Stockholders' Equity

12 Months Ended

Dec. 31, 2022

Equity [Abstract]

Stockholders' Equity

(15) STOCKHOLDERS’ EQUITY

As of December 31, 2022, 2021 and 2020 the Company’s authorized and outstanding preferred and common stock was as follows:

			No. of Shares Outstanding at December 31,
Class of Stock	No. of Shares Authorized at December 31, 2022		2022		2021		2020		Par Value Per Share		Dividends	Voting Rights
Senior Preferred		10,000,000		—		—		—	$	1.00	As declared	Voting
10% Cumulative Preferred		900,000		—		—		—		5.00	As declared	Non-voting
Common		40,000,000		32,875,560		32,603,118		32,719,852		1.00	As declared	Voting

The following is a description of the capital stock of the Company:

(a) Senior Preferred Stock: No shares issued or outstanding. Shares may be issued with such voting, dividend, redemption, sinking fund, conversion, exchange, liquidation and other rights as shall be determined by the Company’s Board of Directors, without approval of the stockholders. The Senior Preferred Stock would have a preference over common stock as to payment of dividends, as to the right to distribution of assets upon redemption of such shares or upon liquidation of the Company.

(b) 10% Cumulative Preferred Stock: Redeemable at the Company’s option at $5.00 per share plus accumulated dividends; non-voting; cumulative dividends at the rate of 10% payable semi-annually on January 15 and July 15; no shares issued or outstanding.

(c) Common stock: At December 31, 2022, 2021 and 2020 the shares issued equaled shares outstanding.

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. During September 2021, the SRP was amended to permit the repurchase of an additional 650,000 shares.

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

	Year Ended December 31,
	2022		2021		2020
Number of shares repurchased		—		212,296		59,284
Average price of shares repurchased	$	—	$	54.94	$	52.26
Shares remaining to be repurchased		500,486		500,486		62,782

The Company’s ability to pay dividends is dependent upon dividend payments received from BancFirst. Banking regulations limit bank dividends based upon net earnings retained and minimum capital requirements. Dividends in excess of these requirements require regulatory approval. At January 1, 2023, approximately $185.1 million of the equity of BancFirst was available for dividend payments to the Company. During any deferral period or any event of default on the Junior Subordinated Debentures, the Company may not declare or pay any dividends on any of its capital stock.

BancFirst Corporation, BancFirst, Pegasus and Worthington are subject to risk-based capital guidelines issued by the Board of Governors of the Federal Reserve System and the FDIC. These guidelines are used to evaluate capital adequacy and involve both quantitative and qualitative evaluations of BancFirst Corporation’s, BancFirst’s, Pegasus’s and Worthington'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 consolidated financial statements. The Company believes that as of December 31, 2022, BancFirst Corporation, BancFirst, Pegasus and Worthington met all capital adequacy requirements to which they are subject. The actual and required capital amounts and ratios are shown in the following table:

	Actual					Required For Capital Adequacy Purposes					With Capital Conservation Buffer					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
As of December 31, 2022:
Total Capital
(to Risk Weighted Assets)-
BancFirst Corporation	$	1,298,329		16.61	%	$	625,387		8.00	%	$	820,821		10.50	%	N/A		N/A
BancFirst		1,092,098		16.68	%		523,932		8.00	%		687,661		10.50	%	$	654,916		10.00	%
Pegasus		117,445		12.91	%		77,802		8.00	%		95,553		10.50	%		91,003		10.00	%
Worthington		47,554		14.09	%		27,006		8.00	%		35,446		10.50	%		33,758		10.00	%
Common Equity Tier 1 Capital
(to Risk Weighted Assets)-
BancFirst Corporation	$	1,120,361		14.33	%	$	351,780		4.50	%	$	547,214		7.00	%	N/A		N/A
BancFirst		991,050		15.13	%		294,712		4.50	%		458,441		7.00	%	$	425,695		6.50	%
Pegasus		108,437		11.92	%		40,951		4.50	%		63,702		7.00	%		59,152		6.50	%
Worthington		44,207		13.10	%		15,191		4.50	%		23,631		7.00	%		21,943		6.50	%
Tier 1 Capital
(to Risk Weighted Assets)-
BancFirst Corporation	$	1,146,361		14.66	%	$	469,041		6.00	%	$	664,474		8.50	%	N/A		N/A
BancFirst		1,011,050		15.44	%		392,949		6.00	%		556,678		8.50	%	$	523,932		8.00	%
Pegasus		108,437		11.92	%		54,602		6.00	%		77,352		8.50	%		72,802		8.00	%
Worthington		44,207		13.10	%		20,255		6.00	%		28,694		8.50	%		27,006		8.00	%
Tier 1 Capital
(to Total Assets)-
BancFirst Corporation	$	1,146,361		9.30	%	$	493,191		4.00	%	N/A		N/A			N/A		N/A
BancFirst		1,011,050		9.72	%		416,004		4.00	%	N/A		N/A			$	520,005		5.00	%
Pegasus		108,437		8.00	%		54,238		4.00	%	N/A		N/A				67,798		5.00	%
Worthington		44,207		8.53	%		20,738		4.00	%	N/A		N/A				25,922		5.00	%
As of December 31, 2021:
Total Capital
(to Risk Weighted Assets)-
BancFirst Corporation	$	1,171,215		17.30	%	$	541,493		8.00	%	$	710,709		10.50	%	N/A		N/A
BancFirst		1,004,835		16.75	%		479,883		8.00	%		629,847		10.50	%	$	599,854		10.00	%
Pegasus		88,224		11.62	%		60,765		8.00	%		79,754		10.50	%		75,956		10.00	%
Common Equity Tier 1 Capital
(to Risk Weighted Assets)-
BancFirst Corporation	$	1,002,096		14.80	%	$	304,590		4.50	%	$	473,806		7.00	%	N/A		N/A
BancFirst		909,817		15.17	%		269,934		4.50	%		419,898		7.00	%	$	389,905		6.50	%
Pegasus		82,056		10.80	%		34,180		4.50	%		53,170		7.00	%		49,372		6.50	%
Tier 1 Capital
(to Risk Weighted Assets)-
BancFirst Corporation	$	1,028,096		15.19	%	$	406,120		6.00	%	$	575,336		8.50	%	N/A		N/A
BancFirst		929,817		15.50	%		359,913		6.00	%		509,876		8.50	%	$	479,883		8.00	%
Pegasus		82,056		10.80	%		45,574		6.00	%		64,563		8.50	%		60,765		8.00	%
Tier 1 Capital
(to Total Assets)-
BancFirst Corporation	$	1,028,096		9.14	%	$	449,847		4.00	%	N/A		N/A			N/A		N/A
BancFirst		929,817		9.22	%		403,460		4.00	%	N/A		N/A			$	504,325		5.00	%
Pegasus		82,056		6.98	%		47,054		4.00	%	N/A		N/A				58,817		5.00	%

As of December 31, 2022, the most recent notifications from the Federal Reserve Bank of Kansas City and the FDIC categorized BancFirst, Pegasus and Worthington as “well capitalized” under the prompt corrective action provisions. The Common Equity Tier 1 Capital of BancFirst Corporation, BancFirst, Pegasus and Worthington includes common stock and related paid-in capital and retained earnings. In connection with the adoption of the Basel III Capital Rules, the election was made to opt-out of the requirement to include most components of accumulated other comprehensive income in Common Equity Tier 1 Capital. Common Equity Tier 1 Capital for BancFirst Corporation, BancFirst, Pegasus and Worthington is reduced by goodwill and other intangible assets, net of associated deferred tax liabilities. The Company’s trust preferred securities have continued to be included in Tier 1 capital, as the Company’s total

assets do not exceed $15 billion. There are no conditions or events since the most recent notifications to BancFirst Corporation, BancFirst, Pegasus and Worthington of their capital category that management believes would materially change their category under capital requirements existing as of the report date.

On June 17, 2021, the Company completed a private placement, under Regulation D of the Securities Act of 1933, of $60 million aggregate principal amount of Subordinated Notes. The Subordinated Notes have been structured to qualify as Tier 2 capital under bank regulatory guidelines.

In April 2020, the Company began originating loans to qualified small businesses under the PPP administered by the SBA. Federal bank regulatory agencies have issued an interim final rule that permits banks to neutralize the regulatory capital effects of participating in the Paycheck Protection Program Lending Facility (the “PPP Facility”) and clarify that PPP loans have a zero percent risk weight under applicable risk-based capital rules. Specifically, a bank may exclude all PPP loans pledged as collateral to the PPP Facility from its average total consolidated assets for the purposes of calculating its leverage ratio, while PPP loans that are not pledged as collateral to the PPP Facility are included. The PPP loans the Company originated in 2021 and 2020 are included in the calculation of the Company’s leverage ratio as of December 31, 2022 and December 31, 2021 as the Company did not utilize the PPP Facility for funding purposes.

In connection with the adoption of ASC 326, the Company recognized an after-tax cumulative effect reduction to retained earnings totaling $2.3 million in 2020. In February 2019, the federal bank regulatory agencies issued a final rule (the “2019 CECL Rule”) that revised certain capital regulations to account for changes to credit loss accounting under U.S. GAAP. The 2019 CECL Rule included a transition option that allows banking organizations to phase in, over a three-year period, the day-one adverse effects of CECL on their regulatory capital ratios (three-year transition option). In March 2020, the federal bank regulatory agencies issued an interim final rule that maintained the three-year transition option of the 2019 CECL Rule and also provided banking organizations that were required under U.S. GAAP (as of January 2020) to implement CECL before the end of 2020 the option to delay for two years an estimate of the effect of CECL on regulatory capital, relative to the incurred loss methodology’s effect on regulatory capital, followed by a three-year transition period (five-year transition option). The Company elected not to adopt the five-year transition option.