BancFirst Corporation (BANF) Earnings Call Transcript & Summary

Good morning, everybody. We'll go ahead and come to order and call the shareholders meeting of BancFirst Corporation together. We don't have a presentation this year. Frankly, when you look back at the past 2 years, you've got a year of uncertainty surrounding COVID, where we were making huge provisions based on the unknown of what a pandemic would do to the economy. And then last year, based on the known that the economy was not going to suffer to the degree we were concerned about, you had reversals of those provisions. And so both years, while fundamentally solid for BancFirst were so heavily influenced by provisions in and provisions out that the numeric analysis almost makes no sense. You've probably seen the first quarter announcement, and we're on to what appears to be, for the time being, a more normal economic environment. And even with the added benefit that we hadn't had in years of a little interest rate movement in wind in our sales. And it's nice when your commodity is not selling at 0. And so we're hopeful that the balance of the year will continue to improve and be reflective of the first quarter. On to the business of the day. Well, first off, I'd like to recognize Joe Goyne, who's CEO of Pegasus Bank, our sister bank or brother bank, whichever you prefer, whichever you identify as in Dallas. And new to us is Greg Morris, I know he's here. There's Greg. Greg Morris is CEO of Worthington Bank in Fort Worth, our brand-new addition in the first quarter. So Randy Foraker, will you please provide proof of the meeting?

Yes, I will. I have a certified copy of the notice for the meeting that was mailed out to shareholders of record on April 12. We -- at the record date of March 31, there were 32,725,587 shares of common stock outstanding. And I also have a list of the shareholders of record as of that date.

Okay. In-person voting. Is there anyone here or on the phone present who intends to vote in person? I hear none. Kevin, do we have a quorum?

Yes. The number of shares represented by proxy or in person is 29,211,802 shares, which is 89.26% of the shares outstanding. There is a quorum present.

All right. We'll declare the meeting convened. And since there is a quorum present, we are in order. Okay. Proposal #1, to elect 21 directors nominated by our Board for a 1-year term. And to remind everybody, our entire slate of directors is reelected every year. There are no terms that exceed 1 year. Any discussion of the proposal? Kevin, would you please report on the results?

Yes, 24,958,197 shares or 85.43% of the shares voting on the election were voted for the directors. No individual director received affirmative votes of less than a majority of the shares voting. All the nominees have been elected.

And by way of a little bit of discussion, 85.43%, that is a range of what the directors got. The lowest was 85.43%, which was probably our fault. One of the shareholder services recommended a vote against our nominating committee chair because we had too many directors. I understand that, but my concern was it was a criteria that we'd never heard of before. It never been mentioned. And the good news is, is that with the retirements we've got coming this coming year, that will not be an issue next year. So the minimum received was 85.43%.Is that right?

That's correct.

Okay. All right. Proposal #2, to amend the BancFirst Corporation stock option plan to increase the number of shares of common stock to be granted after the date of such amendment by 100,000 shares. Any discussion of this proposal? All right. Kevin?

19,378,908 shares or 59.21% of the shares outstanding voted for the proposal. It has been approved.

And a bit of discussion here. 59% is obviously not a super majority. And the reason why that vote was lower was we had a shareholder rating service recommended a vote against this. There's an absolute -- and I don't disagree with the fundamental notion behind it that you shouldn't reprice options. Our plan allows for repricing. We've never repriced an option in the sense of just changing the option price for somebody and letting it stay in place as is otherwise. We've never done that. We wouldn't do it. However, by definition, when you can reissue an option, start a new date, new vesting, new maturity and new price in exchange for someone relinquishing their former option, that is technically defined as repricing and this absolute by the shareholder service would cover that as well. And we can do that. It's allowed in our plan. We've done that before, but very infrequently, Randy, we did not do that. We didn't report this to our shareholders either, but -- which we probably should have that we did not reprice any options at all last year and sell them. And there's even a limit on how many reissuances we can do. But nonetheless, that's something we'll probably look at, 59%, even though we can keep cramming it down every year because of the nature of our shareholder ownership. We're going to readdress that and see if there's not another way to come at that, achieve what we want to do at the same time, get off the radar of the shareholder rating service. So we're not smug about that. We will be responsive in part to that. Proposal #3, to amend the BancFirst Corporation nonemployee director stock option plan to increase the number of retirement shares of common stock authorized to be granted after the amendment by 30,000 shares. Is there any discussion of this proposal? Kevin?

27,763,210 shares or 84.83% of the shares outstanding voted for the proposal. It has been approved.

Okay. And Proposal 4, to ratify BK&D as the company's independent registered public accounting firm. BKD has been selected by the Audit Committee to continue as the company's independent registered public accounting firm for the year ended 12/31/'22. They have served as our auditors for 9 years. Greg Wedel is here and is Chairman of our Audit Committee, and if there are any questions for him, he's available to answer. [ Darren Morgan ] is here from BKD. Darren, welcome. Glad to have you here. And -- so any discussion of BKD to be confirmed as our auditor? None noted. Kevin?

29,169,522 shares or 89.13% of the shares outstanding voted for the proposal. It has been approved.

And I would note one thing. And once again, the auditor wins the vote race. The -- all these numbers, except the election of the directors, which is of shares voted, all these numbers are shares outstanding, which is a very, very high standard. And so these numbers are very strong. We're pleased to have them. Anybody have any questions that are in the room or on the phone? Are there any questions of any shareholders or anyone in attendance? Okay. Is there anything else that needs to come before the meeting? Randy? Kevin? All right. I will declare the meeting to be adjourned, and thank you for your attendance. We're adjourned.