In November 1999, the Company adopted 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 Company, BancFirst and Pegasus Bank are subject to risk-based capital guidelines issued by the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation (“FDIC”). These guidelines are used to evaluate capital adequacy and involve both quantitative and qualitative evaluations of the Company’s, BancFirst’s and Pegasus Bank’s assets, liabilities and certain off-balance-sheet items calculated under regulatory practices. Failure to meet the minimum capital requirements can initiate certain mandatory or discretionary actions by the regulatory agencies that could have a direct material effect on the Company’s financial statements. Management believes that as of March 31, 2020, the Company, BancFirst and Pegasus Bank met all capital adequacy requirements to which they are subject. The actual and required capital amounts and ratios are shown in the following table:

				Required						To Be Well
				For Capital			With			Capitalized Under
				Adequacy			Capital Conservation			Prompt Corrective
	Actual			Purposes			Buffer			Action Provisions
	Amount		Ratio	Amount		Ratio	Amount		Ratio	Amount		Ratio
	(Dollars in thousands)
As of March 31, 2020:
Total Capital
(to Risk Weighted Assets)-
BancFirst Corporation	$	937,808	14.30%	$	524,592	8.00%	$	688,527	10.50%	N/A		N/A
BancFirst		853,975	14.10%		484,515	8.00%		635,926	10.50%	$	605,644	10.00%
Pegasus Bank		65,152	13.31%		39,146	8.00%		51,379	10.50%		48,932	10.00%
Common Equity Tier 1 Capital
(to Risk Weighted Assets)-
BancFirst Corporation	$	841,728	12.84%	$	295,083	4.50%	$	459,018	7.00%	N/A		N/A
BancFirst		767,058	12.67%		272,540	4.50%		423,951	7.00%	$	393,669	6.50%
Pegasus Bank		61,537	12.58%		22,019	4.50%		34,252	7.00%		31,806	6.50%
Tier 1 Capital
(to Risk Weighted Assets)-
BancFirst Corporation	$	867,728	13.23%	$	393,444	6.00%	$	557,379	8.50%	N/A		N/A
BancFirst		787,058	13.00%		363,387	6.00%		514,798	8.50%	$	484,515	8.00%
Pegasus Bank		61,537	12.58%		29,359	6.00%		41,592	8.50%		39,146	8.00%
Tier 1 Capital
(to Total Assets)-
BancFirst Corporation	$	867,728	10.41%	$	333,372	4.00%	N/A		N/A	N/A		N/A
BancFirst		787,058	10.35%		304,312	4.00%	N/A		N/A	$	380,390	5.00%
Pegasus Bank		61,537	8.83%		27,880	4.00%	N/A		N/A		34,850	5.00%

As of March 31, 2020, the most recent notification from the Federal Reserve Bank of Kansas City and the FDIC categorized BancFirst and Pegasus Bank as “well capitalized” under the prompt corrective action provisions. The Common Equity Tier 1 Capital of the Company, BancFirst and Pegasus Bank 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 the Company, BancFirst and Pegasus Bank 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 notification of BancFirst and Pegasus Bank’s capital category that management believes would materially change its category under capital requirements existing as of the report date.

As discussed in Note 1 - Significant Accounting Policies, 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 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 maintains the three-year transition option of the 2019 CECL Rule and also provides 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.