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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐.

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

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

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

As of ~~October~~April 29, ~~2021~~2022 there were ~~32,572,217~~32,731,685 shares of the registrant’s Common Stock outstanding.

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


	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30,						September 30,						March 31,
	2021			2020			2021			2020			2022			2021
INTEREST INCOME
Loans, including fees	$	80,249		$	76,612		$	240,358		$	231,985		$	72,954		$	77,662
Securities:
Debt securities:
Taxable		1,484			2,032			4,779			6,665			3,781			1,693
Tax-exempt		35			131			175			383			26			70
Federal funds sold														1			0
Interest-bearing deposits with banks		1,441			422			2,861			5,586			1,757			595
Total interest income		83,209			79,197			248,173			244,619			78,519			80,020
INTEREST EXPENSE
Deposits		1,988			2,854			6,313			16,004			1,981			2,322
Short-term borrowings		—			—			1			8			1			1
Subordinated debt		1,031			491			2,100			1,474			1,030			491
Total interest expense		3,019			3,345			8,414			17,486			3,012			2,814
Net interest income		80,190			75,852			239,759			227,133			75,507			77,206
Provision for (benefit from) credit losses		1,483			18,740			(8,466	)		57,656
Net interest income after provision for/(benefit from) credit losses		78,707			57,112			248,225			169,477
Provision for credit losses														2,936			—
Net interest income after provision for credit losses														72,571			77,206
NONINTEREST INCOME
Trust revenue		3,210			3,131			9,576			10,154			3,506			3,102
Service charges on deposits		21,706			19,078			61,330			54,642			21,375			19,100
Securities transactions (includes 0 accumulated other comprehensive income reclassifications)		150			—			417			(545	)
Securities transactions (includes accumulated other comprehensive loss reclassifications of $1,536 and $0, respectively)														(3,915	)		95
Income from sales of loans		1,594			1,873			5,737			4,215			1,666			2,010
Insurance commissions		6,666			5,197			17,670			15,316			7,427			5,989
Cash management		3,127			3,701			9,198			12,276			3,131			3,003
Gain on sale of other assets		34			(15	)		2,746			120			45			2,639
Other		3,299			1,610			17,665			5,624			10,415			3,997
Total noninterest income		39,786			34,575			124,339			101,802			43,650			39,935
NONINTEREST EXPENSE
Salaries and employee benefits		42,267			41,995			123,836			123,977			43,932			39,577
Occupancy, net		5,086			4,503			13,962			11,888			4,403			4,348
Depreciation		4,207			3,795			12,217			10,830			4,775			3,877
Amortization of intangible assets		755			968			2,357			2,900			831			793
Data processing services		1,734			1,669			5,072			4,990			1,805			1,678
Net loss/(income) from other real estate owned		1,810			196			6,677			(1,951	)
Net expense from other real estate owned														1,794			1,510
Marketing and business promotion		1,796			1,485			5,323			5,325			2,073			1,879
Deposit insurance		846			723			2,488			1,224			1,128			876
Other		11,713			10,749			37,268			32,936			11,771			10,425
Total noninterest expense		70,214			66,083			209,200			192,119			72,512			64,963
Income before taxes		48,279			25,604			163,364			79,160			43,709			52,178
Income tax expense		9,529			4,714			33,902			14,932			7,794			9,658
Net income	$	38,750		$	20,890		$	129,462		$	64,228		$	35,915		$	42,520
NET INCOME PER COMMON SHARE
Basic	$	1.18		$	0.64		$	3.95		$	1.97		$	1.10		$	1.30
Diluted	$	1.16		$	0.63		$	3.88		$	1.94		$	1.08		$	1.27
OTHER COMPREHENSIVE (LOSS) GAIN
Unrealized (losses)/gains on debt securities, net of tax of $172, $335, $980 and $(1,756) respectively		(552	)		(982	)		(2,565	)		5,254
Unrealized losses on debt securities, net of tax of $10,219 and $336, respectively														(32,833	)		(1,006	)
Reclassification adjustment for losses included in net income, net of tax of $(369) and $0, respectively														1,167			0
Other comprehensive loss, net of tax of $9,850 and $336, respectively														(31,666	)		(1,006	)
Comprehensive income	$	38,198		$	19,908		$	126,897		$	69,482		$	4,249		$	41,514

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


	Nine Months Ended						Three Months Ended
	September 30,						March 31,
	2021			2020			2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	129,462		$	64,228		$	35,915		$	42,520
Adjustments to reconcile to net cash provided by operating activities:
(Benefit from)/provision for credit losses		(8,466	)		57,656
Provision for credit losses								2,936			0
Depreciation and amortization		14,574			13,730			5,606			4,670
Net amortization of securities premiums and discounts		3,069			(240	)		1,921			369
Realized securities (gains)/losses		(417	)		545
Realized securities losses/(gains)								3,915			(95	)
Gain on sales of loans		(5,737	)		(4,215	)		(1,666	)		(2,010	)
Cash receipts from the sale of loans originated for sale		294,387			297,690			83,749			114,517
Cash disbursements for loans originated for sale		(277,480	)		(309,623	)		(67,444	)		(98,043	)
Deferred income tax provision/(benefit)		4,662			(8,664	)
Deferred income tax benefit								(968	)		(738	)
Gain on sale of other assets		(2,991	)		(2,308	)		(771	)		(2,584	)
Decrease/(increase) in interest receivable		3,894			(1,084	)
Increase/(decrease) in interest receivable								(4,714	)		235
Increase/(decrease) in interest payable		69			(1,286	)		485			(329	)
Amortization of stock-based compensation arrangements		1,604			1,265			458			576
Excess tax benefit from stock-based compensation arrangements		(1,622	)		(219	)		(1,024	)		(1,551	)
Other, net		6,615			3,781			5,209			11,504
Net cash provided by operating activities		161,623			111,256			63,607			69,041
INVESTING ACTIVITIES
Net cash received from acquisitions, net of cash paid		12,442			18,397			121,099			—
Net cash paid from sale of assets and liabilities, net of cash received		(13,733	)		—			—			(13,733	)
Net decrease in federal funds sold		15,000			1,000
Purchases of held for investment debt securities		(845	)		(1,395	)
Net increase in federal funds sold								(76	)		—
Purchases of available for sale debt securities		(251,874	)		(455,069	)		(966,818	)		(210,662	)
Proceeds from maturities, calls and paydowns of held for investment debt securities		826			554			61			7
Proceeds from maturities, calls and paydowns of available for sale debt securities		306,231			357,845			19,689			243,597
Proceeds from sales of available for sale securities								222,473			—
Purchase of equity securities		(490	)		(624	)		(144	)		(171	)
Proceeds from paydowns and sales of equity securities		638			445			697			194
Net change in loans		561,540			(955,531	)		(67,669	)		32,053
Net payments on derivative asset contracts								(70,694	)		(671	)
Purchases of premises, equipment and computer software		(20,859	)		(48,317	)		(6,896	)		(7,718	)
Purchase of tax credits		(4,107	)		(731	)		(770	)		(1,262	)
Other, net		6,454			6,565			3,078			2,858
Net cash provided by (used in) investing activities		611,223			(1,076,861	)
Net cash (used in) provided by investing activities								(745,970	)		44,492
FINANCING ACTIVITIES
Net change in deposits		1,708,393			967,250			2,729,040			1,344,608
Net change in short-term borrowings		2,400			(800	)		3,300			2,650
Proceeds from long-term borrowings		—			3,000
Paydown of long-term borrowings		0			(3,000	)
Proceeds from issuance of subordinated notes, net of debt issuance costs		59,150			—
Issuance of common stock in connection with stock options, net		1,722			857			3,143			1,309
Common stock acquired		(11,664	)		(3,098	)
Net cash settlement of options		(5,479	)		0			—			(5,479	)
Cash dividends paid		(33,414	)		(31,361	)		(11,738	)		(11,125	)
Net cash provided by financing activities		1,721,108			932,848			2,723,745			1,331,963
Net increase/(decrease) in cash, due from banks and interest-bearing deposits		2,493,954			(32,757	)
Net increase in cash, due from banks and interest-bearing deposits								2,041,382			1,445,496
Cash, due from banks and interest-bearing deposits at the beginning of the period		1,616,912			1,868,281			2,050,022			1,616,912
Cash, due from banks and interest-bearing deposits at the end of the period	$	4,110,866		$	1,835,524		$	4,091,404		$	3,062,408
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest	$	8,356		$	18,741		$	2,503		$	3,155
Cash paid during the period for income taxes	$	27,800		$	22,025		$	—		$	1,300
Noncash investing and financing activities:
Cash consideration for acquisitions	$	21,000		$	2,861		$	77,685		$	—
Fair value of assets acquired in acquisitions	$	283,962		$	47,838		$	510,888		$	—
Liabilities assumed in acquisitions	$	258,165		$	45,040		$	433,203		$	—
Unpaid common stock dividends declared	$	11,802		$	11,105		$	11,781		$	11,134

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

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting and reporting policies of BancFirst Corporation and its subsidiaries (the “Company”) conform to accounting principles generally accepted in the United States of America (U.S. GAAP) and general practice within the banking industry. A summary of significant accounting policies can be found in Note (1) to the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

Basis of Presentation

The accompanying unaudited interim consolidated financial statements include the accounts of BancFirst Corporation, Council Oak Partners, LLC, BancFirst Insurance Services, Inc., Pegasus Bank ("Pegasus"), Worthington National Bank ("Worthington") and BancFirst and its subsidiaries. The principal operating subsidiaries of BancFirst are Council Oak Investment Corporation, Council Oak Real Estate, Inc., BFTower, LLC, BFC-PNC LLC, and BancFirst Agency, Inc. All significant intercompany accounts and transactions have been eliminated. Assets held in a fiduciary or agency capacity are not assets of the Company and, accordingly, are not included in the unaudited interim consolidated financial statements.

The accompanying unaudited interim consolidated financial statements and notes are presented in accordance with U.S. GAAP for interim financial information and the instructions for Form 10-Q adopted by the Securities and Exchange Commission (“SEC”). 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, ~~2020,~~2021, should be referred to in connection with these unaudited interim consolidated financial statements. Operating results for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year or any future period.

The unaudited interim consolidated financial statements contained herein reflect all adjustments, which are, in the opinion of management, necessary to provide a fair statement of the financial position and results of operations of the Company for the interim periods presented. All such adjustments are of a normal and recurring nature.

Reclassifications

Certain items in prior financial statements have been reclassified to conform to the current presentation. Such reclassifications had no effect on previously reported cash flows, stockholders’ equity or comprehensive income.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with accounting principles generally accepted in the United States inherently involves the use of estimates and assumptions that affect the amounts reported in the financial statements and the related disclosures. These estimates relate principally to the determination of the allowance for credit losses, income taxes, the fair value of financial instruments and the valuation of intangibles. Such estimates and assumptions may change over time and actual amounts realized may differ from those reported.

Recent Accounting Pronouncements

Standards Not Yet Adopted:

In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2022-02, “Financial Instruments – Credit Losses (Topic 326).” ASU 2022-02 eliminates the TDR recognition and measurement guidance and, instead, requires that the Company evaluate, based on the accounting for loan modifications, whether the modification represents a new loan or a continuation of an existing loan. The Company has the option to apply a modified retrospective transition method, resulting in a cumulative-effect adjustment to retained earnings when adopted. In addition, the update requires that the Company disclose current-period write-offs by year of origination for financing receivables. The current-period write-off amendment should be applied prospectively. The amendments are effective for annual periods beginning after December 15, 2022, including interim periods within those annual periods. Early adoption is permitted; however the Company expects to adopt ASU 2022-02 on January 1, 2023. ASU No. 2022-02 is not expected to have a significant impact on the Company’s financial statements.

(2) RECENT DEVELOPMENTS, INCLUDING MERGERS AND ACQUISITIONS

On February 8, 2022, BancFirst Corporation acquired Worthington for an aggregate cash purchase price of $77.7 million. Worthington is chartered and regulated by the Office of the Comptroller of the Currency (OCC) with 1 banking location in Arlington, Texas, 1 in Colleyville, Texas and 2 in Fort Worth, Texas. At acquisition, Worthington had approximately $484 million in total assets, $257 million in loans and $430 million in deposits. Worthington will continue to operate as “Worthington National Bank” under a separate OCC charter and remain a separate subsidiary of BancFirst Corporation governed by its existing board of directors. BancFirst Corporation intends to provide an appropriate amount of capital or other support to increase Worthington’s ability to approve larger loans and allow Worthington to continue to grow earning assets. As a result of the acquisition, the Company recorded a core deposit intangible of approximately $8.7 million and goodwill of approximately $26.6 million. These fair value estimates are considered preliminary and are subject to change for up to one year after the closing date of the acquisition as additional information becomes available. The effect of this acquisition was included in the consolidated financial statements of the Company from the date of acquisition forward. The acquisition did not have a material effect on the Company’s consolidated financial statements.

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 3.50% Fixed-to-Floating Rate Subordinated Notes due 2036 (the “Subordinated Notes”) to various institutional accredited investors. See Note (7) of the Notes to Consolidated Financial Statements for a complete discussion of the Company’s subordinated debt.

On May 20, 2021, the Company purchased approximately $284 million in total assets, which included approximately $195 million in loans, and assumed approximately $256 million in deposits and certain other obligations, from The First National Bank and Trust Company of Vinita, Oklahoma for a purchase price of approximately $21 million. The Company recorded a bargain purchase gain related to this purchase of approximately $4.8 million, which iswas included in other noninterest income on the statement of comprehensive income and in other operating activities on the statement of cash ~~flow.~~flow during the second quarter of 2021. The bargain purchase gain is a noncash item on the statement of cash flow. In addition, the Company recorded expenses related to this purchase of approximately $4.8 million, which ~~are~~were included in noninterest ~~expense.~~expense during the second quarter of 2021. As a result of the purchase, the Company recorded a core deposit intangible of approximately $1.7 million. The effect of this purchase was included in the consolidated financial statement of the Company from the date of purchase forward. The purchase did not have a material effect on the Company’s consolidated financial statements. The First National Bank and Trust Company of Vinita was a nationally chartered bank with 2 banking locations in Vinita and Grove, Oklahoma.

On January 22, 2021, the Company sold approximately $21 million in loans and approximately $38 million in deposits from its Hugo, Oklahoma branch to AmeriState Bank in Atoka, Oklahoma. The Company recorded a gain on the transaction of $2.5 million, which is included in noninterest ~~income.~~income in the first quarter of 2021.

(3) SECURITIES

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



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
September 30, 2021	(Dollars in thousands)
March 31, 2022										(Dollars in thousands)
Mortgage backed securities (1)	$	37	$	2	$	—		$	39	$	27	$	—	$	—	$	27
States and political subdivisions		2,445		—		—			2,445		2,390		—		—		2,390
Other securities		500		—		—			500		500		—		—		500
Total	$	2,982	$	2	$	—		$	2,984	$	2,917	$	—	$	—	$	2,917
December 31, 2020
December 31, 2021
Mortgage backed securities (1)	$	59	$	3	$	—		$	62	$	32	$	1	$	—	$	33
States and political subdivisions		2,405		18		(1	)		2,422		2,445		—		—		2,445
Other securities		500		—		—			500		500		—		—		500
Total	$	2,964	$	21	$	(1	)	$	2,984	$	2,977	$	1	$	—	$	2,978

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



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
September 30, 2021	(Dollars in thousands)
March 31, 2022										(Dollars in thousands)
U.S. treasuries	$	444,695	$	5,582	$	(422	)	$	449,855	$	1,184,289	$	1,005	$	(38,996	)	$	1,146,298
U.S. federal agencies		23,193		354		(2	)		23,545		20,216		320		(2	)		20,534
Mortgage backed securities (1)		33,025		546		(10	)		33,561		21,708		51		(798	)		20,961
States and political subdivisions		5,841		219		(1	)		6,059		4,861		76		(85	)		4,852
Asset backed securities		13,350		132		—			13,482		13,359		—		(79	)		13,280
Other securities											3,000		—		(174	)		2,826
Total	$	520,104	$	6,833	$	(435	)	$	526,502	$	1,247,433	$	1,452	$	(40,134	)	$	1,208,751
December 31, 2020
December 31, 2021
U.S. treasuries	$	465,416	$	9,820	$	—		$	475,236	$	455,701	$	3,693	$	(1,766	)	$	457,628
U.S. federal agencies		19,697		1		(60	)		19,638		21,609		335		(2	)		21,942
Mortgage backed securities (1)		15,268		428		—			15,696		28,897		400		(14	)		29,283
States and political subdivisions		28,571		377		—			28,948		6,128		194		(3	)		6,319
Asset backed securities		13,337		—		(623	)		12,714		13,354		3		—			13,357
Other securities											3,000		—		(6	)		2,994
Total	$	542,289	$	10,626	$	(683	)	$	552,232	$	528,689	$	4,625	$	(1,791	)	$	531,523

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

On January 10, 2022, the Company purchased United States Treasury Notes of $

7600

million par value with an average yield of 1.42% and an average maturity of 53 months.

The maturities of debt securities held for investment and available for sale are summarized in the following table using contractual maturities. Actual maturities may differ from contractual maturities due to obligations that are called or prepaid. For purposes of the maturity table, mortgage-backed securities, which are not due at a single maturity date, have been presented at their contractual maturity.


	September 30, 2021				December 31, 2020				March 31, 2022				December 31, 2021
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
	(Dollars in thousands)								(Dollars in thousands)
Held for Investment
Contractual maturity of debt securities:
Within one year	$	576	$	576	$	807	$	809	$	581	$	581	$	577	$	577
After one year but within five years		2,402		2,403		2,091		2,110		2,332		2,332		2,396		2,397
After five years but within ten years		4		5		65		64		4		4		4		4
After ten years		—		—		1		1		—		—		—		—
Total	$	2,982	$	2,984	$	2,964	$	2,984	$	2,917	$	2,917	$	2,977	$	2,978
Available for Sale
Contractual maturity of debt securities:
Within one year	$	104,497	$	105,174	$	339,752	$	341,102	$	52,902	$	53,213	$	58,478	$	58,688
After one year but within five years		351,947		356,554		162,401		171,135		956,577		917,966		408,253		410,049
After five years but within ten years		8,595		8,792		3,753		3,910		189,828		190,010		10,851		11,011
After ten years		55,065		55,982		36,383		36,085		48,126		47,562		51,107		51,775
Total debt securities	$	520,104	$	526,502	$	542,289	$	552,232	$	1,247,433	$	1,208,751	$	528,689	$	531,523

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:

September 30, 2021

December 31, 2020

(Dollars in thousands)

Book value of pledged securities

$
462,720

$
490,833


	March 31, 2022		December 31, 2021
	(Dollars in thousands)
Book value of pledged securities	$	483,135	$	473,026

The following is a detail of proceeds from sales and the realized losses on available for sale debt securities:



	March 31, 2022		March 31, 2021
	(Dollars in thousands)
Proceeds	$	222,473	$	—
Gross losses realized		3,990		—

During the three months ended March 31, 2022, the Company sold $226 million of debt securities with an average yield of 0.16%, which were subsequently reinvested in $220 million of debt securities with an average yield of 1.86%. The Company used specific identification to reclassify the unrealized loss in other comprehensive income to a realized loss, as shown in the consolidated statements of comprehensive income. There were no sales of debt securities and therefore 0 proceeds from sales or realized securities gains or losses on available for sale debt securities for the three months ended March 31, 2021.

Realized gains/losses on debt and equity securities are reported as securities transactions within the noninterest income section of the consolidated statement of comprehensive income.

The following table summarizes debt securities with unrealized losses, segregated by the duration of the unrealized loss, at March 31, 2022 and December 31, 2021 respectively:


			Less than 12 Months				More than 12 Months				Total
	Number of investments		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
			(Dollars in thousands)
March 31, 2022
Available for Sale
U.S. treasuries		50	$	1,030,589	$	38,875	$	4,876	$	121	$	1,035,465	$	38,996
U.S. federal agencies		2		403		2		—		—		403		2
Mortgage backed securities		63		20,084		798		—		—		20,084		798
States and political subdivisions		6		2,177		85		—		—		2,177		85
Asset backed securities		1		13,280		79		—		—		13,280		79
Other securities		1		2,826		174		—		—		2,826		174
Total		123	$	1,069,359	$	40,013	$	4,876	$	121	$	1,074,235	$	40,134
December 31, 2021
Available for Sale
U.S. treasuries		10	$	298,080	$	1,766	$	—	$	—	$	298,080	$	1,766
U.S. federal agencies		1		376		2		—		—		376		2
Mortgage backed securities		7		2,824		14		—		—		2,824		14
States and political subdivisions		2		505		3		—		—		505		3
Other securities		1		2,994		6		—		—		2,994		6
Total		21	$	304,779	$	1,791	$	—	$	—	$	304,779	$	1,791

The Company has the ability and intent to hold the debt securities classified as held for investment until they mature, at which time the Company will receive full value for the debt securities. Furthermore, as of March 31, 2022 and December 31, 2021, the Company also had the ability and intent to hold the debt securities classified as available for sale for a period of time sufficient for a recovery of cost. The unrealized losses are due to increases in market interest rates over the yields available at the time the underlying debt securities were purchased. The fair value of those debt securities having unrealized losses is expected to recover as the securities approach their maturity date or repricing date, or if market yields for such investments decline. The Company has no intent or requirement to sell before the recovery of the unrealized loss; therefore, no impairment loss was realized in the Company’s consolidated statement of comprehensive income.

(4) LOANS HELD FOR INVESTMENT AND ALLOWANCE FOR CREDIT LOSSES ON LOANS

Loans held for investment are summarized by portfolio segment as follows:


	September 30, 2021		December 31, 2020		March 31, 2022		December 31, 2021
	Amount		Amount		(Dollars in thousands)
	(Dollars in thousands)
BancFirst
Real estate:
Commercial real estate owner occupied	$	653,359	$	641,987	$	784,619	$	684,739
Commercial real estate non-owner occupied		963,544		971,158		1,160,506		1,095,324
Construction and development < 60 months		302,075		229,615		458,859		415,466
Construction residential real estate < 60 months		227,294		206,195		282,027		254,524
Residential real estate first lien		877,160		853,316		1,032,732		937,006
Residential real estate all other		158,145		168,081		160,843		161,018
Farmland		270,215		252,958		276,465		272,179
Commercial and agricultural non-real estate		1,065,973		1,159,810		1,291,627		1,256,487
Consumer non-real estate		383,878		355,405		419,490		413,370
Oil and gas		118,444		179,355		427,792		428,908
Other loans (2)		378,161		822,078		199,380		250,421
Pegasus Bank		618,688		554,548
Total (1)	$	6,016,936	$	6,394,506	$	6,494,340	$	6,169,442
(1) Excludes accrued interest receivable of $21.2 million at September 30, 2021 and $26.0 million at December 31, 2020, that is recorded in accrued interest receivable and other assets.
(2) Includes PPP loans held for investment of $201.2 million, net of unamortized processing fees of $6.7 million at September 30, 2021 and $652.7 million, net of unamortized processing fees of $14.5 million at December 31, 2020.
(1) Excludes accrued interest receivable of $22.1 million at March 31, 2022 and $21.0 million at December 31, 2021, that is recorded in accrued interest receivable and other assets.					(1) Excludes accrued interest receivable of $22.1 million at March 31, 2022 and $21.0 million at December 31, 2021, that is recorded in accrued interest receivable and other assets.
(2) Includes PPP loans held for investment of $30.6 million, net of unamortized processing fees of $394,000, at March 31, 2022 and $80.4 million, net of unamortized processing fees of $2.0 million, at December 31, 2021.					(2) Includes PPP loans held for investment of $30.6 million, net of unamortized processing fees of $394,000, at March 31, 2022 and $80.4 million, net of unamortized processing fees of $2.0 million, at December 31, 2021.

Other loans. Other loans consist of loans approved by the Small Business Administration (“SBA”), which include loans funded through the Paycheck Protection Program (“PPP”). Since PPP loans are fully guaranteed by the SBA, there is no expected credit loss

related to these loans. In April 2020, the Company began originating loans to qualified small businesses under the PPP administered by the SBA. The Company had processing fees, which were recognized as interest income related to the PPP loans totaling $~~10.0~~1.7 million and $~~3.8~~9.8 million during the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020, respectively and $31.7~~ ~~million and $7.5~~ ~~million during the nine months ended September 30, 2021 and 2020,~~ respectively.

~~BancFirst’s~~The Company's loans are ~~mostly to customers within Oklahoma~~currently 84% held by BancFirst and ~~approximately~~ 5716% held by Pegasus and Worthington. In addition, approximately64% of the Company's loans are secured by real estate. Credit risk on loans is managed through limits on amounts loaned to individual and related borrowers, underwriting standards and loan monitoring procedures. The amounts and types of collateral obtained, if any, to secure loans are based upon the Company’s underwriting standards and management’s credit evaluation. Collateral varies, but may include real estate, equipment, accounts receivable, inventory, livestock and securities. The Company’s interest in collateral is secured through filing mortgages and liens, and in some cases, by possession of the collateral.

~~Pegasus Bank’s loans are mostly to customers within Texas and approximately $339~~ ~~million or~~ 55~~% of the loans are secured by real estate at September 30, 2021. Pegasus Bank’s commercial and agricultural non-real estate loans were approximately $257~~ ~~million at September 30, 2021 and approximately $262~~ ~~million at December 31, 2020.~~

BancFirst and Pegasus Bank’s commercial and agricultural non-real estate and oil and gas loan categories include upstream and midstream energy loans, and loans to companies that provide ancillary services to the energy industry, such as transportation, wellsite preparation contractors and equipment manufacturers. Energy loans are summarized as follows:

September 30, 2021

December 31, 2020

Amount

Amount

(Dollars in thousands)

BancFirst energy loans

Upstream
$
129,838

$
190,788

Midstream

26,317

49,734

Ancillary services

66,294

59,410

Pegasus Bank energy loans

Upstream

107,429

107,103

Midstream

8,797

11,047

Ancillary services

29,928

12,503

Total
$
368,603

$
430,585

Accounting policies related to appraisals, and charge-offs are disclosed in Note (1) to the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

The Company's portfolio segment descriptions and the weighted average remaining life of portfolio segments are disclosed in Note (5) to the Company's Annual Report on Form 10-K for the year ended December 31, 2021.

Troubled Debt Restructurings, Other Real Estate Owned and Repossessed Assets and Held for Sale Assets

The following is a summary of troubled debt restructurings and other real estate owned and repossessed assets:


	September 30,		December 31,
	2021		2020		March 31, 2022		December 31, 2021
	(Dollars in thousands)				(Dollars in thousands)
Troubled debt restructurings	$	7,073	$	7,784	$	2,345	$	3,665
Other real estate owned and repossessed assets	$	39,060	$	32,480	$	39,729	$	39,553

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

~~During the nine months ended September 30, 2021, the Company completed the move to its new corporate headquarters and transferred~~Other real estate owned includes approximately $2.4 million ~~from premises and equipment~~ related to ~~its~~the Company's previous ~~headquarters to~~headquarters. As of both March 31, 2022 and December 31, 2021, other real estate ~~owned.~~owned included a single commercial real estate property recorded at approximately $29.5 million.

During the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, the Company sold property held in other real estate owned for a total gain of $~~245,000~~726,000, compared to a total ~~gain~~loss of $~~2.3~~55,000 ~~million~~ in the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021.

Nonaccrual loans

Had nonaccrual loans performed in accordance with their original contractual terms, the Company would have recognized additional interest income of approximately $~~1.7~~376,000 ~~million~~ for the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 and approximately $~~2.1~~521,000 ~~million~~ for the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021.

Nonaccrual loans guaranteed by government agencies totaled approximately $~~3.1~~3.4 million at ~~September 30, 2021~~March 31, 2022 and approximately $~~7.8~~3.3 million at December 31, ~~2020.~~2021.

The following table is a summary of amounts included in nonaccrual loans, segregated by portfolio segment.


	September 30, 2021		December 31, 2020		March 31, 2022		December 31, 2021
	(Dollars in thousands)				(Dollars in thousands)
BancFirst
Real estate:
Commercial real estate owner occupied	$	2,332	$	1,404	$	3,112	$	2,900
Commercial real estate non-owner occupied		492		4,719		407		407
Construction and development < 60 months		83		95		104		80
Construction residential real estate < 60 months		—		—		—		—
Residential real estate first lien		3,167		3,615		2,391		2,763
Residential real estate all other		1,184		1,362		133		280
Farmland		5,561		7,901		4,059		4,224
Commercial and agricultural non-real estate		11,048		12,782		5,956		7,569
Consumer non-real estate		226		268		111		148
Oil and gas		—		—		—		1,070
Other loans		2,514		5,399		1,180		1,451
Pegasus Bank		—		—
Total	$	26,607	$	37,545	$	17,453	$	20,892

1011

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. The following table presents an age analysis of ~~our~~the Company's loans held for investment:

Age Analysis of Past Due Loans

30-59
Days
Past Due

60-89
Days
Past Due

90 Days
and
Greater

Total
Past Due
Loans

Current
Loans

Total Loans

Accruing
Loans 90
Days or
More
Past Due

(Dollars in thousands)

As of September 30, 2021

BancFirst

  Real estate:

Commercial real estate owner occupied

$
1,086

$
—

$
968

$
2,054

$
651,305

$
653,359

$
223

Commercial real estate non-owner occupied

109

—

75

184

963,360

963,544

—

Construction and development < 60 months

114

—

—

114

301,961

302,075

—

Construction residential real estate < 60 months

—

—

—

0

227,294

227,294

—

Residential real estate first lien

3,832

1,213

2,623

7,668

869,492

877,160

1,268

Residential real estate all other

728

128

1,465

2,321

155,824

158,145

386

Farmland

626

0

3,459

4,085

266,130

270,215

224

  Commercial and agricultural non-real estate

1,052

2,026

5,114

8,192

1,057,781

1,065,973

639

  Consumer non-real estate

1,098

379

270

1,747

382,131

383,878

221

  Oil and gas

—

—

—

—

118,444

118,444

—

  Other loans

5,842

733

3,546

10,121

368,040

378,161

2,225

Pegasus Bank

—

—

—

—

618,688

618,688

—

Total

$
14,487

$
4,479

$
17,520

$
36,486

$
5,980,450

$
6,016,936

$
5,186

As of December 31, 2020

BancFirst

  Real estate:

Commercial real estate owner occupied

$
1,096

$
108

$
1,164

$
2,368

$
639,619

$
641,987

$
—

Commercial real estate non-owner occupied

323

—

34

357

970,801

971,158

35

Construction and development < 60 months

511

86

—

597

229,018

229,615

—

Construction residential real estate < 60 months

1,106

—

282

1,388

204,807

206,195

282

Residential real estate first lien

5,428

1,463

2,978

9,869

843,447

853,316

945

Residential real estate all other

520

55

1,606

2,181

165,900

168,081

384

Farmland

1,297

344

6,223

7,864

245,094

252,958

135

  Commercial and agricultural non-real estate

2,788

1,794

4,345

8,927

1,150,883

1,159,810

465

  Consumer non-real estate

2,154

501

534

3,189

352,216

355,405

386

  Oil and gas

—

—

—

—

179,355

179,355

—

  Other loans

951

1,223

6,618

8,792

813,286

822,078

2,170

Pegasus Bank

—

—

—

—

554,548

554,548

—

Total

$
16,174

$
5,574

$
23,784

$
45,532

$
6,348,974

$
6,394,506

$
4,802


	Age Analysis of Past Due Loans
	30-59 Days Past Due		60-89 Days Past Due		90 Days and Greater		Total Past Due Loans		Current Loans		Total Loans		Accruing Loans 90 Days or More Past Due
	(Dollars in thousands)
As of March 31, 2022
Real estate:
Commercial real estate owner occupied	$	731	$	4	$	1,621	$	2,356	$	782,263	$	784,619	$	—
Commercial real estate non-owner occupied		962		407		—		1,369		1,159,137		1,160,506		—
Construction and development < 60 months		106		—		—		106		458,753		458,859		—
Construction residential real estate < 60 months		97		—		—		97		281,930		282,027		—
Residential real estate first lien		3,815		744		2,177		6,736		1,025,996		1,032,732		1,369
Residential real estate all other		350		102		579		1,031		159,812		160,843		559
Farmland		595		433		3,245		4,273		272,192		276,465		37
Commercial and agricultural non-real estate		6,486		2,994		2,891		12,371		1,279,256		1,291,627		214
Consumer non-real estate		2,377		416		387		3,180		416,310		419,490		353
Oil and gas		1,068		83		—		1,151		426,641		427,792		—
Other loans		1,247		1,207		3,836		6,290		193,090		199,380		3,828
Total	$	17,834	$	6,390	$	14,736	$	38,960	$	6,455,380	$	6,494,340	$	6,360

As of December 31, 2021
Real estate:
Commercial real estate owner occupied	$	972	$	223	$	1,363	$	2,558	$	682,181	$	684,739	$	18
Commercial real estate non-owner occupied		7,244		—		—		7,244		1,088,080		1,095,324		—
Construction and development < 60 months		136		—		—		136		415,330		415,466		—
Construction residential real estate < 60 months		2,264		—		—		2,264		252,260		254,524		—
Residential real estate first lien		3,351		567		2,817		6,735		930,271		937,006		1,704
Residential real estate all other		293		30		451		774		160,244		161,018		431
Farmland		253		37		2,077		2,367		269,812		272,179		139
Commercial and agricultural non-real estate		1,807		199		4,574		6,580		1,249,907		1,256,487		124
Consumer non-real estate		1,873		321		272		2,466		410,904		413,370		254
Oil and gas		—		—		—		—		428,908		428,908		—
Other loans		1,773		347		2,646		4,766		245,655		250,421		2,294
Total	$	19,966	$	1,724	$	14,200	$	35,890	$	6,133,552	$	6,169,442	$	4,964

~~Due to the impacts of the COVID-19 pandemic, the Company had approximately $58.4~~ ~~million in modified loans as of September 30, 2021 and $81.7~~ million in modified loans as of December 31, 2020, most of which were secured by commercial real estate. These modifications were undertaken in response to Section 4013 of the CARES Act and the regulatory intent outlined in the Interagency Statement on Loan Modifications by Financial Institutions Working with Customers Affected by the Coronavirus and to provide businesses financial flexibility until the economy has time to recover to a more normal level of activity. However, these modifications, which typically involve payment modifications and forbearance, also have the effect of delaying recognition of loans that may ultimately be permanently impaired. The timing and extent of such consequences are difficult to ascertain at this time and are dependent on the duration of the COVID-19 pandemic, the level and success of the government’s economic stimulus, and further regulatory guidance. These modified loans are included in Current Loans in the table above.

The Company considers credit quality indicators to monitor the credit risk in the loan portfolio including volume and severity of loan delinquencies, nonaccrual loans, internal grading of loans, historical credit loss experience and economic conditions. These indicators are reviewed and updated regularly throughout the year. An internal risk grading system is used to indicate the credit risk of loans. The loan grades used by the Company are for internal risk identification purposes and do not directly correlate to regulatory classification categories or any financial reporting definitions. The general characteristics of the risk grades and the table summarizing ~~our~~the Company’s gross loans held for investment by year of origination and internally assigned credit grades as of December 31, ~~2020,~~2021, are disclosed in Note (5) to the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

The Company’s revolving loans that are converted to term loans are not material and therefore have not been presented.

The following table summarizes ~~our~~the Company’s gross loans held for investment by year of origination and internally assigned credit grades ~~as of September 30, 2021:~~:

Term Loans Amortized Cost Basis by Origination Year

2021

2020

2019

2018

2017

Prior

Revolving Loans Amortized Cost Basis

Total

(Dollars in thousands)

As of September 30, 2021

BancFirst

Commercial real estate owner occupied

Grade 1

$
89,910

$
130,040

$
78,492

$
50,380

$
34,793

$
98,825

$
11,514

$
493,954

Grade 2

24,092

38,773

22,069

9,884

9,466

38,454

7,977

150,715

Grade 3

0

4,096

129

264

471

1,374

—

6,334

Grade 4

337

—

911

452

—

331

325

2,356

Total commercial real estate owner occupied loans

114,339

172,909

101,601

60,980

44,730

138,984

19,816

653,359

Commercial real estate non-owner occupied

Grade 1

124,690

210,442

139,681

58,198

36,899

130,688

9,475

710,073

Grade 2

42,653

54,748

44,156

34,292

18,326

41,774

5,150

241,099

Grade 3

7,387

—

3,301

135

237

642

—

11,702

Grade 4

417

—

49

35

—

169

—

670

Total commercial real estate non-owner occupied loans

175,147

265,190

187,187

92,660

55,462

173,273

14,625

963,544

Construction and development < 60 months

Grade 1

123,070

37,650

64,046

11,080

2,081

2,775

13,624

254,326

Grade 2

16,597

9,714

13,590

2,099

1,782

600

2,004

46,386

Grade 3

1,273

0

0

7

—

—

—

1,280

Grade 4

—

—

58

7

18

—

—

83

Total construction and development < 60 months

140,940

47,364

77,694

13,193

3,881

3,375

15,628

302,075

Construction residential real estate < 60 months

Grade 1

156,524

38,426

46

—

19

29

222

195,266

Grade 2

21,383

9,425

—

107

—

431

—

31,346

Grade 3

547

135

—

—

—

—

—

682

Total construction residential real estate < 60 months

178,454

47,986

46

107

19

460

222

227,294

Residential real estate first lien

Grade 1

193,151

168,628

100,936

64,930

47,968

141,503

—

717,116

Grade 2

33,765

25,873

16,379

15,931

9,710

40,834

—

142,492

Grade 3

942

1,523

2,375

2,044

1,350

4,391

—

12,625

Grade 4

49

648

530

1,164

931

1,605

—

4,927

Total residential real estate first lien

227,907

196,672

120,220

84,069

59,959

188,333

—

877,160

Residential real estate all other

Grade 1

12,798

14,033

9,976

6,381

4,203

13,338

27,591

88,320

Grade 2

1,355

3,188

1,763

1,563

914

2,284

54,473

65,540

Grade 3

279

102

264

240

709

327

556

2,477

Grade 4

14

183

—

580

13

649

369

1,808

Total residential real estate all other

14,446

17,506

12,003

8,764

5,839

16,598

82,989

158,145

Farmland

Grade 1

41,033

40,571

24,326

17,269

13,249

31,871

5,473

173,792

Grade 2

13,328

9,683

24,655

5,522

4,069

12,184

9,628

79,069

Grade 3

2,785

4,069

1,439

319

1,330

1,272

1,973

13,187

Grade 4

773

414

—

2,383

110

209

278

4,167

Total farmland

57,919

54,737

50,420

25,493

18,758

45,536

17,352

270,215

Commercial and agricultural non-real estate

Grade 1

222,156

110,551

93,150

46,932

50,431

48,206

216,301

787,727

Grade 2

52,100

37,867

26,032

9,759

3,176

13,683

72,080

214,697

Grade 3

4,577

5,676

1,357

11,555

1,452

623

28,105

53,345

Grade 4

2,675

421

1,607

958

810

1,268

2,465

10,204

Total commercial and agricultural non-real estate

281,508

154,515

122,146

69,204

55,869

63,780

318,951

1,065,973

Consumer non-real estate

Grade 1

162,782

96,567

52,943

22,050

7,474

3,033

5,483

350,332

Grade 2

14,402

8,211

3,850

2,083

958

1,450

295

31,249

Grade 3

430

304

633

345

97

45

5

1,859

Grade 4

61

94

206

56

4

17

0

438

Total consumer non-real estate

177,675

105,176

57,632

24,534

8,533

4,545

5,783

383,878

Oil and gas

Grade 1

56,060

0

54

59

—

0

29,253

85,426

Grade 2

7,790

1,021

64

—

—

—

8,550

17,425

Grade 3

15,593

—

—

—

—

—

—

15,593

Total oil and gas

79,443

1,021

118

59

—

0

37,803

118,444

Other loans

Grade 1

223,041

32,338

23,410

16,745

14,904

34,319

25,442

370,199

Grade 2

—

—

0

0

2,140

3,047

1,010

6,197

Grade 3

—

0

0

10

0

47

1,052

1,109

Grade 4

—

54

125

—

283

83

111

656

Total other loans

223,041

32,392

23,535

16,755

17,327

37,496

27,615

378,161

Pegasus Bank

Grade 1

90,125

92,819

55,004

5,023

14,241

36,338

156,927

450,477

Grade 2

62,861

9,238

17,008

11,199

22,578

6,365

38,605

167,854

Grade 3

251

106

—

—

—

—

—

357

Total Pegasus Bank

153,237

102,163

72,012

16,222

36,819

42,703

195,532

618,688

Total loans held for investment

$
1,824,056

$
1,197,631

$
824,614

$
412,040

$
307,196

$
715,083

$
736,316

$
6,016,936


	Term Loans Amortized Cost Basis by Origination Year
	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
	(Dollars in thousands)
As of March 31, 2022
Commercial real estate owner occupied
Grade 1	$	53,454	$	130,071	$	115,334	$	94,782	$	49,997	$	120,371	$	24,862	$	588,871
Grade 2		39,504		39,029		33,297		22,802		9,986		35,244		10,657		190,519
Grade 3		—		42		459		601		258		541		212		2,113
Grade 4		—		303		591		870		200		845		307		3,116
Total commercial real estate owner occupied		92,958		169,445		149,681		119,055		60,441		157,001		36,038		784,619
Commercial real estate non-owner occupied
Grade 1		27,931		258,527		208,346		116,081		51,072		118,840		37,306		818,103
Grade 2		18,461		52,282		46,895		50,872		42,738		88,046		29,259		328,553
Grade 3		7,063		—		—		3,206		107		2,828		—		13,204
Grade 4		—		407		—		—		207		32		—		646
Total commercial real estate non-owner occupied		53,455		311,216		255,241		170,159		94,124		209,746		66,565		1,160,506
Construction and development < 60 months
Grade 1		53,028		162,575		39,428		42,116		3,719		6,572		35,506		342,944
Grade 2		14,386		32,079		4,323		13,028		1,825		1,314		44,553		111,508
Grade 3		1,198		3,000		105		—		—		—		—		4,303
Grade 4		—		—		33		54		—		17		—		104
Total construction and development < 60 months		68,612		197,654		43,889		55,198		5,544		7,903		80,059		458,859
Construction residential real estate < 60 months
Grade 1		54,418		159,373		4,522		33		—		46		26,274		244,666
Grade 2		8,528		23,471		473		—		—		419		3,957		36,848
Grade 3		410		103		—		—		—		—		—		513
Total construction residential real estate < 60 months		63,356		182,947		4,995		33		—		465		30,231		282,027
Residential real estate first lien
Grade 1		82,439		255,075		172,583		102,582		65,952		174,331		7,895		860,857
Grade 2		11,906		41,467		28,275		15,303		12,622		46,039		—		155,612
Grade 3		1,293		1,506		886		1,839		1,936		4,688		—		12,148
Grade 4		—		131		239		418		983		2,344		—		4,115
Total residential real estate first lien		95,638		298,179		201,983		120,142		81,493		227,402		7,895		1,032,732
Residential real estate all other
Grade 1		5,357		15,974		13,307		7,665		4,976		14,588		31,325		93,192
Grade 2		933		2,028		2,342		1,895		1,470		3,044		52,937		64,649
Grade 3		40		304		95		88		254		946		559		2,286
Grade 4		—		13		178		—		38		101		386		716
Total residential real estate all other		6,330		18,319		15,922		9,648		6,738		18,679		85,207		160,843
Farmland
Grade 1		15,574		44,160		35,899		23,593		12,282		36,405		5,763		173,676
Grade 2		4,505		16,679		7,874		22,007		6,381		16,671		13,102		87,219
Grade 3		1,346		2,896		1,862		1,873		70		2,704		1,880		12,631
Grade 4		—		1,125		379		—		979		224		232		2,939
Total farmland		21,425		64,860		46,014		47,473		19,712		56,004		20,977		276,465
Commercial and agricultural non-real estate
Grade 1		77,553		296,814		93,424		75,665		20,679		67,573		315,085		946,793
Grade 2		17,955		75,007		30,905		20,516		27,531		12,032		138,823		322,769
Grade 3		1,562		2,516		1,717		1,136		2,259		1,105		7,479		17,774
Grade 4		358		799		266		947		509		1,171		241		4,291
Total commercial and agricultural non-real estate		97,428		375,136		126,312		98,264		50,978		81,881		461,628		1,291,627
Consumer non-real estate
Grade 1		55,988		175,287		67,276		36,818		13,972		5,867		21,964		377,172
Grade 2		6,002		16,755		6,569		4,973		1,806		2,179		1,749		40,033
Grade 3		136		636		299		364		129		103		3		1,670
Grade 4		51		143		84		224		110		3		—		615
Total consumer non-real estate		62,177		192,821		74,228		42,379		16,017		8,152		23,716		419,490
Oil and gas
Grade 1		91,575		122,401		32,400		8,174		1,174		110		93,578		349,412
Grade 2		7,623		8,352		8,426		5,558		9,919		278		30,820		70,976
Grade 3		—		4,914		9		—		—		227		1,185		6,335
Grade 4		—		1,000		—		—		—		—		69		1,069
Total oil and gas		99,198		136,667		40,835		13,732		11,093		615		125,652		427,792
Other loans
Grade 1		5,658		60,549		38,097		26,158		18,786		14,429		30,235		193,912
Grade 2		—		296		—		—		65		2,933		471		3,765
Grade 3		—		—		—		—		140		82		1,052		1,274
Grade 4		—		—		17		109		169		52		82		429
Total other loans		5,658		60,845		38,114		26,267		19,160		17,496		31,840		199,380
Total loans held for investment	$	666,235	$	2,008,089	$	997,214	$	702,350	$	365,300	$	785,344	$	969,808	$	6,494,340

~~On January 1, 2020, the~~The Company ~~adopted ASC 326, which replaces the incurred loss methodology for determining~~determines its provision for credit losses and allowance for credit losses ~~with an~~using the expected loss methodology that is referred to as the CECL model. ~~Upon adoption, the allowance for credit losses was decreased by $3.2~~ ~~million, with no impact to the consolidated statement of income.~~

The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics ~~exist by identifying by portfolio segments, the applicable weighted average life and measuring the~~exist.

The increase in allowance for credit ~~losses using the vintage~~ loss ~~analysis adjusted for qualitative factors. The weighted average lives of the Company’s loans segments are disclosed in Note (1)~~during 2022 was primarily related to the ~~Company’s Annual Report on Form 10-K for~~purchase of loans without credit deterioration during the ~~year ended December 31, 2020.~~quarter.

The decrease in the allowance for credit loss during 2021 was ~~primarily~~ driven by a reversal of a pandemic-related provision during 2021 based on sustained improvements in the economy, both nationally and in ~~Oklahoma,~~the Company's markets, which reduced the amount of expected credit loss within the loan portfolio. This reduction was partially offset by additional allowance for credit loss required by newly acquired ~~loans purchased with credit deterioration.~~

The following table details activity in the allowance for credit losses on 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.


	Allowance for Credit Losses																		Allowance for Credit Losses
	Balance at beginning of period		Initial allowance on loans purchased with credit deterioration			Charge- offs			Recoveries		Net charge-offs			(Benefit from) /Provision for credit losses on loans			Balance at end of period		Balance at beginning of period		Initial allowance on loans purchased with credit deterioration		Charge- offs			Recoveries		Net charge-offs			Provision for /(benefit from) credit losses on loans			Balance at end of period
	(Dollars in thousands)																		(Dollars in thousands)
Three Months Ended September 30, 2021
BancFirst
Three Months Ended March 31, 2022
Real estate:
Commercial real estate owner occupied	$	6,755	$	93		$	(3	)	$	72	$	69		$	(51	)	$	6,866	$	6,410	$	—	$	(16	)	$	48	$	32		$	346		$	6,788
Commercial real estate non-owner occupied		14,490		191			(7	)		67		60			(6	)		14,735		16,987		—		—			—		—			3,687			20,674
Construction and development < 60 months		2,893		0			—			4		4			398			3,295		3,490		—		—			3		3			(184	)		3,309
Construction residential real estate < 60 months		889		—			—			—		—			(35	)		854		1,092		—		—			—		—			1,072			2,164
Residential real estate first lien		2,805		9			(4	)		9		5			186			3,005		3,076		2		(44	)		7		(37	)		380			3,421
Residential real estate all other		1,941		—			0			46		46			202			2,189		2,104		—		—			402		402			(399	)		2,107
Farmland		3,715		(248	)		—			0		0			967			4,434		4,822		—		—			—		—			(439	)		4,383
Commercial and agricultural non-real estate		31,615		952			(146	)		43		(103	)		(859	)		31,605		26,073		48		(171	)		113		(58	)		(77	)		25,986
Consumer non-real estate		3,315		30			(67	)		49		(18	)		51			3,378		3,734		28		(80	)		38		(42	)		51			3,771
Oil and gas		7,817		—			—			—		—			(38	)		7,779		12,978		—		—			—		—			(1,573	)		11,405
Other loans		3,138		—			(73	)		—		(73	)		239			3,304		3,170		—		(11	)		—		(11	)		72			3,231
Pegasus Bank		4,590		—			—			—		—			429			5,019
Total	$	83,963	$	1,027		$	(300	)	$	290	$	(10	)	$	1,483		$	86,463	$	83,936	$	78	$	(322	)	$	611	$	289		$	2,936		$	87,239
Nine Months Ended September 30, 2021
BancFirst
Real estate:
Commercial real estate owner occupied	$	7,035	$	1,080		$	(3	)	$	73	$	70		$	(1,319	)	$	6,866
Commercial real estate non-owner occupied		11,842		824			(803	)		67		(736	)		2,805			14,735
Construction and development < 60 months		2,560		173			—			9		9			553			3,295
Construction residential real estate < 60 months		627		—			—			—		—			227			854
Residential real estate first lien		2,570		126			(56	)		36		(20	)		329			3,005
Residential real estate all other		2,230		—			(46	)		50		4			(45	)		2,189
Farmland		3,136		395			—			1		1			902			4,434
Commercial and agricultural non-real estate		32,400		5,663			(3,683	)		194		(3,489	)		(2,969	)		31,605
Consumer non-real estate		3,377		38			(689	)		247		(442	)		405			3,378
Oil and gas		17,851		—			—			—		—			(10,072	)		7,779
Other loans		3,182		—			(134	)		—		(134	)		256			3,304
Pegasus Bank		4,556		—			—			1		1			462			5,019
Total	$	91,366	$	8,299		$	(5,414	)	$	678	$	(4,736	)	$	(8,466	)	$	86,463

Allowance for Credit Losses

Balance at
beginning of
period

Impact of CECL adoption

Initial allowance on loans purchased with credit deterioration

Charge-
offs

Recoveries

Net
charge-offs

Provision for /(benefit from) credit losses on loans

Balance at
end of
period

(Dollars in thousands)

Three Months Ended September 30, 2020

BancFirst

Real estate:

Commercial real estate owner occupied

$
6,630

$
—

$
—

$
(24
)

$
1

$
(23
)

$
1,287

$
7,894

Commercial real estate non-owner occupied

9,483

—

—

(87
)

—

(87
)

5,508

14,904

Construction and development < 60 months

1,755

—

—

—

3

3

(169
)

1,589

Construction residential real estate < 60 months

2,259

—

—

(368
)

—

(368
)

769

2,660

Residential real estate first lien

8,553

—

—

(133
)

5

(128
)

1,839

10,264

Residential real estate all other

2,720

—

—

(84
)

1

(83
)

219

2,856


Farmland		2,511		—			—		(3	)		—		(3	)		1,902		4,410
Commercial and agricultural non-real estate		34,036		—			—		(594	)		13		(581	)		2,463		35,918
Consumer non-real estate		4,714		—			—		(195	)		43		(152	)		539		5,101
Oil and gas		10,469		—			—		—			—		—			3,055		13,524
Other loans		2,513		—			—		(100	)		8		(92	)		800		3,221
Pegasus Bank		3,857		—			—		(600	)		—		(600	)		528		3,785
Total	$	89,500	$	—		$	—	$	(2,188	)	$	74	$	(2,114	)	$	18,740	$	106,126
Nine Months Ended September 30, 2020
BancFirst
																				Allowance for Credit Losses
																				Balance at beginning of period		Charge- offs			Recoveries		Net charge-offs			Provision for /(benefit from) credit losses on loans			Balance at end of period
																				(Dollars in thousands)
Three Months Ended March 31, 2021
Real estate:																						��
Commercial real estate owner occupied	$	5,625	$	(2,806	)	$	432	$	(137	)	$	2	$	(135	)	$	4,778	$	7,894	$	6,911	$	—		$	—	$	—		$	(406	)	$	6,505
Commercial real estate non-owner occupied		8,358		(5,507	)		—		(87	)		—		(87	)		12,140		14,904		12,318		(38	)		—		(38	)		5,219			17,499
Construction and development < 60 months		2,214		(1,056	)		—		(59	)		6		(53	)		484		1,589		2,723		—			3		3			217			2,943
Construction residential real estate < 60 months		1,933		(778	)		—		(397	)		—		(397	)		1,902		2,660		726		—			—		—			366			1,092
Residential real estate first lien		8,692		(3,831	)		7		(351	)		11		(340	)		5,736		10,264		2,822		(43	)		15		(28	)		143			2,937
Residential real estate all other		2,767		(1,408	)		—		(116	)		29		(87	)		1,584		2,856		2,236		(16	)		3		(13	)		(343	)		1,880
Farmland		2,821		(1,408	)		1		(3	)		—		(3	)		2,999		4,410		3,153		—			—		—			(65	)		3,088
Commercial and agricultural non-real estate		13,462		13,195			62		(968	)		96		(872	)		10,071		35,918		33,020		(104	)		27		(77	)		922			33,865
Consumer non-real estate		3,252		(622	)		—		(751	)		157		(594	)		3,065		5,101		3,542		(413	)		112		(301	)		180			3,421
Oil and gas		1,883		(1,346	)		—		—			—		—			12,987		13,524		20,733		—			—		—			(6,293	)		14,440
Other loans		2,632		(116	)		—		(100	)		10		(90	)		795		3,221		3,182		(52	)		—		(52	)		60			3,190
Pegasus Bank		599		2,488			—		(841	)		424		(417	)		1,115		3,785
Total	$	54,238	$	(3,195	)	$	502	$	(3,810	)	$	735	$	(3,075	)	$	57,656	$	106,126	$	91,366	$	(666	)	$	160	$	(506	)	$	—		$	90,860

A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. During the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ no material amount of interest income was recognized on collateral-dependent loans subsequent to their classification as collateral-dependent. The following table summarizes collateral-dependent gross loans held for investment by collateral type and the related specific allocation as follows:


	Collateral Type												Collateral Type
	Real Estate		Business Assets		Energy Reserves		Other Assets		Total		Specific Allocation		Real Estate		Business Assets		Energy Reserves		Other Assets		Total		Specific Allocation
	(Dollars in thousands)												(Dollars in thousands)
As of September 30, 2021
BancFirst
As of March 31, 2022
Real estate:
Commercial real estate owner occupied	$	1,913	$	—	$	—	$	—	$	1,913	$	692	$	1,894	$	—	$	—	$	—	$	1,894	$	569
Commercial real estate non-owner occupied		806		—		—		—		806		237		1,563		—		—		—		1,563		282
Construction and development < 60 months		—		—		—		—		—		—		—		—		—		—		—		—
Construction residential real estate < 60 months		—		—		—		—		—		—		—		—		—		—		—		—
Residential real estate first lien		927		—		—		—		927		162		756		—		—		—		756		107
Residential real estate all other		1,190		—		—		—		1,190		803		55		—		—		—		55		35
Farmland		8,042		—		—		—		8,042		2,257		7,290		—		—		—		7,290		1,322
Commercial and agricultural non-real estate		—		7,017		747		5,724		13,488		5,636		—		5,072		—		5,777		10,849		4,451
Consumer non-real estate		—		—		—		82		82		26		—		—		—		85		85		57
Oil and gas		—		—		—		—		—		—		—		—		—		—		—		—
Other loans		—		10		—		—		10		10		—		110		—		—		110		72
Pegasus Bank		—		—		—		—		—		—
Total collateral-dependent loans held for investment	$	12,878	$	7,027	$	747	$	5,806	$	26,458	$	9,823	$	11,558	$	5,182	$	—	$	5,862	$	22,602	$	6,895

	Collateral Type												Collateral Type
	Real Estate		Business Assets		Energy Reserves		Other Assets		Total		Specific Allocation		Real Estate		Business Assets		Energy Reserves		Other Assets		Total		Specific Allocation
	(Dollars in thousands)												(Dollars in thousands)
As of December 31, 2020
BancFirst
As of December 31, 2021
Real estate:
Commercial real estate owner occupied	$	848	$	—	$	—	$	—	$	848	$	226	$	1,952	$	—	$	—	$	—	$	1,952	$	576
Commercial real estate non-owner occupied		4,719		—		—		—		4,719		1,000		1,404		—		—		—		1,404		263
Construction and development < 60 months		—		—		—		—		—		—		—		—		—		—		—		—
Construction residential real estate < 60 months		—		—		—		—		—		—		—		—		—		—		—		—
Residential real estate first lien		860		—		—		—		860		151		871		—		—		—		871		143
Residential real estate all other		866		—		—		—		866		616		199		—		—		—		199		178
Farmland		3,258		—		—		—		3,258		1,114		8,703		—		—		—		8,703		1,805
Commercial and agricultural non-real estate		—		8,460		—		413		8,873		2,813		—		6,363		—		5,202		11,565		4,867
Consumer non-real estate		—		—		—		109		109		58		—		—		—		54		54		20
Oil and gas		—		—		—		—		—		—		—		—		—		—		—		—
Other loans		—		13		—		—		13		12		—		109		—		—		109		71
Pegasus Bank		1,257		—		—		—		1,257		222
Total collateral-dependent loans held for investment	$	11,808	$	8,473	$	—	$	522	$	20,803	$	6,212	$	13,129	$	6,472	$	—	$	5,256	$	24,857	$	7,923

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


	Three Months Ended March 31,
	2022		2021
	(Dollars in thousands)
Other real estate owned	$	2,153	$	357
Repossessed assets		277		220
Total	$	2,430	$	577

Nine Months Ended September 30,

2021

2020

(Dollars in thousands)

Other real estate owned

$
10,564

$
3,458

Repossessed assets

594

965

Total

$
11,158

$
4,423

(5) INTANGIBLE ASSETS AND GOODWILL

The following is a summary of intangible assets as of the date listed:


	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(Dollars in thousands)							(Dollars in thousands)
September 30, 2021
March 31, 2022
Core deposit intangibles	$	27,433	$	(9,607	)	$	17,826	$	36,154	$	(11,087	)	$	25,067
Customer relationship intangibles		3,350		(2,851	)		499		3,350		(2,961	)		389
Total	$	30,783	$	(12,458	)	$	18,325	$	39,504	$	(14,048	)	$	25,456
December 31, 2020
December 31, 2021
Core deposit intangibles	$	33,411	$	(15,076	)	$	18,335	$	27,433	$	(10,311	)	$	17,122
Customer relationship intangibles		3,350		(2,686	)		664		3,350		(2,906	)		444
Total	$	36,761	$	(17,762	)	$	18,999	$	30,783	$	(13,217	)	$	17,566

The following is a summary of goodwill by business segment:

Other

Executive,

Metropolitan

Community

Pegasus

Financial

Operations

Banks

Banks

Bank

Services

& Support

Consolidated

(Dollars in thousands)

Nine months ended September 30, 2021

Balance at beginning and end of period

$
13,767

$
61,212

$
68,855

$
5,464

$
624

$
149,922




	Metropolitan Banks		Community Banks		Pegasus		Worthington		Other Financial Services		Executive, Operations & Support		Consolidated
	(Dollars in thousands)
Three months ended March 31, 2022
Balance at beginning of period	$	13,767	$	61,212	$	68,855	$	0	$	5,464	$	624	$	149,922
Acquisitions		—		—		—		26,641		—		—		26,641
Balance at beginning and end of period	$	13,767	$	61,212	$	68,855	$	26,641	$	5,464	$	624	$	176,563

The Company acquired Worthington on February 8, 2022, which added core deposit intangibles and goodwill shown in the tables above. See Note (2) of the Notes to Consolidated Financial Statements for disclosure regarding the Company’s recent developments, including mergers and acquisitions.

Additional information for intangible assets can be found in Note (7) to the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

(8) STOCK-BASED COMPENSATION

The Company has had a nonqualified incentive stock option plan, the BancFirst Corporation Stock Option Plan (the “Employee Plan”), since May 1986. At ~~September 30, 2021,~~March 31, 2022, there were ~~186,000~~116,000 shares available for future grants. The Employee Plan will terminate on December 31, 2024, if not extended. The options vest and are exercisable beginning four years from the date of grant at the rate of 25% per year for four years. Options expire no later than the end of fifteen years from the date of grant. 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 has had the BancFirst Corporation Non-Employee Directors’ Stock Option Plan (the “Non-Employee Directors’ Plan”) since June 1999. Each non-employee director is granted an option for 10,000 shares. At ~~September 30, 2021,~~March 31, 2022, there were 40,000 shares available for future grants. The Non-Employee Directors’ Plan will terminate on December 31, 2024, if not extended. The options vest and are exercisable beginning one year from the date of grant at the rate of 25% per year for four years, and expire no later than the end of fifteen years from the date of grant. The option price must be no less than 100% of the fair value of the stock relating to such option at the date of grant.

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

Although not required or expected, the Company may settle some options in cash on a limited basis at the discretion of the Company. During the ~~nine~~three months ended ~~September 30,~~March 31, 2021, the Company had cash settlements for 121,330 shares for a total net cash settlement of options of $5.5 million that did not increase the outstanding shares of the Company.

The following table is a summary of the activity under both the Employee Plan and the Non-Employee Directors’ Plan:

Wgtd. Avg.

Wgtd. Avg.

Remaining

Aggregate

Exercise

Contractual

Intrinsic

Options

Price

Term

Value

(Dollars in thousands, except option data)

Nine Months Ended September 30, 2021

Outstanding at December 31, 2020

1,343,080

$
35.28

Options granted

152,000

61.63

Options exercised

(183,830
)

23.82

Options canceled, forfeited, or expired

(5,000
)

44.23

Outstanding at September 30, 2021

1,306,250

39.93

8.52 Yrs

$
26,379

Exercisable at September 30, 2021

617,500

27.24

7.15 Yrs

$
20,304


						Wgtd. Avg.
				Wgtd. Avg.		Remaining	Aggregate
				Exercise		Contractual	Intrinsic
	Options			Price		Term	Value
	(Dollars in thousands, except option data)
Three Months Ended March 31, 2022
Outstanding at December 31, 2021		1,303,250		$	40.90
Options granted		42,500			77.32
Options exercised		(116,292	)		25.71
Outstanding at March 31, 2022		1,229,458			43.59	8.39 Yrs	$	48,705
Exercisable at March 31, 2022		516,083			29.07	7.15 Yrs	$	27,941

The following table has additional information regarding options exercised under both the Employee Plan and the Non-Employee Directors’ Plan:


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2021		2020		2021		2020		2022		2021
	(Dollars in thousands)				(Dollars in thousands)				(Dollars in thousands)
Total intrinsic value of options exercised	$	—	$	414	$	7,860	$	1,140	$	5,964	$	7,303
Cash received from options exercised		—		323		4,379		827		2,989		3,966
Tax benefit realized from options exercised		—		105		2,002		290		1,434		1,860

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 September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2021		2020		2021		2020		2022		2021
	(Dollars in thousands)				(Dollars in thousands)				(Dollars in thousands)
Stock-based compensation expense	$	555	$	433	$	1,604	$	1,265	$	458	$	576
Tax benefit		134		110		386		322		110		147
Stock-based compensation expense, net of tax	$	421	$	323	$	1,218	$	943	$	348	$	429

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

September 30, 2021

(Dollars in thousands)

Unearned stock-based compensation expense

$
6,921


	March 31, 2022
	(Dollars in thousands)
Unearned stock-based compensation expense	$	7,780

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


	Nine Months Ended September 30,				Three Months Ended March 31,
	2021		2020		2022		2021
Weighted average grant-date fair value per share of options granted	$	20.92	$	11.70	$	26.21	$	23.80
Risk-free interest rate	1.30 to 1.74%		0.64 to1.13%		1.75 to 2.14%		1.34 to1.64%
Dividend yield	2.00%		2.00%		2.00%		2.00%
Stock price volatility	35.55 to 36.27%		22.84 to 35.94%		34.61 to 34.69%		35.55 to 35.73%
Expected term	10 Yrs		10 Yrs		10 Yrs		10 Yrs

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

The Company has had the BancFirst Corporation Directors’ Deferred Stock Compensation Plan (the “Deferred Stock Compensation Plan”) since May 1999. As of ~~September 30, 2021,~~March 31, 2022, there are ~~37,269~~31,914 shares available for future issuance under the Deferred Stock Compensation Plan. The Deferred Stock Compensation Plan will terminate on December 31, 2024, if not extended. Under the plan, directors and members of the community advisory boards of the Company and its subsidiaries may defer up to 100% of their board fees. They are credited for each deferral with a number of stock units based on the current market price of the Company’s stock, which accumulate in an account until such time as the director or community board member terminates serving as a board member. Shares of common stock of the Company are then distributed to the terminating director or community board member based upon the

number of stock units accumulated in his or her account. There were ~~2,161~~6,177 and ~~1,307~~2,161 shares of common stock distributed from the Deferred Stock Compensation Plan during the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively.

A summary of the accumulated stock units is as follows:

September 30,

December 31,

2021

2020

Accumulated stock units

152,849

148,278

Average price

$
30.12

$
28.57


	March 31,		December 31,
	2022		2021
Accumulated stock units		148,788		152,754
Average price	$	31.82	$	30.86

(9) STOCKHOLDERS’ EQUITY

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. In addition, the SRP may be used 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:

Nine Months Ended
September 30,

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

62,782


	Three Months Ended March 31,
	2022		2021
Number of shares repurchased		—		—
Average price of shares repurchased	$	—	$	—
Shares remaining to be repurchased		500,486		62,782

~~The Company,~~ BancFirst Corporation, BancFirst, Pegasus and ~~Pegasus Bank~~Worthington 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 Corporation’s, BancFirst’s, Pegasus’s and ~~Pegasus Bank’s~~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 financial statements. ~~Management~~The Company believes that as of ~~September 30, 2021, the Company,~~March 31, 2022, BancFirst Corporation, BancFirst, Pegasus and ~~Pegasus Bank~~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:


				Required						To Be Well						Required						To Be Well
				For Capital			With			Capitalized Under						For Capital			With			Capitalized Under
				Adequacy			Capital Conservation			Prompt Corrective						Adequacy			Capital Conservation			Prompt Corrective
	Actual			Purposes			Buffer			Action Provisions			Actual			Purposes			Buffer			Action Provisions
	Amount		Ratio	Amount		Ratio	Amount		Ratio	Amount		Ratio	Amount		Ratio	Amount		Ratio	Amount		Ratio	Amount		Ratio
	(Dollars in thousands)												(Dollars in thousands)
As of September 30, 2021:
As of March 31, 2022:
Total Capital
(to Risk Weighted Assets)-
BancFirst Corporation	$	1,140,098	17.57%	$	519,044	8.00%	$	681,245	10.50%	N/A		N/A	$	1,167,735	15.99%	$	584,236	8.00%	$	766,810	10.50%	N/A		N/A
BancFirst		979,699	16.77%		467,478	8.00%		613,565	10.50%	$	584,348	10.00%		1,010,124	16.25%		497,404	8.00%		652,843	10.50%	$	621,755	10.00%
Pegasus Bank		80,244	12.53%		51,251	8.00%		67,267	10.50%		64,064	10.00%
Pegasus														95,969	11.83%		64,878	8.00%		85,153	10.50%		81,098	10.00%
Worthington														39,569	15.45%		20,490	8.00%		26,893	10.50%		25,613	10.00%
Common Equity Tier 1 Capital
(to Risk Weighted Assets)-
BancFirst Corporation	$	973,762	15.01%	$	291,962	4.50%	$	454,163	7.00%	N/A		N/A	$	995,299	13.63%	$	328,633	4.50%	$	511,207	7.00%	N/A		N/A
BancFirst		886,552	15.17%		262,957	4.50%		409,043	7.00%	$	379,826	6.50%		912,401	14.67%		279,790	4.50%		435,229	7.00%	$	404,141	6.50%
Pegasus Bank		74,911	11.69%		28,829	4.50%		44,845	7.00%		41,642	6.50%
Pegasus														89,376	11.02%		36,494	4.50%		56,768	7.00%		52,714	6.50%
Worthington														36,365	14.20%		11,526	4.50%		17,929	7.00%		16,648	6.50%
Tier 1 Capital
(to Risk Weighted Assets)-
BancFirst Corporation	$	999,762	15.41%	$	389,283	6.00%	$	551,484	8.50%	N/A		N/A	$	1,021,299	13.98%	$	438,177	6.00%	$	620,751	8.50%	N/A		N/A
BancFirst		906,552	15.51%		350,609	6.00%		496,696	8.50%	$	467,478	8.00%		932,401	15.00%		373,053	6.00%		528,492	8.50%	$	497,404	8.00%
Pegasus Bank		74,911	11.69%		38,438	6.00%		54,454	8.50%		51,251	8.00%
Pegasus														89,376	11.02%		48,659	6.00%		68,933	8.50%		64,878	8.00%
Worthington														36,365	14.20%		15,368	6.00%		21,771	8.50%		20,490	8.00%
Tier 1 Capital
(to Total Assets)-
BancFirst Corporation	$	999,762	9.06%	$	441,402	4.00%	N/A		N/A	N/A		N/A	$	1,021,299	8.66%	$	471,735	4.00%	N/A		N/A	N/A		N/A
BancFirst		906,552	9.06%		400,265	4.00%	N/A		N/A	$	500,331	5.00%		932,401	9.08%		410,756	4.00%	N/A		N/A	$	513,445	5.00%
Pegasus Bank		74,911	7.28%		41,173	4.00%	N/A		N/A		51,466	5.00%
Pegasus														89,376	6.81%		52,515	4.00%	N/A		N/A		65,644	5.00%
Worthington														36,365	7.65%		19,019	4.00%	N/A		N/A		23,774	5.00%

As of ~~September 30, 2021,~~March 31, 2022, the most recent ~~notification~~notifications from the Federal Reserve Bank of Kansas City, the FDIC and the ~~FDIC~~Comptroller of the Currency, categorized BancFirst, Pegasus and ~~Pegasus Bank~~Worthington as “well capitalized” under the prompt corrective action provisions. The Common Equity Tier 1 Capital of ~~the Company,~~ BancFirst Corporation, BancFirst, Pegasus and ~~Pegasus Bank~~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 ~~the Company,~~ BancFirst Corporation, BancFirst, Pegasus and ~~Pegasus Bank~~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 ~~notification~~notifications to BancFirst Corporation, BancFirst, Pegasus and Worthington of ~~BancFirst and Pegasus Bank’s~~their capital category that management believes would materially change ~~its~~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 0 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 ~~2020~~2021 and ~~2021~~2020 are included in the calculation of the Company’s leverage ratio as of ~~September 30, 2021~~March 31, 2022 as the Company did not utilize the PPP Facility for funding purposes.

~~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.~~

(10) NET INCOME PER COMMON SHARE

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


	Income (Numerator)		Shares (Denominator)		Per Share Amount		Income (Numerator)		Shares (Denominator)		Per Share Amount
	(Dollars in thousands, except per share data)						(Dollars in thousands, except per share data)
Three Months Ended September 30, 2021
Three Months Ended March 31, 2022
Basic
Income available to common stockholders	$	38,750		32,744,104	$	1.18	$	35,915		32,666,916	$	1.10
Dilutive effect of stock options		—		523,851				—		648,417
Diluted
Income available to common stockholders plus assumed exercises of stock options	$	38,750		33,267,955	$	1.16	$	35,915		33,315,333	$	1.08
Three Months Ended September 30, 2020
Three Months Ended March 31, 2021
Basic
Income available to common stockholders	$	20,890		32,668,789	$	0.64	$	42,520		32,756,852	$	1.30
Dilutive effect of stock options		—		500,149				—		651,264
Diluted
Income available to common stockholders plus assumed exercises of stock options	$	20,890		33,168,938	$	0.63	$	42,520		33,408,116	$	1.27
Nine Months Ended September 30, 2021
Basic
Income available to common stockholders	$	129,462		32,760,015	$	3.95
Dilutive effect of stock options		—		598,822
Diluted
Income available to common stockholders plus assumed exercises of stock options	$	129,462		33,358,837	$	3.88
Nine Months Ended September 30, 2020
Basic
Income available to common stockholders	$	64,228		32,666,554	$	1.97
Dilutive effect of stock options		—		523,740
Diluted
Income available to common stockholders plus assumed exercises of stock options	$	64,228		33,190,294	$	1.94

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 were anti-dilutive for the period:


	Shares
Three Months Ended ~~September 30,~~March 31, 2022		105,278
Three Months Ended March 31, 2021		~~533,701~~
~~Three Months Ended September 30, 2020~~		~~377,071~~
~~Nine Months Ended September 30, 2021~~		~~161,690~~
~~Nine Months Ended September 30, 2020~~		~~408,867~~110,144

(11) 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 Accounting Standards Codification (“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 collaterally dependent loans, repossessed assets, other real estate owned, goodwill and other intangible assets.

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

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

Debt Securities Available for Sale

Debt securities classified as available for sale are reported at fair value. U.S. Treasuries are valued using Level 1 inputs. Other debt securities available for sale including U.S. federal agencies, registered mortgage backed debt securities and state and political subdivisions are valued using prices from an independent pricing service utilizing Level 2 data. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. The Company also invests in private label mortgage backed debt securities for which observable information is not readily available. These debt securities are reported at fair value utilizing Level 3 inputs. For these debt securities, management determines the fair value based on replacement cost, the income approach or information provided by outside consultants or lead investors. Discount rates are primarily based on reference to interest rate spreads on comparable debt securities of similar duration and credit rating as determined by the nationally recognized rating agencies adjusted for a lack of trading volume. Significant unobservable inputs are developed by investment securities professionals involved in the active trading of similar debt securities.

The Company reviews the prices for Level 1 and Level 2 debt 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 debt securities that are esoteric or that have complicated structures. The Company’s portfolio primarily consists of traditional investments including U.S. Treasury obligations, federal agency mortgage pass-through debt securities, general obligation municipal bonds and a small amount of municipal revenue bonds. Pricing for such instruments is fairly generic and is easily obtained. For in-state bond issues that have relatively low issue sizes and liquidity, the Company utilizes the same parameters for pricing mentioned in the preceding paragraph adjusted for the specific issue. Periodically, the Company will validate prices supplied by the independent pricing service by comparison to prices obtained from third party sources.

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.

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

Level 1 Inputs

Level 2 Inputs

Level 3 Inputs

Total Fair Value

(Dollars in thousands)

September 30, 2021

Debt securities available for sale:

U.S. Treasury

$
449,855

$
—

$
—

$
449,855

U.S. federal agencies

—

23,545

—

23,545

Mortgage-backed securities

—

33,561

—

33,561

States and political subdivisions

—

5,739

320

6,059

Asset backed securities

—

13,482

—

13,482

December 31, 2020

Debt securities available for sale:

U.S. Treasury

$
475,236

$
—

$
—

$
475,236

U.S. federal agencies

—

19,638

—

19,638

Mortgage-backed securities

—

15,696

—

15,696

States and political subdivisions

—

28,793

155

28,948

Asset backed securities

—

—

12,714

12,714


	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(Dollars in thousands)
March 31, 2022
Debt securities available for sale:
U.S. Treasury	$	1,146,298	$	—	$	—	$	1,146,298
U.S. federal agencies		—		20,534		—		20,534
Mortgage-backed securities		—		20,961		—		20,961
States and political subdivisions		—		4,612		240		4,852
Asset backed securities		—		13,280		—		13,280
Other debt securities		—		2,826		—		2,826
Derivative assets		—		62,701		—		62,701
Derivative liabilities		—		61,651		—		61,651

December 31, 2021
Debt securities available for sale:
U.S. Treasury	$	457,628	$	—	$	—	$	457,628
U.S. federal agencies		—		21,942		—		21,942
Mortgage-backed securities		—		29,283		—		29,283
States and political subdivisions		—		5,999		320		6,319
Asset backed securities		—		13,357		—		13,357
Other debt securities				2,994				2,994
Derivative assets		—		8,946		—		8,946
Derivative liabilities		—		8,237		—		8,237

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


	Nine Months Ended September 30,			Twelve Months Ended December 31,			Three Months Ended March 31,			Twelve Months Ended December 31,
	2021			2020			2022			2021
	(Dollars in thousands)						(Dollars in thousands)
Balance at the beginning of the year	$	12,869		$	12,714		$	320		$	12,869
Transfers (to)/from level 2		(12,714	)		1,643
Transfers to level 2								—			(12,714	)
Purchases		240			—			—			240
Settlements		(75	)		(1,473	)		(80	)		(75	)
Total unrealized losses		—			(15	)
Balance at the end of the period	$	320		$	12,869		$	240		$	320

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 ~~nine~~three months ended ~~September 30,~~March 31, 2022, the Company did not transfer any debt securities. During the year ended December 31, 2021, the Company transferred debt securities from Level 3 to Level 2 due to a review of the pricing models that determined some asset backed debt securities to be Level 2. During the year ended December 31, 2020, the Company transferred debt securities from Level 2 to Level 3 due to a review of the pricing models that determined some state and political subdivisions bonds to be Level 3.

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.

The Company invests in equity securities without readily determinable fair values and utilizes Level 3 inputs. These equity securities are reported at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The realized and unrealized gains and losses are reported as securities transactions in the noninterest income section of the consolidated statements of comprehensive income.

Collateral dependent loans are reported at the fair value of the underlying collateral if repayment is dependent on liquidation of the collateral. When ~~management~~the Company determines that foreclosure is probable or when the borrower is experiencing financial difficulty at the reporting date and repayment is expected to be provided substantially through the operation or sale of the collateral, expected credit

losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. In no case does the fair value of a collateral dependent loan exceed the fair value of the underlying collateral. The collateral dependent loans are adjusted to fair value through a specific allocation of the allowance for credit losses or a direct charge-down of the loan.

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

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

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


	Total Fair Value		Total Fair Value
	Level 3		Level 3
	(Dollars in thousands)		(Dollars in thousands)
As of and for the Year-to-date Period Ended September 30, 2021
As of and for the Year-to-date Period Ended March 31, 2022
Equity securities	$	23,491	$	10,187
Collateral dependent loans		11,858		642
Repossessed assets		128		96
Other real estate owned		6,824		279
As of and for the Year-to-date Period Ended December 31, 2020
As of and for the Year-to-date Period Ended December 31, 2021
Equity securities	$	21,203	$	10,590
Collateral dependent loans		11,347		13,195
Repossessed assets		291		78
Other real estate owned		32,066		7,496

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 and Interest-Bearing Deposits with Banks

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

Federal Funds Sold

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

Debt Securities Held for Investment

For debt 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 debt securities making adjustments for credit or liquidity if applicable.

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. ~~At December 31, 2020, the Company’s principal subsidiary bank, BancFirst, had approximately $21.6~~ ~~million in loans held for sale at its Hugo, Oklahoma branch that were sold to AmeriState Bank in Atoka, Oklahoma in the first quarter of 2021.~~

Loans

To determine the fair value of loans, the Company uses an exit price calculation, which takes into account factors such as liquidity, credit and the nonperformance risk of loans. For certain homogeneous categories of loans, such as some residential mortgages, fair

values are estimated using the quoted market prices for securities backed by similar loans, adjusted for differences in loan characteristics. The fair values of other types of loans are estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

Deposits

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

Short-Term Borrowings

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

Subordinated Debt

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

Loan Commitments and Letters of Credit

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

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


	September 30,				December 31,				March 31,				December 31,
	2021				2020				2022				2021
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(Dollars in thousands)								(Dollars in thousands)
FINANCIAL ASSETS
Level 2 inputs:
Cash and cash equivalents	$	4,110,866	$	4,110,866	$	1,616,912	$	1,616,912	$	4,091,404	$	4,091,404	$	2,050,022	$	2,050,022
Federal funds sold										3,489		3,489		800		800
Debt securities held for investment		37		39		59		62		27		27		32		33
Loans held for sale		20,950		20,950		53,719		53,719		10,137		10,137		24,776		24,776
Level 3 inputs:
Debt securities held for investment		2,945		2,945		2,905		2,922		2,890		2,890		2,945		2,945
Loans, net of allowance for credit losses		5,930,473		5,919,882		6,303,140		6,347,803		6,407,101		6,276,465		6,085,506		6,059,716
FINANCIAL LIABILITIES
Level 2 inputs:
Deposits		9,992,044		10,064,348		8,064,704		8,084,695		11,250,971		11,258,118		8,091,914		8,161,553
Short-term borrowings		3,500		3,500		1,100		1,100		3,300		3,300		—		—
Subordinated debt		85,973		88,072		26,804		30,535		86,001		85,736		85,987		90,391
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS
Loan commitments				3,584				3,115				3,958				3,648
Letters of credit				560				722				522				621

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

The Company has 0 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 measured at fair value on a nonrecurring basis were 0t considered to be significant to the Company at ~~September 30, 2021~~March 31, 2022 or December 31, ~~2020.~~2021.

(12) 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, to mitigate the exposure to fluctuations in oil and gas prices, the Company simultaneously enters into an offsetting contract with a counterparty. These derivatives are not designated as hedged instruments and are recorded on the Company's consolidated balance sheet at fair value and are included in other assets. The Company's derivative financial instruments require a daily margin to be posted, which fluctuates with oil and gas prices. These margins have increased during 2022 due to the current increase in oil and gas prices and customer activity. These margins are included in other assets totaling $84.6 million at March 31, 2022 and $14.3 million at December 31, 2022.

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:


		March 31, 2022						December 31, 2021
Oil and Natural Gas Swaps and Options	Notional Units	Notional Amount			Estimated Fair Value			Notional Amount			Estimated Fair Value
		(Notional amounts and dollars in thousands)
Oil
Derivative assets	Barrels		3,622		$	40,556			2,585		$	6,563
Derivative liabilities	Barrels		(3,622	)		(39,883	)		(2,585	)		(6,129	)

Natural Gas
Derivative assets	MMBTUs		24,462			22,145			19,752			2,383
Derivative liabilities	MMBTUs		(24,462	)		(21,768	)		(19,752	)		(2,108	)

Total Fair Value	Included in
Derivative assets	Other assets					62,701						8,946
Derivative liabilities	Other liabilities					(61,651	)					(8,237	)

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 March 31,
	2022		2021
	(Dollars in thousands)
Derivative income	$	159	$	2

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 represents the profit derived from the activity and is unaffected by the market price movements. The Company's share of total profit is approximately 35%.

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 Company's net credit exposure relating to oil and gas swaps and options with bank counterparties was 0 as of both March 31, 2022 and December 31, 2021.

Balance Sheet Offsetting

Derivatives may be eligible for offset in the consolidated balance sheet and/or subject to master netting arrangements. The Company's derivative transactions with upstream financial institution counterparties and bank customers are generally executed under International Swaps and Derivative Association ("ISDA") master agreements, which include "right of set-off" provisions. In such cases there is generally a legally enforceable right to offset recognized amounts and there may be an intention to settle such amounts on a net basis. Nonetheless, the Company does not generally offset such financial instruments for financial reporting purposes.

(13) 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 56 principal business units are metropolitan banks, community banks, Pegasus, ~~Bank,~~Worthington, other financial services and executive, operations and support. Metropolitan banks, community banks, Pegasus and ~~Pegasus Bank~~Worthington 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. Pegasus ~~Bank~~ consists of banking locations in the Dallas metropolitan area. Worthington consists of banking locations in the Fort Worth metropolitan area. 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 ~~five~~six business units are as follows:


	Metropolitan Banks		Community Banks		Pegasus Bank		Other Financial Services		Executive, Operations & Support			Eliminations			Consolidated			Metropolitan Banks		Community Banks		Pegasus		Worthington		Other Financial Services		Executive, Operations & Support			Eliminations			Consolidated
	(Dollars in thousands)																	(Dollars in thousands)
Three Months Ended September 30, 2021
Three Months Ended March 31, 2022																	Three Months Ended March 31, 2022
Net interest income	$	18,728	$	47,817	$	6,141	$	8,718	$	(1,386	)	$	172		$	80,190		$	19,608	$	44,568	$	7,620	$	1,694	$	2,913	$	(907	)	$	11		$	75,507
Noninterest income		5,681		16,978		359		12,198		45,214			(40,644	)		39,786			9,773		16,845		191		133		12,983		42,574			(38,849	)		43,650
Income before taxes		15,072		31,722		2,158		5,069		34,298			(40,040	)		48,279			18,171		31,339		2,827		385		6,045		23,648			(38,706	)		43,709

Three Months Ended September 30, 2020
Net interest income	$	20,476	$	43,369	$	5,078	$	6,816	$	(104	)	$	217		$	75,852
Noninterest income		4,735		15,149		379		10,882		25,969			(22,539	)		34,575
Income before taxes		6,669		18,257		1,429		3,819		17,158			(21,728	)		25,604

Nine Months Ended September 30, 2021
Net interest income	$	57,909	$	135,611	$	17,308	$	30,057	$	(1,784	)	$	658		$	239,759
Noninterest income		14,494		48,151		1,098		34,686		156,970			(131,060	)		124,339
Income before taxes		46,598		98,005		5,750		16,240		126,428			(129,657	)		163,364

Nine Months Ended September 30, 2020
Three Months Ended March 31, 2021																	Three Months Ended March 31, 2021
Net interest income	$	64,970	$	131,784	$	15,662	$	14,304	$	196		$	217		$	227,133		$	19,333	$	42,770	$	5,359	$	—	$	9,882	$	(407	)	$	269		$	77,206
Noninterest income		14,006		44,843		631		31,100		79,226			(68,004	)		101,802			5,144		14,976		384		—		11,575		49,731			(41,875	)		39,935
Income before taxes		20,695		58,225		4,372		17,364		44,793			(66,289	)		79,160			13,924		29,769		1,645		—		5,951		42,340			(41,451	)		52,178

Total Assets:
September 30, 2021	$	3,292,422	$	6,558,085	$	1,101,900	$	120,743	$	1,570,064		$	(1,340,443	)	$	11,302,771
December 31, 2020		2,729,886		5,527,611		919,572		137,122		1,073,507			(1,175,341	)		9,212,357
March 31, 2022																		$	3,514,435	$	6,868,166	$	1,461,916	$	517,238	$	91,699	$	1,591,150		$	(1,420,173	)	$	12,624,431
December 31, 2021																			2,627,874		5,821,220		1,045,699		—		71,694		1,201,974			(1,362,849	)		9,405,612

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.

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

The following discussion and analysis of our financial condition as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 and results of operations for the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 should be read in conjunction with our consolidated financial statements and notes to the financial statements for the year ended December 31, ~~2020,~~2021, and the other information included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. Certain risks, uncertainties and other factors, including those set forth under "Risk Factors" in Part I, Item 1A of the ~~2020~~2021 Form 10-K, and "Item 1A, Risk Factors" in this Quarterly Report on Form 10-Q, may cause actual results to differ materially from the results discussed in the forward-looking statements appearing in this discussion and analysis.

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

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

The COVID-19 pandemic and actions taken in response to it have negatively impacted the global economy and all financial markets since March 31, 2020. Although the Company is not able to estimate the impact of the COVID-19 pandemic and the resultant economic circumstances on a long-term basis at this time, the COVID-19 pandemic could materially affect the Company’s financial and operational results. The Company is closely monitoring its loan portfolio for effects related to COVID-19. See Item 1.A. Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, for further discussion.

The Company’s net income for the ~~third~~first quarter of ~~2021~~2022 was ~~$38.8~~$35.9 million, compared to ~~$20.9~~$42.5 million for the ~~third~~first quarter of ~~2020.~~2021. Diluted net income per common share was ~~$1.16~~$1.08 and ~~$0.63~~$1.27 for the ~~third~~first quarter of 2022 and 2021, ~~and 2020,~~ respectively. ~~The Company recorded a provision for credit losses of $1.5 million for the third quarter of 2021, compared to a provision for credit losses of $18.7 million for the third quarter of 2020.~~

Net income was $129.5 million, or $3.88 diluted earnings per share, for the nine months ended September 30, 2021, compared to net income of $64.2 million, or $1.94 diluted earnings per share, for the nine months ended September 30, 2020. The Company recorded a net benefit from reversal of provisions for credit losses of $8.5 million for the nine months ended September 30, 2021 compared to a provision for credit losses of $57.7 million for the nine months ended September 30, 2020.

The Company’s net interest income for the ~~third~~first quarter of ~~2021 increased~~2022 decreased to ~~$80.2~~$75.5 million, compared to ~~$75.9~~$77.2 million for the ~~third~~first quarter of ~~2020,~~2021. ~~as a result~~The decrease was due to the decline of PPP fee income of approximately $8.1 million, partially offset by the increase in interest income on debt securities of $2.0 million, an increase of ~~$6.2~~ $1.2 million related to interest-bearing deposits at the Federal Reserve and $1.7 million in ~~fee~~net interest income ~~from Paycheck Protection Program (PPP) loan forgiveness.~~ related to the Worthington acquisition. The net interest margin for the ~~third~~first quarter was ~~3.09%~~2.78%, compared to ~~3.40%~~3.36% a year ago.The decrease in margin was due to lower PPP fees earned during the quarter and an increase in cash held at the Federal Reserve. For the first quarter of 2022 a provision of $2.9 million was recorded, which was substantially related to acquired loans during the quarter, compared to no provision for credit losses recorded for March 31, 2021. Noninterest income for the ~~third~~first quarter of ~~2021~~2022 totaled ~~$39.8~~$43.7 million, compared to ~~$34.6~~$39.9 million for the ~~third~~first quarter of ~~2020.~~ 2021. The increase in noninterest income was mostly attributable to ~~$2.9~~$4.9 million of income resulting from the application of equity method accounting related to an equity interest received in ~~rental income from other real estate property,~~the process of a ~~$2.1~~loan collection, along with a $2.3 million increase in income from ~~debit card interchange fees~~service charges on deposits and ~~a $1.5~~$1.4 million increase in insurance commissions. The increase in non-interest income was partially offset by a loss of $4.0 million on bonds resulting from the sale of $226 million of low yielding debt securities, which were subsequently reinvested in higher yielding debt securities and a $2.6 million gain on sale of other assets in the first quarter last year.Noninterest expense for the ~~third~~first quarter of ~~2021~~2022 increased to ~~$70.2~~$72.5 million compared to ~~$66.1~~$65.0 million for the ~~third~~first quarter of ~~2020,~~2021 because of the increase in salaries and employee benefits of approximately ~~$2.0~~$4.4 million and other expenses related to ~~other real estate property operating costs and $1.0 million in net occupancy and depreciation primarily from~~ the ~~Company’s move to its new corporate headquarters.~~Worthington acquisition. The Company’s effective tax rate was ~~19.7%~~17.8% for the ~~third~~first quarter of ~~2021~~2022 compared to ~~18.4%~~18.5% for the ~~third~~first quarter of ~~2020.~~2021. The lower effective tax rate was driven by the exercising of stock options during the quarter and a lower state income tax rate.

At ~~September 30, 2021,~~March 31, 2022, the Company’s total assets were ~~$11.3~~$12.6 billion, an increase of ~~$2.1~~$3.2 billion from December 31, ~~2020. Loans totaled $6.0~~2021. Debt securities of $1.2 billion ~~a decrease of $410.3~~were up $677.2 million from December 31, 2020 stemming from a net decrease of approximately $451.5 million in PPP loans and the sale of approximately $21 million of loans from the Company’s Hugo, Oklahoma branch, along with pay downs on loans. The decrease in loans were partially offset by the Company’s purchase of approximately $149 million in loans from the First National Bank and Trust Company of Vinita, Oklahoma. Deposits2021. Loans totaled ~~$10.0~~$6.5 billion, an increase of ~~$1.9~~$310.3 million from December 31, 2021. Loans increased $257.4 million due to the acquisition of Worthington. At March 31, 2022, the balance of the PPP loans was $30.6 million, compared to $80.4 million at December 31, 2021. Deposits totaled $11.3 billion, an increase of $3.2 billion from the December 31, ~~2020~~2021 total. The increase in assets and deposits from December 31, 2021 was ~~predominantly~~primarily related to ~~PPP and other government stimulus payments. At September 30, 2021,~~ the ~~Company had PPP loans held for investment~~return of ~~$201.2 million, net of unamortized processing fees of $6.7 million.~~off-balance sheet sweep accounts related to the Company’s year-end sweep program. Off-balance sheet sweep accounts totaled $2.9 billion at March 31, 2022 compared to $5.1 billion at December 31, 2021. The Company’s total stockholders’ equity at ~~September 30, 2021~~March 31, 2022 was ~~$1.1~~$1.2 billion, ~~an increase~~a decrease of ~~$79.0~~$3.9 million over December 31, ~~2020. Off-balance sheet sweep accounts totaled $2.7 billion at September 30, 2021 compared~~2021. The decrease in stockholders equity was due to ~~$2.8 billion at December 31, 2020.~~unrealized losses included in other comprehensive income.

Nonaccrual loans ~~represent 0.44%~~represented 0.27% of total loans at ~~September 30, 2021,~~March 31, 2022, down from ~~0.58%~~0.34% at December 31, ~~2020. Net charge-offs were 0.01% of average loans for the third quarter of 2021, compared to 0.03% in the third quarter of 2020.~~2021. The allowance for credit losses to total loans was ~~1.43%~~1.34% at ~~September 30, 2021~~March 31, 2022 compared to ~~1.42%~~1.36% at December 31, ~~2020. The~~2021, and the allowance for credit losses to nonaccrual loans was ~~324.96%~~approximately 500% at ~~September 30, 2021~~March 31, 2022 compared to ~~243.35%~~402% at December 31, ~~2020.~~2021. At March 31, 2022, the Company’s nonaccrual loans were $17.5 million compared to $20.9 million at year-end 2021.

See Note (2) of the Notes to Consolidated Financial Statements for disclosure regarding the Company’s recent developments, including mergers and acquisitions.

~~There have been no~~See Note (1) of the Notes to the Consolidated Financial Statements for disclosures regarding changes in the Company’s disclosures regarding recently issued accounting pronouncements since December 31, ~~2020,~~2021, the date of its most recent annual report to stockholders.

See Note ~~(12)~~(13) of the Notes to the Consolidated Financial Statements for disclosures regarding business segments.

The following table presents, for the periods indicated, certain information related to ~~our~~the Company's average balance sheet, ~~and our~~ average yields on assets and average costs of liabilities. Such yields are derived by dividing income or expense by the average balance of the corresponding assets or liabilities. Average balances are derived from daily averages.


BANCFIRST CORPORATION	BANCFIRST CORPORATION																	BANCFIRST CORPORATION
CONSOLIDATED AVERAGE BALANCE SHEETS AND INTEREST MARGIN ANALYSIS	CONSOLIDATED AVERAGE BALANCE SHEETS AND INTEREST MARGIN ANALYSIS																	CONSOLIDATED AVERAGE BALANCE SHEETS AND INTEREST MARGIN ANALYSIS
(Unaudited)	(Unaudited)																	(Unaudited)
Taxable Equivalent Basis	Taxable Equivalent Basis																	Taxable Equivalent Basis
(Dollars in thousands)	(Dollars in thousands)																	(Dollars in thousands)

		Nine Months Ended September 30,																	Three Months Ended March 31,
		2021								2020									2022								2021
					Interest		Average						Interest		Average							Interest		Average						Interest		Average
		Average			Income/		Yield/			Average			Income/		Yield/				Average			Income/		Yield/			Average			Income/		Yield/
		Balance			Expense		Rate			Balance			Expense		Rate				Balance			Expense		Rate			Balance			Expense		Rate
ASSETS
Earning assets:
Loans (1)		$	6,267,176		$	240,733		5.14	%	$	6,376,221		$	232,380		4.85	%		$	6,359,795		$	73,066		4.66	%	$	6,400,845		$	77,766		4.93	%
Debt securities – taxable			531,109			4,779		1.20			556,557			6,665		1.60				1,105,222			3,781		1.39			521,698			1,693		1.32
Debt securities – tax exempt			13,530			222		2.20			28,579			485		2.26				4,774			34		2.93			19,340			88		1.84
Federal funds sold and interest-bearing deposits with banks			3,064,852			2,861		0.12			1,509,493			5,586		0.49				3,548,875			1,758		0.20			2,387,000			595		0.10
Total earning assets			9,876,667			248,595		3.37			8,470,850			245,116		3.85				11,018,666			78,639		2.89			9,328,883			80,142		3.48
Nonearning assets:
Cash and due from banks			270,724								210,558									269,015								268,848
Interest receivable and other assets			688,223								603,167									785,248								683,868
Allowance for credit losses			(89,116	)							(69,603	)								(85,228	)							(90,551	)
Total nonearning assets			869,831								744,122									969,035								862,165
Total assets		$	10,746,498							$	9,214,972								$	11,987,701							$	10,191,048
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY																	LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing liabilities:
Transaction deposits		$	835,363		$	465		0.07	%	$	755,835		$	809		0.14	%		$	942,178		$	191		0.08	%	$	766,994		$	149		0.08	%
Savings deposits			3,675,121			3,034		0.11			3,230,145			8,482		0.35				4,170,503			1,141		0.11			3,504,020			1,106		0.13
Time deposits			658,306			2,814		0.57			699,211			6,713		1.28				654,091			649		0.40			657,938			1,067		0.66
Short-term borrowings			2,595			1		0.07			3,306			8		0.33				2,459			1		0.12			2,928			1		0.19
Long-term borrowings			—			—		—			1,478			—		—
Subordinated debt			46,957			2,100		5.98			26,804			1,474		7.33				85,992			1,030		4.86			26,804			491		7.43
Total interest-bearing liabilities			5,218,342			8,414		0.22			4,716,779			17,486		0.49				5,855,223			3,012		0.21			4,958,684			2,814		0.23
Interest-free funds:
Noninterest-bearing deposits			4,363,925								3,414,106									4,883,050								4,106,084
Interest payable and other liabilities			50,469								46,175									67,688								41,522
Stockholders’ equity			1,113,762								1,037,912									1,181,740								1,084,758
Total interest free funds			5,528,156								4,498,193									6,132,478								5,232,364
Total liabilities and stockholders’ equity		$	10,746,498							$	9,214,972								$	11,987,701							$	10,191,048
Net interest income					$	240,181							$	227,630								$	75,627							$	77,328
Net interest spread								3.15	%							3.36	%								2.68	%							3.25	%
Effect of interest free funds								0.10	%							0.22	%								0.10	%							0.11	%
Net interest margin								3.25	%							3.58	%								2.78	%							3.36	%

For these computations, information is shown on a taxable-equivalent basis assuming a 21% tax rate.	For these computations, information is shown on a taxable-equivalent basis assuming a 21% tax rate.																	For these computations, information is shown on a taxable-equivalent basis assuming a 21% tax rate.
(1) Nonaccrual loans are included in the average loan balances and any interest on such nonaccrual loans is recognized on a cash basis.	(1) Nonaccrual loans are included in the average loan balances and any interest on such nonaccrual loans is recognized on a cash basis.																	(1) Nonaccrual loans are included in the average loan balances and any interest on such nonaccrual loans is recognized on a cash basis.

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

For the three months ended ~~September 30, 2021,~~March 31, 2022, net interest income, which is the Company’s principal source of operating revenue, ~~increased $4.3~~decreased $1.7 million or ~~5.7%~~2.2% compared to the three months ended ~~September 30, 2020. Net~~March 31, 2021. The decrease was due to the decline of PPP fee income of approximately $8.1 million, partially offset by the increase in interest income ~~increased for the third quarter~~on debt securities of ~~2021,~~ ~~as a result of~~$2.0 million, an increase of ~~$6.2~~ $1.2 million related to interest-bearing deposits at the Federal Reserve and $1.7 million in ~~fee~~net interest income ~~from PPP loan forgiveness.~~ related to the Worthington acquisition. Net interest margin is the ratio of taxable-equivalent net interest income to average earning assets for the period. As shown in the preceding table, the Company’s net interest margin for the ~~third~~first quarter of ~~2021~~2022 decreased compared to the ~~third~~first quarter of ~~2020. This~~2021. The decrease in margin was due to ~~larger balances in interest-bearing deposits with banks~~lower PPP fees earned during the ~~quarter.~~

Net interest income for the nine months ended September 30, 2021 increased $12.6 million or 5.6% compared to the nine months ended September 30, 2020. Net interest income increased for the nine months ended September 30, 2021, ~~as a result of~~quarter and an increase ofin cash held at the Federal Reserve. $24.2 million in fee income from PPP loan forgiveness and the drop in average interest rates on deposits. As shown in the preceding table, the Company’s net interest margin for the nine months ended September 30, 2021 decreased compared to the nine months ended September 30, 2020, due to larger balances and lower average rates on interest-bearing deposits with banks during the period.

The Company’s net interest income and net interest margin have been ~~and the Company currently expects them to continue to be,~~ impacted by the decreases in interest rates stemming from the Federal Reserve's response to the COVID-19 pandemic. ~~Our~~However, the Company's expectation is that interest rates will increase ~~slightly in~~during the ~~upcoming~~ year.

For the ~~third~~first quarter of ~~2021,~~2022, the Company recorded a provision for credit losses of ~~$1.5~~$2.9 million, which was substantially related to acquired loans during the quarter, compared to ano provision for credit losses ~~of $18.7 million~~recorded for the ~~third~~first quarter of 2020. The Company’s provision for the third quarter of 2021 supported a stable reserve as COVID continues to impact some businesses in Oklahoma and Texas despite a decline in COVID cases. The elevated provision during the third quarter of 2020 was based on the Company’s evaluation of the level of uncertainty and lack of clarity of the timing of an end to the COVID-19 pandemic, as well as the magnitude of the government’s stimulus response to it.2021. The Company establishes an allowance as an estimate of the expected credit losses in the loan portfolio at the balance sheet date. Management believes the allowance for credit losses is appropriate based upon management’s best estimate of expected losses within the existing loan portfolio. Should any of the factors considered by management in evaluating the appropriate level of the allowance for credit losses

change, the Company’s estimate of expected credit losses could also change, which could affect the amount of future provisions for credit losses. Net loan charge-offs were ~~$10,000~~$289,000 for the ~~third~~first quarter of ~~2021,~~2022, compared to net loan charge-offs of ~~$2.1 million~~$506,000 for the ~~third~~first quarter of ~~2020.~~2021. The rate of net charge-offs to average total loans, as presented in the preceding table, continues to be at a low level.

For the nine months ended September 30, 2021, the Company recorded a net benefit from reversal of provision for credit losses of $8.5 million compared to a provision for credit losses of $57.7 million for nine months ended September 30, 2020. Net loan charge-offs were $4.7 million, compared to $3.1 million for the same period of the prior year. The Company’s reversal of provision for the nine months ended September 30, 2021 was based on improvements in economic conditions and the Company’s outlook for certain economic indicators. The elevated provision during the nine months ended September 30, 2020 was based on the Company’s evaluation of the level of uncertainty and lack of clarity of the timing of an end to the COVID-19 pandemic, as well as the magnitude of the government’s stimulus response to it.

Noninterest income, as presented in the preceding table, increased by ~~$5.2~~$3.7 million for the ~~third~~first quarter of ~~2021~~2022 compared to the ~~third~~first quarter of ~~2020.~~ 2021. The increase in noninterest income was mostly attributable to ~~$2.9~~$4.9 million of income resulting from the application of equity method accounting related to an equity interest received in ~~rental income from other real estate property,~~the process of a ~~$2.1~~loan collection, along with a $2.3 million increase in income from ~~debit card interchange fees~~service charges on deposits and ~~a $1.5~~$1.4 million increase in insurance commissions. The increase in non-interest income was partially offset by a loss of $4.0 million on bonds resulting from the sale of $226 million of low yielding debt securities, which were subsequently reinvested in higher yielding debt securities, and a $2.6 million gain on sale of other assets in the first quarter last year.

Noninterest income included non-sufficient funds fees totaling ~~$6.8~~$6.5 million and ~~$6.4~~$5.5 million for the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively. This represents ~~17.2%~~15.0% and ~~18.6%~~13.8% of the Company’s noninterest income for the respective periods. In addition, the Company had debit card interchange fees totaling $11.7 million and ~~$9.7~~$10.7 million during the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively. This represents ~~29.5% and 27.9%~~26.7% of the Company’s noninterest income for ~~the respective~~both periods. ~~For the third quarter of 2021 compared~~

The Company is subject to political pressures that could limit its ability to charge for non-sufficient funds ("NSF") and overdraft fees. It is expected that recent changes to the ~~third quarter of 2020, government assistance funds that flowed into the market, including PPP loans~~Company's rates charged on NSF and ~~stimulus payments~~overdraft fees will lower annual pretax income by $6 to ~~households, increased both customer liquidity and interchange volume resulting in higher debit card interchange fees.~~$7 million.

Noninterest income increased by $22.5 million for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. The increase in noninterest income was due to a purchase gain of $4.8 million associated with The First National Bank and Trust Company of Vinita, Oklahoma, a gain from the sale of the Company’s Hugo, Oklahoma branch of $2.5 million, a $7.3 million increase in income from debit card interchange fees, $7.5 million in rental income from other real estate property, and a $2.4 million increase in insurance commissions, which were partially offset by a $4.5 million decrease in income from sweep fees. In addition, the Company earned $5.7 million on the sale of loans for the nine months ended September 30, 2021 compared to $4.2 million for the nine months ended September 30, 2020. The income from sales of loans increased due to the increase in volume of mortgage loans originated because of record low mortgage rates.

Noninterest income included non-sufficient fund fees totaling $18.0 million and $19.7 million during the nine months ended September 30, 2021 and 2020, respectively. This represents 14.4% and 19.3% of the Company’s noninterest income for the respective periods. In addition, the Company had debit card interchange fees totaling $34.3 million and $27.0 million during the nine months ended September 30, 2021 and 2020, respectively. This represents 27.6% and 26.5% of the Company’s noninterest income for the respective periods. Government assistance funds that flowed into the market, including PPP loans and stimulus payments to households, increased both customer liquidity and interchange volume. This activity resulted in lower non-sufficient funds fees and higher debit card interchange fees for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.

Prior to the COVID-19 pandemic, there was minimal likelihood that the Company would surpass $10 billion in total assets for several years. However, with the CARES Act, including PPP loans, stimulus payments to households, and artificially high household savings rates, our deposits and assets have grown dramatically beyond reasonably foreseeable levels. To the extent the COVID-19 pandemic and the effects of the aforementioned stimulus programs continue, itIt is ~~likely~~probable the Company will exceed $10 billion in total assets at December 31, ~~2021.~~2022. Pursuant to the Durbin Amendment of the Dodd-Frank Act, based on current run rates, this would trigger an approximate reduction of annual pretax income from debit card interchange fees of between ~~$20~~$22 to ~~$22~~$24 million beginning July 1, ~~2022. The Company is undergoing efforts through the use of our existing sweep product to reduce total assets below $10 bill~~2023.~~ion at December 31, 2021, but the success of these efforts is uncertain.~~

Noninterest expense, as presented in the preceding table, increased by ~~$4.1~~$7.5 million for ~~third~~first quarter of ~~2021~~2022 compared to the ~~third~~first quarter of ~~2020.~~2021. The increase in noninterest expenses was due to ~~$2.0~~the increase in salaries and employee benefits of approximately $4.4 million and other expenses related to ~~other real estate property operating costs and approximately $1.0 million in net occupancy and depreciation primarily from~~ the ~~Company’s move to its new corporate headquarters.~~Worthington acquisition.

For the nine months ended September 30, 2021, noninterest expense increased by $17.1 million compared to the nine months ended September 30, 2020. The increase in noninterest expenses was due to approximately $6.6 million related to other real estate

property operating costs, $4.0 million in acquisition related expenses, approximately $3.5 million in net occupancy and depreciation primarily from the Company’s move to its new corporate headquarters, and a $1.3 million increase in deposit insurance. The nine months ended September 30, 2020 included a $2.3 million gain on the sale of other real estate owned, compared to approximately $245,000 for the nine months ended September 30, 2021, that reduced noninterest expense.

The Company’s effective tax rate was ~~19.7%~~17.8% for the ~~third~~first quarter of ~~2021,~~2022, compared to ~~18.4%~~18.5% for the ~~third~~first quarter of ~~2020.~~ 2021. The lower effective tax rate ~~for~~was driven by the ~~third~~exercising of stock options during the first quarter of ~~2020 was due to~~2022 and a ~~greater effect of~~lower state income tax ~~credits on lower reported income.~~rate.

The Company’s effective tax rate on income before taxes was 20.8% for the nine months ended September 30, 2021, compared to 18.9% for the nine months ended September 30, 2020. The lower effective tax rate for the first nine months of 2020 was due to a greater effect of tax credits on lower reported income.

The reasons for the difference between the Company’s effective tax rate and the federal statutory rate were tax-exempt income, nondeductible amortization, federal and state tax credits and state tax expense.

The aggregate of cash and due from banks and interest-bearing deposits with banks increased by ~~$2.5~~$2.0 billion or ~~154.2%~~99.6% to $4.1 billion, from December 31, ~~2020~~2021 to ~~September 30, 2021.~~March 31, 2022. The increase was primarily related to the ~~increase in deposits from PPP and other government stimulus payments.~~return of off-balance sheet sweep accounts related to the Company’s year-end sweep program, which was partially off-set by the purchase of higher yielding bonds described below.

At ~~September 30, 2021,~~March 31, 2022, total debt securities ~~decreased $25.7~~increased $677.2 million, or ~~4.6%~~126.7% compared to December 31, ~~2020.~~2021. The size of the Company’s securities portfolio is determined by the Company’s liquidity and asset/liability management. The net unrealized ~~gain~~loss on debt securities available for sale, before taxes, was ~~$6.4~~$38.7 million at ~~September 30, 2021,~~March 31, 2022, compared to a net unrealized gain of ~~$9.9~~$2.8 million at December 31, ~~2020.~~2021. These unrealized losses and gains are included in the Company’s stockholders’ equity as accumulated other comprehensive income, net of income tax, in the amounts of a ~~gain~~loss of ~~$4.9~~$29.5 million at ~~September 30, 2021~~March 31, 2022 and a gain of ~~$7.4~~$2.2 million at December 31, ~~2020.~~2021. During the quarter ended March 31, 2022, the Company had a loss of $4.0 million on bonds resulting from the sale

37of $226 million of debt securities with an average yield of 0.16%, which were subsequently reinvested in $220 million of debt securities with an average yield of 1.86%. On January 10, 2022, the Company purchased United States Treasury Notes of $600 million par value with an average yield of 1.42% and an average maturity of 53 months.

See Note (3) of the Notes to Consolidated Financial Statements for disclosures regarding the Company’s Securities.

At ~~September 30, 2021,~~March 31, 2022, total loans ~~decreased $410.3~~increased $310.3 million or ~~6.4%~~5.0% compared to December 31, ~~2020. The decrease in loans resulted from a net decrease~~2021. Loans increased $257.4 million due to the acquisition of approximately $451.5 million in PPP loans and the sale of approximately $21 million of loans from the Company’s Hugo, Oklahoma branch along with pay downs on loans. The decrease in loans were partially offset by the Company’s purchase of approximately $149 million in loans, from The First National Bank and Trust Company of Vinita, Oklahoma.Worthington. At ~~September 30, 2021,~~March 31, 2022, the balance of total PPP loans was ~~$201.2~~$30.6 million, net of unamortized processing fees of ~~$6.7 million.~~approximately $394,000 compared to $80.4 million, net of unamortized processing fees of $2.0 million at December 31, 2021.

See Note (4) of the Notes to Consolidated Financial Statements for disclosures regarding the Company’s loan portfolio segments.

~~On January 1, 2020,~~The increase in the ~~Company adopted ASC 326, which replaces~~allowance for credit loss during 2022 was substantially related to the ~~incurred~~additional allowance for credit loss ~~methodology with an expected loss methodology that is referred to as CECL.~~ required by newly acquired loans. The decrease in the allowance for credit loss during 2021 was ~~primarily~~ driven by a reversal of a pandemic-related provision during ~~the second quarter of 2021, and a lower provision in the third quarter of~~ 2021 based on sustained improvements in the economy, both nationally and in ~~Oklahoma and Texas,~~the Company's markets, which reduced the amount of expected credit loss within the loan portfolio. This reduction was partially offset by additional allowance for credit loss required by newly acquired ~~loans purchased with credit deterioration.~~loans.

At ~~September 30, 2021,~~March 31, 2022, nonperforming and restructured assets decreased ~~$4.7~~$3.2 million to ~~$77.9~~$65.9 million compared to December 31, ~~2020.~~2021. The Company’s level of nonperforming and restructured assets has continued to be relatively low, equating to ~~0.69%~~0.52% of total assets at ~~September 30, 2021~~March 31, 2022 and ~~0.90%~~0.73% of total assets at December 31, ~~2020.~~2021.

Nonaccrual loans totaled ~~$26.6~~$17.5 million at ~~September 30, 2021,~~March 31, 2022, compared to ~~$37.5~~$20.9 million at December 31, ~~2020. At September 30, 2021, the~~2021. The Company’s nonaccrual loans decreased ~~$10.9~~$3.4 million from December 31, ~~2020,~~2021 due to resolutions of several ~~loans, which were offset by $7.2 million of nonaccrual loans acquired from The First National Bank and Trust Company of Vinita, Oklahoma.~~loans. The Company’s nonaccrual loans are primarily commercial and agricultural non-real estate and farmland. Nonaccrual loans negatively impact the Company’s net interest margin. A loan is placed on nonaccrual status when, in the opinion of management, the future collectability of both interest and principal is in serious doubt. Interest income is not recognized until the principal balance is fully collected. However, if the full collection of the remaining principal balance is not in doubt, interest income is recognized on certain of these loans on a cash basis. Had nonaccrual loans performed in accordance with their original contractual terms, the Company would have recognized additional interest income of approximately ~~$1.7 million~~$376,000 for the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 and ~~$2.1 million~~$521,000 for the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021. Only a small amount of this interest is expected to be ultimately collected. Approximately ~~$3.1~~$3.4 million of nonaccrual loans were guaranteed by government agencies at ~~September 30, 2021.~~March 31, 2022.

Restructured loans totaled ~~$7.1~~$2.3 million at ~~September 30, 2021~~March 31, 2022 compared to ~~$7.8~~$3.7 million at December 31, ~~2020.~~2021. The Company charges interest on principal balances outstanding during deferral periods. As a result, the current and future financial effects of the recorded balance of loans considered to be troubled debt restructurings whose terms were modified during the period were not considered to be material.

The classification of a loan as nonperforming does not necessarily indicate that loan principal and interest will ultimately be uncollectible; although, in an economic downturn, the Company’s experience has been that the level of collections declines. The above normal risk associated with nonperforming loans has been considered in the determination of the allowance for credit losses. At ~~September 30, 2021,~~March 31, 2022, the allowance for credit losses as a percentage of nonperforming and restructured loans was ~~222.46%~~333.51%, compared to ~~182.26%~~284.33%, at December 31, ~~2020.~~2021. The level of nonperforming loans and credit losses could rise over time as a result of adverse economic conditions.

Other real estate owned (OREO) and repossessed assets totaled ~~$39.1~~$39.7 million at ~~September 30, 2021,~~March 31, 2022, compared to ~~$32.5~~$39.6 million at December 31, ~~2020.~~2021. Other real estate owned consists of properties acquired through foreclosure proceedings or acceptance of a deed in lieu of foreclosure and premises held for sale. At September 30, 2021, the Company’s OREO increased $6.8 million from December 31, 2020, and included approximately $4.0 million from the repossession of one commercial real estate property, $2.4 million from the decommissioning of the Company’s previous headquarters, ~~and approximately $600,000 acquired from The First National Bank and Trust Company of Vinita, Oklahoma.~~ As of both ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, other real estate owned included a commercial real estate property recorded at approximately ~~$28~~$29.5 million.The Company's rental income from OREO was approximately $2.8 million for the three months ended March 31, 2022 compared to approximately $2.4 million for the three months ended March 31, 2021. In addition, the Company's OREO holding expense was approximately $2.5 million for the three months ended March 31, 2022 compared to approximately $1.5 million for the three months ended March 31, 2021. Other real estate owned and repossessed assets are carried at the lower of the book values of the related loans or fair values based upon appraisals, less estimated costs to sell. Write-downs arising at the time of reclassification of such properties from loans to other real estate owned are charged directly to the allowance for

credit losses. Any losses on bank premises designated to be sold are charged to operating expense at the time of transfer from premises to other

real estate owned. Decreases in values of properties subsequent to their classification as other real estate owned are charged to operating expense.

Identifiable intangible assets and goodwill totaled ~~$168.2~~$202.0 million and ~~$168.9~~$167.5 million at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. The increase in goodwill and intangible assets was due the acquisition of

~~On May 20, 2021, the Company recorded a~~Worthington on February 8, 2022, which added approximately $8.7 million of core deposit ~~intangible~~intangibles and approximately $26.6 million of ~~approximately $1.7 million because of the purchase of assets and assumption of liabilities from The First National Bank and Trust Company of Vinita, Oklahoma. See~~goodwill. See Note (2) of the Notes to Consolidated Financial Statements for disclosure regarding the Company’s recent developments, including mergers and acquisitions.

Other assets includes the cash surrender value of key-man life insurance policies totaling ~~$82.1~~$81.0 million at ~~September 30, 2021~~March 31, 2022 and ~~$80.7~~$81.4 million at December 31, ~~2020.~~2021.

The Company's derivative financial instruments are included in other assets and totaled $62.7 million at March 31, 2022 and $8.9 million at December 31, 2022. The derivative financial instruments have increased due to the increase in oil and gas prices and customer activity. The Company's derivative financial instruments require a daily margin to be posted, which fluctuates with oil and gas prices. These margins have increased during 2022 due to the current increase in oil and gas prices and customer activity. These margins are included in other assets totaling $84.6 million at March 31, 2022 and $14.3 million at December 31, 2022. See Note (12) of the Notes to Consolidated Financial Statements for a complete discussion of the Company’s derivative financial instruments.

Equity securities are reported in other assets on the balance sheet. The Company invests in equity securities without readily determinable fair values. These equity securities are reported at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The realized and unrealized gains and losses are reported as securities transactions in the noninterest income section of the consolidated statements of comprehensive income. The balance of equity securities was ~~$23.5~~$10.2 million at ~~September 30, 2021~~March 31, 2022 and ~~$21.2~~$10.6 million at December 31, ~~2020.~~2021. The Company reviews its portfolio of equity securities for impairment at least quarterly. The balance of these equity securities included equity interests of previous borrowers in the oil and gas industry, which were received through bankruptcy proceedings, which totaled approximately $13.1 million at September 30, 2021 and approximately $11.1 million at December 31, 2020.

During ~~2021,~~2022, there have not been any material changes in the Company’s low income housing tax credit investments and new market tax credit investments, which are included in other assets on the Company’s balance sheet. See Note (6) of the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, for disclosures regarding these investments.

The Company’s principal source of liquidity and funding is its broad deposit base generated from customer relationships. The availability of deposits is affected by economic conditions, competition with other financial institutions and alternative investments available to customers. Through interest rates paid, service charge levels and services offered, the Company can affect its level of deposits to a limited extent. The level and maturity of funding necessary to support the Company’s lending and investment functions is determined through the Company’s asset/liability management process. The Company currently does not rely heavily on long-term borrowings and does not utilize brokered CDs. The Company maintains federal funds lines of credit with other banks and could also utilize the sale of loans, securities and liquidation of other assets as sources of liquidity and funding.

There have not been any other material changes from the liquidity and funding discussion included in Management’s Discussion and Analysis in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

At ~~September 30, 2021,~~March 31, 2022, deposits totaled ~~$10.0~~$11.3 billion, an increase of ~~$1.9~~$3.2 billion or ~~23.9%~~39.0% from the December 31, ~~2020~~2021 total. The increase in deposits was primarily related to ~~deposits~~the return of ~~proceeds from~~off-balance sheet sweep accounts related to the ~~PPP and other government stimulus payments.~~ Company’s year-end sweep program. The Company’s core deposits provide it with a stable, low-cost funding source. The Company’s core deposits as a percentage of total deposits were 98.5% at ~~September 30, 2021~~March 31, 2022 and 98.2% at December 31, ~~2020.~~2021. Noninterest-bearing deposits to total deposits were ~~46.0%~~46.4% at ~~September 30, 2021,~~March 31, 2022, compared to ~~47.0%~~46.7% at December 31, ~~2020.~~2021.

In addition, off-balance sheet sweep accounts totaled $2.9 billion at March 31, 2022 compared to $5.1 billion at December 31, 2021, which included a temporary sweep amount of approximately $2.3 billion. The year-end sweep program affected the balances of both assets and deposits.

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 3.50% Fixed-to-Floating Rate Subordinated Notes due 2036 to various institutional accredited investors. See Note (7) of the Notes to Consolidated Financial Statements for a complete discussion of the Company’s subordinated debt.

Short-term borrowings, consisting primarily of federal funds purchased and repurchase agreements are another source of funds for the Company. The level of these borrowings is determined by various factors, including customer demand and the Company’s ability to earn a favorable spread on the funds obtained. Short-term borrowings were ~~$3.5~~$3.3 million at ~~September 30, 2021, compared to $1.1 million~~March 31, 2022. The Company did not have short-term borrowings at December 31, ~~2020.~~2021.

~~The Company~~BancFirst 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 $862.4~~In addition, BancFirst has a $25.0 million ~~are pledged as collateral for the borrowings under the~~ line of ~~credit.~~ credit with another financial institution that is an overnight federal funds facility. As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020, the Company~~2021, BancFirst had no advances outstanding under ~~the~~either line of credit. Pegasus has a $20.0 million line of credit with another financial institution that is an overnight federal funds facility. As of March 31, 2022 and December 31, 2021, Pegasus had no advances outstanding under its line of credit. Worthington has an $8.5 million line of credit with another financial institution that is an overnight federal funds facility, and a line of credit from ~~FHLB.~~the FHLB of Dallas, Texas to use for liquidity or to match-fund certain long-term fixed rate loans. Worthington had no advances outstanding as of March 31, 2022 under either line of credit.

Stockholders’ equity totaled ~~$1.1~~$1.2 billion at both ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021. In addition to net income of ~~$129.5~~$35.9 million, other changes in stockholders’ equity during the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 included ~~$1.7~~$3.1 million related to common stock issuances for stock option exercises and ~~$1.6 million~~$458,000 related to stock-based compensation, that were partially offset by ~~$34.1~~$11.8 million in dividends ~~$11.7 million from the repurchase of the Company's stock, $5.5 million from settlement of options in cash,~~ and a ~~$2.6~~$31.7 million decrease in accumulated other comprehensive income. The Company’s leverage ratio and total risk-based capital ratios at ~~September 30, 2021,~~March 31, 2022, were well in excess of the regulatory requirements.

See Note (9) of the Notes to Consolidated Financial Statements for a discussion of capital ratios and requirements.

There have not been any material changes in the Company’s liquidity and off-balance sheet arrangements 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, ~~2020.~~2021.

There have been no significant changes in the Company’s disclosures regarding market risk since December 31, ~~2020,~~2021, the date of its most recent annual report to stockholders.

Evaluation of Disclosure Controls and Procedures. Pursuant to Rule 13a-15 of the Securities Exchange Act of 1934 (the “Exchange Act”), the Company’s Chief Executive Officer, Chief Financial Officer and its Disclosure Committee, which includes the Company’s Executive Chairman, Chief Risk Officer, Chief Internal Auditor, Chief Asset Quality Officer, Controller, General Counsel and ~~Vice President~~Director of ~~Corporate Finance,~~Financial Reporting, have evaluated, as of the last day of the period covered by this report, the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). 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.

Changes in Internal Control Over Financial Reporting. During the period to which this report relates, there have not been any changes in the Company’s internal controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, such controls.

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.

~~Except as set forth below, as~~As of ~~September 30, 2021,~~March 31, 2022, 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, ~~2020:~~

The Durbin Amendment is a provision in the larger Dodd-Frank Act that gave the Federal Reserve the authority to establish rates on debit card transactions. The Durbin Amendment aims to control debit card interchange fees and restrict anti-competitive practices. The law applies to banks with over $10 billion in assets and limits what these banks may charge for debit card interchange fees. At December 31, 2020, the Company’s assets did not exceed $10 billion, but at September 30, 2021 the Company’s assets did exceed $10 billion. Prior to the COVID-19 pandemic, there was minimal likelihood that the Company would surpass $10 billion in total assets for several years. However, with the CARES Act, including PPP loans, stimulus payments to households, and artificially high household savings rates, our deposits and assets have grown dramatically beyond reasonably foreseeable levels. To the extent the COVID-19 pandemic and the effects of the aforementioned stimulus programs continue, it is likely the Company will exceed $10 billion in total assets at December 31, 2021. ~~Pursuant to the Durbin Amendment of the Dodd-Frank Act, based on current run rates, this would trigger an approximate reduction of annual pretax income from debit card interchange fees of~~ ~~between $20 to $22 million beginning July 1, 2022. The Company is undergoing efforts through~~ ~~the use of our existing sweep product~~ ~~to reduce total assets below $10 billion at December 31, 2021, but the success of these efforts is uncertain.~~

On November 5, 2021, the Occupational Safety and Health Administration issued an interim final rule that requires employers with 100 or more employees to develop, to implement and to enforce a mandatory COVID-19 vaccination policy, unless unvaccinated employees comply with masking and testing requirements. Such requirements are currently scheduled to be effective on January 4, 2022. The Company is evaluating the effect of such mandate on its workforce, but is concerned that, if the mandate becomes effective, it may have a material adverse effect on employee retention and morale.

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 September 31, 2021.

~~(1)~~ In November 1999, the Company adopted the Stock Repurchase Program (the “SRP”). 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.None.

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.


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


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


	September 30,			December 31,			March 31,			December 31,
	2021			2020			2022			2021
	(unaudited)			(see Note 1)			(unaudited)			(see Note 1)
ASSETS
Cash and due from banks	$	274,057		$	280,518		$	274,872		$	228,819
Interest-bearing deposits with banks		3,836,809			1,336,394			3,816,532			1,821,203
Debt securities held for investment (fair value: $2,984 and $2,984, respectively)		2,982			2,964
Federal funds sold								3,489			800
Debt securities held for investment (fair value: $2,917 and $2,978, respectively)								2,917			2,977
Debt securities available for sale at fair value		526,502			552,232			1,208,751			531,523
Loans held for sale		20,950			53,719			10,137			24,776
Loans held for investment (net of unearned interest)		6,016,936			6,394,506			6,494,340			6,169,442
Allowance for credit losses		(86,463	)		(91,366	)		(87,239	)		(83,936	)
Loans, net of allowance for credit losses		5,930,473			6,303,140			6,407,101			6,085,506
Premises and equipment, net		268,160			261,677			283,843			269,047
Other real estate owned		38,932			32,179			39,617			39,475
Intangible assets, net		18,325			18,999			25,456			17,566
Goodwill		149,922			149,922			176,563			149,922
Accrued interest receivable and other assets		235,659			220,613			375,153			233,998
Total assets	$	11,302,771		$	9,212,357		$	12,624,431		$	9,405,612

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing	$	4,594,324		$	3,790,900		$	5,216,266		$	3,775,387
Interest-bearing		5,397,720			4,273,804			6,034,705			4,316,527
Total deposits		9,992,044			8,064,704			11,250,971			8,091,914
Short-term borrowings		3,500			1,100			3,300			0
Accrued interest payable and other liabilities		74,380			51,864			116,357			55,977
Subordinated debt		85,973			26,804			86,001			85,987
Total liabilities		10,155,897			8,144,472			11,456,629			8,233,878

Stockholders' equity:
Senior preferred stock, $1.00 par; 10,000,000 shares authorized; NaN issued		—			—			—			—
Cumulative preferred stock, $5.00 par; 900,000 shares authorized; NaN issued		—			—			—			—
Common stock, $1.00 par, 40,000,000 shares authorized; shares issued and outstanding: 32,572,217 and 32,719,852, respectively		32,572			32,720
Common stock, $1.00 par, 40,000,000 shares authorized; shares issued and outstanding: 32,725,587 and 32,603,118, respectively								32,726			32,603
Capital surplus		158,877			156,574			163,392			159,914
Retained earnings		950,560			871,161			1,001,200			977,067
Accumulated other comprehensive income, net of income tax of $1,533 and $2,513, respectively		4,865			7,430
Accumulated other comprehensive (loss) income, net of tax of $9,166 and $(684), respectively								(29,516	)		2,150
Total stockholders' equity		1,146,874			1,067,885			1,167,802			1,171,734
Total liabilities and stockholders' equity	$	11,302,771		$	9,212,357		$	12,624,431		$	9,405,612


	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30,						September 30,						March 31,
	2021			2020			2021			2020			2022			2021
COMMON STOCK
Issued at beginning of period	$	32,785		$	32,663		$	32,720		$	32,694		$	32,603		$	32,720
Shares issued for stock options		—			16			65			44			123			51
Shares acquired and canceled		(213	)		—			(213	)		(59	)
Issued at end of period	$	32,572		$	32,679		$	32,572		$	32,679		$	32,726		$	32,771
CAPITAL SURPLUS
Balance at beginning of period	$	158,322		$	154,692		$	156,574		$	153,353		$	159,914		$	156,574
Common stock issued for stock options		—			306			1,657			813			3,020			1,258
Net cash settlement of options		—			—			(958	)		—			—			(958	)
Stock-based compensation arrangements		555			433			1,604			1,265			458			576
Balance at end of period	$	158,877		$	155,431		$	158,877		$	155,431		$	163,392		$	157,450
RETAINED EARNINGS
Balance at beginning of period	$	935,067		$	837,154		$	871,161		$	815,488		$	977,067		$	871,161
Net income		38,750			20,890			129,462			64,228			35,915			42,520
Cumulative effect of change in accounting principle, net of tax of $925		—			—			—			2,270
Dividends on common stock ($0.36, $0.34, $1.04 and $0.98 per share, respectively)		(11,806	)		(11,110	)		(34,091	)		(32,013	)
Dividends on common stock ($0.36 and $0.34 per share, respectively)														(11,782	)		(11,134	)
Net cash settlement of options		—			—			(4,521	)		—			—			(4,521	)
Common stock acquired and canceled		(11,451	)		—			(11,451	)		(3,039	)
Balance at end of period	$	950,560		$	846,934		$	950,560		$	846,934		$	1,001,200		$	898,026
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized (losses)/gains on securities:
Balance at beginning of period	$	5,417		$	9,690		$	7,430		$	3,454		$	2,150		$	7,430
Net change		(552	)		(982	)		(2,565	)		5,254			(31,666	)		(1,006	)
Balance at end of period	$	4,865		$	8,708		$	4,865		$	8,708		$	(29,516	)	$	6,424
Total stockholders’ equity	$	1,146,874		$	1,043,752		$	1,146,874		$	1,043,752		$	1,167,802		$	1,094,671


	Loans acquired with deteriorated credit quality		Loans acquired with deteriorated credit quality
	(Dollars in thousands)		(Dollars in thousands)
For the period ended September 30, 2021
For the period ended March 31, 2022
Purchase price of loans at acquisition	$	39,284	$	661
Allowance for credit losses at acquisition		8,299		78
Par value of acquired loans at acquisition	$	47,583	$	739

For the period ended September 30, 2020
Purchase price of loans at acquisition	$	1,761
Allowance for credit losses at acquisition		502
Par value of acquired loans at acquisition	$	2,263


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


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


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

Emerging growth company	☐


Item			Page		PART I – Financial Information	Page
		PART I – Financial Information
1.		Financial Statements (Unaudited)	2		Financial Statements (Unaudited)	2
		Consolidated Balance Sheets	2		Consolidated Balance Sheets	2
		Consolidated Statements of Comprehensive Income	3		Consolidated Statements of Comprehensive Income	3
		Consolidated Statements of Shareholders’ Equity	4		Consolidated Statements of Shareholders’ Equity	4
		Consolidated Statements of Cash Flow	5		Consolidated Statements of Cash Flow	5

		Notes to Consolidated Financial Statements	6		Notes to Consolidated Financial Statements	6
2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	30		Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
3.		Quantitative and Qualitative Disclosure About Market Risk	40		Quantitative and Qualitative Disclosure About Market Risk	37
4.		Controls and Procedures	40		Controls and Procedures	37

		PART II – Other Information			PART II – Other Information
1.		Legal Proceedings	41		Legal Proceedings	38
1A.		Risk Factors	41		Risk Factors	38
2.		Unregistered Sales of Equity Securities	41		Unregistered Sales of Equity Securities	38
3.		Defaults Upon Senior Securities	41		Defaults Upon Senior Securities	38
4.		Mine Safety Disclosures	41		Mine Safety Disclosures	38
5.		Other Information	41		Other Information	38
6.		Exhibits	42		Exhibits	39
Signatures	Signatures		44	Signatures		41


Total commercial and agricultural non-real estate		281,508		154,515		122,146		69,204		55,869		63,780		318,951		1,065,973
Consumer non-real estate
Grade 1		162,782		96,567		52,943		22,050		7,474		3,033		5,483		350,332
Grade 2		14,402		8,211		3,850		2,083		958		1,450		295		31,249
Grade 3		430		304		633		345		97		45		5		1,859
Grade 4		61		94		206		56		4		17		0		438
Total consumer non-real estate		177,675		105,176		57,632		24,534		8,533		4,545		5,783		383,878
Oil and gas
Grade 1		56,060		0		54		59		—		0		29,253		85,426
Grade 2		7,790		1,021		64		—		—		—		8,550		17,425
Grade 3		15,593		—		—		—		—		—		—		15,593
Total oil and gas		79,443		1,021		118		59		—		0		37,803		118,444
Other loans
Grade 1		223,041		32,338		23,410		16,745		14,904		34,319		25,442		370,199
Grade 2		—		—		0		0		2,140		3,047		1,010		6,197
Grade 3		—		0		0		10		0		47		1,052		1,109
Grade 4		—		54		125		—		283		83		111		656
Total other loans		223,041		32,392		23,535		16,755		17,327		37,496		27,615		378,161
Pegasus Bank
Grade 1		90,125		92,819		55,004		5,023		14,241		36,338		156,927		450,477
Grade 2		62,861		9,238		17,008		11,199		22,578		6,365		38,605		167,854
Grade 3		251		106		—		—		—		—		—		357
Total Pegasus Bank		153,237		102,163		72,012		16,222		36,819		42,703		195,532		618,688
Total loans held for investment	$	1,824,056	$	1,197,631	$	824,614	$	412,040	$	307,196	$	715,083	$	736,316	$	6,016,936


	Allowance for Credit Losses
	Balance at beginning of period		Impact of CECL adoption		Initial allowance on loans purchased with credit deterioration		Charge- offs			Recoveries		Net charge-offs			Provision for /(benefit from) credit losses on loans			Balance at end of period
	(Dollars in thousands)
Three Months Ended September 30, 2020
BancFirst
Real estate:
Commercial real estate owner occupied	$	6,630	$	—	$	—	$	(24	)	$	1	$	(23	)	$	1,287		$	7,894
Commercial real estate non-owner occupied		9,483		—		—		(87	)		—		(87	)		5,508			14,904
Construction and development < 60 months		1,755		—		—		—			3		3			(169	)		1,589
Construction residential real estate < 60 months		2,259		—		—		(368	)		—		(368	)		769			2,660
Residential real estate first lien		8,553		—		—		(133	)		5		(128	)		1,839			10,264
Residential real estate all other		2,720		—		—		(84	)		1		(83	)		219			2,856


							Other		Executive,
	Metropolitan		Community		Pegasus		Financial		Operations
	Banks		Banks		Bank		Services		& Support		Consolidated
	(Dollars in thousands)
Nine months ended September 30, 2021
Balance at beginning and end of period	$	13,767	$	61,212	$	68,855	$	5,464	$	624	$	149,922


								Maximum
						(1	)	Number of Shares
					Total Number of			That May Yet Be
					Shares Purchased			Purchased Under
	Total Number of		Average Price		as Part of Publicly			the Plan at the
Period	Shares Purchased		Paid Per Share		Announced Plan			End of the Period
July 1, 2021 to July 31, 2021		—	$	—		—			62,782
August 1, 2021 to August 31, 2021		—		—		—			62,782
September 1, 2021 to September 30, 2021		212,296		54.94		212,296			500,486


Exhibit Number		Exhibit


2.1		Share Exchange Agreement by and between BancFirst Corporation and Pegasus Bank dated April 23, 2019 (filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K/A dated April 25, 2019 and incorporated herein by reference).
3.1		Amended and Restated By-Laws of BancFirst Corporation (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K dated July 27, 2021 and incorporated herein by reference).

3.2		Restated Certificate of Incorporation of BancFirst Corporation dated August 5, 2021. (filed as Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2021).

4.1		Instruments defining the rights of securities holders (see Exhibits 3.1 and 3.2 above).
4.2		Description of Registrant’s Securities (filed as Exhibit 4.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and incorporated herein by reference).
4.3		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).

4.4		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).

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

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

4.7		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).

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

10.3		BancFirst Corporation Employee Stock Ownership Plan 2019 Amendment Number One (filed as Exhibit 10.10 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and incorporated herein by reference).

10.4		Adoption Agreement for the BancFirst Corporation Thrift Plan adopted April 21, 2016 effective January 1, 2016. (filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2016 and incorporated herein by reference).
10.5		Amendment Number One to the BancFirst Corporation Thrift Plan. (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K dated February 26, 2018 and incorporated herein by reference).
10.6		2019 Amendment BancFirst Corporation Thrift Plan (filed as Exhibit 10.11 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and incorporated herein by reference).

10.7		2020 Amendment BancFirst Corporation Thrift Plan (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K for dated December 17, 2020 and incorporated herein by reference).


10.8		Purchase and Sale Agreement and Escrow Instructions by and between Cotter Tower – Oklahoma L.P. and BancFirst Corporation. (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated September 5, 2018 and incorporated herein by reference).
~~10.9~~		First Amendment to Purchase and Sale Agreement and Escrow Instructions by and between Cotter Tower – Oklahoma L.P. and BancFirst Corporation. (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K dated September 5, 2018 and incorporated herein by reference).

~~10.10~~		Amended and Restated BancFirst Corporation Stock Option Plan. (filed as exhibit 10.10 to the Company's Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2021 and incorporated herein by reference).


	September 30, 2021			March 31, 2022
	(Dollars in thousands)			(Dollars in thousands)
2021 (three months)	$	362
2022		1,254
2022 (nine months)				$	1,085
2023		750			1,106
2024		397			742
2025		340			687
2026					597
Thereafter		926			1,402
Total lease payments		4,029			5,619
Less imputed Interest		(602	)		(731	)
Operating lease liability	$	3,427		$	4,888



~~10.11~~10.9		Amended and Restated BancFirst Corporation Non-Employee Directors’ Stock Option Plan. (filed as exhibit 10.11 to the Company's Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2021 and incorporated herein by reference).

~~10.12~~10.10		Amended and Restated BancFirst Corporation Directors’ Deferred Stock Compensation Plan. (filed as exhibit 10.12 to the Company's Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2021 and incorporated herein by reference).

10.11		Purchase and Sale Agreement and Escrow Instructions by and between Cotter Tower – Oklahoma L.P. and BancFirst Corporation. (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated September 5, 2018 and incorporated herein by reference).
10.12		First Amendment to Purchase and Sale Agreement and Escrow Instructions by and between Cotter Tower – Oklahoma L.P. and BancFirst Corporation. (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K dated September 5, 2018 and incorporated herein by reference).

10.13		Subordinated Note Purchase Agreement. (filed as exhibit 10.1 to the Company's Current Report on Form 8-K dated June 17, 2021 and incorporated herein by reference).

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

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

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

101.INS*		Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*		Inline XBRL Taxonomy Extension Schema Document.

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104*		Cover page Interactive Data File (formatted as Inline XBRL and contained within the Inline XBRL Instance Document in Exhibit 101)


		BANCFIRST CORPORATION
		(Registrant)

Date: ~~November 5, 2021~~May 6, 2022		/s/ David Harlow
		David Harlow
		President
		Chief Executive Officer
		(Principal Executive Officer)

Date: ~~November 5, 2021~~May 6, 2022		/s/ Kevin Lawrence
		Kevin Lawrence
		Executive Vice President
		Chief Financial Officer
		(Principal Financial Officer)