10-Q 1 fm10q033101.txt BOKF 3/31/01 10-Q As filed with the Securities and Exchange Commission on May 15, 2001 ------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended March 31, 2001 Commission File No. 0-19341 BOK FINANCIAL CORPORATION Incorporated in the State of Oklahoma I.R.S. Employer Identification No. 73-1373454 Bank of Oklahoma Tower P.O. Box 2300 Tulsa, Oklahoma 74192 Registrant's Telephone Number, Including Area Code (918) 588-6000 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: (NONE) SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: COMMON STOCK ($.00006 Par Value) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of the latest practicable date: 49,348,025 shares of common stock ($.00006 par value) as of April 30, 2001. ------------------------------------------------------------------------------- BOK Financial Corporation Form 10-Q Quarter Ended March 31, 2001 Index Part I. Financial Information Management's Discussion and Analysis 2 Report of Management on Consolidated Financial Statements 14 Consolidated Statements of Earnings - Unaudited 15 Consolidated Balance Sheets - Unaudited 17 Consolidated Statements of Changes in Shareholders' Equity - Unaudited 18 Consolidated Statements of Cash Flows - Unaudited 19 Notes to Consolidated Financial Statements - Unaudited 20 Financial Summaries - Unaudited 24 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K 26 Signatures 26 MANAGEMENT'S ASSESSMENT OF OPERATIONS AND FINANCIAL CONDITION ASSESSMENT OF OPERATIONS Summary of Performance BOK Financial Corporation ("BOK Financial") recorded net income of $27.4 million or $0.49 per diluted common share for the first quarter of 2001 compared to $24.8 million or $0.45 per diluted common share for the first quarter of 2000. Net income for the first quarter of 2000 included $3.0 million from the favorable resolution of an Internal Revenue Service examination. Both net income and earnings per share increased by 26%, excluding the effects of this resolution. The returns on average assets and equity were 1.12% and 15.37%, respectively for the quarter ended March 31, 2001 compared to adjusted returns on average assets and equity of 1.05% and 15.63% for the same period of 2000. On April 24, 2001, BOK Financial announced a 3% stock dividend payable on or about May 18, 2001. Earnings per share have not been restated for this dividend, see Note 6. Net interest revenue grew $11.9 million due primarily to a $1.4 billion increase in average earning assets. Fees and commissions increased $7.5 million. All categories of fee income increased in the first quarter of 2001 when compared to the same quarter of 2000. Gains from the sale of securities totaled $13.3 million during the first quarter of 2001. Operating expenses increased $19.2 million to $93.8 million. This increase included a $9.7 million provision for impairment of mortgage servicing rights. The provision for loan loss increased $4.9 million to $7.6 million. BOK Financial completed its acquisition of CNBT Bancshares, Inc. ("CNBT") during the first quarter of 2001 for $91 million. This acquisition added seven branches in Houston, Texas and increased total assets by approximately $506 million. Net Interest Revenue Net interest revenue on a tax-equivalent basis was $77.7 million for the first quarter of 2001 compared to $65.5 million for the first quarter of 2000. Average earning assets increased by $1.4 billion, including $244 million from CNBT. Average loans increased $1.1 billion and now comprise 64% of average earning assets. Average loans were 61% of average earning assets for the first quarter of 2000. Loans generally have higher yields than other types of earning assets therefore, the increase in loans significantly increased net interest revenue. Average interest-bearing liabilities increased $1.3 billion and comprised 81% of all funding sources for both quarters. Table 1 shows how net interest revenue was affected by changes in average balances and interest rates for various types of earning assets and interest-bearing liabilities. -------------------------------------------------------------------------------- TABLE 1 - VOLUME/RATE ANALYSIS (In Thousands) Three months ended March 31, 2001/2000 ------------------------------------- Change Due To (1) ------------------------ Yield Change Volume /Rate ------------------------------------- Tax-equivalent interest revenue: Securities $ 7,291 $ 6,004 1,287 Trading securities 40 87 (47) Loans 24,091 23,299 792 Funds sold (280) (296) 16 -------------------------------------------------------------------------------- Total 31,142 29,094 2,048 -------------------------------------------------------------------------------- Interest expense: Interest bearing transaction deposits 2,421 1,887 534 Savings deposits (24) (22) (2) Time deposits 12,458 8,496 3,962 Other borrowings 4,218 5,574 (1,356) Subordinated debenture (73) 175 (248) -------------------------------------------------------------------------------- Total 19,000 16,110 2,890 -------------------------------------------------------------------------------- Tax-equivalent net interest revenue 12,142 12,984 (842) Increase in tax-equivalent adjustment (208) -------------------------------------------------------------------------------- Net interest revenue $ 11,934 -------------------------------------------------------------------------------- (1) Changes attributable to both volume and yield/rate are allocated to both volume and yield/rate on an equal basis. Net interest margin, the ratio of net interest revenue to average earning assets, was 3.54% for both the first quarters of 2001 and 2000 and 3.47% for the fourth quarter of 2000. The yield on average earning assets and the cost of interest bearing liabilities increased by 18 basis points and 23 basis points from the first quarter of 2000 to the first quarter of 2001, respectively, due to increase in market rates during the second half of 2000. The net effect of these changes was offset by an increase in non-interest bearing funding sources. The yield on average earning assets for the first quarter of 2001 decreased by 40 basis points compared to the fourth quarter of 2000. The cost of interest bearing liabilities decreased 52 basis points for the same period. BOK Financial's interest bearing liabilities react more quickly to changes in interest rates than its earning assets. This causes the net interest margin to increase during periods of declining interest rates. Since inception, BOK Financial has followed a strategy of fully utilizing its capital resources by borrowing funds in the capital markets to supplement deposit growth in order to fund increased investments in securities. Although this strategy frequently results in a net interest margin that falls below those normally seen in the commercial banking industry, it provides positive net interest revenue. Management estimates that for the first quarter of 2001, this strategy resulted in a 55 basis point decrease in net interest margin. However, this strategy contributed $4.1 million to net interest revenue. Net interest margin, excluding this strategy was 4.09% for the first quarter of 2001. Management employs various techniques to control, within established parameters, the interest rate and liquidity risk inherent in this strategy, the results of which are presented in the Market Risk section. Other Operating Revenue Other operating revenue increased $20.9 million compared to the same quarter of 2000. Total fees and commissions, which are included in other operating revenue, increased $7.5 million. Approximately $742 thousand of this increase was due to the CNBT acquisition, including $556 thousand of fees on deposit accounts. All categories of fees and commissions increased over the same period of 2000. Most notably, mortgage banking revenue increased 38% due to improved conditions for sales of loans originated into the secondary market. Transaction card revenue increased $1.3 million or 15% compared to the same quarter of last year due primarily to increases in both check card revenue and merchant discount fees. Brokerage and trading revenue also increased 15% due primarily to improved performance of securities trading. Securities gains totaled $13.3 million for the first quarter of 2001, including gains of $11.3 million from a portfolio that management has designated as an economic hedge against the risk of loss in the mortgage servicing portfolio. Additional discussion about the mortgage servicing rights and related hedge portfolio is located in the Market Risk section of this report. Many of BOK Financial's fee generating activities, such as brokerage and trading activities, trust fees, and mortgage banking revenue are indirectly affected by changes in interest rates. Significant increases in interest rates may tend to decrease the volume of trading activities and may lower the value of trust assets managed, which is the basis for certain fees, but would tend to decrease mortgage loan prepayments and increase the value of loan servicing rights. A corresponding decrease in economic activity would decrease transaction card revenue. Significant decreases in interest rates could have the opposite effect by increasing the fees earned on trading and brokerage activities and trust fees. However, decreasing interest rates could reduce revenue from mortgage loan servicing due to increased prepayment activity.
----------------------------------------------------------------------------------------------- TABLE 2 - OTHER OPERATING REVENUE (In Thousands) Three Months Ended ------------------------------------------------------------ March 31, Dec. 31, Sept. 30, June 30, March 31, 2001 2000 2000 2000 2000 ------------------------------------------------------------ Brokerage and trading revenue $ 5,100 $ 3,978 $ 3,451 $ 4,219 $ 4,426 Transaction card revenue 9,902 10,063 10,739 9,331 8,620 Trust fees and commissions 9,937 9,978 10,072 9,743 9,523 Service charges and fees on deposit accounts 11,789 10,929 11,012 10,736 10,255 Mortgage banking revenue 10,833 10,144 9,774 9,427 7,834 Leasing revenue 1,119 1,377 931 1,192 744 Other revenue 5,221 5,277 4,371 3,344 4,973 --------------------------------------------------------------------------------------------- Total fees and commissions 53,901 51,746 50,350 47,992 46,375 --------------------------------------------------------------------------------------------- Gain on student loan sales 521 30 28 38 433 Loss on sale of other assets - (148) - - - Gain (loss) on securities 13,280 3,296 (538) (682) (17) --------------------------------------------------------------------------------------------- Total other operating revenue $ 67,702 $ 54,924 $ 49,840 $ 47,348 $ 46,791 ---------------------------------------------------------------------------------------------
Other Operating Expense Operating expenses for the first quarter of 2001 increased $19.2 million or 26% compared to the first quarter of 2000. The first quarter of 2001 included operating expenses of $ 4.2 million from CNBT (primarily personnel expense and amortization of intangible assets) and a provision for impairment of mortgage servicing rights of $9.7 million. Excluding the effect of these items, operating expenses increased $5.3 million or 7%. The following discussion of operating expenses excludes these items to improve comparability.
------------------------------------------------------------------------------------------------------- TABLE 3 - OTHER OPERATING EXPENSE (In Thousands) Three Months Ended ----------------------------------------------------------------- March 31, Dec. 31, Sept. 30, June 30, March 31, 2001 2000 2000 2000 2000 ----------------------------------------------------------------- Personnel $ 39,936 $ 37,200 $ 35,937 $ 35,789 $ 37,289 Business promotion 2,872 1,971 1,941 2,148 2,335 Professional fees/services 3,057 2,994 2,145 2,161 2,318 Net occupancy & equipment 10,343 9,568 9,061 8,318 8,500 Data processing & communications 9,373 8,753 8,601 9,087 8,520 FDIC and other insurance 443 399 403 387 380 Printing, postage and supplies 2,991 2,808 2,546 3,095 2,811 Net (gains) losses and operating expenses on repossessed assets 29 (8) (574) (118) (583) Amortization of intangible assets 5,027 3,444 3,940 4,016 4,078 Mortgage banking costs 6,418 5,697 5,600 5,540 5,437 Provision for impairment of mortgage servicing rights 9,723 2,900 - - - Other expense 3,574 3,592 4,364 4,494 3,531 -------------------------------------------------------------------------------------------------------- Total $ 93,786 $ 79,318 $ 73,964 $ 74,917 $ 74,616 --------------------------------------------------------------------------------------------------------
Personnel costs increased $1.1 million or 3%. Regular compensation (including overtime and temporary assistance) increased $567 thousand or 2% while benefit expense increased $450 thousand or 8%. Average staffing on a full time equivalent ("FTE") basis decreased by 28 employees or 1% while average compensation expense per FTE increased by 4%. Incentive compensation, which varies directly with the performance of the respective business unit over pre-determined targets, increased by 1% to $5.6 million for the first quarter of 2001. Net occupancy and equipment expense increased $1.4 million or 17% due primarily to a $982 thousand increase in depreciation expense. Data processing and communication expense increased 6% or $537 thousand due primarily to a $357 thousand increase in charges for processing transaction card activity. Mortgage banking costs increased 30% or $1.1 million due primarily to amortization of mortgage servicing rights, which was caused by an increase in loan prepayments.
------------------------------------------------------------------------------------------------------- TABLE 4 - OTHER OPERATING EXPENSE, EXCLUDING SIGNIFICANT OR NONRECURRING ITEMS (In Thousands) Three Months Ended ----------------------------------------------------------------- March 31, Dec. 31, Sept. 30, June 30, March 31, 2001 2000 2000 2000 2000 ----------------------------------------------------------------- Total other operating expense $ 93,786 $ 79,318 $ 73,964 $ 74,917 $ 74,616 Reorganization costs - - - - (638) Net gains and operating costs from repossessed assets (29) 8 574 118 583 Provision for impairment of mortgage servicing rights (9,723) (2,900) - - - ------------------------------------------------------------------------------------------------------- Total $ 84,034 $ 76,426 $ 74,538 $ 75,035 $ 74,561 -------------------------------------------------------------------------------------------------------
LINES OF BUSINESS BOK Financial operates four principal lines of business under its Bank of Oklahoma franchise: corporate banking, consumer banking, mortgage banking and trust services. It also operates a fifth line of business, regional banks, which includes all functions for Bank of Arkansas, N.A., Bank of Texas, N.A. (including CNBT), and Bank of Albuquerque, N.A. Other lines of business include the TransFund ATM system and BOSC, Inc., a securities broker-dealer. Corporate Banking The Corporate Banking Division, which provides loan and lease financing and treasury and cash management services to businesses throughout Oklahoma and seven surrounding states, contributed $11.0 million or 40% to consolidated net income for the first quarter of 2001. This is compared to $10.3 million or 42% of consolidated net income for the first quarter of 2000. First quarter 2001 had net charge-offs of $2.4 million compared to $126 thousand in the same quarter of 2000. Table 5 Corporate Banking (In Thousands) Three months ended March 31, ------------------------------------------------ ------------------------------ 2001 2000 --------------- ---------- Revenue from (interest expense) external sources $ 65,585 $ 60,256 Revenue (interest expense) from internal sources (29,371) (30,289) Operating expense 14,351 12,875 Net income 10,996 10,317 Average assets $ 3,808,409 $ 3,254,854 Average equity 432,539 372,138 Return on assets 1.17% 1.29% Return on equity 10.31 11.24 Efficiency ratio 39.63 42.96 Consumer Banking The Consumer Banking Division, which provides a full line of deposit, loan and fee-based services to customers throughout Oklahoma, contributed $4.2 million or 15% to consolidated net income for the first quarter of 2001. This is compared to $3.9 million or 16% of consolidated net income for the first quarter of 2000. The increase in contribution to net income from the Consumer Banking Division was due primarily to an increase in the internal interest rate paid for funds provided by this Division. Table 6 Consumer Banking (In Thousands) Three months ended March 31, ------------------------------------------------ ------------------------------ 2001 2000 --------------- ---------- Revenue from (interest expense) external sources $ (4,846) $ (3,621) Revenue (interest expense) from internal sources 27,806 24,239 Operating expense 14,903 13,686 Net income 4,180 3,858 Average assets $ 2,176,709 $ 2,172,435 Average equity 64,367 63,312 Return on assets 0.78% 0.72% Return on equity 26.34 24.72 Efficiency ratio 64.91 66.38 Mortgage Banking The Mortgage Banking Division contributed $1.9 million or 7% to consolidated net income for the first quarter of 2001. This is compared to a $464 thousand loss for the first quarter of 2000. Revenue from external services increased $8.0 million including $4.0 million of interest on securities held for hedging program. Loan servicing fees were $8.3 million, unchanged from the first quarter of 2000. Gains on loans sold were $2.6 million in 2001 compared to a loss on loans sold of $425 thousand for the same period of 2000. Increase in interest expense from internal services is due to cost to fund growth in assets. Mortgage loans originated during the first quarter of 2001 totaled $211 million compared to $109 million for 2000 due to lower interest rates. Table 7 Mortgage Banking (In Thousands) Three months ended March 31, -------------------------------------------- ---------------------------- 2001 2000 --------------- ---------- Revenue from (interest expense) external sources $ 19,003 $ 10,961 Revenue (interest expense) from internal sources (6,530) (2,409) Operating expense 10,959 9,312 Provision for impairment of mortgage servicing rights 9,723 - Gains (losses) on sales of securities 11,309 - Net income 1,879 (464) Average assets $ 590,076 $ 325,026 Average equity 38,374 27,409 Return on assets 1.29% (0.58)% Return on equity 19.86 (6.87) Efficiency ratio 87.86 108.89 Capitalized mortgage servicing rights totaled $100.5 million compared to $113.0 million at March 31, 2000 and $110.8 million at December 31, 2000. These amounts are net of a valuation allowance of $12.6 million at March 31, 2001 and $2.9 million at December 31, 2000. No valuation allowance was required at March 31, 2000. A provision for impaired servicing rights of $9.7 million was charged against earnings for the first quarter of 2001. The valuation allowance and related provision reflected the effects of declining interest rates on the fair value of the loan servicing rights. The provision for impaired servicing rights was offset by realized gains of $11.3 million in a securities portfolio that management has designated as an economic hedge against the risk of loss in the mortgage servicing portfolio. Additional discussion about the sensitivity of the mortgage loan servicing portfolio to changes in interest rates and the hedging strategy is the Market Risk section. Trust Services Trust Services, which includes institutional, investment and retirement products and services to affluent individuals, businesses, not-for-profit organizations, and governmental agencies, contributed $2.2 million or 8% of consolidated net income for the first quarter of 2001. This is compared to $1.9 million or 8% of consolidated net income for the same quarter of 2000. Net revenue from external sources decreased from 2000 due to an increase in interest expense on funds provided by the Trust Services division averaged $414 million at a cost of $4.4 million for the first quarter of 2001 compared to funds provided of $277 million at a cost of $2.3 million in 2000. This increase in funds provided also caused the increase in revenue from internal sources. At March 31, 2001, trust assets with an aggregate market value of $17 billion were subject to various fiduciary arrangements. Table 8 Trust Services (In Thousands) Three months ended March 31, --------------------------------------------- ----------------------------- 2001 2000 ------------ ---------- Revenue from (interest expense) external sources $ 9,734 $ 11,000 Revenue (interest expense) from internal sources 3,638 1,523 Operating expense 9,761 9,425 Net income 2,206 1,891 Average assets $ 448,942 $ 308,891 Average equity 39,632 36,319 Return on assets 1.99% 2.48% Return on equity 22.57 21.11 Efficiency ratio 73.00 75.26 Regional Banks Regional banks provide a full range of corporate and consumer banking, trust services, treasury services and retail investments in their respective markets. Small businesses and middle-market corporations are the regional banks' primary customer focus. Regional banks contributed $6.5 million or 24% to consolidated net income for the first quarter of 2001. This is compared to $4.5 million or 18% of consolidated net income for the first quarter of 2000. Table 9 Regional Banks (In Thousands) Three months ended March 31, ------------------------------------------------ ----------------------------- 2001 2000 ----------- --------- Revenue from (interest expense) external sources $ 36,810 $ 26,852 Revenue (interest expense) from internal sources (2,487) (3,135) Operating expense 21,206 16,412 Gains (losses) on sales of securities (551) - Net income 6,456 4,472 Tangible net income 8,878 14,699 Average assets $ 3,166,918 $ 2,318,626 Average equity 377,702 253,384 Tangible return on assets 1.14% 1.18% Tangible return on equity 9.53 10.83 Efficiency ratio 61.78 69.20 Average equity assigned to regional banks included both an amount based on management's assessment of risk and an additional amount based on BOK Financial's investment in these entities. Management measures performance for regional banks based on tangible net income, return on assets and return on equity which excludes the amortization of all intangible assets. INCOME TAXES Income tax expense totaled $14.9 million for the first quarter of 2001 or 35% of pre-tax income compared to $8.4 million or 25% of pre-tax income for the first quarter of 2000. The Internal Revenue Service closed its examination of 1996 and management completed a review of the various tax issues during the first quarter of 2000. As a result of these events, BOK Financial reduced its tax reserve by $3.0 million. Income tax expense for the first quarter of 2000 was $11.4 million, including $128 thousand tax effect on the transition adjustment to FAS 133, or 34% of pre-tax book income excluding the reduction in this reserve. ASSESSMENT OF FINANCIAL CONDITION The aggregate loan portfolio at March 31, 2001 totaled $5.9 billion, an increase of $359 million since December 31, 2000. This increase included $184 million from the CNBT acquisition. Energy loans increased $44 million during the quarter and comprised 15% of total loans. The energy category included loans to oil and gas producers which totaled $587 million, loans to borrowers involved in the transportation and sale of oil and gas, and loans to borrowers that manufacture equipment and provide other services to the energy industry.
--------------------------------------------------------------------------------------------------------------------- TABLE 10 - LOANS (In Thousands) March 31, Dec. 31, Sept. 30, June 30, March 31, 2001 2000 2000 2000 2000 --------------------------------------------------------------------------------- Commercial: Energy $ 881,128 $ 837,223 $ 774,284 $ 665,550 $ 601,991 Manufacturing 507,207 421,046 418,986 389,823 368,337 Wholesale/retail 544,097 499,017 450,337 450,681 435,026 Agricultural 203,345 185,407 159,099 185,473 184,299 Services 983,454 963,171 901,749 817,871 782,825 Other commercial and industrial 273,847 342,169 289,787 323,162 310,224 Commercial real estate: Construction and land development 321,578 311,700 303,965 291,871 278,551 Multifamily 294,548 271,459 268,595 258,658 269,667 Other real estate loans 714,640 687,335 676,176 635,089 624,309 Residential mortgage: Secured by 1-4 family residential properties 696,033 638,044 597,464 573,346 551,639 Residential mortgages held for 93,117 48,901 58,888 55,332 42,967 sale Consumer 364,288 312,390 299,199 294,466 269,964 --------------------------------------------------------------------------------------------------------------------- Total $ 5,877,282 $ 5,517,862 $ 5,198,529 $ 4,941,322 $ 4,719,799 ---------------------------------------------------------------------------------------------------------------------
While BOK Financial continues to increase geographic diversification through expansion into Texas and New Mexico, geographic concentration subjects the loan portfolio to the general economic conditions in Oklahoma. Notable loan concentrations by the primary industry of the borrowers are presented in Table 10. Agriculture includes $174 million of loans to the cattle industry. Services included loans totaling $111 million to the healthcare industry, $114 to nursing homes and $67 million to the hotel industry. Approximately 68% of the loan portfolio was attributed to Oklahoma and approximately 22% of the loan portfolio was attributed to Texas. Approximately 41% of commercial real estate loans was secured by property in Oklahoma, primarily in the Tulsa and Oklahoma City metropolitan areas. An additional 29% of commercial real estate loans was secured by property in Texas. The major components of other commercial real estate loans were office buildings, $258 million and retail facilities, $220 million. SUMMARY OF LOAN LOSS EXPERIENCE The reserve for loan losses, which is available to absorb losses inherent in the loan portfolio, totaled $87 million at March 31, 2001, $83 million at December 31, 2000 and $77.8 million at March 31, 2000. This represented 1.50%, 1.51% and 1.66% of total loans, excluding loans held for sale, at March 31, 2001, December 31, 2000 and March 31, 2000, respectively. Losses on loans held for sale, principally mortgage loans accumulated for placement in securitized pools, are charged to earnings through adjustments in carrying value to the lower of cost or market value in accordance with accounting standards applicable to mortgage banking. Table 11 presents statistical information regarding the reserve for loan losses for the past five quarters.
------------------------------------------------------------------------------------------------------------------- TABLE 11 - SUMMARY OF LOAN LOSS EXPERIENCE (In Thousands) Three Months Ended -------------------------------------------------------------------------------- March 31, Dec. 31, Sept. 30, June 30, March 31, 2001 2000 2000 2000 2000 -------------------------------------------------------------------------------- Beginning balance $ 82,655 $ 81,445 $ 79,405 $ 77,828 $ 76,234 Loans charged-off: Commercial 5,484 3,990 1,747 1,165 845 Commercial real estate 9 - 615 311 250 Residential mortgage 101 139 63 62 21 Consumer 1,698 1,605 1,511 1,329 1,148 ------------------------------------------------------------------------------------------------------------------- Total 7,292 5,734 3,936 2,867 2,264 ------------------------------------------------------------------------------------------------------------------- Recoveries of loans previously charged-off: Commercial 279 396 121 348 261 Commercial real estate 359 24 100 39 265 Residential mortgage 12 3 17 3 134 Consumer 649 521 707 520 559 ------------------------------------------------------------------------------------------------------------------- Total 1,299 944 945 910 1,219 ------------------------------------------------------------------------------------------------------------------- Net loans charged-off (recoveries) 5,993 4,790 2,991 1,957 1,045 Provision for loan losses 7,573 6,000 5,031 3,534 2,639 Additions due to acquisitions 2,300 - - - - ------------------------------------------------------------------------------------------------------------------- Ending balance $ 86,535 $ 82,655 $ 81,445 $ 79,405 $ 77,828 ------------------------------------------------------------------------------------------------------------------- Reserve to loans outstanding at period-end(1) 1.50% 1.51% 1.58% 1.63% 1.66% Net loan losses (annualized) to average loans (1) 0.42 0.22 0.24 0.16 0.09 ------------------------------------------------------------------------------------------------------------------- (1) Excludes residential mortgage loans held for sale which are carried at the lower of aggregate cost or market value.
The adequacy of the reserve for loan losses is assessed by management based upon an ongoing quarterly evaluation of the probable estimated losses inherent in the portfolio, including probable losses on both outstanding loans and unused financing commitments. A consistent methodology has been developed that includes reserves assigned to specific criticized loans, general reserves that are based upon a statistical migration analysis for each category of loans, and unallocated reserves that are based upon an analysis of current economic conditions, loan concentrations, portfolio growth, and other relevant factors. An independent Credit Administration department is responsible for performing this evaluation for all of BOK Financial's subsidiaries to ensure that the methodology is applied consistently. All significant criticized loans are reviewed quarterly. Written documentation of these reviews is maintained. Specific reserves for impairment are determined in accordance with generally accepted accounting principles and appropriate regulatory standards. At March 31, 2001 specific impairment reserves totaled $6.9 million on loans that totaled $18 million. The adequacy of the general loan loss reserve is determined primarily through an internally developed migration analysis model. Management uses an eight-quarter aggregate accumulation of net loan losses as the basis for this model. Greater emphasis is placed on net losses in the more recent periods. This model is used to assign general loan loss reserves to commercial loans and capital leases, residential loans, and consumer loans. All loans, capital leases, and letters of credit are allocated a migration factor by this model. Management can override the general allocation only by utilizing a specific allocation based on a measure of impairment of the loan. A nonspecific reserve for loan losses is maintained for risks beyond those factors specified to a particular loan or those identified by the migration analysis. These factors include trends in general economic conditions in BOK Financial's primary lending areas, duration of the business cycle, specific conditions in industries where BOK Financial has a concentration of loans, overall growth in the loan portfolio, bank regulatory examination results, error potential in either the migration analysis model or in the underlying data, and other relevant factors. A range of potential losses is then determined for each factor identified. At March 31, 2001 the loss potential for the more significant factors was: Concentration of large loans - $1.1 million to $2.1 million Loan portfolio growth and expansion into new markets - $1.1 million to $2.2 million A provision for loan losses is charged against earnings in amounts necessary to maintain an adequate reserve for loan losses. These provisions were $7.6 million for the first quarter of 2001, compared to $2.6 million for the first quarter of 2000. NONPERFORMING ASSETS Information regarding nonperforming assets, which totaled $58 million at March 31, 2001, $44 million at December 31, 2000 and $23 million at March 31, 2000, is presented in Table 12. Nonperforming loans included nonaccrual loans and renegotiated loans and excluded loans 90 days or more past due but still accruing. Newly identified nonaccrual loans totaled $18 million during the first quarter of 2001. This amount included $11 million for one borrower whose acquisition strategy was adversely affected by market conditions. Total nonaccrual loans were decreased by $2.6 million from gross charge-offs and $3.3 million from transfers to other nonperforming assets.
--------------------------------------------------------------------------------------------------------------------- TABLE 12 - NONPERFORMING ASSETS (In Thousands) March 31, Dec. 31, Sept. 30, June 30, March 31, 2001 2000 2000 2000 2000 ---------------------------------------------------------------------- Nonperforming assets: Nonperforming loans: Nonaccrual loans: Commercial $ 46,956 $ 37,146 $ 34,421 $ 21,445 $ 13,448 Commercial real estate 680 161 169 823 1,629 Residential mortgage 2,255 1,855 2,115 2,410 2,555 Consumer 218 499 474 709 970 --------------------------------------------------------------------------------------------------------------------- Total nonaccrual loans 50,109 39,661 37,179 25,387 18,602 Renegotiated loans 86 87 88 89 - --------------------------------------------------------------------------------------------------------------------- Total nonperforming loans 50,195 39,748 37,267 25,476 18,602 Other nonperforming assets 7,492 3,851 3,790 3,805 3,972 --------------------------------------------------------------------------------------------------------------------- Total nonperforming assets $ 57,687 $ 43,599 $ 41,057 $ 29,281 $ 22,574 --------------------------------------------------------------------------------------------------------------------- Ratios: Reserve for loan losses to nonperforming loans 172.40% 207.95% 219.06% 311.69% 418.39% Nonperforming loans to period-end loans (2) 0.87 0.73 0.73 0.52 0.40 --------------------------------------------------------------------------------------------------------------------- Loans past due 90 days (1) $ 14,750 $ 15,467 $ 10,931 $ 9,828 $ 9,704 --------------------------------------------------------------------------------------------------------------------- (1) Includes residential mortgages guaranteed by agencies of the U.S. Government $ 7,277 $ 7,616 $ 7,369 $ 7,363 $ 7,623 Excludes residential mortgages guaranteed by agencies of the U.S. Government in foreclosure 5,276 5,630 5,202 6,817 8,102 (2) Excludes residential mortgage loans held for sale ---------------------------------------------------------------------------------------------------------------------
The loan review process also identifies loans that possess more than the normal amount of risk due to deterioration in the financial condition of the borrower or the value of the collateral. Because the borrowers are performing in accordance with the original terms of the loan agreements and no loss of principal or interest is anticipated, such loans are not included in the Nonperforming Assets totals. However, known information causes management to have concerns as to the borrower's ability to comply with the current repayment terms. These potential problem loans totaled $40 million at March 31, 2001 and $24 million at December 31, 2000. Two loans represent $35 million of the total potential problem loans. Both are shared national credits to manufactures with ties to the local Oklahoma economy that have been experiencing financial difficulties. MARKET RISK Market risk is a broad term for the risk of economic loss due to adverse changes in the fair value of a financial instrument. These changes may be the result of various factors, including interest rates, foreign exchange rates, commodity prices, or equity prices. Additionally, the financial instruments subject to market risk can be classified either as held for trading or held for purposes other than trading. BOK Financial is subject to market risk primarily through the effect of changes in interest rates on its portfolio of assets held for purposes other than trading and trading assets. The effect of other changes, such as foreign exchange rates, commodity prices or equity prices, is not material to BOK Financial. The responsibility for managing market risk rests with the Asset/Liability Committee which operates under policy guidelines which have been established by the Board of Directors. The negative acceptable variation in net interest revenue and economic value of equity due to a 200 basis point increase or decrease in interest rates is limited by these guidelines to +/- 10%. These guidelines also establish maximum levels for short-term borrowings, short-term assets, and public and brokered deposits, and establish minimum levels for unpledged assets, among other things. Compliance with these guidelines is reviewed monthly. Interest Rate Risk Management (Other than Trading) BOK Financial performs a sensitivity analysis to identify more dynamic interest rate risk exposures, including embedded option positions, on net interest revenue, net income and economic value of equity. A simulation model is used to estimate the effect of changes in interest rates over the next twelve months based three interest rate scenarios. These are a "most likely" rate scenario and two "shock test" scenarios, the first assuming a sustained parallel 200 basis point increase and the second a sustained parallel 200 basis point decrease in interest rates. An independent source is used to determine the most likely interest rates for the next year. BOK Financial's primary interest rate exposures included the Federal Reserve Bank's discount rate which affects short-term borrowings and the prime lending rate and the London InterBank Offering Rate ("LIBOR") which are the basis for much of the variable-rate loan pricing. Additionally, BOK Financial has exposure to the 30-year mortgage rate, which directly affects the prepayment speeds for mortgage-backed securities and mortgage servicing rights. Derivative financial instruments and other financial instruments used for purposes other than trading are included in this simulation. The sensitivity of fee income to market interest rate levels, such as those related to cash management services and mortgage servicing, are included. The model incorporates management's assumptions regarding the level of interest rate or balance changes on indeterminable maturity deposits (demand deposits, interest-bearing transaction accounts and savings accounts) for a given level of market rate changes. The assumptions have been developed through a combination of historical analysis and future expected pricing behavior. Interest rate swaps on all products are included to the extent that they are effective in the 12-month simulation period. Additionally, changes in prepayment behavior of mortgage-backed securities, residential mortgage loans and mortgage servicing in each rate environment are captured using industry estimates of prepayment speeds for various coupon segments of the portfolio. Finally, the impact of planned growth and new business activities is factored into the simulation model. At March 31, 2001 and 2000, this modeling indicated interest rate sensitivity as follows:
Table 13 - Interest Rate Sensitivity (Dollars in Thousands) 200 bp Increase 200 bp Decrease Most Likely --------------------- -------------------- ------------------------ 2001 2000 2001 2000 2001 2000 --------------------- -------------------- ------------------------ Anticipated impact over the next twelve months: Net interest revenue $ 592 $ (2,521) $ (3,181) $ 3,990 $ (860) $ 522 0.2% (0.9)% (0.9)% 1.4% (0.3)% 0.2% ----------------------------------------------------------------------------------------------------- Net income $ 370 $ (1,576) $ (1,988) $ 2,494 $ (537) $ 326 0.3% (1.7)% (1.7)% 2.6% (0.4)% 0.3% ----------------------------------------------------------------------------------------------------- Economic value of equity $(36,867) $(34,188) $(42,356) $(5,025) $ 27,832 $(13,444) (2.9)% (3.0)% (3.3)% (0.4)% 2.2% (1.2)% -----------------------------------------------------------------------------------------------------
The estimated changes in interest rates on net interest revenue, net income, and economic value of equity was within guidelines established by the Board of Directors for all interest rate scenarios. BOK Financial hedges its portfolio of mortgage servicing rights by acquiring mortgage-backed and principal only securities whenever the prepayment risk exceeds certain levels. The fair value of these securities is expected to vary inversely to the value of the mortgage servicing rights. Management may sell these securities to recognize gains when necessary to offset losses on the mortgage servicing rights. At March 31, 2001, securities with a fair value of $196 million and an aggregate unrealized gain of $6.2 million were held for this program. The interest rate sensitivity of the mortgage servicing portfolio and the securities held as hedges is modeled over a range of +/- 50 basis points. At March 31, 2001, the pre-tax results of this modeling are: Table 14 - Mortgage Servicing Interest Rate Sensitivity (Dollars in Thousands) 50 bp increase 50 bp decrease ----------------- ------------------ Anticipated change in Mortgage servicing rights $13,220 $ (19,715) Hedging instruments (15,588) 16,350 ----------------- ------------------ Net mortgage servicing rights $ (2,368) $ (3,365) ----------------- ------------------ The simulations used to manage market risk are based on numerous assumptions regarding the effect of changes in interest rates on the timing and extent of repricing characteristics, future cash flows and customer behavior. These assumptions are inherently uncertain and, as a result, the model cannot precisely estimate net interest revenue, net income or economic value of equity or precisely predict the impact of higher or lower interest rates on net interest revenue, net income or economic value of equity. Actual results will differ from simulated results due to timing, magnitude and frequency of interest rate changes and changes in market conditions and management strategies, among other factors. BOK Financial uses interest rate swaps, a form of off-balance sheet derivative product, in managing its interest rate sensitivity. These products are generally used to match interest received or paid on certain long-term, fixed rate loans, certificates of deposit and subordinated debt with other variable rate assets and liabilities. These interest rate swaps are carried at fair value as shown in Table 15. Changes in fair value are recorded in current period income. BOK Financial accrues and periodically receives a fixed amount from the counterparties to these swaps and accrues and periodically makes a variable payment to the counterparties. Additionally, management has identified interest rate swaps with a notional amount of $150 million as a fair value hedge against the effect of changes in market interest rates on BOk's long-term, fixed rate debt. At March 31, 2001, the aggregate change in fair value of these interest rate swaps was $3.9 million and the change in fair value of the BOk debt associated with changes in the hedged risk was $4.4 million. ------------------------------------------------------------------------------- TABLE 15 - INTEREST RATE SWAPS (In thousands) Notional Pay Receive Fair Amount Rate Rate Value ----------------------------------------------------------------- Expiration: 2001 $ 4,324 5.03% 5.08% (1) $ (1) 2002 53,000 4.71 - 5.08 6.65 - 6.88 295 2003 52,400 4.88 7.35 - 7.91 150 2004 60,000 4.88 - 5.08 6.98 - 7.36 3,534 2006 91,500 4.88 - 7.26 4.88 - 5.99 (66) 2007 160,000 5.08 - 7.48 4.88 - 6.80 (1) 9,422 (1) Rates are variable based on LIBOR and reset monthly, quarterly or semiannually. Trading Activities BOK Financial enters into trading account activities both as an intermediary for customers and for its own account. As an intermediary, BOK Financial will take positions in securities, generally mortgage-backed securities, government agency securities, and municipal bonds. These securities are purchased for resale to customers, which include individuals, corporations, foundations, and other financial institutions. BOK Financial may also take trading positions in U.S. Treasury securities, mortgage-backed securities, municipal bonds, and financial futures for its own account through BOk and BOSC, Inc. These positions are taken with the objective of generating trading profits. Both of these activities involve interest rate risk. A variety of methods are used to manage the interest rate risk of trading activities. These methods include daily marking of all positions to market value, independent verification of inventory pricing, and position limits for each trading activity. Hedges in either the futures or cash markets may be used to reduce the risk associated with some trading positions. The Risk Management Department monitors trading activity daily and reports to senior management and the Risk Oversight and Audit Committee of the Board of Directors on any exceptions to trading position limits and risk management policy. BOK Financial uses a Value at Risk ("VAR") methodology to measure the market risk inherent in its trading activities. VAR is calculated based upon historical simulations over the past five years. It represents an amount of market loss that is likely to be exceeded only one out of every 100 two-week periods. Trading positions are managed within guidelines approved by the Board of Directors. These guidelines limit the nominal aggregate trading positions to $360 million, the VAR to $6.5 million. At March 31, 2001, the nominal aggregate trading positions was $37.5 million, the VAR was $618 thousand. BORROWINGS AND CAPITAL BOK Financial issued a $30 million subordinated debenture due on March 23, 2008 to its principal shareholder, George B. Kaiser, during the first quarter of 2001. Interest is based on LIBOR plus 1.75% and is payable quarterly. BOK Financial contributed $25 million from the proceeds of this debenture to BOk to support its asset growth and $5 million was retained to fund operating expenses. The amount of dividends which BOK Financial's subsidiary banks can declare are limited by various banking regulations. Generally, dividends declared during a calendar year are limited to net profits, as defined, for the year plus retained profits for the preceding two years. The amount of dividends is further restricted by minimum capital requirements. BOk declared and paid a $92 million dividend during the first quarter of 2001 to fund the CNBT acquisition. At March 31, 2001, the subsidiary banks could pay dividends of $20 million under management's most restrictive assessment of capital requirements. BOK Financial has sufficient cash available to fund its short-term obligations. For a banking institution to qualify as well capitalized, its Tier 1, Total and Leverage capital ratios must be at least 6%, 10% and 5%, respectively. All of BOK Financial's banking subsidiaries exceeded the regulatory definition of well capitalized at March 31, 2001. BOK Financial's capital ratios are presented in Table 16. -------------------------------------------------------------------------------- TABLE 16 - CAPITAL RATIOS March 31, Dec. 31, Sept. 30, June 30, March 31, 2001 2000 2000 2000 2000 --------------------------------------------------- Average shareholders' equity to average assets 7.31% 7.00% 6.89% 6.79% 6.71% Risk-based capital: Tier 1 capital 7.39 8.06 8.14 7.80 7.45 Total capital 10.89 11.23 11.49 11.15 10.80 Leverage 5.73 6.51 6.48 6.23 6.06 -------------------------------------------------------------------------------- NEW ACCOUNTING STANDARDS During 1998, the Financial Accounting Standards Board adopted Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("FAS 133"), subsequently amended by Statements No. 137 and 138. BOK Financial adopted FAS 133 effective January 1, 2001. All derivative instruments are now recognized on the balance sheet at fair value. Derivatives that do not qualify for special hedge accounting treatment are adjusted to fair value through income. BOK Financial recorded a one-time after-tax transition adjustment that increased income by $236 thousand for the adoption of FAS 133. The pre-tax effect of the fair value adjustments required by FAS 133 since the transition date totaled $646 thousand. In 1999, the Financial Accounting Standards Board issued a proposed statement of financial accounting standards for business combinations and intangible assets. This standard would eliminate the pooling of interests method of accounting for business combinations. All business combinations initiated after the issuance date of the statement would be accounted for by the purchase method. In 2001, the Financial Accounting Standards Board issued a limited revision to this proposed standard that addresses accounting for goodwill. This revision would eliminate the requirement to amortize goodwill over an arbitrary period. Goodwill would be carried as an asset and would be tested for impairment when circumstances indicated that the goodwill might be impaired. Other identifiable intangible assets that have finite lives will continue to be amortized. The pro forma effect of this proposed standard on previously reported earnings are (dollars in thousand, except per share data): TABLE 17 - TANGIBLE RESULTS Quarters ended March 31, --------------------------- 2001 2000 ----------------------------- Net income $ 29,538 $ 26,374 Diluted earnings per share 0.53 0.47 Return on average equity 16.57% 18.90% Return on average assets 1.21 1.27 FORWARD LOOKING STATEMENTS This quarterly report contains forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates, and projections about BOK Financial, the financial services industry, and the economy in general. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "plans," "projects," variations of such words, and similar expressions are intended to identify such forward-looking statements. Management judgments relating to, and discussion of the provision and reserve for loan losses involve judgments as to future events and are inherently forward-looking statements. Assessments that BOK Financial's acquisitions and other growth endeavors will be profitable are necessary statements of belief as to the outcome of future events, based in part on information provided by others which BOK Financial has not independently verified. These statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions which are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what is expressed, implied or forecasted in such forward-looking statements. Internal and external factors that might cause such a difference include, but are not limited to, (1) the ability to fully realize expected cost savings from mergers within the expected time frames, (2) the ability of other companies on which BOK Financial relies to provide goods and services in a timely and accurate manner, (3) changes in interest rates and interest rate relationships, (4) demand for products and services, (5) the degree of competition by traditional and nontraditional competitors, (6) changes in banking regulations, tax laws, prices, levies, and assessments, (7) the impact of technological advances, and (8) trends in customer behavior as well as their ability to repay loans. BOK Financial and its affiliates undertake no obligation to update, amend, or clarify forward-looking statements, whether as a result of new information, future events, or otherwise. REPORT OF MANAGEMENT ON CONSOLIDATED FINANCIAL STATEMENTS Management is responsible for the consolidated financial statements which have been prepared in accordance with generally accepted accounting principles. In management's opinion, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial condition, results of operations and cash flows of BOK Financial and its subsidiaries at the dates and for the periods presented. The financial information included in this interim report has been prepared by management without audit by independent public accountants and should be read in conjunction with BOK Financial's 2000 Form 10-K filed with the Securities and Exchange Commission which contains audited financial statements. -------------------------------------------------------------------------------- Consolidated Statement of Earnings - UNAUDITED (In Thousands Except Share Data) Three Months Ended March 31, ------------------------------- 2001 2000 ------------------------------- Interest Revenue Loans $ 125,104 $ 101,038 Taxable securities 46,904 40,276 Tax-exempt securities 3,506 2,967 -------------------------------------------------------------------------------- Total securities 50,410 43,243 -------------------------------------------------------------------------------- Trading securities 341 360 Funds sold 423 703 -------------------------------------------------------------------------------- Total interest revenue 176,278 145,344 -------------------------------------------------------------------------------- Interest Expense Deposits 60,891 46,036 Other borrowings 37,334 33,116 Subordinated debenture 2,441 2,514 -------------------------------------------------------------------------------- Total interest expense 100,666 81,666 -------------------------------------------------------------------------------- Net Interest Revenue 75,612 63,678 Provision for Loan Losses 7,573 2,639 -------------------------------------------------------------------------------- Net Interest Revenue After Provision for Loan Losses 68,039 61,039 -------------------------------------------------------------------------------- Other Operating Revenue Brokerage and trading revenue 5,100 4,426 Transaction card revenue 9,902 8,620 Trust fees and commissions 9,937 9,523 Service charges and fees on deposit accounts 11,789 10,255 Mortgage banking revenue, net 10,833 7,834 Leasing revenue 1,119 744 Other revenue 5,221 4,973 -------------------------------------------------------------------------------- Total fees and commissions revenue 53,901 46,375 -------------------------------------------------------------------------------- Gain on sale of student loans 521 433 Securities gains (losses), net 13,280 (17) -------------------------------------------------------------------------------- Total other operating revenue 67,702 46,791 -------------------------------------------------------------------------------- Other Operating Expense Personnel 39,936 37,289 Business promotion 2,872 2,335 Professional fees and services 3,057 2,318 Net occupancy & equipment 10,343 8,500 Data processing & communications 9,373 8,520 FDIC and other insurance 443 380 Printing, postage and supplies 2,991 2,811 Net (gains) losses and operating expenses of repossessed assets 29 (583) Amortization of intangible assets 5,027 4,078 Mortgage banking costs 6,418 5,437 Provision for impairment of mortgage servicing rights 9,723 - Other expense 3,574 3,531 -------------------------------------------------------------------------------- Total other operating expense 93,786 74,616 -------------------------------------------------------------------------------- Income Before Taxes 41,955 33,214 Federal and state income tax 14,789 8,401 -------------------------------------------------------------------------------- Income before cumulative effect of a change in accounting principle, net of tax 27,166 24,813 Transition adjustment of adoption of FAS 133 236 - -------------------------------------------------------------------------------- Net Income $ 27,402 $ 24,813 -------------------------------------------------------------------------------- Earnings Per Share: Basic: Before cumulative effect of change in accounting principle $ 0.55 $ 0.50 Transition adjustment of adoption of FAS 133 - - -------------------------------------------------------------------------------- Net Income $ 0.55 $ 0.50 -------------------------------------------------------------------------------- Diluted: Before cumulative effect of change in accounting principle $ 0.49 $ 0.45 Transition adjustment of adoption of FAS 133 - - -------------------------------------------------------------------------------- Net Income $ 0.49 $ 0.45 -------------------------------------------------------------------------------- Average Shares Used in Computation: Basic 49,298,201 49,185,789 -------------------------------------------------------------------------------- Diluted 55,898,108 55,659,829 -------------------------------------------------------------------------------- See accompanying notes to consolidated financial statements.
-------------------------------------------------------------------------------------------------------------------- CONSOLIDATED BALANCE SHEETS - UNAUDITED (In Thousands Except Share Data) March 31, December 31, March 31, 2001 2000 2000 -------------------------------------------------- ASSETS Cash and due from banks $ 484,380 $ 701,424 $ 438,256 Funds sold 7,150 49,305 30,685 Trading securities 12,449 39,865 15,043 Securities: Available for sale 2,205,836 2,105,619 1,832,936 Available for sale securities pledged to creditors 748,522 658,201 771,648 Investments (fair value: March 31, 2001 - $213,114; December 31, 2000 -$233,867; March 31, 2000 - $204,519) 211,971 233,371 206,365 -------------------------------------------------------------------------------------------------------------------- Total securities 3,166,329 2,997,191 2,810,949 -------------------------------------------------------------------------------------------------------------------- Loans 5,877,282 5,517,862 4,719,799 Less reserve for loan losses 86,535 82,655 77,828 -------------------------------------------------------------------------------------------------------------------- Net loans 5,790,747 5,435,207 4,641,971 -------------------------------------------------------------------------------------------------------------------- Premises and equipment, net 143,001 132,066 120,167 Accrued revenue receivable 76,019 74,981 67,850 Excess cost over fair value of net assets acquired and core deposit premiums (net of accumulated amortization: March 31, 2001 - $85,797; December 31, 2000 - $80,770; March 31, 2000 - $69,370) 166,735 109,045 120,934 Mortgage servicing rights, net 100,526 110,791 112,998 Real estate and other repossessed assets 7,492 3,851 3,972 Bankers' acceptances 10,111 6,925 23,730 Other assets 80,686 87,683 163,090 -------------------------------------------------------------------------------------------------------------------- Total assets $ 10,045,625 $ 9,748,334 $ 8,549,645 -------------------------------------------------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Noninterest-bearing demand deposits $ 1,173,363 $ 1,243,766 $ 1,077,098 Interest-bearing deposits: Transaction 2,180,943 1,985,670 1,925,016 Savings 156,362 143,381 160,233 Time 3,059,109 2,673,188 2,348,881 -------------------------------------------------------------------------------------------------------------------- Total deposits 6,569,777 6,046,005 5,511,228 -------------------------------------------------------------------------------------------------------------------- Funds purchased and repurchase agreements 1,532,320 1,853,073 1,321,498 Other borrowings 887,205 882,204 880,083 Subordinated debentures 188,890 148,816 148,682 Accrued interest, taxes and expense 78,869 77,860 67,378 Bankers' acceptances 10,111 6,925 23,730 Other liabilities 30,179 29,875 20,098 -------------------------------------------------------------------------------------------------------------------- Total liabilities 9,297,351 9,044,758 7,972,697 -------------------------------------------------------------------------------------------------------------------- Shareholders' equity: Preferred stock 25 25 25 Common stock ($.00006 par value; 2,500,000,000 shares authorized; shares issued and outstanding March 31, 2001 - 49,848,953; December 31, 2000 - 49,706,055; March 31, 2000 -49,462,016) 3 3 3 Capital surplus 280,301 278,882 275,906 Retained earnings 458,417 431,390 357,189 Treasury stock (shares at cost: March 31, 2001 - 512,147; December 31, 2000 - 487,553; March 31, 2000 - 357,181) (10,684) (10,044) (7,844) Accumulated other comprehensive income (loss) 20,212 3,320 (48,331) -------------------------------------------------------------------------------------------------------------------- Total shareholders' equity 748,274 703,576 576,948 -------------------------------------------------------------------------------------------------------------------- Total liabilities and shareholders' equity $ 10,045,625 $ 9,748,334 $ 8,549,645 -------------------------------------------------------------------------------------------------------------------- See accompanying notes to consolidated financial statements.
------------------------------------------------------------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - UNAUDITED (In Thousands) Accumulated Other Preferred Stock Common Stock Comprehensive Capital Retained Treasury Stock ----------------------------------- -------------------- Shares Amount Shares Amount Income(loss) Surplus Earnings Shares Amount Total -------------------------------------------------------------------------------------------------- Balances at December 31, 1999 250,000 $ 25 49,382 $ 3 $(43,577) $274,980 $332,751 316 $(7,018) $ 557,164 Comprehensive income: Net income - - - - - - 24,813 - - 24,813 Other Comprehensive income, net of tax: Unrealized gains(loss) on securities available for sale (1) - - - - (4,754) - - - - (4,754) ---------- Total Comprehensive income 20,059 ---------- Exercise of stock options - - 63 - - 551 - 27 (544) 7 Preferred dividend paid in shares of common stock - - 17 - - 375 (375) - - - Director retainer shares - - - - - - - - - - Treasury stock purchase - - - - - - - 14 (282) (282) ------------------------------------------------------------------------------------------------------------------------------- Balance at March 31, 2000 250,000 $ 25 49,462 $ 3 $(48,331) $275,906 $357,189 357 $ (7,844)$ 576,948 ------------------------------------------------------------------------------------------------------------------------------- Balances at December 31, 2000 250,000 $ 25 49,706 $ 3 $ 3,320 $278,882 $431,390 488 $(10,044)$ 703,576 Comprehensive income: Net income - - - - - - 27,402 - - 27,402 Other Comprehensive income, net of tax: Unrealized gains(loss) on securities available for sale (1) - - - - 16,892 - - - - 16,892 ---------- Total Comprehensive income 44,294 ---------- Director retainer shares - - - - - 8 - (4) 68 76 Exercise of stock options - - 143 - - 1,422 - 49 (1,094) 328 Preferred stock dividend paid in shares of common stock - - - - - (11) (375) (21) 386 - ------------------------------------------------------------------------------------------------------------------------------- Balances at March 31, 2001 250,000 $ 25 49,849 $ 3 $20,212 $280,301 $458,417 512 $(10,684) $748,274 -------------------------------------------------------------------------------------------------------------------------------
(1) March 31, 2001 March 31, 2000 -------------- -------------- Reclassification adjustments: Unrealized gains (losses) on available for sale securities $ 25,079 $ (4,767) Less: reclassification adjustment for gains realized 8,187 (13) included in net income, net of tax ---------------------------------- Net unrealized gains (losses) on securities $ 16,892 $ (4,754) ---------------------------------- See accompanying notes to consolidated financial statements. ---------------------------------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED (In Thousands) Three Months Ended March 31, -------------------------------------- 2001 2000 -------------------------------------- Cash Flow From Operating Activities: Net income $ 27,402 $ 24,813 Adjustments to reconcile net income to net cash provided by operating activities: Provision for loan losses 7,573 2,639 Provision for mortgage servicing rights 9,723 - Depreciation and amortization 15,183 12,406 Tax reserve reversal - 3,000 Net amortization of security discounts and premiums (1,823) (115) Net gain on sale of assets (17,173) (1,805) Mortgage loans originated for resale (187,637) (105,853) Proceeds from sale of mortgage loans held for resale 146,343 121,594 Change in trading securities 27,416 (310) Change in accrued revenue receivable (1,038) (17) Change in other assets (2,265) 14,822 Change in accrued interest, taxes and expense 1,009 4,947 Change in other liabilities 36,101 (10,021) ---------------------------------------------------------------------------------------------------- Net cash provided by operating activities 60,814 66,100 ---------------------------------------------------------------------------------------------------- Cash Flow From Investing Activities: Proceeds from maturities of investment securities 24,220 12,502 Proceeds from maturities of available for sale securities 473,109 45,817 Purchases of investment securities (2,874) (5,728) Purchases of available for sale securities (1,579,940) (120,901) Proceeds from sales of available for sale securities 1,186,163 36,300 Loans originated or acquired net or principal collected (180,564) (176,733) Proceeds from disposition of assets 51,908 43,508 Purchases of assets (20,197) (24,426) Cash and cash equivalents of branches & subsidiaries acquired and sold, net (73,475) - ---------------------------------------------------------------------------------------------------- Net cash used by investing activities (121,650) (189,661) ---------------------------------------------------------------------------------------------------- Cash Flows From Financing Activities: Net change in demand deposits, transaction deposits, money market deposits, and savings accounts (227,936) 119,013 Net change in certificates of deposit 385,921 129,031 Net change in other borrowings (356,752) (82,122) Purchase of treasury stock - (282) Issuance of preferred, common and treasury stock, net 404 7 ---------------------------------------------------------------------------------------------------- Net cash provided by financing activities (198,363) 165,647 ---------------------------------------------------------------------------------------------------- Net change in cash and cash equivalents (259,199) 42,086 Cash and cash equivalents at beginning of period 750,729 426,855 ---------------------------------------------------------------------------------------------------- Cash and cash equivalents at end of period $ 491,530 $ 468,941 ---------------------------------------------------------------------------------------------------- Cash paid for interest $ 95,568 $ 76,726 ---------------------------------------------------------------------------------------------------- Cash paid for taxes $ 2,389 $ 2,896 ---------------------------------------------------------------------------------------------------- Net loans transferred to repossessed real estate and other assets $ 3,899 $ 869 ---------------------------------------------------------------------------------------------------- Payment of preferred stock dividends in common stock $ 375 $ 375 ---------------------------------------------------------------------------------------------------- See accompanying notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED (1) ACCOUNTING POLICIES Basis of Presentation The accounting and reporting policies of BOK Financial Corporation conform to generally accepted accounting principles and to generally accepted practices within the banking industry. The Consolidated Financial Statements of BOK Financial include the accounts of BOK Financial and its subsidiaries, primarily Bank of Oklahoma, N.A. ("BOk"), Bank of Arkansas N.A., Bank of Texas, N.A., and Bank of Albuquerque, N.A. Certain prior period balances have been reclassified to conform with the current period presentation. Derivative Instruments Derivative instruments, primarily interest rate swaps and forward sales contracts, are uses as part of an interest rate risk management strategy. Interest rate swaps are used to modify the interest income and expense on certain long-term, fixed rate assets and liabilities. Amounts payable to or receivable from the counterparties are reported in interest income and expense using the accrual method. The fair value of the interest rate swaps is included in other assets or liabilities. Changes in the fair value of interest rate swaps are included in other operating revenue. In certain circumstance, interest rate swaps may be designated as hedges and may qualify for hedge accounting. Changes in the fair value of the hedged asset or liability that are attributable to the hedged risk are reported in other operating revenue. Hedges are considered to be effective if the cumulative fair value adjustments of the interest rate swaps are within a range of 80% to 120% of the cumulative fair value adjustment of the hedged assets or liabilities. Forward sales contracts are used to hedge existing and anticipated loans in conjunction with mortgage banking activities. The fair value of these contracts is included in determining the adjustment of the loans held for sale portfolio to the lower of cost or market. Changes in the fair value of these contracts are included in other operating revenue. Additionally, energy swaps are used to assist certain customers in hedging their risk of adverse changes in natural gas and oil prices. BOK Financial serves as an intermediary between its energy customers and the commodities market by arranging fixed price / floating price swaps. Each swap between BOK Financial and its customer is exactly offset by a swap between BOK Financial and the commodities market. Fee income is recognized over the life of the swaps. (2) ACQUISITIONS On January 11, 2001, BOK Financial paid $91 million to acquire all outstanding common shares of CNBT Bancshares, Inc. and its subsidiary Citizen National Bank of Texas in Houston, (collectively "CNBT"). This acquisition was accounted for by the purchase method of accounting. Allocation of the purchase price to the net assets acquired were as follows (in thousands): Cash and cash equivalents $ 17,973 Securities 227,244 Loans 184,461 Less reserve for loan losses 2,300 ---------------- Loans, net 182,161 Premises and equipment 11,032 Core deposit premium 13,715 Other assets 4,602 ---------------- Total assets acquired 456,727 Deposits: Noninterest bearing 78,482 Interest bearing 287,305 ---------------- Total deposits 365,787 Borrowed funds 41,000 Other liabilities 7,495 ---------------- Net assets acquired 42,445 Less purchase price 91,448 ---------------- Goodwill $ 49,003 ---------------- (3) MORTGAGE BANKING ACTIVITIES At March 31, 2001, BOk owned the rights to service 91,961 mortgage loans with outstanding principal balances of $6.8 billion, including $205.2 million serviced for BOk. The weighted average interest rate and remaining term was 7.46% and 271 months, respectively. Activity in capitalized mortgage servicing rights and related valuation allowance during the three months ending March 31, 2001 is as follows:
Capitalized Mortgage Servicing Rights ----------------------------------------------------------------------------------------- Valuation Hedging Purchased Originated Total Allowance Loss Net ---------------- ------------ --------------- -------------- ---------------- ----------- Balance at December 31, 2000 $ 69,238 $ 34,448 $ 103,686 $ (2,900) $ 10,005 $ 110,791 Additions 1,182 3,085 4,267 - - 4,267 Amortization expense (3,051) (1,402) (4,453) - (356) (4,809) Provision for impairment (9,723) - (9,723) ------------------------------- --- ---------- -- ---------- -- ---------- -- -------------- -- ---------- -- ----------- Balance at March 31, 2001 $ 67,369 $ 36,131 $ 103,500 $ (12,623) $ 9,649 $ 100,526 ------------------------------- --- ---------- -- ---------- -- ---------- -- -------------- -- ---------- -- ----------- Estimated fair value of mortgage servicing rights (1) $ 63,718 $ 39,773 $ 103,491 $ 103,491 ------------------------------- --- ---------- -- ---------- -- ---------- -- -------------- -- ---------- -- -----------
(1) Excludes approximately $6.5 million of loan servicing rights on mortgage loans originated prior to the adoption of FAS 122. Stratification of the mortgage loan servicing portfolio, outstanding principal of loans serviced, and related hedging information by interest rate at March 31, 2001 follows (in thousands): Less than 6.50% 6.50% - 7.49% 7.50% - 8.49% => 8.50% Total ------------- ----------------- ----------------- ------------- ------------- Cost less accumulated amortization $ 10,558 $ 58,650 $ 31,695 $ 2,597 $ 103,500 Deferred hedge losses - 8,040 1,609 - 9,649 ---------------------------------------- ------------- ----------------- ----------------- ------------- ------------- Adjusted cost $ 10,558 $ 66,690 $ 33,304 $ 2,597 $ 113,149 ---------------------------------------- ------------- ----------------- ----------------- ------------- ------------- Fair value $ 11,065 $ 62,717 $ 26,169 $ 3,540 $ 103,491 ---------------------------------------- ------------- ----------------- ----------------- ------------- ------------- Impairment (2) $ 703 $ 4,664 $ 7,212 $ 44 $ 12,623 ---------------------------------------- ------------- ----------------- ----------------- ------------- ------------- Outstanding principal of loans serviced (in millions) (1) $ 617,500 $3,597,200 $1,885,000 $ 245,400 $6,345,100 ---------------------------------------- ------------- ----------------- ----------------- ------------- ------------- (1) Excludes outstanding principal of $407.7 million for loans serviced for which there is no capitalized mortgage servicing rights. (2) Impairment is determined by both an interest rate and loan type statification.
(4) DISPOSAL OF AVAILABLE FOR SALE SECURITIES Sales of available for sale securities resulted in gains and losses as follows (in thousands): Three Months Ended March 31, ----------------------------------- 2001 2000 --------------- ---------------- Proceeds $ 1,186,163 $ 36,300 Gross realized gains 15,109 30 Gross realized losses 2,475 47 Related federal and state income tax expense (benefit) 4,447 (4) (5) EARNINGS PER SHARE The following table presents the computation of basic and diluted earnings per share (dollars in thousands except share data): Three Months Ended -------------------------- March 31, March 31, 2001 2000 -------------------------- Numerator: Net income $ 27,402 $ 24,813 Preferred stock dividends (375) (375) -------------------------------------------------------------------------------- Numerator for basic earnings per share - income available to common stockholders 27,027 24,438 -------------------------------------------------------------------------------- Effect of dilutive securities: Preferred stock dividends 375 375 -------------------------------------------------------------------------------- Numerator for diluted earnings per share - income available to common stockholders after assumed conversion $ 27,402 $ 24,813 -------------------------------------------------------------------------------- Denominator: Denominator for basic earnings per share -weighted average shares 49,298,201 49,185,789 Effect of dilutive securities: Employee stock options 450,542 324,675 Convertible preferred stock 6,149,365 6,149,365 -------------------------------------------------------------------------------- Dilutive potential common shares 6,599,907 6,474,040 -------------------------------------------------------------------------------- Denominator for diluted earnings per share - adjusted weighted average shares and assumed conversions 55,898,108 55,659,829 -------------------------------------------------------------------------------- Basic earnings per share $ 0.55 $ 0.50 -------------------------------------------------------------------------------- Diluted earnings per share $ 0.49 $ 0.45 -------------------------------------------------------------------------------- (1) Excludes employee stock options with exercise price greater than current market price - 1,692,850 (6) SHAREHOLDER'S EQUITY On April 24, 2001, the Board of Directors of BOK Financial declared a 3% stock dividend payable in shares of BOK Financial common stock. The dividend is payable on May 18, 2001 to shareholders of record on May 7, 2001. Generally accepted accounting principles require earnings per share information to be retroactively restated to reflect the new capital structure upon consummation of a stock dividend. Accordingly, for all financial statements issued after May 18, 2001, earnings per share will be restated as follows: Fully Diluted Earnings Per Share: As Reported Restated 2000: 1st Quarter $ 0.45 $ 0.43 2nd Quarter 0.43 0.42 3rd Quarter 0.46 0.45 4th Quarter 0.46 0.44 Year Ended December 31 1.80 1.75 2001: 1st Quarter $ 0.49 $ 0.48 (7) DERIVATIVE INSTRUMENTS Interest rate swaps - BOK Financial had interest rate swaps with gross positive fair values of $13.9 million and gross negative fair values of $555 thousand at March 31, 2001. This included swaps with a gross positive fair value of $9.8 million that have been designated as a fair value hedge against the effect of changes in interest rates on BOk's subordinated debenture. The fair value adjustment of the BOk debenture attributable to the hedged risk was $10.0 million. Changes in the fair values of interest rate swaps during the first quarter of 2001, excluding the transition adjustment, increased pre-tax income by $5.0 million, including $3.9 million from the swaps designated as a hedge. Changes in fair value of the BOk subordinated debenture decreased pre-tax income by $4.4 million. Energy swaps - The gross positive and negative fair values of energy swaps between BOK Financial and its customers and between BOK Financial and the commodities market was $1.9 million at March 31, 2001. The changes in fair value of these contracts had no effect on income. Forward sales contracts - The fair value adjustments for forward sales contracts reduced pre-tax income by $385 thousand during the first quarter of 2001. (8) REPORTABLE SEGMENTS Reportable segments reconciliation to the Consolidated Financial Statements for the three months ended March 31, 2001 is as follows:
Other Other Net Interest Operating Operating Average Revenue Revenue Expense Assets -------------------------------------------------------------------- Total reportable lines of business $ 78,845 $ 51,255 $ 80,903 $ 10,191,054 Total non-reportable lines of business 236 13,972 10,136 31,672 Unallocated items: Tax-equivalent adjustment 2,075 - - - Funds management 270 2,658 1,516 141,367 Eliminations and all others, net (5,814) (183) 1,231 (473,380) -------------------------------------------------------------------- BOK Financial consolidated $ 75,612 $ 67,702 $ 93,786 $ 9,890,713 ====================================================================
Reportable segments reconciliation to the Consolidated Financial Statements for the three months ended March 31, 2000 is as follows:
Other Other Net Interest Operating Operating Average Revenue Revenue Expense Assets -------------------------------------------------------------------- Total reportable lines of business $ 61,469 $ 33,908 $ 61,710 $ 8,379,832 Total non-reportable lines of business 133 12,472 9,450 29,507 Unallocated items: Tax-equivalent adjustment 1,867 - - - Funds management 4,973 291 2,564 224,827 Eliminations and all others, net (4,764) 120 892 (281,821) -------------------------------------------------------------------- BOK Financial consolidated $ 63,678 $ 46,791 $ 74,616 $ 8,352,345 ====================================================================
(9) CONTINGENT LIABILITIES In the ordinary course of business, BOK Financial and its subsidiaries are subject to legal actions and complaints. Management believes, based upon the opinion of counsel, that the actions and liability or loss, if any, resulting from the final outcomes of the proceedings, will not be material in the aggregate. ------------------------------------------------------------------------------------------------------------------------------ QUARTERLY FINANCIAL SUMMARY - UNAUDITED Consolidated Daily Average Balances, Average Yields and Rates (In Thousands Except Share Data) For Three months ended ------------------------------------------------------------------------------------- March 31, 2001 December 31, 2000 ------------------------------------------ ------------------------------------- Average Revenue/ Yield Average Revenue/ Yield Balance Expense(1) /Rate Balance Expense(1) /Rate ------------------------------------------------------------------------------------- Assets Taxable securities $ 2,910,580 46,902 6.54% $ 2,654,996 $ 43,345 6.49% Tax-exempt securities(1) 282,656 5,266 7.56 276,478 5,172 7.44 ------------------------------------------------------------------------------------------------------------------------------ Total securities 3,193,236 52,168 6.63 2,931,474 48,517 6.58 ------------------------------------------------------------------------------------------------------------------------------ Trading securities 18,421 400 8.81 18,458 405 8.73 Funds sold 28,063 423 6.11 45,310 788 6.92 Loans(2) 5,737,543 125,362 8.86 5,265,300 125,854 9.51 Less reserve for loan losses 86,156 83,246 ------------------------------------------------------------------------------------------------------------------------------ Loans, net of reserve 5,651,387 125,362 9.00 5,182,054 125,854 9.66 ------------------------------------------------------------------------------------------------------------------------------ Total earning assets 8,891,107 178,353 8.14 8,177,296 175,564 8.54 ------------------------------------------------------------------------------------------------------------------------------ Cash and other assets 999,606 955,024 ------------------------------------------------------------------------------------------------------------------------------ Total assets $ 9,890,713 $ 9,132,320 ------------------------------------------------------------------------------------------------------------------------------ Liabilities and Shareholders' Equity Transaction deposits $ 2,133,537 15,222 2.89% $ 1,910,167 $ 15,646 3.26% Savings deposits 151,392 648 1.74 143,969 673 1.86 Other time deposits 2,960,828 45,021 6.17 2,671,285 43,237 6.44 ------------------------------------------------------------------------------------------------------------------------------ Total interest-bearing deposits 5,245,757 60,891 4.71 4,725,421 59,556 5.01 ------------------------------------------------------------------------------------------------------------------------------ Other borrowings 2,606,177 37,334 5.81 2,503,706 42,080 6.69 Subordinated debenture 160,144 2,441 6.18 148,794 2,667 7.13 ------------------------------------------------------------------------------------------------------------------------------ Total interest-bearing liabilities 8,012,078 100,666 5.10 7,377,921 104,303 5.62 ------------------------------------------------------------------------------------------------------------------------------ Demand deposits 1,047,267 1,002,969 Other liabilities 108,514 86,403 Shareholders' equity 722,854 665,027 ------------------------------------------------------------------------------------------------------------------------------ Total liabilities and shareholders' $ 9,890,713 $ 9,132,320 Equity ------------------------------------------------------------------------------------------------------------------------------ Tax-Equivalent Net Interest Revenue (1) 77,687 3.04% $ 71,261 2.92% Tax-Equivalent Net Interest Revenue (1) To Earning Assets 3.54 3.47 Less tax-equivalent adjustment (1) 2,075 2,069 ------------------------------------------------------------------------------------------------------------------------------ Net Interest Revenue 75,612 69,192 Provision for loan losses 7,573 6,000 Other operating revenue 68,066 54,924 Other operating expense 93,786 79,318 ------------------------------------------------------------------------------------------------------------------------------ Income Before Taxes 42,319 38,798 Federal and state income tax 14,917 13,302 ------------------------------------------------------------------------------------------------------------------------------ Net Income $ 27,402 $ 25,496 ------------------------------------------------------------------------------------------------------------------------------ Earnings Per Share: Net Income Basic $ 0.55 $ 0.51 ------------------------------------------------------------------------------------------------------------------------------ Diluted $ 0.49 $ 0.46 ------------------------------------------------------------------------------------------------------------------------------ (1) Tax equivalent at the statutory federal and state rates for the periods presented. The taxable equivalent adjustments shown are for comparative purposes. (2) The loan averages include loans on which the accrual of interest has been discontinued and are stated net of unearned income.
-------------------------------------------------------------------------------------------------------------------------- For Three months ended -------------------------------------------------------------------------------------------------------------------------- September 30, 2000 June 30, 2000 March 31, 2000 -------------------------------------------------------------------------------------------------------------------------- Average Revenue/ Yield Average Revenue/ Yield Average Revenue/ Yield Balance Expense(1) /Rate Balance Expense(1) /Rate Balance Expense(1) /Rate -------------------------------------------------------------------------------------------------------------------------- $ 2,520,917 $ 41,135 6.49% $ 2,625,306 $ 42,738 6.55% $ 2,547,499 $ 40,275 6.36% 274,402 4,692 6.80 267,320 5,111 7.69 260,593 4,602 7.10 -------------------------------------------------------------------------------------------------------------------------- 2,795,319 45,827 6.52 2,892,626 47,849 6.65 2,808,092 44,877 6.43 -------------------------------------------------------------------------------------------------------------------------- 16,873 370 8.72 12,562 315 10.09 14,593 360 9.92 47,053 791 6.69 44,731 680 6.11 47,782 703 5.92 5,020,994 118,523 9.39 4,796,948 109,453 9.18 4,650,020 101,271 8.76 81,194 79,503 77,808 -------------------------------------------------------------------------------------------------------------------------- 4,939,800 118,523 9.55 4,717,445 109,453 9.33 4,572,212 101,271 8.91 -------------------------------------------------------------------------------------------------------------------------- 7,799,045 165,511 8.44 7,667,364 158,297 8.30 7,442,679 147,211 7.96 -------------------------------------------------------------------------------------------------------------------------- 910,737 920,169 909,666 -------------------------------------------------------------------------------------------------------------------------- $ 8,709,782 $ 8,587,533 $ 8,352,345 -------------------------------------------------------------------------------------------------------------------------- $ 1,916,712 13,684 2.84% $ 1,875,180 12,888 2.76% $ 1,856,644 12,801 2.77% 151,385 700 1.84 156,369 658 1.69 155,848 672 1.73 2,510,655 39,475 6.26 2,431,978 35,252 5.83 2,364,126 32,563 5.54 -------------------------------------------------------------------------------------------------------------------------- 4,578,752 53,859 4.68 4,463,527 48,798 4.40 4,376,618 46,036 4.23 -------------------------------------------------------------------------------------------------------------------------- 2,299,155 38,867 6.73 2,318,426 37,094 6.44 2,216,244 33,116 6.01 148,750 2,704 7.23 148,705 2,552 6.90 148,663 2,514 6.80 -------------------------------------------------------------------------------------------------------------------------- 7,026,657 95,430 5.40 6,930,658 88,444 5.13 6,741,525 81,666 4.87 -------------------------------------------------------------------------------------------------------------------------- 974,478 989,716 954,307 87,439 82,438 95,268 621,208 584,721 561,245 -------------------------------------------------------------------------------------------------------------------------- $ 8,709,782 $ 8,587,533 $ 8,352,345 -------------------------------------------------------------------------------------------------------------------------- $ 70,081 3.04% $69,853 3.17% $ 65,545 3.08% 3.05 3.57 3.66 3.54 1,934 1,983 1,867 -------------------------------------------------------------------------------------------------------------------------- 68,147 67,870 63,678 5,031 3,534 2,639 49,840 47,348 46,791 73,964 74,917 74,616 -------------------------------------------------------------------------------------------------------------------------- 38,992 36,767 33,214 13,355 12,573 8,401 -------------------------------------------------------------------------------------------------------------------------- $ 25,637 $ 24,194 $ 24,813 -------------------------------------------------------------------------------------------------------------------------- $ 0.51 $ 0.48 $ 0.50 -------------------------------------------------------------------------------------------------------------------------- $ 0.46 $ 0.43 $ 0.45 --------------------------------------------------------------------------------------------------------------------------
PART II. Other Information Item 6. Exhibits and Reports on Form 8-K (A) Exhibits: None. (B) Reports on Form 8-K: No reports on Form 8-K were filed during the three months ended March 31, 2001. 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. BOK FINANCIAL CORPORATION (Registrant) Date: May 15, 2001 /s/ Steven E. Nell Steven E. Nell Executive Vice President and Chief Financial Officer /s/ John C. Morrow John C. Morrow Senior Vice President and Director of Financial Accounting & Reporting