Terms

Series

7.20% Cumulative Trust Preferred Securities

Liquidation Preference

$25.00

Coupon Rate

7.2%

Rate Type

Fixed

Annual Dividend

$1.80

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

No

Convertible

No

Callable

Yes

First Call Date

March 31, 2009

First Call Price

$25.00

Mandatory Redemption Date

March 31, 2034

Capital Stack Ranking

Junior To: All Current And Future Senior Debt Of Bancfirst Corporation, All Existing And Future Liabilities Of Bancfirst Corporation'S Subsidiaries (Structural Subordination); Pari Passu With: Bfc Capital Trust I 9.65% Preferred Securities (Via Parity Of Junior Subordinated Debentures), Other Junior Subordinated Debentures Issued To Similar Trusts; Senior To: Bancfirst Corporation Common Stock, Bancfirst Corporation Common Securities Of The Trust

Regulatory (Basel III) Call

Yes

Tax Classification

Other

Qualifies for QDI

No

Qualifies for DRD

No

Shares Offered

1,000,000

Prospectus Summary

BFC Capital Trust II, a Delaware statutory trust created by BancFirst Corporation (an Oklahoma bank holding company), is offering 1,000,000 7.20% Cumulative Trust Preferred Securities at $25 per security (liquidation amount $25), maturing March 31, 2034, and callable at par on or after March 31, 2009. These are trust preferred securities — not depositary shares — representing beneficial interests in junior subordinated debentures issued by BancFirst Corporation to the trust. Distributions are cumulative, meaning any deferred payments accrue with compounding interest at 7.20% and must be paid before BancFirst can resume common dividends, though the issuer may defer payments for up to 20 consecutive quarters (5 years) without triggering a default. These trust preferred securities sit near the bottom of BancFirst Corporation's capital stack. They are senior only to BancFirst's common equity and the common securities of the trust. They are structurally subordinated to all liabilities of BancFirst's banking subsidiary (BancFirst) — the entity that actually generates cash flows — because the holding company depends on upstream dividends from the bank to service the junior subordinated debentures. They rank junior to all of BancFirst Corporation's current and future senior debt (approximately $4 million as of September 2003) and are effectively subordinated to ~$30 million of subsidiary-level obligations. A regulatory capital call provision allows redemption at par if the Federal Reserve determines the securities no longer qualify as Tier 1 capital, a meaningful near-term risk given FASB's FIN 46 guidance at the time of issuance. At the $25 offering price, the securities yield exactly 7.20% annually ($1.80/year, $0.45/quarter), payable on January 15, April 15, July 15, and October 15 each year, with the first payment on April 15, 2004. Critically, distributions are treated as interest income — not qualified dividends — because the trust is structured as a grantor trust holding debt instruments. They do not qualify for the 15%/20% QDI rate or the corporate dividends-received deduction. During any deferral period, holders must still accrue interest income for U.S. federal tax purposes even without receiving cash, creating a potential OID inclusion and tax-liquidity mismatch. The dividend stopper prevents BancFirst from paying common stock dividends during any deferral period.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If BancFirst Corporation defers interest payments on the junior subordinated debentures (triggering a distribution deferral on the preferred securities), it is prohibited from paying dividends on its common stock or any pari passu or junior debt securities until the deferral period ends.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 74 (Strong)