As filed with the Securities and Exchange Commission on August 13, 1996
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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 June 30,1996
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 ($.00006 Par Value)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest practicable date: 20,462,446 shares of
common stock ($.00006 par value) as of July 31, 1996.
================================================================================
<PAGE>
BOK Financial Corporation
Form 10-Q
Quarter Ended June 30, 1996
Index
Part I. Financial Information
Management's Discussion and Analysis
of Financial Condition and
Results of Operations 2
Report of Management on Consolidated
Financial Statements 12
Consolidated Statements of Earnings 13
Consolidated Balance Sheets 14
Consolidated Statements of Changes
in Shareholders' Equity 15
Consolidated Statements of Cash Flows 16
Notes to Consolidated Financial Statements 17
Financial Summaries - Unaudited 19
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K 22
Signature 22
MANAGEMENT'S DISCUSSION AND ANALYSIS
HIGHLIGHTS
BOK Financial Corporation ("BOK Financial")recorded net income of $13.6 million
or $0.58 per fully diluted common share for the second quarter of 1996 compared
to $12.1 million or $0.52 per fully diluted common share for the second quarter
of 1995. Returns on average assets and equity were 1.29% and 17.51%,
respectively, for the second quarter of 1996. This is compared to returns on
average assets and equity of 1.20% and 18.35%, respectively, for the same
period in 1995.
Year to date net income and earnings per fully diluted common share were $26.6
million or $1.14, respectively for 1996 compared to $24.0 million or $1.03,
respectively for 1995.
RESULTS OF OPERATIONS
Net interest revenue on a tax-equivalent basis was $34.4 million for the second
quarter of 1996 compared to $30.1 million for the second quarter of 1995, an
increase of $4.3 million or 14.3%. Average earning assets increased by $188
million while interest bearing liabilities increased $109 million. Total
interest-bearing liabilities as a percent of earning assets decreased to 86.0%
from 87.4% due to increases in both average demand deposits and equity.
Concurrently, average loans increased by $275 million or 14.1%.Total loans, net
of allowance, now comprise 57.6% of average earning assets, an increase from
53.1% in the second quarter of 1995. The increase in average earning assets and
the improvement in asset mix increased interest income by $4.9 million. This
2
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increase was partially offset by lower aggregate yields on earning assets of
$1.7 million.
Since the second quarter of 1995, management has taken steps to reduce BOK
Financial's reliance on borrowed funds and to increase deposits as a source of
funding. Average interest-bearing deposits increased $468 million or 22.6%
compared to the second quarter of 1995 while borrowed funds decreased $359
million or 32.9%. This improvement in the mix of interest-bearing liabilities
also contributed to the increase in net interest revenue. Additionally,
interest rate swaps which hedge against interest rate risk on certain long-term
certificates of deposit, reduced interest expense for the second quarter and
year to date, 1996 by $446 thousand and $672 thousand, respectively.
- --------------------------------------------------------------------------------
TABLE 1 - VOLUME/RATE ANALYSIS
(In thousands)
Three months ended Six months ended
June 30, 1996/1995 June 30, 1996/1995
-------------------------------------------------------
-----Due to----- -----Due to----
Yield Yield
Change Volume /Rate Change Volume /Rate
-------------------------------------------------------
Tax-equivalent interest
revenue:
Securities $ (2,251) $(1,708) $ (543)$ (4,407) $(2,759)$(1,649)
Trading securities 28 29 (1) 76 76 0
Loans 5,086 6,127 (1,041) 11,952 13,427 (1,474)
Funds sold 361 426 (65) 417 486 (69)
- -------------------------------------------------------------------------------
Total 3,224 4,874 (1,650) 8,038 11,230 (3,192)
- -------------------------------------------------------------------------------
Interest expense:
Transaction deposits (1,993) (2,785) 792 (2,657) (2,998) 341
Money market deposits 2,599 3,518 (919) 3,748 4,761 (1,013)
Savings deposits (114) (121) 7 (340) (280) (60)
Time deposits 5,125 5,740 (615) 11,291 10,703 588
Other borrowings (6,701) (5,279) (1,422) (10,517) (8,041) (2,476)
Subordinated debenture (12) (12) 0 (352) (352) 0
- -------------------------------------------------------------------------------
Total (1,096) 1,061 (2,157) 1,173 3,793 (2,620)
- -------------------------------------------------------------------------------
Tax-equivalent net
interest revenue $ 4,320 $ 3,813 $ 507 $ 6,865 $ 7,437 (572)
Change in tax-equivalent
adjustment 232 378
- -------------------------------------------------------------------------------
Net interest revenue $ 4,088 $ 6,487
===============================================================================
(1) Changes attributable to both volume and yield 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 3.64% for the second quarter of 1996. This is compared to 3.34% in the
same quarter of 1995 and 3.53% for the first quarter of 1996. The improvement
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in net interest margin continues to be due primarily to the change in mix of
interest-bearing liabilities. While the yield on average earning assets
decreased slightly compared to the second quarter of 1995, the cost of interest
bearing liabilities decreased 29 basis points. This decrease in the cost of
funds contributed $2.2 million to the increase in net interest revenue.
Year to date tax equivalent net interest revenue was $67.1 million, a $6.9
million or 11.4% increase from the first half of 1995. Growth in average
earning assets and improvement in the mix of earning assets contributed $11.2
million, partially offset by lower yield. Increases in average interest-bearing
liabilities between the two periods were substantially reduced by lower rates.
- ------------------------------------------------------------------------------
TABLE 2 - OTHER OPERATING REVENUE
(In thousands)
Three Months Ended
-----------------------------------------------------
JUNE 30, March 31, Dec. 30, Sept. 30, June 30,
1996 1996 1995 1995 1995
-----------------------------------------------------
Brokerage and trading
revenue $ 1,823 $ 2,078 $ 1,518 $ 1,808 $ 1,431
TransFund network revenue 2,153 2,096 1,880 1,867 1,729
Securities gains (losses),
net (1,967) (18) 0 948 226
Trust fees and commissions 5,528 5,469 5,014 4,731 4,616
Service charges and fees
on deposit accounts 5,732 5,839 5,697 5,205 5,150
Mortgage banking revenue 6,056 5,869 5,905 4,850 5,297
Other revenue 4,641 5,251 3,937 3,776 3,408
- -------------------------------------------------------------------------------
Total $ 23,966 $ 26,584 $ 23,951 $ 23,185 $ 21,857
===============================================================================
Other operating revenue (excluding securities gains and losses) increased $4.3
million or 19.9% compared to the same quarter of 1995. All significant revenue
producing activities contributed to this increase. The increased revenue from
brokerage and trading activities, TransFund network,trust fees and deposit fees
was due primarily to volume gains in each area. Mortgage banking revenue
increased $759 thousand or 14.3% due primarily to servicing fees on loans
originated or purchased. The growth in other revenue was due primarily to
volume increases in customer use of debit and credit cards and to growth in
equipment leasing activities.
During the second quarter of 1996, management elected to sell securities
totaling $185 million at a loss of $2.0 million. The proceeds of this sale were
reinvested in securities which will return a higher yield without extending the
duration of the securities portfolio.
Year to date, other operating revenue (excluding securities gains and losses)
increased $8.8 million or 20.0%. The same volume-related factors which caused
the second quarter's increases also contributed to the year to date increases.
4
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- --------------------------------------------------------------------------------
TABLE 3 - OTHER OPERATING EXPENSE
(In thousands)
Three Months Ended
------------------------------------------------------
JUNE 30, March 31, Dec. 31, Sept. 30, June 30,
1996 1996 1995 1995 1995
------------------------------------------------------
Personnel $ 18,059 $ 17,747 $ 17,097 $ 16,729 $ 16,103
Business promotion 1,801 1,494 1,315 1,658 1,468
Professional fees/services 1,420 1,242 1,307 1,973 1,208
Net occupancy, equipment
and data processing 7,845 7,158 7,318 7,106 6,649
FDIC and other insurance 555 539 660 519 1,600
Printing, postage and
supplies 1,763 1,577 1,771 1,582 1,402
Net gains and operating
expenses on repossessed
assets (946) (197) (164) (858) (1,039)
Amortization of intangible
assets 5,288 1,465 1,527 1,495 1,477
Mortgage banking costs 3,646 3,745 3,222 3,184 3,231
Other expense 3,343 2,872 2,799 2,294 2,468
- --------------------------------------------------------------------------------
Total $ 42,774 $ 37,642 $ 36,852 $ 35,682 $ 34,567
===============================================================================
Operating expenses for the second quarter of 1996 increased $8.2 million or
23.7% compared to the second quarter of 1996. The most significant increase in
operating expenses was due to the write-off of certain intangible assets
totaling $3.8 million. Since 1991, BOK Financial acquired deposits insured by
the FDIC's Savings Association Insurance Fund ("SAIF") totaling approximately
$843 million. In conjunction with these acquisitions, core deposit intangible
assets which represent the future net earnings potential of these funds, were
recorded. In determining the value of these core deposit intangible assets,
assumptions were made regarding the returns which were expected to be earned
over the costs incurred, which included interest expense, processing costs and
deposit insurance premiums. The failure of Congress to resolve the differential
between deposit insurance rates paid on SAIF insured deposits compared to Bank
Insurance Fund ("BIF") deposits, which was expected to occur early in 1996, in
addition to heightened competitive pressures have caused the spreads between
the actual returns and costs to decrease significantly. These conditions have
caused the value of these core deposit intangible assets to be impaired.
Personnel costs have increased $2.0 million or 12.1% compared to the second
quarter of 1995. Approximately $490 thousand of this increase is due to
incentive compensation plans which vary directly with increases in revenue.
Other expenses, including business promotion, data processing and mortgage
banking costs have increased 17.0% due to expanded volume. The increases in
operating expenses were partially offset by a decrease in premiums due on BIF
insured deposits. As previously noted, the ultimate resolution of the insurance
rate differential between BIF insured deposits and SAIF insured deposits
remains uncertain. Previous proposals would require banks and savings
associations to pay a one-time assessment on all SAIF-insured deposits. The
ultimate amount and timing of this assessment, if any, is subject to the
Federal budget reconciliation process. Management will accrue for any
resulting assessment once it becomes reasonably estimable.
5
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In addition to the write-down of impaired intangible assets, BOK Financial
incurred expenses of $750 thousand on its deposit operations primarily related
to the conversion to item processing equipment which will enhance future
operating efficiency.
The relative growth in operating expenses exceeded growth in tax-equivalent
revenue when compared to the first quarter of 1996. The result is an efficiency
ratio of 66.09% compared to efficiency ratios of 63.83% and 68.80% for the
first quarter of 1996 and the second quarter of 1995, respectively. Management
believes that the actions taken during the quarter to enhance future operations
will cause the efficiency ratio to decrease over the remainder of 1996.
- -------------------------------------------------------------------------------
TABLE 4 - OTHER OPERATING EXPENSE, EXCLUDING
SIGNIFICANT OR NONRECURRING ITEMS
(In thousands)
Three Months Ended
------------------------------------------------------
JUNE 30, March 31, Dec. 31, Sept. 30, June 30,
1996 1996 1995 1995 1995
------------------------------------------------------
Total Other Operating
Expense $ 42,774 $ 37,642 $ 36,852 $ 35,682 $ 34,567
FDIC Insurance premium
reduction, net of costs 0 0 0 0 (1,085)
Organizational costs for
new subsidiary 0 0 0 (500) 0
Net gains and operating
costs from repossessed
assets 946 197 164 858 1,039
Asset valuation charges (4,071) (500) (500) (350) (605)
Item processing conversion
and related costs (750) - - - -
Employee benefits and
other related charges 0 0 0 0 550
- -------------------------------------------------------------------------------
Total $ 38,889 $ 37,339 $ 36,516 $ 35,690 $ 34,466
===============================================================================
Year to date, operating expenses (excluding gains on repossessed assets and the
previously discussed write-off of core deposit intangible assets)increased $6.0
million or 8.3%. The more significant increases were personnel expenses which
increased $2.3 million (including $1.2 million of increased incentive
compensation which varies directly with increased revenue), data processing
costs which increased $1.4 million due to increased processing volume, and
mortgage banking costs which increased $1.3 million due to additional loan
servicing.
BOK Financial recorded a provision for loan losses of $2.9million in the second
quarter of 1996 compared to $40 thousand in the second quarter of 1995. The
factors considered by management in determining that a provision for loan
losses was appropriate are discussed subsequently under the Risk Elements
heading.
6
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BOK Financial reversed $6.2 million of valuation allowance related to certain
deferred tax assets during the second quarter of 1996, resulting in a net tax
benefit for the quarter of $2.9 million. The valuation allowance was related to
certain built-in losses and net operating loss carryforwards which existed from
the time BOK Financial acquired Bank of Oklahoma. BOK Financial's ability to
realize the benefits of these losses was limited during a five year period
after the acquisition. This period expired on June 6, 1996, and accordingly the
valuation allowance was no longer considered necessary. Excluding the reversal
of this allowance, income tax expense was 31% of income before taxes.
RISK ELEMENTS
The aggregate loan portfolio at June 30, 1996 increased $50 million or 2.3%
since December 31, 1995 with substantially all of the increase occurring in the
second quarter. Commercial and commercial real estate loans increased $64
million or 4.4%. Residential mortgage loans retained by BOK Financial decreased
by $12 million as production of adjustable rate mortgages failed to maintain
pace with normal loan payments. Consumer loans increased by $22 million after
adjusting for the sale of $25 million of student loans in the first quarter.
- --------------------------------------------------------------------------------
TABLE 5 - LOANS
(In thousands)
JUNE 30, March 31, Dec. 31, Sept. 30, June 30,
1996 1996 1995 1995 1995
------------------------------------------------------
Commercial:
Energy $ 176,685 $ 156,230 $ 159,887 $ 159,430 $ 160,223
Manufacturing 139,509 148,068 136,701 131,465 122,781
Wholesale/retail 179,458 156,261 143,941 139,426 145,141
Agricultural 88,036 89,080 86,733 74,342 75,917
Loans for purchasing or
carrying securities 8,587 7,613 7,963 7,491 8,748
Other commercial and
industrial 287,339 288,518 325,839 284,590 300,783
Commercial real estate:
Construction and land
development 151,032 143,476 148,217 126,219 119,794
Other real estate loans 493,107 473,110 450,385 436,929 406,819
Residential mortgage:
Secured by 1-4 family
residential property 424,766 419,135 436,816 432,565 429,750
Residential mortgages
held for resale 73,335 102,836 72,412 79,914 63,165
Consumer 222,844 214,834 225,474 239,184 221,890
- --------------------------------------------------------------------------------
Total $2,244,698 $2,199,161 $2,194,368 $2,111,555 $2,055,011
===============================================================================
Substantially all commercial and consumer loans and a large portion of
residential mortgage loans (excluding loans held for sale) are to businesses
and individuals within Oklahoma or Northwest Arkansas. This geographic
concentration subjects the loan portfolio to the general economic conditions
within BOK Financial's primary market area. Major segments of the commercial
loan portfolio are presented in Table 5. Commercial real estate loans are
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secured primarily by properties located in the Tulsa or Oklahoma City
metropolitan areas.
- --------------------------------------------------------------------------------
TABLE 6 - NONPERFORMING ASSETS
(In thousands)
JUNE 30, March 31, Dec. 31, Sept. 30, June 30
1996 1996 1995 1995 1995
-----------------------------------------------
Nonperforming assets:
Nonperforming loans:
Nonaccrual loans:
Commercial $ 11,418 $ 12,399 $ 14,646 $ 15,095 $ 16,221
Commercial real estate 8,528 10,138 10,621 6,412 5,057
Residential mortgage 3,001 3,136 2,794 3,269 3,441
Consumer 1,037 1,178 1,227 1,175 1,020
- -------------------------------------------------------------------------------
Total nonaccrual loans 23,984 26,851 29,288 25,951 25,739
Loans past due (90 days)(1) 17,424 15,023 9,379 7,888 7,721
- -------------------------------------------------------------------------------
Total nonperforming loans(1) 41,408 41,874 38,667 33,839 33,460
- -------------------------------------------------------------------------------
Other nonperforming assets:
Commercial real estate 3,342 2,949 3,023 3,429 3,550
Other 481 526 376 344 382
- -------------------------------------------------------------------------------
Total other nonperforming
assets 3,823 3,475 3,399 3,773 3,932
- -------------------------------------------------------------------------------
Total nonperforming assets $ 45,231 $ 45,349 $ 42,066 $ 37,612 $ 37,392
- -------------------------------------------------------------------------------
Ratios:
Reserve for loan losses to
nonperforming loans 103.38% 94.48% 99.02% 112.98% 114.00%
Nonperforming loans(1) to
period-end loans(2) 1.91 2.00 1.82 1.67 1.68
- -------------------------------------------------------------------------------
(1) Includes 1-4 family loans
guaranteed by agencies of
the U.S. government $ 12,456 $ 12,165 $ 6,754 $ 5,931 $ 7,084
(2) Excludes residential
mortgage loans held for sale
===============================================================================
BOK Financial monitors loan performance on a portfolio and individual loan
basis. Nonperforming loans are reviewed at least quarterly. The loan review
process involves evaluating the credit worthiness of customers and their
ability, based upon current and anticipated economic conditions, to meet future
principal and interest payments. Loans may be identified which 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. These loans are assigned to various risk
categories in order to focus management's attention on the loans with higher
8
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risk of loss. At June 30, 1996, loans totaling $32 million were assigned to the
substandard risk category, and loans totaling $72 million were assigned to the
special mention category. These are compared to $42 million and $40 million,
respectively, at December 31, 1995.
The allowance for loan losses, which is available to absorb losses inherent in
the loan portfolio,totaled $43 million at June 30, 1996 compared to $38 million
at December 31 1995 or 1.97% and 1.80%, respectively, of total loans, excluding
loans held for sale. Losses on loans held for sale, principally residential
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 7 presents statistical information regarding the reserve for loan losses.
- -------------------------------------------------------------------------------
TABLE 7 - SUMMARY OF LOAN LOSS EXPERIENCE
(In thousands)
Three months ended
--------------------------------------------------
JUNE 30, March 31, Dec. 31, Sept. 30, June 30,
1996 1996 1995 1995 1995
--------------------------------------------------
Beginning balance $ 39,561 $ 38,287 $ 38,232 $ 38,143 $ 38,020
Loans charged-off:
Commercial 222 397 135 96 180
Commercial real estate 106 82 155 0 0
Residential mortgage 80 14 153 2 24
Consumer 820 735 696 647 641
- -------------------------------------------------------------------------------
Total 1,228 1,228 1,139 745 845
- -------------------------------------------------------------------------------
Recoveries of loans
previously charged-off:
Commercial 449 807 428 318 410
Commercial real estate 741 463 119 259 269
Residential mortgage 44 130 302 19 27
Consumer 303 191 169 223 222
- -------------------------------------------------------------------------------
Total 1,537 1,591 1,018 819 928
- -------------------------------------------------------------------------------
Net loans charged-off
(recoveries) (309) (363) 121 (74) (83)
Provision for loan losses 2,937 911 176 15 40
Addition due to acquisition 0 0 0 0 0
- -------------------------------------------------------------------------------
Ending balance $ 42,807 $ 39,561 $ 38,287 $ 38,232 $ 38,143
- -------------------------------------------------------------------------------
Reserve to loans outstanding
at period-end(1) 1.97 1.89 1.80 1.88 1.91
Net loan losses
(recoveries) (annualized)
to average loans(1) (0.06) (.07) .02 (.01) (.02)
- -------------------------------------------------------------------------------
(1) Excludes residential mortgage loans held for sale
===============================================================================
9
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The adequacy of the allowance for loan losses is assessed by management based
upon an evaluation of the current risk characteristics of the loan portfolio
including current economic conditions, historical experience, collateral
valuation, changes in the composition of the portfolio and other relevant
factors. A provision for loan losses is charged against earnings in amounts
necessary to maintain the adequacy of the allowance for loan losses. These
provisions totaled $2.9 million for the second quarter of 1996 compared to $911
thousand in the first quarter of 1996 and $40 thousand for the second quarter
of 1995. The provision for loan losses recorded in the second quarter of 1996
reflects management's assessment of the increased risk of loss due primarily to
continued growth in the loan portfolio, moderation of economic activity in BOK
Financial's primary market areas and drought conditions which prevailed over
much of Oklahoma during the first half of 1996. Management believes that the
allowance for loan losses is adequate for each period presented based upon the
evaluation criteria and information available at that time.
INTEREST RATE SENSITIVITY AND LIQUIDITY
BOK Financial's asset/liability management policy addresses several
complementary goals: assuring adequate liquidity, maintaining an appropriate
balance between interest sensitive assets and liabilities, and maximizing net
interest revenue. The responsibility for attaining these goals rests with the
Asset/Liability Committee.
Interest rate sensitivity, the risk associated with changes in interest rates,
is of primary importance within the banking industry. Management has
established strategies and procedures to protect net interest revenue against
significant changes in interest rates. Generally, these strategies are designed
to achieve an acceptable level of net interest revenue based upon management's
projections of future changes in interest rates.
Management simulates the potential effect of changes in interest rates through
computer modeling which incorporates both the current gap position and the
expected magnitude of the repricing of specific types of assets and
liabilities. This modeling is performed assuming expected interest rates over
the next twelve months based on both a "most likely" rate scenario and a "shock
test" rate scenario assuming a 200 basis point increase over the next twelve
months. An independent source is used to determine the most likely interest
rates for the next year. At June 30, 1996, this modeling indicated that under
both the most likely interest rate forecast and the shock test, net interest
revenue for the next twelve months could increase by approximately 15% compared
to 1995. While these results are consistent with the increase in net interest
revenue for the first six months of 1996 compared to the same period in 1995,
these simulations are based on numerous assumptions regarding the timing and
extent of repricing characteristics. Actual results may differ significantly.
BOK Financial uses interest rate swaps, a form of off-balance sheet derivative
product, in managing its interest rate sensitivity. These swaps are used to
more closely match the interest paid on certain long-term, fixed rate
certificates of deposit with earning assets. Swaps allow BOK Financial to offer
these deposits to its customers without altering the desired repricing
characteristics. BOK Financial accrues and periodically receives a fixed amount
from the counter parties to these swaps and accrues and periodically makes a
variable payment to the counter parties.Credit risk from these swaps is closely
monitored and counter parties to these contracts are selected on the basis of
their credit worthiness among other factors. Derivative products are not used
for speculative purposes.
10
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- -------------------------------------------------------------------------------
TABLE 8 - INTEREST RATE SWAPS
(In thousands)
Notional Pay Receive
Amount Rate Rate
----------------------------------------------------
Expiration:
1998 $70,000 5.25 - 7.03% (1) 5.8125 - 7.96%
1999 15,000 5.2578 (1) 7.68
- -------------------------------------------------------------------------------
(1) Rates are variable based on LIBOR and reset quarterly or semiannually.
===============================================================================
The best measure of liquidity is the ability to obtain funds to meet cash
requirements. Liquidity is achieved through maturities of earning assets,
securities available for sale and loans held for sale. On the liability side,
liquidity depends on the availability of deposits and short-term borrowings in
both the local and national markets.
Cash provided by operating activities in the first half of 1996 totaled $33
million. This compares to cash provided by operating activities of $5 million,
or $29 million excluding the decrease in mortgage loans held for sale, in the
first half of 1995.
Investing activities used $177 million in the first half of 1996, primarily for
the net purchase of securities totaling $116 million and net loan fundings of
$74 million. This is compared to $227 million in net loan fundings and limited
net securities purchases in the first half of 1995.
Financing activities provided $139 million during the first half of 1996.
Demand deposits provided $107 million of the $164 million increase in total
demand, transaction, money market and savings deposits. Certificates of deposit
provided $110 million. These funds were used to reduce other borrowings by $134
million as well as for investing activities.
- ------------------------------------------------------------------------------
TABLE 9 - CAPITAL RATIOS
June 30, March 31, Dec. 31, Sept. 30, June 30,
1996 1996 1995 1995 1995
------------------------------------------------
Average shareholders' equity
to average assets
Risk-based capital
Tier 1 capital 10.43 10.08 9.91 9.75 9.44
Total capital 11.69 11.33 11.17 11.01 10.70
Leverage 7.09 6.80 6.55 6.27 5.92
===============================================================================
11
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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 1995 Form 10-K to the
Securities and Exchange Commission which contains audited financial statements.
12
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- -------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF EARNINGS
(In Thousands Except Share Data)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------------------------
1996 1995 1996 1995
---------------------------------------------
INTEREST REVENUE
Loans $ 49,024 $ 43,999 $ 96,890 $ 84,998
Taxable securities 19,215 21,905 38,310 43,496
Tax-exempt securities 3,307 3,039 6,465 6,004
- -------------------------------------------------------------------------------
Total securities 22,522 24,944 44,775 49,500
- -------------------------------------------------------------------------------
Trading securities 100 72 195 119
Funds sold 574 213 976 559
- -------------------------------------------------------------------------------
Total interest revenue 72,220 69,228 142,836 135,176
- -------------------------------------------------------------------------------
INTEREST EXPENSE
Deposits 29,606 23,989 58,427 46,385
Other borrowings 10,167 16,868 21,160 31,677
Subordinated debenture -- 12 -- 352
- -------------------------------------------------------------------------------
Total interest expense 39,773 40,869 79,587 78,414
- -------------------------------------------------------------------------------
NET INTEREST REVENUE 32,447 28,359 63,249 56,762
PROVISION FOR LOAN LOSSES 2,937 40 3,848 40
- -------------------------------------------------------------------------------
NET INTEREST REVENUE AFTER
PROVISION FOR LOAN LOSSES 29,510 28,319 59,401 56,722
- -------------------------------------------------------------------------------
OTHER OPERATING REVENUE
Brokerage and trading revenue 1,823 1,431 3,901 2,720
TransFund network revenue 2,153 1,729 4,249 3,278
Securities gains (losses), net (1,967) 226 (1,985) 226
Trust fees and commissions 5,528 4,616 10,997 9,618
Service charges and fees on
deposit accounts 5,732 5,150 11,571 10,250
Mortgage banking revenue, net 6,056 5,297 11,925 9,581
Other revenue 4,641 3,408 9,892 8,337
- -------------------------------------------------------------------------------
Total other operating revenue 23,966 21,857 50,550 44,010
- -------------------------------------------------------------------------------
OTHER OPERATING EXPENSE
Personnel 18,059 16,103 35,806 33,472
Business promotion 1,801 1,468 3,295 3,066
Professional fees and services 1,420 1,208 2,662 2,618
Net occupancy, equipment and
data processing 7,845 6,649 15,003 12,900
FDIC and other insurance 555 1,600 1,094 3,227
Printing postage and supplies 1,763 1,402 3,340 2,987
Net gains and operating expenses
on repossessed assets (946) (1,039) (1,143) (2,076)
Amortization of intangible assets 5,288 1,477 6,753 2,969
Mortgage banking costs 3,646 3,231 7,391 6,123
Other expense 3,343 2,468 6,215 4,386
- -------------------------------------------------------------------------------
Total other operating expense 42,774 34,567 80,416 69,672
- -------------------------------------------------------------------------------
INCOME BEFORE TAXES 10,702 15,609 29,535 31,060
Federal and state income tax (2,889) 3,527 2,949 7,011
- -------------------------------------------------------------------------------
NET INCOME $ 13,591 $ 12,082 $ 26,586 $ 24,049
===============================================================================
EARNINGS PER SHARE:
Net income
Primary $ 0.64 $ 0.57 $ 1.26 $ 1.13
- -------------------------------------------------------------------------------
Fully diluted $ 0.58 $ 0.52 $ 1.14 $ 1.03
- -------------------------------------------------------------------------------
AVERAGE SHARES USED IN COMPUTATION:
Primary 20,535,122 20,523,233 20,526,580 20,529,053
- -------------------------------------------------------------------------------
Fully diluted 23,369,980 23,261,447 23,367,499 23,267,369
===============================================================================
See accompanying notes to consolidated financial statements
13
<PAGE>
CONSOLIDATED BALANCE SHEETS
(In Thousands Except Share Data)
June 30, December 31, June 30,
1996 1995 1995
-------------------------------------------
ASSETS
Cash and due from banks $ 290,139 $ 303,499 $ 277,450
Funds sold 16,755 8,440 1,120
Trading securities 6,055 7,777 1,825
Securities:
Available for sale 1,440,331 1,366,661 676,037
Investment (fair value:
June 30, 1996 - $191,420;
December 31, 1995 - $181,786;
June 30, 1995 - $926,850) 194,386 179,121 945,138
- -------------------------------------------------------------------------------
Total securities 1,634,717 1,545,782 1,621,175
- -------------------------------------------------------------------------------
Loans 2,244,698 2,194,368 2,055,011
Less reserve for loan losses 42,807 38,287 38,143
- -------------------------------------------------------------------------------
Net loans 2,201,891 2,156,081 2,016,868
- -------------------------------------------------------------------------------
Premises and equipment, net 48,659 47,673 45,555
Accrued revenue receivable 43,807 41,121 37,428
Excess cost over fair value of net
assets acquired and core deposit
premiums (net of accumulated
amortization:
June 30, 1996 - $28,279;
December 31, 1995 - $21,526;
June 30, 1995 - $18,493) 30,755 37,134 40,106
Mortgage servicing rights 61,815 50,634 43,605
Real estate and other repossessed
assets 3,823 3,399 3,932
Other assets 41,985 20,378 21,445
- -------------------------------------------------------------------------------
Total assets $ 4,380,401 $ 4,221,918 $ 4,110,509
===============================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing demand deposits $ 758,173 $ 651,134 $ 621,698
Interest-bearing deposits:
Transaction 107,878 411,861 394,616
Money market 731,052 369,344 370,882
Savings 103,486 104,726 120,228
Time 1,510,704 1,400,644 1,184,499
- -------------------------------------------------------------------------------
Total deposits 3,211,293 2,937,709 2,691,923
- -------------------------------------------------------------------------------
Funds purchased and repurchase
agreements 522,031 697,497 944,099
Other borrowings 291,320 250,309 162,966
Accrued interest, taxes and expense 25,778 25,107 26,406
Other liabilities 14,904 9,731 9,011
- -------------------------------------------------------------------------------
Total liabilities 4,065,326 3,920,353 3,834,405
- -------------------------------------------------------------------------------
Stockholders' equity:
Preferred stock 23 23 13
Common stock ($.00006 par value;
2,500,000,000 shares authorized;
shares issued and outstanding:
June 30, 1995 -20,458,215;
December 31, 1995 - 20,415,504;
June 30, 1995 -19,779,712) 1 1 1
Capital surplus 158,297 157,395 143,668
Retained earnings 172,563 146,727 135,177
Unrealized loss on securities
available for sale (15,676) (2,427) (2,515)
Less notes receivable from
exercise of stock options (133) (154) (240)
- -------------------------------------------------------------------------------
Total shareholders' equity 315,075 301,565 276,104
- -------------------------------------------------------------------------------
Total liabilities and
shareholders' equity $ 4,380,401 $ 4,221,918 $ 4,110,509
===============================================================================
See accompanying notes to consolidated financial statements.
14
<PAGE>
- -------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CHANGES
IN SHAREHOLDERS EQUITY
(in thousands)
<TABLE>
Preferred Stock Common Stock Capital Retained Unrealized Notes
Shares Amount Shares Amount Surplus Earnings Gain(Loss) Receivable Total
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balances at
December 31, 1994 250,000 $ 13 19,735 $1 $142,718 $111,878 $(17,423) $(285) $236,902
Net income - - - - - 24,049 - - 24,049
Issuance of common stock
to Thrift Plan - - 3 - 70 - - - 70
Exercise of stock options - - 2 - 52 - - - 52
Payments on stock option
notes receivable - - - - - - - 45 45
Preferred dividends paid
in shares of common stock - - 36 - 750 (750) - - -
Director retainer shares - - 4 - 78 - - - 78
Change in unrealized net
gain(loss) on securities
available for sale - - - - - - 14,908 - 14,908
- ------------------------------------------------------------------------------------------------------------------
Balances at
June 30, 1995 250,000 $ 13 19,780 $1 $143,668 $135,177 $ (2,515) $(240) $276,104
==================================================================================================================
Balances at
December 31, 1995 250,102 $ 23 20,416 $1 $157,395 $146,727 $ (2,427) $(154) $301,565
Net income - - - - - 26,586 - - 26,586
Issuance of common stock
to Thrift Plan - - - - - - - - -
Exercise of stock options - - 5 - 69 - - - 69
Payments on stock option
notes receivable - - - - - - - 21 21
Issuance of preferred stock 3 - - - - - - - -
Preferred dividends paid
in shares of common stock - - 33 - 750 (750) - - -
Director retainer shares - - 4 - 83 - - - 83
Change in unrealized net
gain(loss) on securities
available for sale - - - - - - (13,249) - (13,249)
- ------------------------------------------------------------------------------------------------------------------
Balances at
June 30, 1996 250,105 $ 23 20,458 $1 $158,297 $172,563 $(15,676) $(133) $315,075
==================================================================================================================
See accompanying notes to consolidated financial statements.
</TABLE>
15
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands Except Share Data)
Six Months Ended
June 30,
---------------------
1996 1995
---------------------
CASH FLOW FROM OPERATING ACTIVITIES:
Net income $ 26,586 $ 24,049
Adjustments to reconcile net income
to net cash provided by operating
activities:
Provision for loan and repossessed
real estate losses 3,848 40
Depreciation and amortization 11,202 9,466
Valuation adjustment of intangible assets 3,821 --
Net amortization of investment security
discounts and premiums 1,240 925
Net gain on sale of assets (885) (2,393)
Mortgage loans originated for resale (377,699) (185,788)
Proceeds from sale of mortgage loans
held for resale 377,035 162,409
Decrease in trading securities 1,722 710
(Increase) decrease in accrued revenue receivable (2,686) 3,970
Increase in other assets (21,635) (7,166)
Increase (decrease)in accrued interest, taxes and expense 11,050 (480)
Decrease in other liabilities (517) (350)
- -------------------------------------------------------------------------------
Net cash provided (used) by operating activities 33,082 5,392
- -------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of investment securities 17,092 29,172
Proceeds from maturities of available for sale securities 154,199 61,293
Purchases of investment securities (32,528) (17,918)
Purchases of available for sale securities (474,321) (193,643)
Proceeds from sales of available for sale securities 219,771 111,394
Loans originated or acquired net of principal collected (74,202) (227,142)
Proceeds from sales of assets 27,995 40,244
Purchases of assets (15,235) (14,282)
Cash and cash equivalents of branches & subsidiaries
acquired and sold, net (200) (19,371)
- -------------------------------------------------------------------------------
Net cash used by investing activities (177,429) (230,253)
- -------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in demand deposits,
transaction deposits, money market deposits,
and savings accounts 163,524 (17,599)
Net increase in certificates of deposit 110,060 101,955
Net increase (decrease) in other borrowings (134,455) 132,731
Repayment of capital note -- (23,000)
Issuance of preferred, common and treasury stock, net 152 200
Payments on stock option notes receivable 21 45
- -------------------------------------------------------------------------------
Net cash provided by financing activities 139,302 194,332
- -------------------------------------------------------------------------------
Net decrease in cash and cash equivalents (5,045) (30,529)
Cash and cash equivalents at beginning of period 311,939 309,099
- -------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 306,894 $ 278,570
===============================================================================
CASH PAID FOR INTEREST $ 78,157 $ 76,457
===============================================================================
CASH PAID FOR TAXES $ 5,065 $ 8,496
===============================================================================
NET LOANS TRANSFERRED TO
REPOSSESSED REAL ESTATE AND OTHER ASSETS $ 778 $ 960
===============================================================================
PAYMENT OF PREFERRED STOCK DIVIDENDS IN COMMON STOCK $ 750 $ 750
===============================================================================
See accompanying notes to consolidated financial statements.
16
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) 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 banking subsidiaries,
Bank of Oklahoma, N.A. and Citizens Bank of Northwest Arkansas, N.A. Certain
prior period balances have been reclassified to conform with the current period
presentation.
(2) MORTGAGE BANKING ACTIVITIES
BOK Financial engages in mortgage-banking activities through its subsidiary,
BancOklahoma Mortgage Corp. ("BOMC"). At June 30, 1996, BOMC owned the rights
to service 78,639 mortgage loans with outstanding principal balances of $5.6
billion, including $239 million serviced for BOK. The weighted average interest
rate and remaining term was 7.69% and 285 months, respectively.
Activity in capitalized mortgage servicing rights and related valuation
allowance during the current period is as follows:
Capitalized Mortgage Servicing Rights
----------------------------------Valuation
Purchased Originated Total Allowance Net
- ------------------------------------------------------------------------------
Balance at
December 31, 1995 $ 49,532 $ 1,641 $ 51,173 $ (539) $50,634
Additions 14,189 2,072 16,261 16,261
Amortization expense (4,177) (542) (4,719) (4,719)
Provision for impairment - - - (361) (361)
- ------------------------------------------------------------------------------
Balance at
June 30, 1996 $ 59,544 $ 3,171 $ 62,715 $ (900) $61,815
===============================================================================
Estimated fair value of
mortgage servicing
rights (*) $ 74,830 $ 5,752 $ 80,582 $ - $80,582
===============================================================================
(*) Excludes approximately $18.0 million of loan servicing rights on
mortgage loans originated prior to the adoption of FAS 122.
17
<PAGE>
(3) DISPOSAL OF AVAILABLE FOR SALE SECURITIES
Sales of available for sale securities for the period ending June 30, 1996
resulted in gains and losses as follows (in thousands):
Proceeds 219,771
Gross realized gains 144
Gross realized losses 2,129
Related federal and state
income tax expense (benefit) (615)
(4) FEDERAL AND STATE INCOME TAXES
BOK Financial reduced its valuation allowance for deferred tax assets by $6.2
million during the second quarter of 1996. The valuation allowance is related
to built-in and net operating loss carry forwards which existed from the time
BOK Financial acquired Bank of Oklahoma. BOK Financial's ability to realize the
benefits of these losses expired on June 6, 1996, and accordingly the valuation
allowance was no longer considered necessary.
(5) 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.
18
<PAGE>
- -------------------------------------------------------------------------------
QUARTERLY FINANCIAL SUMMARY - UNAUDITED
Consolidated Daily Average Balances,
Average Yields and Rates
(In Thousands Except Share Data)
For Three months ended
---------------------------------------------------
June 30, 1996 March 31, 1996
---------------------------------------------------
Average Revenue/ Yield Average Revenue/Yield
Balance Expense /Rate Balance Expense /Rate
---------------------------------------------------
ASSETS
Taxable securities $1,280,094 19,215 6.04 $1,274,853 $19,095 6.02
Tax-exempt securities(1) 282,738 5,238 7.45 269,115 5,032 7.52
- -------------------------------------------------------------------------------
Total securities 1,562,832 24,453 6.29 1,543,968 24,127 6.28
- -------------------------------------------------------------------------------
Trading securities 6,416 100 6.27 6,005 95 6.36
Funds sold 43,274 574 5.33 27,409 402 5.90
Loans(2) 2,233,711 49,085 8.84 2,189,423 47,866 8.79
Less reserve for
loan losses 40,311 38,966
- -------------------------------------------------------------------------------
Loans, net of reserve 2,193,400 49,085 9.00 2,150,457 47,866 8.95
- -------------------------------------------------------------------------------
Total earning assets 3,805,922 74,212 7.84 3,727,839 72,490 7.82
- --------------------------------------------------------------------------------
Cash and other assets 446,659 432,081
- -------------------------------------------------------------------------------
Total assets $4,252,581 $4,159,920
===============================================================================
LIABILITIES AND
SHAREHOLDERS' EQUITY
Transaction deposits $ 72,085 746 4.16 $ 298,442 2,051 2.76
Money market deposits 760,042 6,114 3.24 506,281 4,336 3.44
Savings deposits 103,274 624 2.43 103,931 629 2.43
Other time deposits 1,605,179 22,122 5.54 1,533,143 21,805 5.72
- -------------------------------------------------------------------------------
Total interest-bearing
deposits 2,540,580 29,606 4.69 2,441,797 28,821 4.75
- -------------------------------------------------------------------------------
Other borrowings 732,122 10,167 5.59 778,343 10,993 5.68
Subordinated debenture 0 0 0 0 0 0
- -------------------------------------------------------------------------------
Total interest-bearing
liabilities 3,272,702 39,773 4.89 3,220,140 39,814 4.97
- -------------------------------------------------------------------------------
Demand deposits 629,973 588,624
Other liabilities 37,637 40,865
Shareholders' equity 312,269 310,291
- -------------------------------------------------------------------------------
Total liabilities and
shareholders' equity $4,252,581 $4,159,920
===============================================================================
TAX-EQUIVALENT NET
INTEREST REVENUE(1) 34,439 2.95 32,676 2.85
TAX-EQUIVALENT NET
INTEREST REVENUE(1) TO
EARNING ASSETS 3.64 3.53
Less tax-equivalent
adjustment(1) 1,992 1,874
- -------------------------------------------------------------------------------
NET INTEREST REVENUE 32,447 30,802
Provision for loan losses 2,937 911
Other operating revenue 23,966 26,584
Other operating expense 42,774 37,642
- -------------------------------------------------------------------------------
INCOME BEFORE TAXES 10,702 18,833
Federal and state income tax (2,889) 5,838
- -------------------------------------------------------------------------------
NET INCOME $13,591 $12,995
===============================================================================
EARNINGS PER SHARE:
NET INCOME
Primary $ .64 $ .62
- -------------------------------------------------------------------------------
Fully Diluted $ .58 $ .56
===============================================================================
(1) Tax-equivalent at the statutory federal and state rates for all periods
presented. The taxable equivalent adjustments shown above are for
comparative purposes.
(2) The loan averages include loans on which the accrual of interest has been
discounted and are stated net of unearned income.
19
<PAGE>
For Three months ended
- -------------------------------------------------------------------------------
December 31, 1995 September 30, 1995 June 30, 1995
- -------------------------------------------------------------------------------
Average Revenue/ Yield Average Revenue/ Yield Average Revenue/Yield
Balance Expense /Rate Balance Expense /Rate Balance Expense /Rate
- -------------------------------------------------------------------------------
$1,285,158 $19,337 5.97% $1,336,474 $20,243 6.01% $1,425,922 $21,905 6.16%
256,599 4,824 7.46 255,688 4,798 7.44 253,770 4,799 7.59
- -------------------------------------------------------------------------------
1,541,757 24,161 6.22 1,592,162 25,041 6.24 1,679,692 26,704 6.38
- -------------------------------------------------------------------------------
3,787 72 7.54 3,323 51 6.09 4,565 72 6.33
19,197 288 5.95 9,826 149 6.02 13,670 213 6.25
2,145,558 47,838 8.85 2,073,088 46,216 8.84 1,958,467 43,999 9.01
38,378 38,372 38,218
- -------------------------------------------------------------------------------
2,107,180 47,838 9.01 2,034,716 46,216 9.01 1,920,249 43,999 9.19
- -------------------------------------------------------------------------------
3,671,921 72,359 7.82 3,640,027 71,457 7.79 3,618,176 70,988 7.87
- -------------------------------------------------------------------------------
431,982 418,656 424,687
- -------------------------------------------------------------------------------
$4,103,903 $ 4,058,683 $4,042,863
===============================================================================
$ 385,302 2,714 2.79 $ 387,039 2,713 2.78 $ 393,141 2,739 2.79
374,618 3,891 4.12 378,298 3,802 3.99 362,817 3,515 3.89
106,633 654 2.43 115,312 710 2.44 123,169 738 2.40
1,338,106 19,416 5.76 1,208,924 17,454 5.73 1,193,816 16,997 5.71
- -------------------------------------------------------------------------------
2,204,659 26,675 4.80 2,089,573 24,679 4.69 2,072,943 23,989 4.64
- -------------------------------------------------------------------------------
973,914 14,457 5.89 1,060,864 15,952 5.97 1,090,359 16,868 6.21
0 0 0 0 0 0 506 12 9.00
- -------------------------------------------------------------------------------
3,178,573 41,132 5.13 3,150,437 40,631 5.12 3,163,808 40,869 5.18
- -------------------------------------------------------------------------------
584,748 586,340 576,761
43,465 39,746 38,268
297,117 282,160 264,025
- -------------------------------------------------------------------------------
$4,103,903 $4,058,683 $4,042,862
===============================================================================
31,227 2.69 30,826 2.67 30,119 2.69
3.37 3.36 3.34
1,780 1,771 1,760
- -------------------------------------------------------------------------------
29,447 29,055 28,359
176 15 40
23,951 23,185 21,857
36,852 35,682 34,567
- -------------------------------------------------------------------------------
16,370 16,543 15,609
3,707 4,050 3,527
- -------------------------------------------------------------------------------
$12,663 $12,493 $12,082
===============================================================================
$ .60 $ .59 $ .57
- -------------------------------------------------------------------------------
$ .54 $ .54 $ .52
===============================================================================
20
<PAGE>
THREE MONTH FINANCIAL SUMMARY - UNAUDITED
Consolidated Daily Average Balances,
Average Yields and Rates
(In Thousands Except Share Data)
For Six months ended
----------------------------------------------------
JUNE 30, 1996 JUNE 30, 1995
----------------------------------------------------
Average Revenue/ Yield Average Revenue/ Yield
Balance Expense /Rate Balance Expense /Rate
----------------------------------------------------
ASSETS
Taxable securities $1,277,475 $ 38,310 6.03% $1,399,811 $ 43,496 6.27%
Tax-exempt securities(1) 275,926 10,270 7.48 251,759 9,491 7.60
- ------------------------------------------------------------------------------
Total securities 1,553,401 48,580 6.29 1,651,570 52,987 6.47
- -------------------------------------------------------------------------------
Trading securities 6,210 195 6.31 3,792 119 6.33
Funds sold 35,341 976 5.55 18,539 559 6.08
Loans(2) 2,211,567 96,950 8.82 1,914,222 84,998 8.95
Less reserve for
loan losses 39,638 38,260
- -------------------------------------------------------------------------------
Loans, net of reserve 2,171,929 96,951 8.98 1,875,962 84,998 9.14
- -------------------------------------------------------------------------------
Total earning assets 3,766,881 146,701 7.83 3,549,863 138,663 7.88
- -------------------------------------------------------------------------------
Cash and other assets 437,390 415,871
- -------------------------------------------------------------------------------
Total assets $4,204,271 $3,965,734
===============================================================================
LIABILITIES AND
SHAREHOLDERS' EQUITY
Transaction deposits $ 185,264 2,797 3.04 $ 392,706 5,454 2.80
Money market deposits 633,162 10,450 3.32 361,787 6,702 3.74
Savings deposits 103,602 1,253 2.43 126,483 1,593 2.54
Other time deposits 1,569,160 43,927 5.63 1,185,298 32,636 5.55
- -------------------------------------------------------------------------------
Total interest-bearing
deposits 2,491,188 58,427 4.72 2,066,274 46,385 4.53
- --------------------------------------------------------------------------------
Other borrowings 755,233 21,160 5.63 1,030,277 31,677 6.20
Subordinated debenture 0 0 0.00 11,691 352 6.10
- -------------------------------------------------------------------------------
Total interest-bearing
liabilities 3,246,421 79,587 4.93 3,108,242 78,414 5.09
- -------------------------------------------------------------------------------
Demand deposits 609,299 564,008
Other liabilities 37,272 38,692
Shareholders' equity 311,280 254,792
- -------------------------------------------------------------------------------
Total liabilities and
shareholders' equity $4,204,271 $3,965,734
===============================================================================
TAX-EQUIVALENT NET
INTEREST REVENUE(1) 67,114 2.90 60,249 2.79
TAX-EQUIVALENT NET
INTEREST REVENUE(1) TO
EARNING ASSETS 3.58 3.42
Less tax-equivalent
adjustment(1) 3,865 3,487
- -------------------------------------------------------------------------------
NET INTEREST REVENUE 63,249 56,762
Provision for loan losses 3,848 40
Other operating revenue 50,550 44,010
Other operating expense 80,416 69,672
- -------------------------------------------------------------------------------
INCOME BEFORE TAXES 29,535 31,060
Federal and state income tax 2,949 7,011
- -------------------------------------------------------------------------------
NET INCOME $ 26,586 $ 24,049
===============================================================================
EARNINGS PER SHARE:
NET INCOME
Primary $ 1.26 $ 1.13
- -------------------------------------------------------------------------------
Fully Diluted $ 1.14 $ 1.03
===============================================================================
(1) Tax-equivalent at the statutory federal and state rates for all periods
presented. The taxable equivalent adjustments shown above are for
comparative purposes.
(2) The loan averages include loans on which the accrual of interest has been
discounted and are stated net of unearned income.
21
<PAGE>
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibits:
No. 27 Financial Data Schedule filed herewith electronically.
(B) Reports on Form 8-K:
No reports on Form 8-K were filed during the three months ended
June 30, 1996.
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 August 13, 1996 /s/ James A. White
----------------- -------------------
James A. White
Executive Vice President and
Chief Financial Officer
22
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the BOK
Financial Corporation's 10-Q for the period ended June 30,1996 and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 230,039
<INT-BEARING-DEPOSITS> 100
<FED-FUNDS-SOLD> 16,755
<TRADING-ASSETS> 6,055
<INVESTMENTS-HELD-FOR-SALE> 1,440,331
<INVESTMENTS-CARRYING> 194,386
<INVESTMENTS-MARKET> 191,420
<LOANS> 2,244,698
<ALLOWANCE> 42,807
<TOTAL-ASSETS> 4,380,401
<DEPOSITS> 3,211,293
<SHORT-TERM> 77,205
<LIABILITIES-OTHER> 40,682
<LONG-TERM> 736,146
0
23
<COMMON> 1
<OTHER-SE> 315,051
<TOTAL-LIABILITIES-AND-EQUITY> 4,380,401
<INTEREST-LOAN> 96,890
<INTEREST-INVEST> 44,775
<INTEREST-OTHER> 1,171
<INTEREST-TOTAL> 142,836
<INTEREST-DEPOSIT> 58,427
<INTEREST-EXPENSE> 79,587
<INTEREST-INCOME-NET> 63,249
<LOAN-LOSSES> 3,848
<SECURITIES-GAINS> (1,985)
<EXPENSE-OTHER> 80,416
<INCOME-PRETAX> 29,535
<INCOME-PRE-EXTRAORDINARY> 26,586
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 26,586
<EPS-PRIMARY> 1.26
<EPS-DILUTED> 1.14
<YIELD-ACTUAL> 3.58
<LOANS-NON> 23,984
<LOANS-PAST> 17,424
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 32,490
<ALLOWANCE-OPEN> 38,287
<CHARGE-OFFS> 2,456
<RECOVERIES> 3,128
<ALLOWANCE-CLOSE> 42,807
<ALLOWANCE-DOMESTIC> 42,807
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
