BancFirst (BANF) 10-Q 2005 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2005

OR

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

For the transition period from            to            

Commission File Number 0-14384

BancFirst Corporation

(Exact name of registrant as specified in charter)

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

101 N. Broadway, Oklahoma City, Oklahoma

73102-8401

(Address of principal executive offices)

(Zip Code)

(405) 270-1086

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal

year, if changed since last report)

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

Indicate by checkmark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes  x    No  ¨

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

As of October 31, 2005 there were 7,815,760 shares of the registrant’s Common Stock outstanding.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

BANCFIRST CORPORATION

CONSOLIDATED BALANCE SHEET

(Unaudited)

(Dollars in thousands)

	September 30,						December 31, 2004
	2005			2004
ASSETS
Cash and due from banks	$	151,216		$	125,788		$	100,564
Interest-bearing deposits with banks		15,741			1,008			15,643
Federal funds sold		—			170,500			130,000
Securities (market value: $485,333, $559,776 and $561,242, respectively)		484,837			558,465			560,234
Loans:
Total loans (net of unearned interest)		2,267,082			2,036,025			2,093,515
Allowance for loan losses		(26,866	)		(25,568	)		(25,746	)
Loans, net		2,240,216			2,010,457			2,067,769
Premises and equipment, net		71,441			66,954			68,643
Other real estate owned		2,232			2,813			2,035
Intangible assets, net		5,597			4,202			6,203
Goodwill		30,046			27,561			30,046
Accrued interest receivable		20,381			18,134			18,723
Other assets		55,790			50,856			47,117
Total assets	$	3,077,497		$	3,036,738		$	3,046,977
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Noninterest-bearing	$	856,946		$	806,856		$	807,474
Interest-bearing		1,823,405			1,857,913			1,849,960
Total deposits		2,680,351			2,664,769			2,657,434
Short-term borrowings		24,523			16,183			27,707
Accrued interest payable		3,903			2,988			3,884
Other liabilities		15,574			20,327			18,542
Long-term borrowings		4,858			7,894			7,815
Junior subordinated debentures		51,804			51,804			51,804
Minority interest		2,252			2,245			2,294
Total liabilities		2,783,265			2,766,210			2,769,480
Commitments and contingent liabilities
Stockholders’ equity:
Senior preferred stock, $1.00 par; 10,000,000 shares authorized; none issued		—			—			—
Cumulative preferred stock, $5.00 par; 900,000 shares authorized; none issued		—			—			—
Common stock, $1.00 par, 20,000,000 shares authorized; shares issued and outstanding: 7,815,135, 7,830,008 and 7,840,796, respectively		7,815			7,830			7,841
Capital surplus		64,713			62,485			63,054
Retained earnings		223,388			194,611			203,450
Accumulated other comprehensive income (loss), net of income tax benefit (expense) of $900, ($2,576) and ($1,187), respectively		(1,684	)		5,602			3,152
Total stockholders’ equity		294,232			270,528			277,497
Total liabilities and stockholders’ equity	$	3,077,497		$	3,036,738		$	3,046,977

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

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BANCFIRST CORPORATION

CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)

(Dollars in thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005			2004
INTEREST INCOME
Loans, including fees	$	38,374		$	30,247		$	107,653		$	87,589
Securities:
Taxable		4,736			5,366			15,512			15,661
Tax-exempt		333			354			985			1,112
Federal funds sold		41			708			909			1,888
Interest-bearing deposits with banks		122			2			357			24
Total interest income		43,606			36,677			125,416			106,274
INTEREST EXPENSE
Deposits		8,997			5,516			23,335			16,535
Short-term borrowings		397			88			820			213
Long-term borrowings		81			130			277			428
Junior subordinated debentures		1,103			1,103			3,309			3,007
Total interest expense		10,578			6,837			27,741			20,183
Net interest income		33,028			29,840			97,675			86,091
Provision for loan losses		873			879			2,967			1,800
Net interest income after provision for loan losses		32,155			28,961			94,708			84,291
NONINTEREST INCOME
Trust revenue		1,248			1,156			3,610			3,279
Service charges on deposits		7,549			6,875			20,679			20,549
Securities transactions		1			2			82			(146	)
Income from sales of loans		840			636			1,653			1,316
Insurance commissions and premiums		1,991			903			5,527			3,129
Other		3,257			2,881			9,447			8,769
Total noninterest income		14,886			12,453			40,998			36,896
NONINTEREST EXPENSE
Salaries and employee benefits		16,757			15,875			48,938			47,437
Occupancy and fixed assets expense, net		1,931			1,646			5,226			4,853
Depreciation		1,669			1,591			4,706			4,480
Amortization of intangible assets		202			170			606			524
Data processing services		590			589			1,818			1,871
Net (income) expense from other real estate owned		(28	)		73			163			354
Marketing and business promotion		1,636			835			3,253			2,445
Other		10,494			6,455			23,960			19,018
Total noninterest expense		33,251			27,234			88,670			80,982
Income before taxes		13,790			14,180			47,036			40,205
Income tax expense		(4,574	)		(4,867	)		(15,735	)		(14,064	)
Net income		9,216			9,313			31,301			26,141
Other comprehensive income, net of tax:
Unrealized gains (losses) on securities		(2,399	)		2,331			(4,783	)		(4,330	)
Reclassification adjustment for (gains) losses included in net income		(1	)		(1	)		(53	)		95
Comprehensive income	$	6,816		$	11,643		$	26,465		$	21,906
NET INCOME PER COMMON SHARE
Basic	$	1.18		$	1.19		$	4.01		$	3.34
Diluted	$	1.15		$	1.17		$	3.91		$	3.27

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

3

BANCFIRST CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(Dollars in thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30
	2005			2004			2005			2004
COMMON STOCK
Issued at beginning of period	$	7,801		$	7,826		$	7,841		$	7,823
Shares issued		14			9			39			39
Shares acquired and canceled		—			(5	)		(65	)		(32	)
Issued at end of period	$	7,815		$	7,830		$	7,815		$	7,830
CAPITAL SURPLUS
Balance at beginning of period	$	64,047		$	62,085		$	63,054		$	60,819
Common stock issued		666			400			1,659			1,666
Balance at end of period	$	64,713		$	62,485		$	64,713		$	62,485
RETAINED EARNINGS
Balance at beginning of period	$	216,654		$	187,777		$	203,450		$	176,893
Net income		9,216			9,313			31,301			26,141
Dividends on common stock ($0.32, $0.28, $0.88, $0.78 per share, respectively)		(2,500	)		(2,187	)		(6,864	)		(6,106	)
Adjustment to basis of Subsidiary		18			—			18			—
Common stock acquired and canceled		—			(292	)		(4,517	)		(2,317	)
Balance at end of period	$	223,388		$	194,611		$	223,388		$	194,611
ACCUMULATED OTHER COMPREHENSIVE INCOME
Unrealized gains on securities:
Balance at beginning of period	$	716		$	3,272		$	3,152		$	9,837
Net change		(2,400	)		2,330			(4,836	)		(4,235	)
Balance at end of period	$	(1,684	)	$	5,602		$	(1,684	)	$	5,602
Total stockholders’ equity	$	294,232		$	270,528		$	294,232		$	270,528

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

4

BANCFIRST CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

	Nine Months Ended September 30,
	2005			2004
CASH FLOWS FROM OPERATING ACTIVITIES	$	28,860		$	33,935
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of securities:
Held for investment		(4,987	)		(2,174	)
Available for sale		(10,192	)		(151,920	)
Maturities of securities:
Held for investment		4,698			7,342
Available for sale		74,602			140,232
Proceeds from sales and calls of securities:
Held for investment		342			1,001
Available for sale		2,318			3,201
Net (increase) decrease in federal funds sold		130,000			(64,691	)
Purchases of loans		(32,146	)		(3,177	)
Proceeds from sales of loans		155,985			102,013
Net other increase in loans		(301,449	)		(192,593	)
Purchases of premises and equipment		(11,467	)		(5,948	)
Proceeds from the sale of other real estate owned and repossessed assets		7,159			3,522
Other, net		—			1,388
Net cash provided (used) by investing activities		14,863			(161,804	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in demand, transaction and savings deposits		27,266			133,482
Net decrease in certificates of deposits		(4,349	)		(54,403	)
Net increase in short-term borrowings		(3,184	)		(427	)
Net decrease in long-term borrowings		(2,957	)		(3,169	)
Issuance of junior subordinated debentures		—			26,804
Issuance of common stock		1,698			1,705
Acquisition of common stock		(4,583	)		(2,349	)
Cash dividends paid		(6,864	)		(6,106	)
Net cash provided by financing activities		7,027			95,537
Net increase (decrease) in cash and due from banks		50,750			(32,332	)
Cash and due from banks at the beginning of the period		116,207			159,128
Cash and due from banks at the end of the period	$	166,957		$	126,796
SUPPLEMENTAL DISCLOSURE
Cash paid during the period for interest	$	27,721		$	20,936
Cash paid during the period for income taxes	$	18,451		$	12,694

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

5

BANCFIRST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) GENERAL

The accompanying consolidated financial statements include the accounts of BancFirst Corporation, Century Life Assurance Company, Council Oak Partners, LLC, Wilcox & Jones, Inc., and BancFirst and its subsidiaries (the “Company”). The operating subsidiaries of BancFirst are Council Oak Investment Corporation, BancFirst Community Development Corporation, Citibanc Insurance Agency, Inc., BancFirst Agency, Inc., Lenders Collection Corporation, and PremierSource LLC. Three other operating subsidiaries of BancFirst, Mojave Asset Management Company, Desert Asset Management Company, and Delamar Asset Limited Partnership, were liquidated and dissolved in August 2004. One other operating subsidiary of BancFirst, Express Financial Corporation, was liquidated and dissolved in December 2004. All significant intercompany accounts and transactions have been eliminated. Assets held in a fiduciary or agency capacity are not assets of the Company and, accordingly, are not included in the consolidated financial statements.

The unaudited interim financial statements contained herein reflect all adjustments which are, in the opinion of management, necessary to provide a fair statement of the financial position and results of operations of the Company for the interim periods presented. All such adjustments are of a normal and recurring nature. There have been no significant changes in the accounting policies of the Company since December 31, 2004, the date of the most recent annual report. Certain amounts in the 2004 financial statements have been reclassified to conform to the 2005 presentation.

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

(2) STOCK-BASED COMPENSATION

The Company uses the intrinsic value method, as described in Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) and related interpretations, for accounting for its stock-based compensation. Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (“FAS 123”), as amended by Statement of Financial Accounting Standards No. 148, “Accounting for Stock-Based Compensation-Transition and Disclosure-an amendment of FASB Statement No. 123,” which, if fully adopted by the Company, would change the method the Company applies in recognizing the cost of these plans to the fair value method. Adoption of the cost recognition provisions of FAS 123 is optional and the Company has not adopted such provisions. However, pro forma disclosures as if the Company adopted the cost recognition provisions of FAS 123 in 1995 are required and are presented below.

	(Dollars in thousands, except per share data)
	Three Months Ended September 30,								Nine Months Ended September 30,
	2005				2004				2005				2004
	As Reported		Pro Forma		As Reported		Pro Forma		As Reported		Pro Forma		As Reported		Pro Forma
APB 25 charge	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
FAS 123 charge		—		162		—		160		—		457		—		468
Net income		9,216		9,054		9,313		9,153		31,301		30,844		26,141		25,673
Net income per share:
Basic	$	1.18	$	1.16	$	1.19	$	1.17	$	4.01	$	3.95	$	3.34	$	3.28
Diluted	$	1.15	$	1.13	$	1.17	$	1.15	$	3.91	$	3.86	$	3.27	$	3.21

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The effects of applying FAS No. 123 to the pro forma disclosure are not indicative of future results. FAS No. 123 does not apply to grants of options prior to 1995 and the Company anticipates making additional grants in the future.

(3) RECENT ACCOUNTING PRONOUNCEMENTS

In March 2004, the Financial Accounting Standards Board (FASB) Emerging Issues Task Force (EITF) released Issue 03-01, “Meaning of Other Than Temporary Impairment,” which addressed other-than-temporary impairment for certain debt and equity investments. The recognition and measurement requirements of Issue 03-01, and other disclosure requirements not already implemented, were effective for periods beginning after June 15, 2004. In September 2004, the FASB staff issued FASB Staff Position (FSP) 03-1-a, which delayed the effective date for certain measurement and recognition guidance contained in Issue 03-01. The FSP requires the application of pre-existing other-than-temporary guidance during the period of delay until a final consensus is reached. In July 2005, the FASB decided to retain the accounting for certain debt securities and will not make the changes proposed in FSP 03-1-a but will issue a final FSP codifying the existing accounting guidance rather than changing the accounting. In November 2005, the FASB issued FSP 115-1 and 124-1 which addresses the determination as to when an investment is considered impaired, whether that impairment is other than temporary, and the measurement of an impairment loss. The FSP also includes accounting considerations subsequent to the recognition of an other-than-temporary impairment and requires certain disclosures about unrealized losses that have not been recognized as other-than-temporary impairments. The FSP amends FASB Statements No. 115 “Accounting for Certain Investments in Debt and Equity Securities”, and No. 124 “Accounting for Certain Investments Held by Not-for-Profit Organizations”, and APB Opinion No. 18 “the Equity Method of Accounting for Investments in Common Stock”. The provisions of this guidance will be effective for reporting periods beginning after December 15, 2005. The Company will adopt this new guidance effective January 1, 2006. The adoption of this guidance is not expected to have a material effect on the Company’s consolidated financial statements.

In December 2004, the FASB revised FAS 123, “Accounting for Stock-Based Compensation” (FAS 123R). FAS 123R establishes accounting requirements for share-based compensation to employees and carries forward prior guidance on accounting for awards to nonemployees. This statement applies to all awards granted after the required effective date and to awards modified, repurchased or cancelled after that date. The cumulative effect of initially applying this statement, if any, is recognized as of the required effective date. This statement requires a public entity to measure and recognize the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). The grant-date fair value of employee share options and similar instruments will be estimated using option-pricing models adjusted for the unique characteristics of those instruments. If an equity award is modified after the grant date, incremental compensation cost will be recognized in an amount equal to the excess of the fair value of the modified award over the fair value of the original award immediately before the modification. As of the required effective date, all public entities that used the fair-value based method for either recognition or disclosure under FAS No. 123 will apply this statement using a modified version of prospective application. Under that transition method, compensation cost is recognized on or after the required effective date for the portion of outstanding awards for which the requisite service has not yet been rendered, based on the grant-date fair value of those awards calculated under FAS No. 123 for either recognition or pro forma disclosures. For periods prior to the required effective date, those entities may elect to apply a modified version of retrospective application under which financial statements for prior periods are adjusted on a basis consistent with the pro forma disclosures required for those periods by FAS No. 123. Adoption of FAS No. 123(R) is required for public entities as of the beginning of the first fiscal year beginning after June 15, 2005. The Company will adopt this new standard effective January 1, 2006. The adoption of this standard is not expected to have a material effect on the Company’s consolidated financial statements.

In May 2005, the FASB issued FAS No. 154, “Accounting Changes and Error Corrections-a replacement of APB Opinion No. 20 and FASB Statement No. 3”. The provisions of this statement will be effective for accounting changes made in fiscal years beginning after December 15, 2005. FAS 154 requires the retrospective application for voluntary changes in accounting principles unless it is impracticable to do so, replacing the current requirement to

7

recognize the voluntary changes in the current period of the change by including in net income the cumulative effect of changing to the new accounting principle. The Company will adopt this new standard effective January 1, 2006. The adoption of this standard is not expected to have a material effect on the Company’s consolidated financial statements.

(4) RECENT DEVELOPMENTS; MERGERS, ACQUISITIONS AND DISPOSALS

In January 2004, BancFirst Corporation established BFC Capital Trust II (“BFC II”), a trust formed under the Delaware Business Trust Act. BancFirst Corporation owns all of the common securities of BFC II. In February 2004, BFC II issued $25 million of aggregate liquidation amount of 7.20% Cumulative Trust Preferred Securities (the “Trust Preferred Securities”) to other investors. In March 2004, BFC II issued an additional $1 million in Trust Preferred Securities through the execution of an over-allotment option. The proceeds from the sale of the Trust Preferred Securities and the common securities of BFC II were invested in $26,804 thousand of 7.20% Junior Subordinated Debentures of BancFirst Corporation. Interest payments on the 7.20% Junior Subordinated Debentures are payable January 15, April 15, July 15 and October 15 of each year. Such interest payments may be deferred for up to twenty consecutive quarters. The stated maturity date of the 7.20% Junior Subordinated Debentures is March 31, 2034, but they are subject to mandatory redemption pursuant to optional prepayment terms. The Trust Preferred Securities represent an undivided interest in the 7.20% Junior Subordinated Debentures, are guaranteed by BancFirst Corporation, and qualify as Tier 1 regulatory capital. During any deferral period or during any event of default, BancFirst Corporation may not declare or pay any dividends on any of its capital stock.

In October 2004, the Company completed the acquisition of Wilcox & Jones, Inc., an independent insurance agency headquartered in Tulsa, Oklahoma for $4.8 million. The purchase price included $4 million in cash and $800 thousand in notes payable. As a result of the acquisition, Wilcox & Jones became a wholly-owned subsidiary of BancFirst Corporation. The acquisition was accounted for as a purchase. Accordingly, the effects of the acquisition have been included in the Company’s consolidated financial statements from the date of the acquisition forward.

In October 2005, the Company entered into an agreement to acquire Park State Bank, Nicoma Park, Oklahoma. Park State Bank has approximately $13 million in loans, $44 million in assets, $36 million in deposits, and $8 million in equity capital as of September 30, 2005. The purchase price is a premium of approximately $3 million above equity capital and will be accounted for as a purchase. Accordingly, the effects of the acquisition will be included in the Company’s consolidated financial statements from the date of the acquisition forward. The acquisition is expected to be completed in the fourth quarter of 2005 and will not have a material effect on the results of operations of the Company for 2005. The acquisition will enhance the Company’s eastern Oklahoma County presence.

(5) SECURITIES

The table below summarizes securities held for investment and securities available for sale (dollars in thousands).

	September 30,				December 31, 2004
	2005		2004
Held for investment at cost (market value; $32,596, $33,616 and $33,168, respectively)	$	32,100	$	32,305	$	32,160
Available for sale, at market value		452,737		526,160		528,074
Total	$	484,837	$	558,465	$	560,234

The table below summarizes the maturity of securities (dollars in thousands).

	September 30,				December 31, 2004
	2005		2004
Contractual maturity:
Within one year	$	163,141	$	82,311	$	126,205
After one year but within five years		285,680		430,238		400,799
After five years		21,716		30,053		17,794
Total debt securities		470,537		542,602		544,798
Equity securities		14,300		15,863		15,436
Total	$	484,837	$	558,465	$	560,234

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At September 30, 2005, the Company held 111 securities available for sale that had unrealized losses. These securities had a market value totaling $308,090 thousand and unrealized losses totaling $6,375 thousand. These unrealized losses occurred due to increases in interest rates and spreads and not as a result of a decline in credit quality. The Company has both the intent and ability to hold these securities until the unrealized losses are recovered.

(6) LOANS AND ALLOWANCE FOR LOAN LOSSES

The following is a schedule of loans outstanding by category (dollars in thousands):

	September 30,								December 31
	2005				2004				2004
	Amount		Percent		Amount		Percent		Amount		Percent
Commercial and industrial	$	471,835	20.81	%	$	362,119	17.79	%	$	382,438	18.27	%
Agriculture		79,641	3.51			72,803	3.58			93,691	4.48
State and political subdivisions:
Taxable		8,427	0.37			3,117	0.15			3,093	0.15
Tax-exempt		12,225	0.54			16,475	0.81			15,822	0.76
Real Estate:
Construction		213,696	9.43			150,887	7.41			152,402	7.28
Farmland		82,438	3.64			81,261	3.99			83,887	4.01
One to four family residences		516,431	22.78			501,331	24.62			502,015	23.98
Multifamily residential properties		10,060	0.44			11,354	0.56			11,987	0.57
Commercial		544,120	24.00			523,136	25.69			544,370	26.00
Consumer		286,008	12.62			284,293	13.96			273,548	13.07
Other		42,201	1.86			29,249	1.44			30,262	1.43
Total loans	$	2,267,082	100.00	%	$	2,036,025	100.00	%	$	2,093,515	100.00	%
Loans held for sale (included above)	$	8,056			$	7,523			$	9,066

The Company’s loans are mostly to customers within Oklahoma and over half of the loans are secured by real estate. Credit risk on loans is managed through limits on amounts loaned to individual borrowers, underwriting standards and loan monitoring procedures. The amounts and types of collateral obtained to secure loans are based upon the Company’s underwriting standards and management’s credit evaluation. Collateral varies, but may include real estate, equipment, accounts receivable, inventory, livestock and securities. The Company’s interest in collateral is secured through filing mortgages and liens, and in some cases, by possession of the collateral. The amount of estimated loss due to credit risk in the Company’s loan portfolio is provided for in the allowance for loan losses. The amount of the allowance required to provide for all existing losses in the loan portfolio is an estimate based upon evaluations of loans, appraisals of collateral and other estimates which are subject to rapid change due to changing economic conditions and the economic prospects of borrowers. It is reasonably possible that a material change could occur in the estimated allowance for loan losses in the near term.

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Changes in the allowance for loan losses are summarized as follows (dollars in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005			2004
Balance at beginning of period	$	27,148		$	25,921		$	25,746		$	26,148
Charge-offs		(1,348	)		(1,472	)		(2,415	)		(3,242	)
Recoveries		193			240			568			862
Net charge-offs		(1,155	)		(1,232	)		(1,847	)		(2,380	)
Provisions charged to operations		873			879			2,967			1,800
Balance at end of period	$	26,866		$	25,568		$	26,866		$	25,568

The net charge-offs by category are summarized as follows (dollars in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2005		2004			2005			2004
Commercial, financial and other	$	455	$	476		$	628		$	1,031
Real estate – construction		—		(11	)		(7	)		(7	)
Real estate – mortgage		469		459			616			597
Consumer		231		308			610			759
Total	$	1,155	$	1,232		$	1,847		$	2,380

(7) NONPERFORMING AND RESTRUCTURED ASSETS

Below is a summary of nonperforming and restructured assets (dollars in thousands):

	September 30,						December 31, 2004
	2005			2004
Past due over 90 days and still accruing	$	2,339		$	1,699		$	3,149
Nonaccrual		7,101			8,399			8,688
Restructured		736			378			362
Total nonperforming and restructured loans		10,176			10,476			12,199
Other real estate owned and repossessed assets		2,692			3,167			2,513
Total nonperforming and restructured assets	$	12,868		$	13,643		$	14,712
Nonperforming and restructured loans to total loans		0.45	%		0.51	%		0.58	%
Nonperforming and restructured assets to total assets		0.42	%		0.45	%		0.48	%

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(8) INTANGIBLE ASSETS AND GOODWILL

The following is a summary of intangible assets (dollars in thousands):

	September 30,										December 31, 2004
	2005					2004
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Core deposit intangibles	$	6,297	$	(2,879	)	$	6,297	$	(2,095	)	$	6,297	$	(2,370	)
Customer relationship intangibles		2,308		(128	)		20		(20	)		2,308		(32	)
Total	$	8,605	$	(3,007	)	$	6,317	$	(2,115	)	$	8,605	$	(2,402	)

Amortization of intangible assets and estimated amortization of intangible assets are as follows (dollars in thousands):

Amortization:
Three months ended September 30, 2005	$	202
Three months ended September 30, 2004		170
Nine months ended September 30, 2005		606
Nine months ended September 30, 2004		524
Year ended December 31, 2004		831
Estimated Amortization:
Year ended December 31,
2005	$	804
2006		767
2007		606
2008		512
2009		512

The following is a summary of goodwill by business segment (2004 amounts have been restated for the realignment of regional executive responsibilities for certain bank locations as described in note 14, Segment Information,dollars in thousands):

	Metropolitan Banks			Community Banks			Other Financial Services		Executive, Operations & Support		Elimin- ations			Consol- idated
Three Months Ended:
September 30, 2005
Balance at beginning and end of period	$	6,150		$	20,881		$	2,485	$	1,713	$	(1,183	)	$	30,046
September 30, 2004
Balance at beginning of period, as presented	$	13,204		$	14,212		$	—	$	1,713	$	(1,183	)	$	27,946
Restatement for realignment		(7,017	)		7,017			—		—		—			—
Balance at beginning of period, as restated		6,187			21,229			—		1,713		(1,183	)		27,946
Adjustments, as restated		(37	)		(348	)		—		—		—			(385	)
Balance at end of period	$	6,150		$	20,881		$	—	$	1,713	$	(1,183	)	$	27,561

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	Metropolitan Banks			Community Banks			Other Financial Services		Executive, Operations & Support		Elimin- ations			Consol- idated
Nine Months Ended:
September 30, 2005
Balance at beginning of period, as presented	$	12,819		$	14,212		$	2,485	$	1,713	$	(1,183	)	$	30,046
Restatement for realignment		(6,669	)		6,669			—		—		—			—
Balance at beginning and end of period, as restated	$	6,150		$	20,881		$	2,485	$	1,713	$	(1,183	)	$	30,046
September 30, 2004
Balance at beginning of period, as presented	$	12,993		$	14,088		$	—	$	1,713	$	(1,183	)	$	27,611
Restatement for realignment		(6,814	)		6,814			—		—		—			—
Balance at beginning of period, as restated		6,179			20,902			—		1,713		(1,183	)		27,611
Acquisitions, as restated		8			327			—		—		—			335
Adjustments, as restated		(37	)		(348	)		—		—		—			(385	)
Balance at end of period	$	6,150		$	20,881		$	—	$	1,713	$	(1,183	)	$	27,561

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(9) LONG-TERM BORROWINGS

The Company borrows under a line of credit from the Federal Home Loan Bank of Topeka, Kansas in order to match-fund certain long-term fixed rate loans. Such advances are at rates from 5.09% to 7.86% and mature from 2005 through 2008. Interest payments on the advances are due monthly. The Company’s assets, including residential first mortgages, are pledged as collateral for the borrowings under the line of credit.

In October 2004, the Company issued two promissory notes related to the acquisition of Wilcox & Jones, Inc., an independent insurance agency, totaling $800 thousand. The notes are payable to the prior principals who remain in management positions with the agency. The notes mature in three equal annual installments with the first installment of $267 thousand due in October 2005. The first installment of $267 thousand was paid in September 2005 leaving a remaining balance of $533 thousand. The notes have a six month adjustable interest rate equal to the 180 day Treasury Bill. At September 30, 2005 the effective interest rate was 3.09%.

(10) CAPITAL

The Company is subject to risk-based capital guidelines issued by the Board of Governors of the Federal Reserve System. These guidelines are used to evaluate capital adequacy and involve both quantitative and qualitative evaluations of the Company’s assets, liabilities, and certain off-balance-sheet items calculated under regulatory practices. Failure to meet the minimum capital requirements can initiate certain mandatory or discretionary actions by the regulatory agencies that could have a direct material effect on the Company’s consolidated financial statements. The required minimums and the Company’s respective ratios are shown below.

	(dollars in thousands)
	Minimum Required		September 30,						December 31, 2004
			2005			2004
Tier 1 capital			$	315,345		$	286,393		$	293,650
Total capital			$	342,519		$	312,099		$	319,791
Risk-adjusted assets			$	2,466,118		$	2,252,720		$	2,304,018
Leverage ratio	3.00	%		10.36	%		9.53	%		9.75	%
Tier 1 capital ratio	4.00	%		12.79	%		12.71	%		12.75	%
Total capital ratio	8.00	%		13.89	%		13.85	%		13.88	%

To be “well capitalized” under federal bank regulatory agency definitions, a depository institution must have a Tier 1 Ratio of at least 6%, a combined Tier 1 and Tier 2 ratio of at least 10%, and a leverage ratio of at least 5%. As of September 30, 2005 and 2004, and December 31, 2004, BancFirst was considered to be “well capitalized”. There are no conditions or events since the most recent notification of BancFirst’s capital category that management believes would change its category.

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(11) STOCK REPURCHASE PLAN

In November 1999, the Company adopted a new Stock Repurchase Program (the “SRP”) authorizing management to repurchase up to 300,000 shares of the Company’s common stock. The SRP was amended in May 2001 to increase the shares authorized to be purchased by 277,916 shares and was amended again in August 2002 to increase the number of shares authorized to be purchased by 182,265 shares. The SRP may be used as a means to increase earnings per share and return on equity, to purchase treasury stock for the exercise of stock options or for distributions under the Deferred Stock Compensation Plan, to provide liquidity for optionees to dispose of stock from exercises of their stock options, and to provide liquidity for shareholders wishing to sell their stock. The timing, price and amount of stock repurchases under the SRP may be determined by management and must be approved by the Company’s Executive Committee. At September 30, 2005 there were 143,026 shares remaining that could be repurchased under the SRP. Below is a summary of the shares repurchased under the program.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2005		2004		2005		2004
Number of shares repurchased		—		5,000		65,100		41,500
Average price of shares repurchased	$	—	$	58.90	$	70.36	$	56.85

(12) COMPREHENSIVE INCOME

The only component of comprehensive income reported by the Company is the unrealized gain or loss on securities available for sale. The amount of this unrealized gain or loss, net of tax, has been presented in the statement of income for each period as a component of other comprehensive income. Below is a summary of the tax effects of this unrealized gain or loss.

	(dollars in thousands)
	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005			2004
Unrealized gain (loss) during the period:
Before-tax amount	$	(3,360	)	$	3,544		$	(6,841	)	$	(6,900	)
Tax (expense) benefit		961			(1,213	)		2,058			2,570
Net-of-tax amount	$	(2,399	)	$	2,331		$	(4,783	)	$	(4,330	)

The amount of unrealized gain or loss included in accumulated other comprehensive income is summarized below.

	(dollars in thousands)
	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005			2004
Unrealized gain (loss) on securities:
Beginning balance	$	716		$	3,272		$	3,152		$	9,837
Current period change		(2,399	)		2,331			(4,783	)		(4,330	)
Reclassification adjustment for (gains) losses included in net income		(1	)		(1	)		(53	)		95
Ending balance	$	(1,684	)	$	5,602		$	(1,684	)	$	5,602

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(13) NET INCOME PER COMMON SHARE

Basic and diluted net income per common share are calculated as follows (dollars in thousands, except per share data):

	Income (Numerator)		Shares (Denominator)	Per Share Amount
Three Months Ended September 30, 2005
Basic
Income available to common stockholders	$	9,216	7,808,713	$	1.18
Effect of stock options		—	197,180
Diluted
Income available to common stockholders plus assumed exercises of stock options	$	9,216	8,005,893	$	1.15
Three Months Ended September 30, 2004
Basic
Income available to common stockholders	$	9,313	7,827,370	$	1.19
Effect of stock options		—	160,367
Diluted
Income available to common stockholders plus assumed exercises of stock options	$	9,313	7,987,737	$	1.17
Nine Months Ended September 30, 2005
Basic
Income available to common stockholders	$	31,301	7,811,101	$	4.01
Effect of stock options		—	185,442
Diluted
Income available to common stockholders plus assumed exercises of stock options	$	31,301	7,996,543	$	3.91
Nine Months Ended September 30, 2004
Basic
Income available to common stockholders	$	26,141	7,828,974	$	3.34
Effect of stock options		—	157,167
Diluted
Income available to common stockholders plus assumed exercises of stock options	$	26,141	7,986,141	$	3.27

As of September 30, 2005 and 2004, there were no options that were excluded from the computation of diluted net income per share for each period because the options’ exercise prices were greater than the average market price of the common shares.

(14) SEGMENT INFORMATION

The Company evaluates its performance with an internal profitability measurement system that measures the profitability of its business units on a pre-tax basis. The four principal business units are metropolitan banks, community banks, other financial services, and executive, operations and support. Metropolitan and community banks offer traditional banking products such as commercial and retail lending, and a full line of deposit accounts. Metropolitan banks consist of banking locations in the metropolitan Oklahoma City and Tulsa areas. Community banks consist of banking locations in communities throughout Oklahoma. Other financial services are specialty product business units including guaranteed small business lending, guaranteed student 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.

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In May 2005, the Company realigned of the responsibilities of its regional executives whereby four bank locations previously reported as metropolitan banks were now assigned to community bank regional executives. All comparative results of operations and selected information for the 2004 reporting periods has been restated for this realignment of metropolitan and community banks management responsibilities.

The results of operations and selected financial information for the four business units are as follows (dollars in thousands):

	Metropolitan Banks		Community Banks		Other Financial Services		Executive, Operations & Support			Elimin- ations			Consol- idated
Three Months Ended:
September 30, 2005
Net interest income (expense)	$	9,301	$	23,299	$	1,876	$	(1,445	)	$	(3	)	$	33,028
Noninterest income		1,916		6,915		5,013		10,881			(9,839	)		14,886
Income before taxes		5,218		11,538		2,152		4,639			(9,757	)		13,790
September 30, 2004
As originally presented:
Net interest income (expense)	$	10,139	$	19,364	$	1,498	$	(1,161	)	$	—		$	29,840
Noninterest income		2,567		5,891		3,381		10,840			(10,226	)		12,453
Income before taxes		5,048		11,708		1,577		6,127			(10,280	)		14,180
As restated:
Net interest income (expense)	$	7,645	$	21,858	$	1,498	$	(1,161	)	$	—		$	29,840
Noninterest income		1,818		6,640		3,381		10,840			(10,226	)		12,453
Income before taxes		3,740		13,016		1,577		6,127			(10,280	)		14,180
Nine Months Ended:
September 30, 2005
Net interest income (expense)	$	27,309	$	68,949	$	5,679	$	(4,230	)	$	(32	)	$	97,675
Noninterest income		5,581		19,929		13,183		35,655			(33,350	)		40,998
Income before taxes		15,577		39,983		6,216		18,573			(33,312	)		47,037
September 30, 2004
As originally presented:
Net interest income (expense)	$	28,260	$	56,358	$	4,516	$	(3,043	)	$	—		$	86,091
Noninterest income		7,791		17,367		9,354		33,711			(31,327	)		36,896
Income before taxes		14,328		33,774		3,469		20,059			(31,425	)		40,205
As restated:
Net interest income (expense)	$	20,884	$	63,734	$	4,516	$	(3,043	)	$	—		$	86,091
Noninterest income		5,646		19,512		9,354		33,711			(31,327	)		36,896
Income before taxes		10,313		37,789		3,469		20,059			(31,425	)		40,205
Total Assets:
September 30, 2005	$	1,109,792	$	2,145,067	$	176,876	$	5,223		$	(359,461	)	$	3,077,497
September 30, 2004:
As originally presented	$	1,173,303	$	1,879,433	$	190,036	$	142,302		$	(348,336	)	$	3,036,738
As restated		949,622		2,103,114		190,036		142,302			(348,336	)		3,036,738

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 revenues related to other financial services are allocated to the banks whose customers receive the services and, therefor, are not reflected in the income for other financial services. 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.

16

(15) COMMITMENTS AND CONTINGENT LIABILITIES

In the second quarter of 2005, the Company reported a $3.3 million cash shortfall at one of its branches. The Company notified its fidelity bond carrier of the pending claim and that a thorough investigation would ensue. Based on the facts available at the time and outside consultation, the Company recorded as an expense its deductible on the coverage of $250 thousand and a receivable for the bond claim of approximately $3 million during the second quarter.

During the third quarter, it became apparent that the Company’s investigation was going to take much longer than management and the Company’s consultant originally expected. Specifically, the time frame for ongoing criminal investigation of the matter and the possibility of litigation amongst the parties has created uncertainty as to the timing of any recovery under the fidelity bond. While management still expects a significant recovery under its fidelity bond coverage, the amount and timing of the recovery is no longer reasonably estimable. As a result, the Company believes it is prudent to write off, and recognize as an expense, the $3 million bond claim receivable. The amount of the recovery will be recognized as income upon final agreement with the fidelity bond carrier.

17

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

BANCFIRST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SUMMARY

Net income for the third quarter of 2005 was $9.2 million, compared to $9.3 million for the third quarter of 2004. Diluted net income per share was $1.15, compared to $1.17 for the third quarter of 2004. For the first nine months of 2005, net income was $31.3 million, compared to $26.1 million for the first nine months of 2004. Diluted net income per share for the first nine months was $3.91 compared to $3.27 for the first nine months of 2004.

Total assets at September 30, 2005 increased to $3.1 billion, up $30.5 million from December 31, 2004 and up $40.8 million from September 30, 2004. Stockholders’ equity was $294 million at September 30, 2005, up $17 million from December 31, 2004 and up $24 million compared to September 30, 2004.

In January 2004, the Company established BFC Capital Trust II (“BFC II”), a trust formed under the Delaware Business Trust Act. The Company owns all of the common securities of BFC II. In February 2004, BFC II issued $25.0 million of aggregate liquidation amount of 7.20% Cumulative Trust Preferred Securities (the “Trust Preferred Securities”) to other investors. In March 2004, BFC II issued an additional $1.0 million in Trust Preferred Securities through the execution of an over-allotment option. The proceeds from the sale of the Trust Preferred Securities and the common securities of BFC II were invested in $26.8 million of 7.20% Junior Subordinated Debentures of BancFirst Corporation. Interest payments on the 7.20% Junior Subordinated Debentures are payable January 15, April 15, July 15 and October 15 of each year. The stated maturity date of the 7.20% Junior Subordinated Debentures is March 31, 2034, but they are subject to mandatory redemption pursuant to optional prepayment terms.

In October 2004, the Company completed the acquisition of Wilcox & Jones, Inc., an independent insurance agency headquartered in Tulsa, Oklahoma for $4.8 million. As a result of the acquisition, Wilcox & Jones was merged into the Company and became a wholly owned subsidiary of BancFirst Corporation. The acquisition was accounted for as a purchase. Accordingly, the effects of the acquisition have been included in the Company’s consolidated financial statements from the date of the acquisition forward.

In October 2005, the Company entered into an agreement to acquire Park State Bank, Nicoma Park, Oklahoma. Park State Bank has approximately $13 million in loans, $44 million in assets, $36 million in deposits, and $8 million in equity capital as of September 30, 2005. The purchase price is a premium of approximately $3 million above equity capital and will be accounted for as a purchase. Accordingly, the effects of the acquisition will be included in the Company’s consolidated financial statements from the date of the acquisition forward. The acquisition is expected to be completed in the fourth quarter of 2005 and will not have a material effect on the results of operations of the Company for 2005. The acquisition will enhance the Company’s eastern Oklahoma County presence.

During the third quarter of 2005, the Company wrote-off a $3 million receivable the Company had recorded in the second quarter of 2005 for a fidelity bond claim, see note 15 to the consolidated financial statements. This one time expense had an after tax effect of $1.8 million, or $0.23 per share.

RESULTS OF OPERATIONS

Third Quarter

Net interest income for the third quarter of 2005 was $33 million, up $3.2 million from the third quarter of 2004. The net interest margin in 2005 improved to 4.79% from 4.34% for the third quarter of 2004. Loan growth during the third quarter of 2005 was funded by a reduction in investments and federal funds sold. The change in mix of earning assets and increasing rates produced a positive rate variance.

18

The Company provided $873 thousand for loan losses in the third quarter of 2005, virtually unchanged from the third quarter of 2004. The Company’s nonperforming and restructured loans were unchanged from a year ago at $10 million at September 30, 2005. The percentage coverage of loan loss reserve to total nonperforming and restructured loans increased from 244.06% at September 30, 2004 to 264.01% at September 30, 2005. Net loan charge-offs were $1.2 million for the third quarter of 2005, virtually unchanged from the third quarter of 2004. The net charge-offs represent an annualized rate of 0.21% of average total loans for the third quarter of 2005 versus 0.25% for the third quarter of 2004.

Noninterest income of $14.9 million, excluding securities transactions, increased $2.4 million compared to the third quarter of 2004 due to an increase in service charges on deposits, and cash management and electronic banking services and sales of insurance products. There was a gain of $1 thousand on securities transactions in the third quarter of 2005, while a gain of $2 thousand was recognized in the third quarter of 2004. Noninterest expense increased $6.0 million to $33.3 million compared to the third quarter of 2004. Noninterest expense for the third quarter of 2005 included a write-off of a $3 million receivable the Company had recorded in the second quarter of 2005 for a fidelity bond claim, see note 15 to the consolidated financial statements. This one time expense had an after tax effect of $1.8 million, or $0.23 per share. The Company’s efficiency ratio (total noninterest expenses divided by total revenues) increased from 64.4% for the third quarter of 2004 to 69.4% (65.3% normalized for the $3 million write-off) for the same period of 2005. The results of the operations of Wilcox and Jones are included in the 3^rd quarter of 2005, but the company was not acquired until the fourth quarter of 2004. The results of their operations are included in Insurance commissions and premiums and Noninterest expenses. Income tax expense decreased $293 thousand compared to the third quarter of 2004. The effective tax rate on income before taxes was 33.2%, compared to 34.3% for the third quarter of 2004.

Year-To-Date

Net interest income for the first nine months of 2005 was $97.7 million, up $11.6 million over the first nine months of 2004. The net interest margin increased to 4.76% for the first nine months of 2005 compared to 4.22% for the same period of 2004. While average earning assets increased by $14.8 million between the first nine months of 2005 and the first nine months of 2004, average loans increased by $221.5 million in the same period, producing a positive volume variance that was complimented by a positive rate variance. In a rising rate environment the benefit of the Company’s noninterest-bearing funds is increased, resulting in an increase in the Company’s net interest margin over time.

The Company provided $3.0 million for loan losses in the first nine months of 2005, compared to $1.8 million for the same period of 2004. The increase in the provision for loan losses resulted largely from loan growth of $174 million in the first nine months of 2005. Net loan charge-offs were $1.8 million for the first nine months of 2005, compared to $2.4 million for the first nine months of 2004. The net charge-offs represent an annualized rate of 0.11% of average total loans for the first nine months of 2005 versus 0.16% for the first nine months of 2004.

Noninterest income of $41.0 million, excluding securities transactions, for the first nine months of 2005 increased $4.1 million compared to the same period in 2004 due to an increase in cash management and electronic banking services and sales of insurance products. There was a gain of $82 thousand on securities transactions in the first nine months of 2005, while losses of $146 thousand were recognized in the first nine months of 2004. Noninterest expense increased $7.7 million to $88.7 million compared to the first nine months of 2004. The Company’s efficiency ratio (total noninterest expenses divided by total revenues) improved from 65.9% for the first nine months of 2004 to 63.9% for the same period of 2005. Income tax expense increased $1.7 million compared to the first nine months of 2004. Wilcox & Jones are included in the results of operations beginning upon acquisition in the fourth quarter of 2004 and for the nine months ended September 30, 2005. The effective tax rate on income before taxes decreased to 33.5% compared to 35.0% for the first nine months of 2004; the decrease was principally due to the recognition of tax credits on qualified loans during the 2005 period.

19

FINANCIAL POSITION

The aggregate of cash and due from banks, interest-bearing deposits with banks, and federal funds sold decreased $79 million from December 31, 2004, and $130 million from September 30, 2004. The decreases were related primarily to federal funds sold used to fund growth in loans of $173 million since December 31, 2004 and $231 million since September 30, 2004.

Total securities decreased $75 million compared to December 31, 2004 and $73 million compared to September 30, 2004. The size of the Company’s securities portfolio is a function of liquidity management and excess funds available for investment. The Company has maintained a short maturity on its securities portfolio to provide funds for loan growth. The net unrealized loss on securities available for sale, before taxes, was $2.6 million at the end of the third quarter of 2005, compared to an unrealized gain of $4.3 million at December 31, 2004 and a gain of $8.2 million at September 30, 2004. The average taxable equivalent yield on the securities portfolio for the third quarter of 2005 increased to 4.17% from 4.16% for the same quarter of 2004.

Total loans increased $174 million from December 31, 2004, and increased $231 million from September 30, 2004. The increases were due to internal loan growth. The allowance for loan losses increased $1.1 million from year-end 2004 and increased $1.3 million from the third quarter of 2004. The allowance as a percentage of total loans was 1.19%, 1.23% and 1.26% at September 30, 2005, December 31, 2004 and September 30, 2004, respectively. The allowance to nonperforming and restructured loans at the same dates was 264.01%, 211.05% and 244.06%, respectively.

Nonperforming and restructured loans totaled $10.2 million at September 30, 2005, compared to $12.2 million at December 31, 2004 and $10.5 million at September 30, 2004. The ratio of nonperforming and restructured loans to total loans for the same periods was 0.45%, 0.58% and 0.51%, respectively. The level of nonperforming loans and loan losses may rise over time as a result of economic and credit cycles.

Total deposits increased slightly by $23 million compared to December 31, 2004, and by $16 million compared to September 30, 2004. The Company’s deposit base continues to be comprised substantially of core deposits, with large denomination certificates of deposit being only 8.68% of total deposits at September 30, 2005, compared to 8.38% at December 31, 2004 and 8.17% at September 30, 2004.

Short-term borrowings decreased $3 million from December 31, 2004, and $8 million from September 30, 2004. Fluctuations in short-term borrowings are a function of federal funds purchased from correspondent banks, customer demand for repurchase agreements and liquidity needs of the bank.

Long-term borrowings decreased $3.0 million from year-end 2004 and third quarter of 2004. The decrease compared to the third of quarter 2004 was due to scheduled principal payments. The Company uses these borrowings primarily to match-fund, long-term fixed rate loans.

Stockholders’ equity increased $17 million from year-end 2004 and $23 million from the third quarter of 2004, due to accumulated earnings offset by dividends and a decrease in unrealized gains in securities. Average stockholders’ equity to average assets for the third quarter of 2005 was 9.57%, compared to 8.78% for the third quarter of 2004. The Company’s leverage ratio and total risk-based capital ratio were 10.37% and 13.90%, respectively, at September 30, 2005, well in excess of the regulatory minimums.

During the quarter, the Company’s Board of Directors approved an increase in the Company’s quarterly dividend from $0.28 per common share to $0.32 per common share, a 14.3% increase. This was the thirteenth consecutive dividend increase of 10% or more.

FUTURE APPLICATION OF ACCOUNTING STANDARDS

See note (3) of the Notes to Consolidated Financial Statements for a discussion of recently issued accounting pronouncements.

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SEGMENT INFORMATION

See note (14) of the Notes to Consolidated Financial Statements for disclosures regarding business segments.

FORWARD LOOKING STATEMENTS

The Company may make forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 with respect to earnings, credit quality, corporate objectives, interest rates and other financial and business matters. Forward-looking statements include estimates and give management’s current expectations or forecasts of future events. The Company cautions readers that these forward-looking statements are subject to numerous assumptions, risks and uncertainties, including economic conditions, the performance of financial markets and interest rates; legislative and regulatory actions and reforms; competition; as well as other factors, all of which change over time. Actual results may differ materially from forward-looking statements.

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BANCFIRST CORPORATION

SELECTED CONSOLIDATED FINANCIAL DATA

(Unaudited)

(Dollars in thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005			2004
Per Common Share Data
Net income – basic	$	1.18		$	1.19		$	4.01		$	3.34
Net income – diluted		1.15			1.17			3.91			3.27
Cash dividends		0.32			0.28			0.88			0.78
Performance Data
Return on average assets		1.19	%		1.22	%		1.36	%		1.15	%
Return on average stockholders’ equity		12.46			13.92			14.61			13.10
Cash dividend payout ratio		27.14			23.53			21.97			23.35
Net interest spread		4.14			3.94			4.18			3.85
Net interest margin		4.79			4.34			4.76			4.22
Efficiency ratio		69.40			64.39			63.94			65.85
Annualized net charge-offs to average total loans		0.21			0.25			0.11			0.16

	September 30,						December 31, 2004
	2005			2004
Balance Sheet Data
Book value per share	$	37.65		$	34.55		$	35.39
Tangible book value per share		33.09			30.49			30.77
Average loans to deposits (year-to-date)		81.92	%		73.86	%		74.47	%
Average earning assets to total assets (year-to-date)		90.27			91.04			91.02
Average stockholders’ equity to average assets (year-to-date)		9.33			8.81			8.85
Asset Quality Ratios
Nonperforming and restructured loans to total loans		0.45	%		0.51	%		0.58	%
Nonperforming and restructured assets to total assets		0.42			0.45			0.48
Allowance for loan losses to total loans		1.19			1.26			1.23
Allowance for loan losses to nonperforming and restructured loans		264.01			244.06			211.05

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BANCFIRST CORPORATION

CONSOLIDATED AVERAGE BALANCE SHEETS AND INTEREST MARGIN ANALYSES

(Unaudited)

Taxable Equivalent Basis (Dollars in thousands)

	Three Months Ended September 30,
	2005							2004
	Average Balance			Interest Income/ Expense		Average Yield/ Rate		Average Balance			Interest Income/ Expense		Average Yield/ Rate
ASSETS
Earning assets:
Loans (1)	$	2,237,372		$	38,487	6.82	%	$	1,999,693		$	30,384	6.04	%
Securities - taxable		466,021			4,736	4.03			529,666			5,366	4.03
Securities - tax exempt		33,167			512	6.13			35,051			545	6.18
Federal funds sold		20,525			163	3.15			201,022			710	1.40
Total earning assets		2,757,085			43,898	6.32			2,765,432			37,005	5.32
Nonearning assets:
Cash and due from banks		149,8633							122,805
Interest receivable and other assets		182,676							169,405
Allowance for loan losses		(27,107	)						(25,851	)
Total nonearning assets		305,432							266,359
Total assets	$	3,062,517						$	3,031,791
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing liabilities:
Transaction deposits	$	374,081			655	0.69	%	$	425,729			306	0.29	%
Savings deposits		773,086			3,814	1.96			750,742			2,070	1.10
Time deposits		675,199			4,528	2.66			699,633			3,140	1.79
Short-term borrowings		46,773			397	3.37			28,549			88	1.23
Long-term borrowings		5,422			81	5.93			8,203			130	6.29
Junior subordinated debentures		51,804			1,103	8.45			51,804			1,103	8.47
Total interest-bearing liabilities		1,926,365			10,578	2.18			1,964,660			6,837	1.38
Interest-free funds:
Noninterest-bearing deposits		818,507							779,736
Interest payable and other liabilities		24,259							21,170
Stockholders’ equity		293,386							266,225
Total interest free funds		1,136,152							1,067,131
Total liabilities and stockholders’ equity	$	3,062,517						$	3,031,791
Net interest income				$	33,320						$	30,168
Net interest spread						4.14	%						3.94	%
Net interest margin						4.79	%						4.34	%

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

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BANCFIRST CORPORATION

CONSOLIDATED AVERAGE BALANCE SHEETS AND INTEREST MARGIN ANALYSES

(Unaudited)

Taxable Equivalent Basis (Dollars in thousands)

	Nine Months Ended September 30,
	2005							2004
	Average Balance			Interest Income/ Expense		Average Yield/ Rate		Average Balance			Interest Income/ Expense		Average Yield/ Rate
ASSETS
Earning assets:
Loans (1)	$	2,181,293		$	108,007	6.62	%	$	1,959,779		$	87,977	6.00	%
Securities - taxable		493,535			15,512	4.20			532,399			15,661	3.93
Securities - tax exempt		32,508			1,515	6.23			36,170			1,712	6.32
Federal funds sold		62,809			1,266	2.69			227,006			1,912	1.12
Total earning assets		2,770,145			126,300	6.10			2,755,354			107,262	5.20
Nonearning assets:
Cash and due from banks		147,396							124,763
Interest receivable and other assets		177,559							172,370
Allowance for loan losses		(26,526	)						(26,055	)
Total nonearning assets		298,429							271,078
Total assets	$	3,068,574						$	3,026,432
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing liabilities:
Transaction deposits	$	364,055		$	1,780	0.65	%	$	431,913			923	0.29	%
Savings deposits		798,009			9,424	1.58			752,730			6,033	1.07
Time deposits		679,580			12,130	2.39			725,284			9,579	1.76
Short-term borrowings		37,800			820	2.90			27,385			213	1.04
Long-term borrowings		6,274			277	5.91			9,069			428	6.30
Junior subordinated debentures		51,804			3,309	8.54			46,005			3,007	8.73
Total interest-bearing liabilities		1,937,522			27,740	1.91			1,992,386			20,183	1.35
Interest-free funds:
Noninterest-bearing deposits		820,934							743,600
Interest payable and other liabilities		23,768							23,959
Stockholders’ equity		286,350							266,487
Total interest free funds		1,131,052							1,034,046
Total liabilities and stockholders’ equity	$	3,068,574						$	3,026,432
Net interest income				$	98,560						$	87,079
Net interest spread						4.18	%						3.85	%
Net interest margin						4.76	%						4.22	%

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

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no significant changes in the Registrant’s disclosures regarding market risk since December 31, 2004, the date of its annual report to stockholders.

Item 4. Controls and Procedures.

The Company’s Chief Executive Officer and Chief Financial Officer and Disclosure Committee, which includes the Company’s Chief Risk Officer, Chief Asset Quality Officer, Chief Internal Auditor, Senior Vice President of Corporate Finance, Holding Company Controller, Bank Controller and General Counsel, have evaluated, as of the last day of the period covered by this report, the Company’s disclosure controls and procedures. Based on their evaluation they concluded that the disclosure controls and procedures of the Company are adequate to ensure that information required to be disclosed by the Company in the reports filed or submitted by it under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms. No changes in the Company’s internal control over financial reporting occurred during the current quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

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Item 6. Exhibits.

Exhibit Number	Exhibit
3.1	Second Amended and Restated Certificate of Incorporation (filed as Exhibit 1 to the Company’s Form 8-A/A filed July 23, 1998 and incorporated herein by reference).
3.2	Certificate of Designations of Preferred Stock (filed as Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998 and incorporated herein by reference).
3.3	Amended By-Laws (filed as Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1992 and incorporated herein by reference).
3.4	Resolution of the Board of Directors amending Section XXVII of the Company’s By-Laws (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K dated February 26, 2004 and incorporated herein by reference).
3.5	Amendment to the Second Amended and Restated Certificate of Incorporation (filed as Exhibit 3.5 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2005 and incorporated herein by reference).
4.1	Instruments defining the rights of securities holders (see Exhibits 3.1, 3.2, 3.3 and 3.4 above).
4.2	Amended and Restated Declaration of Trust of BFC Capital Trust I dated as of February 4, 1997 (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K dated February 4, 1997 and incorporated herein by reference).
4.3	Form of 9.65% Series B Cumulative Trust Preferred Security Certificates for BFC Capital Trust I (included as Exhibit D to Exhibit 4.2).
4.4	Indenture dated as of February 4, 1997, relating to the 9.65% Junior Subordinated Deferrable Interest Debentures of BancFirst Corporation issued to BFC Capital Trust I (filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K dated February 4, 1997 and incorporated herein by reference).
4.5	Form of Certificate of 9.65% Series B Junior Subordinated Deferrable Interest Debenture of BancFirst Corporation (included as Exhibit A to Exhibit 4.4).
4.6	Form of Series B Guarantee of BancFirst Corporation relating to the 9.65% Series B Cumulative Trust Preferred Securities of BFC Capital Trust I (filed as Exhibit 4.7 to the Company’s registration statement on Form S-4, File No. 333-25599, and incorporated herein by reference).
4.7	Amended and Restated Trust Agreement relating to the 7.20% Cumulative Trust Preferred Securities of BFC Capital Trust II (filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K dated February 26, 2004 and incorporated herein by reference).
4.8	First Amendment to Amended and Restated Trust Agreement (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K dated March 24, 2004 and incorporated herein by reference).

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Exhibit Number	Exhibit
4.9	Form of 7.20% Cumulative Trust Preferred Security Certificate for BFC Capital Trust II (included as Exhibit D to Exhibit 4.7).
4.10	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 Current Report on Form 8-K dated February 26, 2004 and incorporated herein by reference).
4.11	Guarantee of BancFirst Corporation relating to the 7.20% Cumulative Trust Preferred Securities of BFC Capital Trust II (filed as Exhibit 4.5 to the Company’s Current Report on Form 8-K dated February 26, 2004 and incorporated herein by reference).
4.12	Rights Agreement, dated as of February 25, 1999, between BancFirst Corporation and BancFirst, as Rights Agent, including as Exhibit A the form of Certificate of Designations of the Company setting forth the terms of the Preferred Stock, as Exhibit B the form of Right Certificate and as Exhibit C the form of Summary of Rights Agreement (filed as Exhibit 1 to the Company’s Current Report on Form 8-K dated February 25, 1999 and incorporated herein by reference).
10.1	Sixth Amended and Restated BancFirst Corporation Stock Option Plan (filed as Exhibit 4.1 to the Company’s Form S-8 Registration Statements filed October 8, 2004 and incorporated herein by reference).
10.3	1988 Incentive Stock Option Plan of Security Corporation as assumed by BancFirst Corporation (filed as Exhibit 4.1 to the Company’s Registration Statement on Form S-8, File No. 333-65129 and incorporated herein by reference).
10.4	1993 Incentive Stock Option Plan of Security Corporation as assumed by BancFirst Corporation (filed as Exhibit 4.2 to the Company’s Registration Statement on Form S-8, File No. 333-65129 and incorporated herein by reference).
10.5	1995 Non-Employee Director Stock Plan of AmQuest Financial Corp. as assumed by BancFirst Corporation (filed as Exhibit 4.3 to the Company’s Registration Statement on Form S-8, File No. 333-65129 and incorporated herein by reference).
10.6	BancFirst Corporation Non-Employee Directors’ Stock Option Plan (filed as Exhibit 10.6 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000 and incorporated herein by reference).
10.7	BancFirst Corporation Directors’ Deferred Stock Compensation Plan (filed as Exhibit 10.7 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000 and incorporated herein by reference).
31.1*	CEO’s Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a).
31.2*	CFO’s Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a).
32.1*	CEO’s Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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Exhibit Number		Exhibit
32.2	*	CFO’s Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1		Stock Repurchase Program (filed as Exhibit 99.1 to the Company’s Form 8-K dated November 18, 1999 and incorporated herein by reference).

* Filed herewith.

SIGNATURES

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

	BANCFIRST CORPORATION (Registrant)
Date:November 8, 2005	/s/ Joe T. Shockley, Jr.
	(Signature) Joe T. Shockley, Jr. Executive Vice President Chief Financial Officer

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