,237

Exercisable at June 30, 2012		699,848			24.44		5.27	Yr	$	12,223

The following table is a summary of the Company’s non-vested options as of June 30, 2012, and any changes during the six months ended June 30, 2012:


	Options
Non-vested at December 31, 2011		591,700
Options granted		—
Options vested		(35,250	)
Options forfeited		—

Non-vested at June 30, 2012		556,450

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,
	2012		2011		2012		2011
	(Dollars in thousands, except per share data)
Weighted average grant-date fair value per share of options granted	$	—	$	11.36	$	—	$	12.48
Total intrinsic value of options exercised		617		—		1,749		405
Cash received from options exercised		239		—		722		438
Tax benefit realized from options exercised		239		—		677		157

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,
	2012			2011			2012			2011
	(Dollars in thousands)
Stock-based compensation expense	$	357		$	271		$	798		$	646
Tax		(138	)		(105	)		(309	)		(250	)

Stock-based compensation expense, net of tax	$	219		$	166		$	489		$	396

The Company will continue to amortize the remaining fair value of stock options over the remaining vesting period of approximately seven years. The following table shows the remaining fair value of stock options:


	June 30, 2012
	(Dollars in thousands)
Fair value of stock options	$	5,675

The following table shows the assumptions used for computing stock-based compensation expense under the fair value method:


	Six Months Ended June 30,
	2012			2011
Risk-free interest rate		1.78	%		3.61	%
Dividend yield		2.00	%		2.00	%
Stock price volatility		38.72	%		25.26	%
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.

(8) 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:


	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Number of shares repurchased		6,787		117,176		6,787		117,176
Average price of shares repurchased	$	37.70	$	37.75	$	37.70	$	37.75
Shares remaining to be repurchased		234,964		426,724		234,964		426,724

The Company and BancFirst are subject to risk-based capital guidelines issued by the Board of Governors of the Federal Reserve System and 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, as of June 30, 2012, that the Company and BancFirst met all capital adequacy requirements to which they are subject. The required capital amounts and the Company’s and BancFirst’s respective ratios are shown in the following table:


	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
As of June 30, 2012:
Total Capital
(to Risk Weighted Assets)-
BancFirst Corporation	$	500,048		14.62	%	$	273,588		8.00	%		N/A		N/A
BancFirst		475,563		13.94	%		272,894		8.00	%	$	341,118		10.00	%
Tier 1 Capital
(to Risk Weighted Assets)-
BancFirst Corporation	$	462,612		13.53	%	$	136,794		4.00	%		N/A		N/A
BancFirst		438,127		12.84	%		136,447		4.00	%	$	204,671		6.00	%
Tier 1 Capital
(to Total Assets)-
BancFirst Corporation	$	462,612		8.24	%	$	170,193		3.00	%		N/A		N/A
BancFirst		438,127		7.81	%		169,614		3.00	%	$	282,690		5.00	%

As of June 30, 2012, BancFirst was considered to be “well capitalized” and there are no conditions or events since the most recent notification of BancFirst’s capital category that management believes would materially change its category under capital requirements existing as of the report date. To be well capitalized under Federal bank regulatory agency definitions, a depository institution must have a Tier 1 Ratio of at least 6%, a combined Tier 1 and Tier 2 Ratio of at least 10%, and a Leverage Ratio of at least 5%. The Company’s trust preferred securities have continued to be included in Tier 1 capital as the Company’s total assets do not exceed $10 billion.

(9) NET INCOME PER COMMON SHARE

Basic and diluted net income per common share are calculated as follows:


	Income (Numerator)		Shares (Denominator)		Per Share Amount
	(Dollars in thousands, except per share data)
Three Months Ended June 30, 2012
Basic
Income available to common stockholders	$	11,729		15,155,525	$	0.77

Effect of stock options		—		271,271

Diluted
Income available to common stockholders plus assumed exercises of stock options	$	11,729		15,426,796	$	0.76

Three Months Ended June 30, 2011
Basic
Income available to common stockholders	$	10,115		15,364,738	$	0.66

Effect of stock options		—		287,215

Diluted
Income available to common stockholders plus assumed exercises of stock options	$	10,115		15,651,953	$	0.65

Six Months Ended June 30, 2012
Basic
Income available to common stockholders	$	25,734		15,145,066	$	1.70

Effect of stock options		—		276,608

Diluted
Income available to common stockholders plus assumed exercises of stock options	$	25,734		15,421,674	$	1.67

Six Months Ended June 30, 2011
Basic
Income available to common stockholders	$	21,470		15,362,764	$	1.40

Effect of stock options		—		295,723

Diluted
Income available to common stockholders plus assumed exercises of stock options	$	21,470		15,658,487	$	1.37

The following table shows the number and average exercise price 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		Average Exercise Price
Three Months Ended June 30, 2012		607,200	$	38.70
Three Months Ended June 30, 2011		537,008	$	38.94
Six Months Ended June 30, 2012		607,200	$	38.70
Six Months Ended June 30, 2011		503,857	$	38.80

(10) 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, foreclosed assets, other real estate, 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, mortgage backed securities, and states 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 equity securities classified as available for sale for which observable information is not readily available. These securities are reported at fair value utilizing Level 3 inputs. For these securities, management determines the fair value based on replacement cost, the income approach or information provided by outside consultants or lead investors.

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 entire portfolio 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 adjusted for the specific issue. From time to time, the Company will validate, on a sample basis, prices supplied by the independent pricing service by comparison to prices obtained from third party sources.

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.

Mortgage Servicing Intangibles

The Company acquired these Mortgage Servicing Intangibles with the acquisition of 1^st Bank Oklahoma on July 12, 2011. The Company estimates the fair value of the Mortgage Servicing Intangibles with its carrying amount, based on the present value of future cash flows over several interest rate scenarios, which are then discounted at risk-adjusted rates. The Company considers portfolio characteristics, contractually specified servicing fees, prepayment assumptions, delinquency rates, late charges, other ancillary revenue, costs to service and other economic factors. When available, fair value estimates and assumptions are compared to observable market data and the recent market activity and actual portfolio experience.

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of June 30, 2012 and 2011, 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, 2012
Securities available for sale	$	—	$	544,813	$	10,487	$	555,300
Derivative assets		—		7,652		—		7,652
Derivative liabilities		—		5,648		—		5,648
Loans held for sale		—		16,612		—		16,612
Mortgage servicing intangibles		—		—		915		915
June 30, 2011
Securities available for sale	$	35,096	$	506,811	$	12,498	$	554,405
Derivative assets		—		6,663		—		6,663
Derivative liabilities		—		5,136		—		5,136
Loans held for sale		—		11,258		—		11,258
Mortgage servicing intangibles		—		—		—		—

The changes in Level 3 assets measured at estimated fair value on a recurring basis during the six months ended June 30, 2012 and 2011 were as follows:


	Six Months Ended June 30,
	2012			2011
	(Dollars in thousands)
Balance at the beginning of the year	$	13,225		$	10,837
Purchases, issuances and settlements		1,770			—
Sales		(534	)		(189	)
(Losses) gains included in earnings		(596	)		20
Total unrealized (losses) gains		(2,463	)		1,830

Balance at the end of the period	$	11,402		$	12,498

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, 2012 and 2011, 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. The impaired loans are adjusted to fair value through a specific allocation of the allowance for loan losses.

Foreclosed 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 foreclosed 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 and the related gains or losses recognized during the period:


	Level 1		Level 2		Level 3		Total Fair Value		Gains (Losses)
	(Dollars in thousands)
Six Months Ended June 30, 2012
Impaired loans		—		—	$	43,125	$	43,125	$	—
Foreclosed assets		—		—	$	135	$	135	$	(86	)
Other real estate owned		—		—	$	10,088	$	10,088	$	(1,067	)
Six Months Ended June 30, 2011
Impaired loans		—		—	$	19,281	$	19,281	$	—
Foreclosed assets		—		—	$	510	$	510	$	1
Other real estate owned		—		—	$	14,991	$	14,991	$	291

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

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.

Long-term Borrowings

The fair values of fixed-rate long-term borrowings are estimated using the rates that would be charged for borrowings of similar remaining maturities.

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 are as follows:


	June 30,
	2012					2011
	Carrying Amount			Fair Value		Carrying Amount			Fair Value
	(Dollars in thousands)
FINANCIAL ASSETS
Cash and cash equivalents	$	1,763,908		$	1,763,908	$	1,571,199		$	1,571,199
Securities held for investment		19,734			20,104		25,654			26,225
Loans:
Loans (net of unearned interest)		3,065,439					2,861,844
Allowance for loan losses		(37,436	)				(37,092	)

Loans, net		3,028,003			3,092,725		2,824,752			2,843,098
FINANCIAL LIABILITIES
Deposits		5,099,648			5,121,335		4,701,999			4,732,880
Short-term borrowings		6,340			6,340		1,400			1,400
Long-term borrowings		11,329			11,431		32,121			32,620
Junior subordinated debentures		26,804			28,970		28,866			31,997
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS
Loan commitments					1,321					1,058
Letters of credit					428					441

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 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 were not considered to be significant to the Company at June 30, 2012 or 2011.

(11) DERIVATIVE FINANCIAL INSTRUMENTS

The Company enters into oil and gas swaps and options contracts to accommodate the business needs of its customers. Upon the origination of an oil or gas swap or option contract with a customer, the Company simultaneously enters into an offsetting contract with a counterparty to mitigate the exposure to fluctuations in oil and gas prices. These derivatives are not designated as hedged instruments and are recorded on the Company’s consolidated balance sheet at fair value.

The Company utilizes dealer quotations and observable market data inputs to substantiate internal valuation models. The notional amounts and estimated fair values of oil and gas derivative positions outstanding are presented in the following table:


	June 30, 2012
Oil and Natural Gas Swaps and Options	Notional Units	Notional Amount			Estimated Fair Value
	(Notional amounts and dollars in thousands)
Oil
Derivative assets	Barrels		633		$	5,062
Derivative liabilities	Barrels		(633	)		(3,838	)
Natural Gas
Derivative assets	MMBTUs		4,627			2,590
Derivative liabilities	MMBTUs		(4,627	)		(1,810	)
Total Fair Value	Included in

Derivative assets	Other assets					7,652
Derivative liabilities	Other liabilities					5,648

The following table is a summary of the Company’s recognized income related to the activity, which was included in other noninterest income:


	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(Dollars in thousands)
Derivative income	$	141	$	74	$	350	$	198

The Company’s credit exposure on oil and gas swaps and options varies based on the current market prices of oil and natural gas. Other than credit risk, changes in the fair value of customer positions will be offset by equal and opposite changes in the counterparty positions. The net positive fair value of the contracts is the profit derived from the activity and is unaffected by market price movements.

Customer credit exposure is managed by strict position limits and is primarily offset by first liens on production while the remainder is offset by cash. Counterparty credit exposure is managed by selecting highly rated counterparties (rated A- or better by Standard and Poor’s) and monitoring market information.

The following table is a summary of the Company’s net credit exposure relating to oil and gas swaps and options with bank counterparties:


	June 30, 2012
	(Dollars in thousands)
Credit exposure	$	7,201

The Company entered into a $30 million five year guaranty with a counterparty on June 4, 2008 for the timely payment of the obligations of its subsidiary Bank related to the settlement of oil and gas positions.

(12) 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, 2012
Net interest income (expense)	$	13,354	$	26,384	$	1,721	$	(590	)	$	—		$	40,869
Noninterest income		2,672		10,721		6,214		13,245			(12,488	)		20,364
Income before taxes		8,220		14,944		2,011		5,686			(12,439	)		18,422

June 30, 2011
Net interest income (expense)	$	12,311	$	24,921	$	1,759	$	(985	)	$	—		$	38,006
Noninterest income		2,706		9,647		6,427		11,616			(10,717	)		19,679
Income before taxes		6,398		13,616		3,132		3,603			(10,687	)		16,062
Six Months Ended:

June 30, 2012
Net interest income (expense)	$	26,517	$	53,015	$	3,434	$	(1,280	)	$	—		$	81,686
Noninterest income		5,353		20,856		16,078		28,626			(27,112	)		43,801
Income before taxes		16,652		30,199		8,398		12,219			(27,002	)		40,466

June 30, 2011
Net interest income (expense)	$	24,483	$	49,058	$	3,751	$	(1,997	)	$	—		$	75,295
Noninterest income		5,512		18,685		11,581		24,264			(22,633	)		37,409
Income before taxes		14,880		26,836		5,632		9,090			(22,542	)		33,896

Total Assets:
June 30, 2012	$	1,801,752	$	3,688,931	$	130,762	$	607,662		$	(557,396	)	$	5,671,711
December 31, 2011	$	1,738,426	$	3,660,239	$	153,872	$	602,577		$	(546,289	)	$	5,608,825
June 30, 2011	$	1,656,064	$	3,401,037	$	151,220	$	605,726		$	(546,602	)	$	5,267,445

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.

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, 2011 consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 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. Actual results may differ materially from forward-looking statements.

SUMMARY

BancFirst Corporation’s net income was $11.7 million or $0.76 diluted earnings per share for the second quarter of 2012 and $25.7 million or $1.67 diluted earnings per share for the six months ended June 30, 2012. These results compared to net income of $10.1 million or $0.65 diluted earnings per share for the second quarter of 2011 and $21.5 million or $1.37 diluted earnings per share for the six months ended June 30, 2011.

Net interest income for the second quarter of 2012 was $40.9 million, up $2.9 million or 7.5% from the second quarter in 2011. The increase was attributable to growth in the Company’s average loans which totaled $3.1 billion, up $251.6 million from the prior year. The Company’s average earning assets rose to $5.3 billion as a result of internal growth combined with the acquisition made in July 2011. The Company’s net interest margin for the second quarter of 2012 was 3.14% versus 3.17% a year ago as interest rates remain at historically low levels. The Company’s loan loss provision for the second quarter was $248,000 down from $2.0 million for the same period in 2011. Nonperforming and restructured assets were 0.89% of total assets compared to 0.92% at March 31, 2012 and 0.71% at December 31, 2011. Net charge-offs were 0.06% compared to 0.15% for the same period a year ago. Noninterest income totaled $20.4 million which was up $685,000 from a year ago. Excluding security gains, core noninterest income increased $1.8 million or 9.7% from the prior year. The increases in revenues resulted primarily from growth in trust services, commercial deposit revenues, insurance commissions and treasury management services. Noninterest expense for the second quarter was $42.6 million compared to $39.6 million a year ago. The increase in noninterest expense is related to the acquisition made in July 2011 and net expense on other real estate of $922,000.

At June 30, 2012, the Company’s total assets were $5.7 billion, up $62.9 million or 1.1% over December 31, 2011. Total loans were $3.1 billion, up $51.9 million or 1.7% from December 31, 2011. At June 30, 2012, total deposits were $5.1 billion, up $61.9 million from December 31, 2011. Stockholders’ equity was $499.6 million at June 30, 2012, an increase of $16.5 million or 3.4% over December 31, 2011.

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 (12) 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,
	2012			2011			2012			2011
Income Statement Data
Net interest income	$	40,869		$	38,006		$	81,686		$	75,295
Provision for loan losses		248			2,013			421			2,801
Securities transactions		226			1,316			4,258			1,324
Total noninterest income		20,364			19,679			43,801			37,409
Salaries and employee benefits		24,830			22,557			49,630			44,369
Total noninterest expense		42,563			39,610			84,600			76,007
Net income		11,729			10,115			25,734			21,470
Per Common Share Data
Net income – basic	$	0.77		$	0.66		$	1.70		$	1.40
Net income – diluted		0.76			0.65			1.67			1.37
Cash dividends		0.27			0.25			0.54			0.50
Performance Data
Return on average assets		0.83	%		0.77	%		0.91	%		0.83	%
Return on average stockholders’ equity		9.46			8.59			10.44			9.24
Cash dividend payout ratio		35.06			37.88			31.76			35.71
Net interest spread		2.95			2.91			2.96			2.93
Net interest margin		3.14			3.17			3.16			3.19
Efficiency ratio		69.51			68.67			67.42			67.44
Net charge-offs to average loans		0.06			0.15			0.04			0.10

Net Interest Income

For the three months ended June 30, 2012, net interest income, which is the Company’s principal source of operating revenue, increased $2.9 million, or 7.5%, compared to the three months ended June 30, 2011. The increase was attributable to the increase in the Company’s average loans, which were $3.1 billion, up $251.6 million from the prior year and $1.6 million from the ongoing operations of the Company’s July 2011 acquisition. In addition, interest expense decreased due to interest rates remaining at historically low levels. Net interest margin is the ratio of taxable-equivalent net interest income to average earning assets for the period. The Company’s net interest margin decreased for the three months ended June 30, 2012 compared to the three months ended June 30, 2011, as shown in the preceding table, which was due to continued low interest rates, the rolloff of higher yielding earning assets and an increase in earning assets at relatively low rates. If interest rates and/or loan volume do not increase, management expects continued compression of its net interest margin for the remainder of 2012 as higher yielding loans and securities mature and are replaced at current market rates.

Net interest income for the six months ended June 30, 2012 increased $6.4 million, or 8.5% compared to the six months ended June 30, 2011. The increase was due to the increase in the Company’s average loans and $3.3 million related to the ongoing operations of the Company’s July 2011 acquisition. The net interest margin for the six months ended June 30, 2012 decreased compared to the six months ended June 30, 2011 as shown in the preceding table.

Provision for Loan Losses

For the three months ended June 30, 2012, the Company’s provision for loan losses was $248,000, a decrease of $1.8 million compared to the same period a year ago. The decrease in the provision for loan losses during the second quarter of 2012 compared to the same quarter in 2011 is reflective of the decreasing trend in classified loans and a decrease in net charge-offs. Management believes the recorded amount of 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 level of future provisions for loan losses. Net loan charge-offs were $445,000 for the second quarter of 2012, compared to $1.1 million for the second quarter of 2011. The rate of net charge-offs to average total loans is presented in the preceding table.

For the six months ended June 30, 2012, the Company’s provision for loan losses was $421,000, a decrease of $2.4 million compared to the same period of 2011. Net loan charge-offs were $641,000 for the six months ended June 30, 2012, compared to $1.5 million for the six months ended June 30, 2011.

Noninterest Income

Noninterest income increased $685,000 or 3.5% for the three months ended June 30, 2012 compared to the same period in 2011. Noninterest income growth stemmed from the Company’s July 2011 acquisition which added $671,000 along with increased revenues from trust services, commercial deposit revenues, insurance commissions and treasury management services.

Noninterest income for the six months ended June 30, 2012 increased $6.4 million or 17.1% compared to the same period in 2011. The increases in revenues were primarily from a $4.5 million pretax securities gain from the sale of an investment by Council Oak Investment Corporation, a wholly-owned subsidiary of BancFirst. In addition, the ongoing operations of the Company’s July 2011 acquisition added $1.4 million, along with increased revenues from trust services, commercial deposit revenues, insurance commissions and treasury management services.

The Company had income from debit card usage totaling $8.2 million and $7.4 million during the six months ended June 30, 2012 and 2011, respectively. The Dodd-Frank Act has given the Federal Reserve the authority to establish rules regarding debit card interchange fees charged for electronic debit transactions by payment card issuers. Because of the uncertainty as to any future rulemaking by the Federal Reserve and the inability to forecast competitive responses, the Company cannot provide any assurance as to the ultimate impact of the Dodd-Frank Act on the amount of income from debit card usage reported in future periods.

Noninterest Expense

For the three months ended June 30, 2012, noninterest expense increased $3.0 million or 7.5%, compared to the three months ended June 30, 2011. The increase in noninterest expense included $2.0 million of ongoing operating expenses related to the July 2011 bank acquisition and an increase in salaries and benefits excluding acquisitions of $1.4 million.

Noninterest expense included deposit insurance expense which totaled $724,000 for the three months ended June 30, 2012, compared to $764,000 for the three months ended June 30, 2011. The decrease in deposit insurance expense during the second quarter of 2012 compared to the same quarter of 2011 was primarily related to the April 1, 2011 change in the deposit insurance assessment base and a change in the method by which the assessment rate is determined, which is more fully discussed in the Company’s 2011 Form 10-K.

For the six months ended June 30, 2012, noninterest expense increased $8.6 million or 11.3%, compared to the six months ended June 30, 2011. Included in the 2012 noninterest expense was $1.6 million in merger related costs and approximately $500,000 of expenses related to the sale of the previously mentioned investment. Additionally, the six months ended June 30, 2012 included $4.2 million of ongoing operating expenses related to the July 2011 bank acquisition and net expense on other real estate of $1.2 million.

Noninterest expense included deposit insurance expense which totaled $1.4 million for the six months ended June 30, 2012, compared to $2.2 million for the six months ended June 30, 2011. The decrease in deposit insurance expense during the second quarter of 2012 compared to the same quarter of 2011 was primarily related to the April 1, 2011 change in the deposit insurance assessment base and a change in the method by which the assessment rate is determined.

Income Taxes

The Company’s effective tax rate on income before taxes was 36.3% for the second quarter of 2012, compared to 37.0% for the second quarter of 2011.

The Company’s effective tax rate on income before taxes was 36.4% for the first six months of 2012, compared to 36.7% for the first six months of 2011.

FINANCIAL POSITION

BANCFIRST CORPORATION

SELECTED CONSOLIDATED FINANCIAL DATA

(Unaudited)

(Dollars in thousands, except per share data)


	June 30,			December 31,			June 30,
	2012			2011			2011
	(unaudited)						(unaudited)
Balance Sheet Data
Total assets	$	5,671,711		$	5,608,825		$	5,267,445
Total loans		3,065,439			3,013,498			2,861,844
Allowance for loan losses		37,436			37,656			37,092
Securities		575,034			614,977			580,059
Deposits		5,099,648			5,037,735			4,701,999
Stockholders’ equity		499,561			483,041			470,397
Book value per share		32.97			31.95			30.80
Tangible book value per share		29.16			28.07			27.17
Average loans to deposits (year-to-date)		60.17	%		60.64	%		60.49	%
Average earning assets to total assets (year-to-date)		92.56			92.49			92.49
Average stockholders’ equity to average assets (year-to-date)		8.75			8.85			9.00
Asset Quality Ratios
Nonperforming and restructured loans to total loans		1.31	%		0.76	%		0.84	%
Nonperforming and restructured assets to total assets		0.89			0.71			0.75
Allowance for loan losses to total loans		1.22			1.25			1.30
Allowance for loan losses to nonperforming and restructured loans		93.14			163.54			154.68

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 as of June 30, 2012 increased $55.8 million from December 31, 2011 and $192.7 million from June 30, 2011. The increase was primarily due to increased deposits. Federal funds sold consist of overnight investments of excess funds with other financial institutions. Due to the high degree of counterparty instability in the Federal funds market and near zero overnight Federal funds rates, the Company has continued to maintain the majority of its excess funds with the Federal Reserve Bank. The Federal Reserve Bank pays interest on these funds based upon the lowest target rate for the maintenance period.

Securities

At June 30, 2012, total securities decreased $39.9 million compared to December 31, 2011, and $5.0 million compared to June 30, 2011. The size of the Company’s securities portfolio is a function of liquidity and rate risk management and excess funds available for investment. The Company has maintained a very liquid securities portfolio to provide funds for loan growth. The net unrealized gain on securities available for sale, before taxes, was $10.7 million at June 30, 2012, compared to an unrealized gain of $14.6 million at December 31, 2011, and $14.8 million at June 30, 2011. These unrealized gains are included in the Company’s stockholders’ equity as accumulated other comprehensive income, net of income tax, in the amounts of $7.0 million, $9.4 million and $9.7 million, respectively.

Loans (Including Acquired Loans)

At June 30, 2012, total loans were up $51.9 million or 1.7% from December 31, 2011 due to internal growth and up $203.6 million or 7.1% from June 30, 2011 due to internal growth and the July 2011 acquisition.

Allowance for Loan Losses/Fair Market Value Adjustments on Acquired Loans

The allowance for loan losses as a percentage of total loans and the allowance to nonperforming and restructured loans are shown in the preceding table.

The fair market value adjustment on acquired loans contains a market component to adjust the rates on the loans to market value and a credit component to absorb potential and identified credit exposures in the acquired loans. The credit component was $3.2 million at June 30, 2012, $3.7 million at December 31, 2011, and $1.6 million at June 30, 2011 while the acquired loans outstanding were $149.4 million, $193.4 million and $120.7 million, respectively.

Nonperforming Loans, Restructured Loans and Other Real Estate Owned

Nonperforming and restructured loans totaled $40.2 million at June 30, 2012, compared to $23.0 million at December 31, 2011 and $24.0 million at June 30, 2011. The increase in restructured loans in 2012 was due primarily to the principal deferral of one real estate credit valued at approximately $18.0 million. This loan was evaluated by management and determined to be well collateralized. Additionally, none of the concessions granted involved a principal reduction or a change from the current market rate of interest. Collateral value will be monitored periodically to evaluate possible impairment. 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 that were restructured during the period were not considered to be material. The level of nonperforming loans and loan losses may rise over time as a result of economic conditions. Nonperforming and restructured assets as a percentage of total assets are shown in the preceding table.

Other real estate owned and repossessed assets totaled $10.2 million at June 30, 2012, compared to $16.6 million at December 31, 2011 and $15.5 million at June 30, 2011. The decrease was due to the sale of a commercial real estate property.

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 $6.5 million of these loans at June 30, 2012 compared to $26.3 million at December 31, 2011 and $7.5 million at June 30, 2011. These 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. The Company’s nonaccrual loans are primarily commercial and real estate loans.

Liquidity and Funding

Deposits

At June 30, 2012 total deposits increased $61.9 million compared to December 31, 2011, and $397.6 million compared to June 30, 2011. The increase from December 2011 was due to internal deposit growth due in part to FDIC coverage on noninterest-bearing accounts and low yields on alternative investments, and the increase from June 2011 was due to internal growth and the July 2011 acquisition. The Company’s deposit base continues to be comprised substantially of core deposits. The Company’s core deposits provide it with a stable, low-cost funding source. The Company’s core deposits averaged 92.4% at June 30, 2012 compared to 91.8% at December 31, 2011 and 91.2% at June 30, 2011. Noninterest-bearing deposits to total deposits were 36.1% at June 30, 2012, compared to 33.8% at December 31, 2011 and 32.1% at June 30, 2011.

The Company has recognized that it received depository funds due to the low interest rate environment and extended FDIC deposit insurance coverage provided by the U.S. Treasury under the Transaction Account Guaranty Program (“TAGP”). If interest rates increase or if the TAGP fails to be extended after December 31, 2012, the Company could lose deposits of an estimated $600 to $800 million over a short period of time. The Company maintains excess liquidity to absorb the potential loss of funds.

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. As of June 30, 2012, short-term borrowings were $6.3 million, a decrease of $1.9 million from December 31, 2011, and an increase of $4.9 million from June 30, 2011.

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 $518.6 million, are pledged as collateral for the borrowings under the line of credit. As of June 30, 2012, the Company had approximately $11.3 million in advances outstanding due to acquisitions, compared to $18.5 million at December 31, 2011 and $17.6 million at June 30, 2011. The advances mature at varying dates through 2014.

In December 2010, the Company borrowed $14.5 million from a commercial bank to fund a portion of the Company’s acquisitions. The Company made a payment of $6.0 million in July 2011 and paid the remaining balance of $8.5 million in October 2011.

There have not been 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, 2011.

Capital Resources

At June 30, 2012, stockholders’ equity increased $16.5 million from December 31, 2011 and $29.2 million from June 30, 2011. In addition to net income of $25.7 million, other changes in stockholders’ equity during the six months ended June 30, 2012 included $964,000 related to stock option exercises, $798,000 related to stock-based compensation partially offset by $8.2 million in dividends, $256,000 of common stock repurchases and a $2.5 million change to other comprehensive income. Stockholders’ equity has continued to increase due to net earnings retained, stock option exercises and unrealized gains on securities, partially offset by common stock repurchases, dividends and unrealized losses on securities. The ratios of average stockholders’ equity to average assets are presented above. The Company’s leverage ratio and total risk-based capital ratio were 8.24% and 14.62%, respectively, at June 30, 2012, well in excess of the regulatory minimums.

See Note (8) 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, 2011 other than the redemption of $9,279,000 of trust preferred securities and related debentures in June 2012.

BANCFIRST CORPORATION

CONSOLIDATED AVERAGE BALANCE SHEETS AND INTEREST MARGIN ANALYSIS

(Unaudited)

Taxable Equivalent Basis (Dollars in thousands)


	Three Months Ended June 30,
	2012								2011
				Interest		Average						Interest		Average
	Average			Income/		Yield/			Average			Income/		Yield/
	Balance			Expense		Rate			Balance			Expense		Rate
ASSETS
Earning assets:
Loans (1)	$	3,073,027		$	41,952		5.48	%	$	2,821,461		$	40,344		5.74	%
Securities – taxable		516,195			2,087		1.62			544,915			3,032		2.23
Securities – tax exempt		51,731			632		4.90			77,031			927		4.83
Interest bearing deposits w/ banks & FFS		1,612,649			1,061		0.26			1,423,104			906		0.26

Total earning assets		5,253,602			45,732		3.49			4,866,511			45,209		3.73

Nonearning assets:
Cash and due from banks		146,124								141,218
Interest receivable and other assets		311,157								290,152
Allowance for loan losses		(37,635	)							(36,185	)

Total nonearning assets		419,646								395,185

Total assets	$	5,673,248							$	5,261,696

LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing liabilities:
Transaction deposits	$	721,868		$	260		0.14	%	$	723,429		$	390		0.22	%
Savings deposits		1,721,452			1,401		0.33			1,608,045			2,719		0.68
Time deposits		868,330			2,222		1.03			905,940			2,877		1.27
Short-term borrowings		7,361			8		0.44			6,585			3		0.18
Long-term borrowings		12,783			91		2.86			34,522			255		2.96
Junior subordinated debentures		34,691			565		6.53			28,866			525		7.29

Total interest bearing liabilities		3,366,485			4,547		0.54			3,307,387			6,769		0.82

Interest free funds:
Noninterest bearing deposits		1,780,168								1,452,690
Interest payable and other liabilities		29,051								29,286
Stockholders’ equity		497,544								472,333

Total interest free funds		2,306,763								1,954,309

Total liabilities and stockholders’ equity	$	5,673,248							$	5,261,696

Net interest income				$	41,185							$	38,440

Net interest spread							2.95	%							2.91	%

Net interest margin							3.14	%							3.17	%

(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,
	2012								2011
				Interest		Average						Interest		Average
	Average			Income/		Yield/			Average			Income/		Yield/
	Balance			Expense		Rate			Balance			Expense		Rate
ASSETS
Earning assets:
Loans (1)	$	3,049,750		$	84,014		5.52	%	$	2,807,497		$	79,694		5.72	%
Securities – taxable		527,879			4,494		1.71			581,608			6,659		2.31
Securities – tax exempt		52,504			1,284		4.90			78,146			1,896		4.89
Interest bearing deposits w/ banks & FFS		1,596,812			2,034		0.26			1,348,460			1,702		0.25

Total earning assets		5,226,945			91,826		3.52			4,815,711			89,951		3.77

Nonearning assets:
Cash and due from banks		146,047								139,316
Interest receivable and other assets		311,793								287,766
Allowance for loan losses		(37,649	)							(36,058	)

Total nonearning assets		420,191								391,024

Total assets	$	5,647,136							$	5,206,735

LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest bearing liabilities:
Transaction deposits	$	731,827		$	534		0.15	%	$	717,783		$	802		0.23	%
Savings deposits		1,713,777			2,944		0.34			1,605,861			5,568		0.70
Time deposits		880,232			4,654		1.06			910,928			5,861		1.30
Short-term borrowings		7,626			16		0.42			6,594			7		0.21
Long-term borrowings		13,617			196		2.89			34,773			501		2.91
Junior subordinated debentures		35,387			1,151		6.52			28,866			1,050		7.34

Total interest bearing liabilities		3,382,466			9,495		0.56			3,304,805			13,789		0.84

Interest free funds:
Noninterest-bearing deposits		1,742,597								1,406,915
Interest payable and other liabilities		27,920								26,235
Stockholders’ equity		494,153								468,780

Total interest free funds		2,264,670								1,901,930

Total liabilities and stockholders’ equity	$	5,647,136							$	5,206,735

Net interest income				$	82,331							$	76,162

Net interest spread							2.96	%							2.93	%

Net interest margin							3.16	%							3.19	%

(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, 2011, 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 Disclosure Committee, which includes the Company’s Chief Risk Officer, Chief Asset Quality Officer, Chief Internal Auditor, Senior Vice President of Corporate Finance and Treasurer, Controller and General Counsel, have evaluated, as of the last day of the period covered by this report, the Company’s disclosure controls and procedures. Based on their evaluation they concluded that the disclosure controls and procedures of the Company are effective to ensure that information required to be disclosed by the Company in the reports filed or submitted by it under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms.

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

Except as set forth below, as of June 30, 2012, 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, 2011.

Regulatory reforms under consideration could have a significant impact on our business, financial condition and results of operations.

Recently proposed changes in the laws and regulations affecting financial institutions could cause us to report capital under new methodologies or incur increased costs as we evaluate the implications of new rules and respond to new requirements. Compliance with the proposed rules under Basel III and some of the provisions of the Dodd-Frank Act related to the capital treatment of junior subordinated debentures may increase our operating costs, require us to hold higher levels of regulatory capital or liquidity or both or otherwise adversely affect our business or financial results in the future. Our management is actively reviewing the provisions of Basel III and certain provisions of the Dodd-Frank Act and assessing its probable impact on our business, financial condition, and results of operations. However, because many aspects of Basel III and the Dodd-Frank Act are in the comment phase or subject to future rulemaking, it is difficult to precisely anticipate its overall financial impact on us at this time.

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

The following table provides information with respect to purchases made by or on behalf of the Company or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934), of the Company’s common stock during the three months ended June 30, 2012.


Period	Total Number of Shares Purchased (1)		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan		Maximum Number of Shares That May Yet Be Purchased Under the Plan at the End of the Period
April 1, 2012 to April 30, 2012		—		—		—		241,751
May 1, 2012 to May 31, 2012		3,887	$	37.74		—		237,864
June 1, 2012 to June 30, 2012		2,900	$	37.65		—		234,964

(1)	Represents repurchases made in connection with the Company’s November 1999 Stock Repurchase Program. The amount approved is subject to amendment. The Stock Repurchase Program will remain in effect until all shares are repurchased.

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 23, 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	Certificate of Designation of Preferred Stock (filed as Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the Year Ended December 31, 1998 and incorporated herein by reference).

	3.4	Amended By-Laws (filed as Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the Year Ended December 31, 1992 and incorporated herein by reference).

	3.5	Resolution of the Board of Directors amending Section XXVII of the Company’s By-Laws (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K dated February 26, 2004 and incorporated herein by reference).

	3.6	Resolution of the Board of Directors amending Article XVI, Section 1 and Article XVII, Section 1 of the Company’s By-Laws (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K dated February 28, 2008 and incorporated herein by reference).

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

	4.2	Rights Agreement, dated as of February 25, 1999, between BancFirst Corporation and BancFirst, as Rights Agent, including as Exhibit A the form of Certificate of Designations of the Company setting forth the terms of the Preferred Stock, as Exhibit B the form of Right Certificate and as Exhibit C the form of Summary of Rights Agreement (filed as Exhibit 4.1 to the Company’s 8-K dated January 28, 2009 and incorporated herein by reference).

	4.3	Amendment No. 1 to Rights Agreement, dated as of February 25, 1999, between BancFirst Corporation and BancFirst, as Rights Agent (filed as Exhibit 4.2 to the Company’s 8-K dated January 28, 2009 and incorporated herein by reference).

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

	4.5	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).

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

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

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

	4.9	Form of Indenture relating to the Union National Bancshares, Inc. (BancFirst Corp. as successor) Fixed/Floating Rate Junior Subordinated Deferrable Interest Debentures, Form of Fixed/Floating Rate Junior Subordinated Deferrable Interest Debenture, and Form of Certificate to Trustee (filed as Exhibit 4.9 to the Company’s Annual Report on Form 10-K for the Year Ended December 31, 2010 and incorporated herein by reference).

	4.10	Form of Indenture relating to the FBC Financial Corporation (BancFirst Corp. as successor) Floating Rate Junior Subordinated Deferrable Interest Debentures, Form of Floating Rate Junior Subordinated Deferrable Interest Debenture, and Form of Certificate to Trustee (filed as Exhibit 4.10 to the Company’s Quarterly Report on Form 10-Q for the Quarter ended September 30, 2011 and incorporated herein by reference).

	10.1	Tenth Amended and Restated BancFirst Corporation Stock Option Plan (filed as Exhibit 4.1 to the Company’s registration statement on Form S-8, File No. 333-175914 dated July 29, 2011, and incorporated herein by reference).


Exhibit Number		Exhibit

10.2		BancFirst Corporation Employee Stock Ownership and Trust Agreement adopted December 21, 2006 effective January 1, 2007 (filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the Quarter ended March 31, 2008 and incorporated herein by reference).

10.3		Second Amended and Restated BancFirst Corporation Non-Employee Directors’ Stock Option Plan (filed as Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2009 and incorporated herein by reference).

10.4		Third Amended and Restated BancFirst Corporation Directors’ Deferred Stock Compensation Plan (filed as Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2009 and incorporated herein by reference).

10.5		Amended and Restated BancFirst Corporation Thrift Plan adopted March 25, 2010 effective January 1, 2010 (filed as Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2010 and incorporated herein by reference).

10.6		Amendment (Code Section 415 Compliance) to the BancFirst Corporation Employee Stock Ownership Plan and Trust Agreement, adopted July 23, 2009 (filed as Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2010 and incorporated herein by reference).

10.7		Amendment (Pension Protection Act, Heart Act and the Worker, Retiree, and Employer Recovery Act) to the BancFirst Corporation Employee Stock Ownership Plan and Trust Agreement, adopted December 17, 2009 (filed as Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2010 and incorporated herein by reference).

10.8		Amendment to the Amended and Restated BancFirst Corporation Thrift Plan adopted December 16, 2010 effective January 1, 2011 (filed as Exhibit 10.9 to the Company’s Annual Report on Form 10-K for the Year Ended December 31, 2010 and incorporated herein by reference).

10.9		Amendment to the Amended and Restated BancFirst Corporation Thrift Plan adopted October 27, 2011 effective October 1, 2011 (filed as Exhibit 10.9 to the Company’s Annual Report on Form 10-K for the Year Ended December 31, 2011 and incorporated herein by reference).

10.10		Amendment to the Amended and Restated BancFirst Corporation Employee Ownership Plan adopted October 27, 2011 effective October 1, 2011 (filed as Exhibit 10.10 to the Company’s Annual Report on Form 10-K for the Year Ended December 31, 2011 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).

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

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

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.

**	Furnished 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, 2012		/s/ Joe T. Shockley, Jr.
		Joe T. Shockley, Jr.
		Executive Vice President
		Chief Financial Officer
		(Duly Authorized Officer and
		Principal Financial Officer)