As filed with the Securities and Exchange Commission on May 15, 2000
- --------------------------------------------------------------------------------
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, 2000
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 ($.00006 Par Value)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest practicable date: 49,124,113 shares of
common stock ($.00006 par value) as of April 30, 2000.
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<PAGE>2
BOK Financial Corporation
Form 10-Q
Quarter Ended March 31, 2000
Index
Part I. Financial Information
Management's Discussion and Analysis 2
Report of Management on Consolidated
Financial Statements 15
Consolidated Statements of Earnings - Unaudited 16
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 23
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K 25
Signature 25
MANAGEMENT'S ASSESSMENT OF OPERATIONS AND FINANCIAL CONDITION
Assessment of Operations
Summary of Performance
BOK Financial Corporation ("BOK Financial") recorded net income of $24.8 million
or $0.45 per diluted common share for the first quarter of 2000 compared to
$21.2 million or $0.38 per diluted common share for the first quarter of 1999.
Returns on average assets were 1.19% for the first quarter of 2000 compared to
1.23% for the first quarter of 1999. Returns on average equity were 17.78% and
16.16% for the first quarter of 2000 and 1999, respectively.
Net interest revenue for the first quarter of 2000 increased by $11.7 million or
22%. Fees and commission revenue was $46.4 million, a slight increase from the
first quarter of 1999. Gains on sales of securities, loans and other assets
decreased by $1.5 million. Operating expenses increased $9.8 million or 15%
compared to the first quarter of 1999. This increase included $3.9 million of
expenses from acquisitions that were consummated in the second quarter of 1999.
These expenses affect the comparability between the two quarters. Income tax
expense was reduced by $3.0 million based on the favorable resolution of a
recent IRS examination.
<PAGE>3
Tangible Operating Results
Since inception, BOK Financial has completed several acquisitions that were
accounted for under the purchase method of accounting. The purchase method
results in the recording of goodwill and other identifiable intangible assets
that are amortized as non-cash charges in future years into operating expense.
Operating results excluding the impact of the amortization of these intangible
assets are summarized below:
- -------------------------------------------------------------------------------
TABLE 1 - TANGIBLE OPERATING RESULTS
(Dollars in Thousands Except Share Data) Three months ended
----------------------------
March 31, March 31,
2000 1999
-------------- -------------
Net income $ 24,813 $ 21,237
After-tax impact of amortization of
intangible assets 3,415 2,580
- ----------------------------------------------------------------- -------------
Tangible net income $ 28,228 $ 23,817
- ----------------------------------------------------------------- -------------
Tangible net income per diluted share $ 0.51 $ 0.43
- ----------------------------------------------------------------- -------------
Tangible return on average shareholders' equity 20.23% 18.13%
- ----------------------------------------------------------------- -------------
Tangible return on average assets 1.36% 1.38%
- ----------------------------------------------------------------- -------------
Net Interest Revenue
Net interest revenue on a tax-equivalent basis was $65.5 million for the first
quarter of 2000 compared to $54.3 million for the first quarter of 1999. Average
earning assets increased $1.3 billion, including $392 million due to
acquisitions. Average loans increased $1.0 billion and now comprise 62% of
average earning assets. Average loans were 59% of average earning assets for the
first quarter of 1999. Loans generally have higher yields than other types of
earning assets therefore, the increase in average loans had a significant impact
on the growth in interest revenue. Average interest bearing liabilities
increased $1.4 billion, including $281 million due to acquisitions. Interest
bearing liabilities now comprise 81% of all funding sources compared to 76% for
the first quarter of 1999. Table 2 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 2 - VOLUME/RATE ANALYSIS
(In Thousands)
Three months ended
March 31, 2000/1999
-------------------------------------
Change Due To (1)
------------------------
Yield
Change Volume /Rate
-------------------------------------
Tax-equivalent interest revenue:
Securities $ 5,765 $ 4,365 1,400
Trading securities (336) (747) 411
Loans 28,588 21,950 6,638
Funds sold 290 172 118
- --------------------------------------------------------------------------------
Total 34,307 25,740 8,567
- --------------------------------------------------------------------------------
Interest expense:
Interest bearing transaction deposits 2,243 2,815 (572)
Savings deposits (57) 4 (61)
Time deposits 9,411 6,795 2,616
Other borrowings 11,317 7,025 4,292
Subordinated debenture 193 13 180
- --------------------------------------------------------------------------------
Total 23,107 16,652 6,455
- --------------------------------------------------------------------------------
Tax-equivalent net interest revenue
before nonrecurring foregone interest 11,200 9,088 2,112
Change in tax-equivalent adjustment (467)
- --------------------------------------------------------------------------------
Net interest revenue $ 11,667
- --------------------------------------------------------------------------------
(1) Changes attributable to both volume and yield/rate are allocated to both
volume and yield/rate on an equal basis.
<PAGE>4
Net interest margin, the ratio of net interest revenue to average earning
assets, was 3.54% for the first quarter of 2000 compared to 3.58% for the first
quarter of 1999 and 3.70% for the fourth quarter of 1999. Most of BOK
Financial's earning assets and interest bearing liabilities have variable
interest rates. However, as market interest rates increased during the first
quarter of 2000, interest bearing liabilities generally repriced more quickly
than earning assets. This resulted in a decrease in net interest margin during
the first quarter of 2000.
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 2000, this
strategy resulted in a 74 basis point decrease in net interest margin. However,
this strategy contributed $2.2 million to net interest revenue. 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 decreased $674 thousand compared to the same quarter of
1999. Total fees and commissions, which are included in other operating revenue,
increased $875 thousand. Transaction card and trust revenue increased 13% and
23%, respectively. These increases were substantially offset by lower revenue
from mortgage banking and leasing. Transaction card revenue increased $1.0
million over the first quarter of 1999 due to a greater volume of transactions
processed. Leasing revenue decreased $1.1 million or 60% due primarily to the
sale of BOK Financial's interests in four leasing partnerships during 1999. BOK
Financial expanded its equipment leasing activities late in the first quarter of
2000 and expects leasing revenue to increase in subsequent quarters.
<TABLE>
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TABLE 3 - OTHER OPERATING REVENUE
(In Thousands)
Three Months Ended
---------------------------------------------------------------
March 31, Dec. 31, Sept. 30, June 30, March 31,
2000 1999 1999 1999 1999
---------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Brokerage and trading revenue $ 4,426 $ 4,781 $ 3,237 $ 3,779 $ 4,436
Transaction card revenue 8,620 8,767 8,298 7,986 7,597
Trust fees and commissions 9,523 9,439 9,045 8,874 7,769
Service charges and fees
on deposit accounts 10,255 10,684 10,857 10,073 9,453
Mortgage banking revenue 7,834 8,628 9,189 9,877 9,292
Leasing revenue 744 514 526 817 1,868
Other revenue 4,973 3,716 4,129 4,659 5,085
- --------------------------------------------------------------------------------------------------
Total fees and commissions 46,375 46,529 45,281 46,065 45,500
- --------------------------------------------------------------------------------------------------
Gain on student loan sales 433 16 39 16 529
Gain on loan securitization - - - - 270
Gain on sale of other assets - 96 - 3,638 892
Gain (loss) on securities (17) 80 (485) (288) 274
- --------------------------------------------------------------------------------------------------
Total other operating revenue $ 46,791 $ 46,721 $ 44,835 $ 49,431 $ 47,465
- --------------------------------------------------------------------------------------------------
</TABLE>
While management expects continued growth in other operating revenue, the future
rate of increase could be affected by increased competition from national and
regional financial institutions and from market saturation. Continued growth may
require BOK Financial to introduce new products or to enter new markets. This
growth introduces additional demands on capital and managerial resources.
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 of certain fees, but would tend to decrease
the incidence of mortgage loans prepayments. Similarly, a decrease in economic
activity would decrease ATM, bankcard, and related revenue.
<PAGE>5
Other Operating Expenses
Operating expenses for the first quarter of 2000 increased $9.8 million or 15%
compared to the first quarter of 1999. The first quarter of 2000 included
operating expenses of $3.9 million for acquired banks that were not part of BOK
Financial in the first quarter of 1999. These operating expenses consisted
primarily of $1.6 million of personnel costs, $1.1 million of intangible asset
amortization, and $744 thousand of occupancy, equipment and data processing
costs. The discussion following Table 4 of other operating expenses excludes
these charges for 2000 to improve comparability.
<TABLE>
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TABLE 4 - OTHER OPERATING EXPENSE
(In Thousands)
Three Months Ended
-----------------------------------------------------------
March 31, Dec. 31, Sept. 30, June 30, March 31,
2000 1999 1999 1999 1999
----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Personnel $ 37,289 $ 35,801 $ 34,262 $ 34,047 $ 31,900
Business promotion 2,335 2,244 1,925 2,410 2,498
Professional fees/services 2,318 2,451 2,452 2,780 1,901
Net occupancy, equipment
and data processing 15,897 16,061 15,198 13,657 13,108
FDIC and other insurance 380 338 323 369 326
Printing, postage and supplies 2,811 3,035 2,729 3,019 2,816
Net gains and operating
expenses on repossessed assets (583) (544) (1,501) (132) (1,296)
Amortization of intangible
assets 4,078 4,389 4,519 3,667 3,248
Mortgage banking costs 5,437 5,658 6,183 6,787 5,304
Other expense 4,654 4,824 4,665 4,074 5,021
- -------------------------------------------------------------------------------------------
Total $ 74,616 $ 74,257 $ 70,755 $ 70,678 $ 64,826
- -------------------------------------------------------------------------------------------
</TABLE>
Personnel costs increased $3.8 million or 12% due to increased staffing, normal
compensation increases, and increased incentive compensation. Staffing on a full
time equivalent ("FTE") basis increase by 75 employees while average
compensation per FTE increased by 3%. Incentive compensation, which varies
directly with revenue, increased $1.9 million to $5.6 million for the quarter.
The increase in incentive compensation was due to growth in revenue over
predetermined targets and growth in the number of business units covered by
incentive plans. Additionally, personnel costs included $638 thousand of
nonrecurring charges related to the reorganization of several business units in
Dallas. Occupancy, equipment and data processing costs increased $2.0 million or
16% due primarily to an increase in data processing costs. A significant portion
of BOK Financial's data processing is outsourced to third parties. Therefore,
data processing costs are directly related to the volume of transactions
processed.
<TABLE>
- --------------------------------------------------------------------------------------------
TABLE 5 - OTHER OPERATING EXPENSE, EXCLUDING SIGNIFICANT OR NONRECURRING ITEMS
(In Thousands)
Three Months Ended
---------------------------------------------------------
March 31, Dec. 31, Sept. 30, June 30, March 31,
2000 1999 1999 1999 1999
---------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total other operating expense $ 74,616 $ 74,257 $ 70,755 $ 70,678 $ 64,826
Acquisition expenses - - - (1,266) -
Reorganization costs (638) - - - -
Net gains and operating costs from
repossessed assets 583 544 1,501 132 1,296
- --------------------------------------------------------------------------------------------
Total $ 74,561 $ 74,801 $ 72,256 $ 69,544 $ 66,122
- --------------------------------------------------------------------------------------------
</TABLE>
<PAGE>6
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 banking functions for Bank of Arkansas, Bank of Texas, and Bank of
Albuquerque. Other lines of business include the TransFund ATM system and BOSC,
Inc., a broker-dealer in securities.
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 $11.9 million or 48% of consolidated net
income for the first quarter of 2000. This is compared to $11.5 million or 54%
of consolidated net income for the first quarter of 1999. Revenue increased $3.2
million or 11% due to increased loan volumes. Operating expenses increased by
$2.1 million due primarily to a $911 increase in personnel costs. Returns on
average assets and equity both declined from the first quarter of 1999 due to a
narrowing of the difference between loan yields and BOK Financial's cost of
funds.
Table 6 Corporate Banking
(In Thousands)
Three months ended March 31,
--------------------------------------
2000 1999
---------------- --- -----------------
Revenue from external sources $ 59,918 $ 48,315
Revenue(expense) from internal sources (26,506) (18,152)
Total revenue 33,412 30,163
Operating expense 13,700 11,605
Net income 11,917 11,545
Average assets $ 3,731,164 $ 3,172,766
Average equity 366,655 320,629
Return on assets 1.28% 1.48%
Return on equity 13.07% 14.60%
Efficiency ratio 41.00% 38.47%
Consumer Banking
The Consumer Banking Division, which provides a full line of deposit, loan and
fee-based services to customers throughout Oklahoma, contributed $2.9 million or
12% of consolidated net income for the first quarter of 2000 compared to $2.5
million or 12% of consolidated net income for the first quarter of 1999. Total
revenue, which consists primarily of intercompany credit for funds provided to
other divisions of BOK Financial and fees generated by various services,
increased $1.8 million or 12% compared to the first quarter of 1999. Operating
expenses increased $1.1 million for the same period.
Table 7 Consumer Banking
(In Thousands)
Three months ended March 31,
--------------------------------------
2000 1999
---------------- ---- ----------------
Revenue from external sources $ (1,166) $ (820)
Revenue(expense) from internal sources 18,912 16,717
Total revenue 17,746 15,897
Operating expense 12,399 11,348
Net income 2,891 2,545
Average assets $ 1,820,555 $ 1,777,555
Average equity 47,587 41,242
Return on assets 0.64% 0.58%
Return on equity 24.43% 25.03%
Efficiency ratio 69.87% 71.38%
<PAGE>7
Mortgage Banking
Mortgage banking operations resulted in a net loss of $503 thousand for the
first quarter of 2000 compared to net income of $1.0 million for the first
quarter of 1999. Total revenue decreased $2.3 million due primarily to secondary
marketing activities. Mortgage loans sold generated losses of $426 thousand in
the first quarter of 2000 compared to gains of $1.3 million in the first quarter
of 1999. This performance shift was due to higher interest rates that reduced
loan origination activity. The decrease in secondary marketing gains was
partially offset by a $370 thousand increase in servicing revenue.
Capitalize mortgage servicing rights totaled $113.0 million at March 31, 2000
compared to $92.3 million at March 31, 1999 and $114.1 million at December 31,
1999. At March 31, 2000, capitalized mortgage servicing rights included $11.1
million of deferred hedge losses.
Table 8 Mortgage Banking
(In Thousands)
Three months ended March 31,
-------------------------------------
2000 1999
--------------- ---- ----------------
Revenue from external sources $ 10,963 $ 13,027
Revenue(expense) from internal sources (2,409) (2,126)
Total revenue 8,554 10,901
Operating expense 9,378 9,261
Net income (503) 1,002
Average assets $ 325,025 $ 341,891
Average equity 22,662 24,871
Return on assets (0.62%) 1.19%
Return on equity (8.93%) 16.34%
Efficiency ratio 109.63% 84.96%
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 $2.0 million or 8% of
consolidated net income for the first quarter of 2000. This is compared to $1.3
million or 6% of consolidated net income for the first quarter of 1999. Revenue
from trust services increased $1.9 million or 18% for the quarter while
operating expenses increased $706 thousand or 8%. At March 31, 2000, trust
assets with an aggregate market value of $ 17.6 billion were subject to various
fiduciary arrangements, compared to trust assets of $15.0 billion at March 31,
1999.
Table 9 Trust Services
(In Thousands)
Three months ended March 31,
--------------------------------------
2000 1999
---------------- ---- ----------------
Revenue from external sources $ 11,155 $ 8,907
Revenue(expense) from internal sources 1,516 1,849
Total revenue 12,671 10,756
Operating expense 9,385 8,679
Net income 2,006 1,269
Average assets $ 309,356 $ 320,531
Average equity 35,498 31,233
Return on assets 2.61% 1.61%
Return on equity 22.73% 16.48%
Efficiency ratio 74.07% 80.69%
<PAGE>8
Regional Banks
Regional Banks include Bank of Texas, Bank of Arkansas, and Bank of Albuquerque.
Each of these banks provides 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 $2.6 million or 11% of consolidated net income for
the first quarter of 2000, compared to $811 thousand in 1999. Total revenue
increased by $8.0 million to $21.5 million. Operating expenses increased by $4.7
million to $16.2 million. The growth in total revenue and operating expenses
included $5.2 million and $3.9 million, respectively, from acquisitions that
were completed in the second quarter of 1999.
Table 10 Regional Banks
(In Thousands)
Three months ended March 31,
--------------------------------------
2000 1999
---------------- --- -----------------
Revenue from external sources $ 24,970 $ 14,514
Revenue(expense) from internal sources (3,473) (1,025)
Total revenue 21,497 13,489
Operating expense 16,216 11,565
Net income 2,642 811
Average assets $ 2,243,539 $ 1,258,117
Average equity 229,048 147,114
Return on assets 0.47% 0.26%
Return on equity 4.64% 2.24%
Efficiency ratio 75.43% 85.74%
INCOME TAXES
Income tax expense was $8.4 million or 25% of pre-tax income for the first
quarter of 2000, compared to $10.0 million or 32% of pre-tax income for the
first quarter of 1999. The Internal Revenue Service closed its examination of
1996 and management completed a review of 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 or 34% of pre-tax income excluding the reduction in this
allowance.
YEAR 2000 CONSIDERATIONS
The Year 2000 issue, in general, is the result of computer programs being
written using two digits rather than four to define the applicable year. Any
computer programs that have date sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruptions in operations, including among
other things, a temporary inability to process transactions or to engage in
similar normal business activities.
BOK Financial personnel continue to monitor its information technology and
non-information technology systems and to communicate with large customers to
determine whether any disruptions have occurred. To date, no significant
disruptions in operations have been identified. No additional expenditures
related to the Year 2000 issue are expected.
<PAGE>9
ASSESSMENT OF FINANCIAL CONDITION
The aggregate loan portfolio at March 31, 2000 increased $76 million to $4.7
billion during the first quarter of 2000. Commercial loans increased $18 million
and commercial real estate loans increased $78 million. Consumer loans decreased
due to the sale of $43 million of student loans during the quarter.
<TABLE>
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TABLE 11 - LOANS
(In Thousands)
March 31, Dec. 31, Sept. 30, June 30, March 31,
2000 1999 1999 1999 1999
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Commercial:
Energy $ 601,991 $ 606,561 $ 593,944 $ 558,975 $ 484,810
Manufacturing 337,172 344,175 327,195 289,879 280,155
Wholesale/retail 435,026 407,785 400,730 371,867 319,545
Agricultural 184,299 173,653 162,531 151,010 212,314
Services 813,990 807,184 833,671 757,012 647,963
Other commercial and industrial 310,224 325,343 206,045 190,668 189,752
Commercial real estate:
Construction and land development 278,551 249,160 258,947 246,948 203,968
Multifamily 269,667 257,187 259,276 240,906 191,173
Other real estate loans 624,309 588,195 523,324 495,304 412,798
Residential mortgage:
Secured by 1-4 family
residential properties 551,639 531,058 526,622 520,061 482,990
Residential mortgages held for 42,967 57,057 58,466 79,994 81,277
sale
Consumer 269,964 296,131 259,414 224,493 175,217
- -------------------------------------------------------------------------------------------------------
Total $4,719,799 $4,643,489 $ 4,410,165 $4,127,117 $ 3,681,962
- -------------------------------------------------------------------------------------------------------
</TABLE>
While BOK Financial continues to increase geographic diversification through
expansion into the Dallas, Texas and Albuquerque, New Mexico areas, geographic
concentration subjects the loan portfolio to the general economic conditions in
Oklahoma. Notable loan concentrations by primary industry of the borrowers are
presented in Table 11. Agriculture included loans totaling $150 million to the
cattle industry and services included loans totaling $211 million to nursing and
medical facilities and $112 million to the hotel industry. Approximately 53% of
commercial real estate loans was secured by property in Oklahoma, primarily in
the Tulsa and Oklahoma City metropolitan areas. An additional 12% of commercial
real estate loans was secured by property located in Texas. The major components
of other real estate loans were office buildings, $219 million and retail
facilities, $186 million.
SUMMARY OF LOAN LOSS EXPERIENCE
The reserve for loan losses, which is available to absorb losses inherent in the
loan portfolio, totaled $78 million at March 31, $76 million at December 31,
1999, and $69 million at March 31, 1999. This represented 1.66%, 1.66%, and
1.92% of total loans, excluding loans held for sale, at March 31, 2000, December
31, 1999, and March 31, 1999, 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 12 presents statistical information regarding the reserve for
loan losses for the past five quarters.
<PAGE>10
- --------------------------------------------------------------------------------
TABLE 12 - SUMMARY OF LOAN LOSS EXPERIENCE
(In Thousands)
Three Months Ended
-------------------------------------------------------
March 31, Dec. 31, Sept. 30, June 30, March 31,
2000 1999 1999 1999 1999
-------------------------------------------------------
Beginning balance $ 76,234 $ 75,186 $ 72,732 $ 68,994 $ 65,922
Loans charged-off:
Commercial 845 641 71 1,420 4
Commercial real estate 250 - - - 35
Residential mortgage 21 546 20 37 14
Consumer 1,148 820 1,237 1,339 1,164
- --------------------------------------------------------------------------------
Total 2,264 2,007 1,328 2,796 1,217
- --------------------------------------------------------------------------------
Recoveries of loans previously charged-off:
Commercial 261 308 830 1,839 133
Commercial real estate 265 39 208 4 236
Residential mortgage 134 14 2 1 -
Consumer 559 439 600 627 490
- --------------------------------------------------------------------------------
Total 1,219 800 1,640 2,471 859
- --------------------------------------------------------------------------------
Net loans charged-off
(recoveries) 1,045 1,207 (312) 325 358
Provision for loan losses 2,639 2,255 2,142 2,538 3,430
Additions due to acquisitions - - - 1,525 -
- --------------------------------------------------------------------------------
Ending balance $ 77,828 $ 76,234 $ 75,186 $ 72,732 $ 68,994
- --------------------------------------------------------------------------------
Reserve to loans outstanding
at period-end(1) 1.66% 1.66% 1.73% 1.80% 1.92%
Net loan losses (annualized)
to average loans (1) 0.09 0.11 (0.03) 0.03 0.04
- --------------------------------------------------------------------------------
(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, and includes probable losses on both outstanding loans and unused
commitments to provide financing. 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 with written
documentation. Specific reserves for impairment are determined in accordance
with generally accepted accounting principles and appropriate regulatory
standards. At March 31, 2000, specific impairment reserves totaled $1.9 million.
The adequacy of the general loan loss reserves 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 loan losses in the more recent periods.
This model is used to assign general loan loss reserves to commercial loans and
capital leases, residential mortgage 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 that is greater than the general allocation.
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, 2000, the loss potential ranges for the more
significant factors were:
<PAGE>11
Concentration of large loans - $2.1 million to $4.2 million
Loan portfolio growth and expansion into new markets - $2.2 million to
$4.5 million
A provision for loan losses is charged against earnings in amounts necessary to
maintain an adequate reserve for loan losses. These provisions were $2.6 million
for the first quarter of 2000, compared to $3.4 million for the first quarter of
1999.
NONPERFORMING ASSETS
Information regarding nonperforming assets, which were $23 million at March 31,
2000, $23 million at December 31, 1999, and $21 million at March 31, 1999, is
presented in Table 13. Nonperforming loans included nonaccrual loans and
renegotiated loans and excluded loans 90 days or more past due but still
accruing.
<TABLE>
- ---------------------------------------------------------------------------------------------------------------------
TABLE 13 - NONPERFORMING ASSETS
(In Thousands)
March 31, Dec. 31, Sept. 30, June 30, March 31,
2000 1999 1999 1999 1999
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nonperforming assets:
Nonperforming loans:
Nonaccrual loans:
Commercial $ 13,448 $ 12,686 $ 12,088 $ 13,754 $ 9,712
Commercial real estate 1,629 2,046 1,796 2,824 2,726
Residential mortgage 2,555 3,383 44 699 2,097
Consumer 970 1,350 3,938 3,198 1,410
- ---------------------------------------------------------------------------------------------------------------------
Total nonaccrual loans 18,602 19,465 17,866 20,475 15,945
Renegotiated loans - - - - -
- ---------------------------------------------------------------------------------------------------------------------
Total nonperforming loans 18,602 19,465 17,866 20,475 15,945
Other nonperforming assets 3,972 3,478 4,447 4,450 4,927
- ---------------------------------------------------------------------------------------------------------------------
Total nonperforming assets $ 22,574 $ 22,943 $ 22,313 $ 24,925 $ 20,872
- ---------------------------------------------------------------------------------------------------------------------
Ratios:
Reserve for loan losses to
nonperforming loans 418.39% 391.65% 420.83% 355.22% 432.70%
Nonperforming loans to
period-end loans (2) 0.40 0.42 0.41 0.51 0.44
- ---------------------------------------------------------------------------------------------------------------------
Loans past due 90 days (1) $ 9,704 $ 11,336 $ 12,757 $ 11,082 $ 13,037
- ---------------------------------------------------------------------------------------------------------------------
(1) Includes residential mortgages guaranteed
by agencies of the U.S. Government $ 7,623 $ 8,538 $ 7,712 $ 7,958 $ 7,674
Excludes residential mortgages guaranteed
by agencies of the U.S. Government in
foreclosure 8,102 8,310 8,159 7,487 7,099
(2) Excludes residential mortgage loans held for sale
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
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. These loans are assigned to various risk categories
in order to focus management's attention on the loans with higher risk of loss.
At March 31, 2000, loans totaling $71 million were assigned by management to the
substandard risk category and loans totaling $51 million were assigned to the
special mention risk category, compared to $71 million and $25 million,
respectively, at March 31, 1999. Approximately $11 million of the increase in
special mention loans was due to one borrower that is experiencing difficulties
due to their expansion activities. This increase does not appear to indicate a
trend toward increased asset quality problems at this time.
<PAGE>12
LEASING
BOK Financial expanded its equipment leasing activities during the first quarter
of 2000. Other assets included $25 million of equipment held for various
operating leases at March 31, 2000, compared to $14 million at December 31,
1999. These activities include a much greater range of equipment financing than
the natural gas compressors that were the focus of BOK Financial's previous
leasing activities and introduce unique credit, collateral valuation, and
transaction structure risk to the company.
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 both 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, do not pose a material
market risk to BOK Financial. The responsibility for managing market risk rests
with the Asset/Liability Committee, which operates under policy guidelines
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 generally 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 on 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 include the Federal Reserve Bank's discount rate which affects
short-term borrowings, the prime lending rate, and the London InterBank Offering
Rate ("LIBOR") which are the basis for much of the variable-rate loan pricing,
and 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. In addition, sensitivity of fee income to
market interest rate levels, such as those related to cash management services
and mortgage servicing, is included. The model incorporates management's
assumptions regarding the level of interest rate or balance sheet 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 rights 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,
2000 and 1999, this modeling indicated interest rate sensitivity as follows:
<PAGE>13
<TABLE>
- -----------------------------------------------------------------------------------------------
Table 14 - Interest Rate Sensitivity
(Dollars in Thousands)
200 bp Increase 200 bp Decrease Most Likely
--------------------------------------------------------------------
2000 1999 2000 1999 2000 1999
------------ ------------------------------------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Anticipated impact over the next twelve months:
Net interest revenue $ (2,521) $ (1,394) $ 3,990 $ (477) $ 522 $ (69)
(0.9)% (0.6)% 1.4% (0.2)% 0.2% (0.0)%
- ----------------------------------------- --------- --------- ----------------------- ---------
Net income $(1,576) $ (1,171) $ 2,494 $(1,772) $ 326 $ (80)
(1.7)% (1.3)% 2.6% (2.0)% 0.3% (0.0)%
- ----------------------------------------- --------- --------- ----------------------- ---------
Economic value of equity $(34,188) $(86,488) $(5,025) $(4,251) $(13,444) $(11,192)
(3.0)% (10.0)% (0.4)% (0.5)% (1.2)% (1.3)%
- ----------------------------------------- --------- --------- ----------------------- ---------
</TABLE>
The estimated changes in interest rates on net interest revenue, net income, or
economic value of equity is not projected to be significant within the +/- 200
basis point range of assumptions.
During the first quarter of 2000, BOK Financial changed its strategy for hedging
its loss exposure from prepayment of mortgage loans that it services. The new
strategy is to acquire 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 and to recognize gains when necessary to
offset losses on its mortgage servicing rights. No securities were held under
this program at March 31, 2000. The interest rate sensitivity of the mortgage
servicing portfolio is modeled over a range of + or - 50 basis points. At March
31, 2000, the pre-tax results of this modeling are as follows:
Table 15 - Mortgage Servicing Interest Rate Sensitivity
(Dollars in Thousands)
50 bp increase 50 bp decrease
----------------- ------------------
Anticipated change in
Mortgage servicing rights $3,556 $ (4,766)
================= ==================
The simulation 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 more closely match interest paid on certain long-term certificates of
deposit and subordinated debt with earning assets. 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. For the
first quarter of 2000, income from these swaps exceeded the cost of the swaps by
$457 thousand. Credit risk from these swaps is closely monitored and
counterparties of these contracts are selected on the basis of their credit
worthiness, among other factors. Derivative products are not used for
speculative puposes.
<PAGE>14
- --------------------------------------------------------------------------------
TABLE 16 - INTEREST RATE SWAPS
(In thousands)
Notional Pay Receive Fair
Amount Rate Rate Value
------------------------------------------------------------------
Expiration:
2001 4,324 5.03% 6.13% (1) 80
2002 201,660 5.03 - 6.53 (1) 6.13 - 6.92 (1) (1,587)
2003 42,081 4.82 - 5.99 6.13 (1) 1,884
2004 75,604 5.65 - 6.29 (1) 6.13 - 7.36 (1) 1,077
2005 8,383 5.08 - 5.21 6.13 (1) 588
2006 16,500 7.26 6.53 (1) 69
2007 184,193 5.23 - 7.48 (1) 6.13 - 6.80 (1) (3,539)
2008 36,785 5.15 - 6.63 6.13 (1) 2,188
2009 82,732 5.22 - 6.85 6.13 (1) 3,481
- --------------------------------------------------------------------------------
(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 a 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 will 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 and the VAR to $6.5 million. At March 31, 2000, the nominal
aggregate trading positions was $32 million and the VAR was $300 thousand.
- --------------------------------------------------------------------------------
TABLE 17 - CAPITAL RATIOS
March 31, Dec. 31, Sept. 30, June 30, March 31,
2000 1999 1999 1999 1999
--------------------------------------------------
Average shareholders' equity
to average assets 6.71% 6.80% 6.72% 7.36% 7.62%
Risk-based capital:
Tier 1 capital 7.45 7.27 7.09 7.09 8.19
Total capital 10.80 10.72 10.67 10.89 12.23
Leverage 6.06 5.92 5.64 5.47 6.32
- --------------------------------------------------------------------------------
<PAGE>15
NEW ACCOUNTING STANDARDS
During 1998, the Financial Accounting Standards Board adopted Statement No. 133,
"Accounting for Derivative Instruments and Hedging Activities" (FAS 133"). The
effective date for FAS 133 has been deferred until fiscal years beginning after
June 15, 2000. BOK Financial expects to adopt FAS 133 effective January 1, 2001.
FAS 133 will require the recognition of all derivative financial instruments on
the balance sheet at fair value. Derivatives that do not qualify for special
hedge accounting treatment must be adjusted to fair value through income. If the
derivative qualifies for hedge accounting, depending on the nature of the hedge,
changes in fair value of the derivatives will either be offset against changes
in fair value of the hedged assets, liabilities, or firm commitments through
earnings or recognized in other comprehensive income until the hedged item is
recognized in earnings. The ineffective portion of a derivative's change in fair
value will be immediately recognized in earnings.
BOK Financial is currently analyzing the effect of FAS 133 on the derivatives
used as part of its asset / liability management programs. Although the full
effect of FAS 133 on earnings and financial position has not yet been
determined, it appears that its adoption may result in an increase in earnings
volatility.
FORWARD-LOOKING STATEMENTS
This 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
risks, uncertainties, and assumptions that 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 with 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 1999 Form 10-K filed with the Securities and
Exchange Commission which contains audited financial statements.
<PAGE>16
- --------------------------------------------------------------------------------
Consolidated Statement of Earnings - UNAUDITED
(In Thousands Except Share Data)
Three Months Ended
March 31,
-----------------------------
2000 1999
------------- --- -----------
Interest Revenue
Loans $ 101,038 $ 72,531
Taxable securities 40,276 33,008
Tax-exempt securities 2,967 3,922
- ---------------------------------------------- --- ------------- --- -----------
Total securities 43,243 36,930
- ---------------------------------------------- --- ------------- --- -----------
Trading securities 360 696
Funds sold 703 413
- ---------------------------------------------- --- ------------- --- -----------
Total interest revenue 145,344 110,570
- ---------------------------------------------- --- ------------- --- -----------
Interest Expense
Deposits 46,036 34,438
Other borrowings 33,116 21,773
Subordinated debenture 2,514 2,348
- ---------------------------------------------- --- ------------- --- -----------
Total interest expense 81,666 58,559
- ---------------------------------------------- --- ------------- --- -----------
Net Interest Revenue 63,678 52,011
Provision for Loan Losses 2,639 3,430
- ---------------------------------------------- --- ------------- --- -----------
Net Interest Revenue After
Provision for Loan Losses 61,039 48,581
- ---------------------------------------------- --- ------------- --- -----------
Other Operating Revenue
Brokerage and trading revenue 4,426 4,436
Transaction card revenue 8,620 7,597
Trust fees and commissions 9,523 7,769
Service charges and fees on deposit accounts 10,255 9,453
Mortgage banking revenue, net 7,834 9,292
Leasing revenue 744 1,868
Other revenue 4,973 5,085
- ---------------------------------------------- --- ------------- --- -----------
Total fees and commissions revenue 46,375 45,500
- ---------------------------------------------- --- ------------- --- -----------
Gain on sale of student loans 433 529
Gain on loan securitization - 270
Gain on sale of other assets - 892
Securities gains (losses), net (17) 274
- ---------------------------------------------- --- ------------- --- -----------
Total other operating revenue 46,791 47,465
- ---------------------------------------------- --- ------------- --- -----------
Other Operating Expense
Personnel 37,289 31,900
Business promotion 2,335 2,498
Professional fees and services 2,318 1,901
Net occupancy, equipment & data processing 15,897 13,108
FDIC and other insurance 380 326
Printing, postage and supplies 2,811 2,816
Net gains and operating expenses of
repossessed assets (583) (1,296)
Amortization of intangible assets 4,078 3,248
Mortgage banking costs 5,437 5,304
Other expense 4,654 5,021
- ---------------------------------------------- --- ------------- --- -----------
Total other operating expense 74,616 64,826
- ---------------------------------------------- --- ------------- --- -----------
Income Before Taxes 33,214 31,220
Federal and state income tax 8,401 9,983
- ---------------------------------------------- --- ------------- --- -----------
Net Income $ 24,813 $ 21,237
- ---------------------------------------------- --- ------------- --- -----------
Earnings Per Share:
Net Income
Basic $ 0.50 $ 0.43
- ---------------------------------------------- --- ------------- --- -----------
Diluted $ 0.45 $ 0.38
- ---------------------------------------------- --- ------------- --- -----------
Average Shares Used in Computation:
Basic 49,101,720 48,911,086
- ---------------------------------------------- ----------------- ---------------
Diluted 55,575,760 55,803,082
- ---------------------------------------------- ----------------- ---------------
See accompanying notes to consolidated financial statements.
<PAGE>17
<TABLE>
- --------------------------------------------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS - UNAUDITED
(In Thousands Except Share Data)
March 31, December 31, March 31,
2000 1999 1999
--------------------------------------------------
<S> <C> <C> <C>
ASSETS
Cash and due from banks $ 438,256 $ 397,895 $ 412,557
Funds sold 30,685 28,960 17,631
Trading securities 15,043 14,452 51,924
Securities:
Available for sale 2,604,584 2,588,704 2,506,070
Investments (fair value: March 31, 2000 - $204,519;
December 31, 1999 -$211,624;
March 31, 1999 - $229,719) 206,365 213,180 230,190
- ----------------------------------------------------------------------------------------------------------------
Total securities 2,810,949 2,801,884 2,736,260
- ----------------------------------------------------------------------------------------------------------------
Loans 4,719,799 4,643,489 3,681,962
Less reserve for loan losses 77,828 76,234 68,994
- ----------------------------------------------------------------------------------------------------------------
Net loans 4,641,971 4,567,255 3,612,968
- ----------------------------------------------------------------------------------------------------------------
Premises and equipment, net 120,167 119,239 92,345
Accrued revenue receivable 67,850 67,640 70,293
Excess cost over fair value of net assets acquired
and core deposit premiums (net of accumulated
amortization: March 31, 2000 - $69,370;
December 31, 1999 - $65,292;
March 31, 1999 - $52,717) 120,934 125,011 95,540
Mortgage servicing rights 112,998 114,134 92,305
Real estate and other repossessed assets 3,972 3,478 4,927
Bankers' acceptances 23,730 30,161 15,916
Other assets 163,090 103,888 88,350
- ----------------------------------------------------------------------------------------------------------------
Total assets $ 8,549,645 $ 8,373,997 $ 7,291,016
- ----------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing demand deposits $ 1,077,098 $ 1,020,996 $ 1,115,506
Interest-bearing deposits:
Transaction 1,925,016 1,866,499 1,474,595
Savings 160,233 155,839 160,943
Time 2,348,881 2,219,850 1,817,578
- ----------------------------------------------------------------------------------------------------------------
Total deposits 5,511,228 5,263,184 4,568,622
- ----------------------------------------------------------------------------------------------------------------
Funds purchased and repurchase agreements 1,321,498 1,345,683 1,052,770
Other borrowings 880,083 938,020 893,819
Subordinated debenture 148,682 148,642 148,504
Accrued interest, taxes and expense 67,378 62,431 56,539
Bankers' acceptances 23,730 30,161 15,916
Other liabilities 20,098 28,712 16,880
- ----------------------------------------------------------------------------------------------------------------
Total liabilities 7,972,697 7,816,833 6,753,050
- ----------------------------------------------------------------------------------------------------------------
Shareholders' equity:
Preferred stock 25 25 25
Common stock ($.00006 par value; 2,500,000,000
shares authorized; shares issued and outstanding
March 31, 2000 - 49,462,016; December 31, 1999
- 49,382,262; March 31, 1999 -48,216,146) 3 3 3
Capital surplus 275,906 274,980 238,090
Retained earnings 357,189 332,751 297,478
Treasury stock (shares at cost: March 31, 2000 -357,181;
December 31, 1999 - 316,325; March 31, 1999 - 769,522) (7,844) (7,018) (2,976)
Accumulated other comprehensive income (loss) (48,331) (43,577) 5,346
- ----------------------------------------------------------------------------------------------------------------
Total shareholders' equity 576,948 557,164 537,966
- ----------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 8,549,645 $ 8,373,997 $ 7,291,016
- ----------------------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>18
<TABLE>
- -------------------------------------------------------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balances at December 31, 1998 250,000 $ 25 48,112 $ 3 $12,297 $236,726 $278,365 749 $(2,623) $ 524,793
Comprehensive income:
Net income - - - - - - 21,237 - - 21,237
Other Comprehensive
income, net of tax:
Unrealized gains(loss)
on securities
available - - - - (6,951) - - - - (6,951)
for sale (1)
----------
Total Comprehensive income 14,286
----------
Exercise of stock options - - 70 - - 595 - 17 (285) 310
Issuance of common stock to
thrift Plan - - 14 - - 322 - (1) 33 355
Common stock dividend - - - - - - (1,749) - - (1,749)
Preferred dividend paid
in shares of common - - 17 - - 375 (375) - - -
stock
Director retainer shares - - 3 - - 72 - - - 72
Treasury stock purchase - - - - - - - 4 (101) (101)
- -------------------------------------------------------------------------------------------------------------------------------
Balance at March 31, 1999 250,000 $ 25 48,216 $ 3 $5,346 $238,090 $297,478 769 $(2,976) $ 537,966
- -------------------------------------------------------------------------------------------------------------------------------
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
Dividends paid in shares of
common stock:
Preferred stock - - 17 - - 375 (375) - - -
Treasury stock purchase - - - - - - - 14 (282) (282)
- -------------------------------------------------------------------------------------------------------------------------------
Balances at March 31, 2000 250,000 $ 25 49,462 $ 3 $ (48,331) $275,906 $357,189 357 $(7,844) $576,948
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) March 31, 2000 March 31, 1999
-------------- --------------
Reclassification adjustments:
Unrealized losses on available for
sale securities $ (4,767) $ (6,767)
Less: reclassification adjustment for
gains realize included in net
income, net of tax (13) 184
---------------------------------
Net unrealized losses on securities $ (4,754) $ (6,951)
---------------------------------
See accompanying notes to consolidated financial statements.
<PAGE>19
<TABLE>
- --------------------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(In Thousands)
Three Months Ended
March 31,
----------------------------------
2000 1999
----------------------------------
<S> <C> <C>
Cash Flow From Operating Activities:
Net income $ 24,813 $ 21,237
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 2,639 3,430
Depreciation and amortization 12,406 11,977
Tax reserve reversal 3,000 -
Net amortization of security discounts and premiums (115) 310
Net gain on sale of assets (1,805) (5,599)
Mortgage loans originated for resale (105,853) (198,720)
Proceeds from sale of mortgage loans held for resale 121,594 219,513
Change in trading securities (310) (2,738)
Change in accrued revenue receivable (17) (7,801)
Change in other assets 14,822 (17,417)
Change in accrued interest, taxes and expense 4,947 4,951
Change in other liabilities (10,021) 11,346
- --------------------------------------------------------------------------------------------
Net cash provided by operating activities 66,100 40,489
- --------------------------------------------------------------------------------------------
Cash Flow From Investing Activities:
Proceeds from maturities of investment securities 12,502 19,375
Proceeds from maturities of available for sale securities 45,817 99,988
Purchases of investment securities (5,728) (21,855)
Purchases of available for sale securities (120,901) (743,785)
Proceeds from sales of available for sale securities 36,300 453,566
Loans originated or acquired net or principal collected (176,733) (206,260)
Proceeds from disposition of assets 43,508 151,239
Purchases of assets (24,426) (38,004)
Cash and cash equivalents of branches & subsidiaries
acquired and sold, net - (1,339)
- --------------------------------------------------------------------------------------------
Net cash used by investing activities (189,661) (287,075)
- --------------------------------------------------------------------------------------------
Cash Flows From Financing Activities:
Net change in demand deposits, transaction
deposits, money market deposits, and savings accounts 119,013 (55,331)
Net change in certificates of deposit 129,031 16,233
Net change in other borrowings (82,122) 245,560
Purchase of treasury stock (282) (101)
Common stock dividend - (1,749)
Issuance of preferred, common and treasury stock, net 7 737
- --------------------------------------------------------------------------------------------
Net cash provided by financing activities 165,647 205,349
- --------------------------------------------------------------------------------------------
Net change in cash and cash equivalents 42,086 41,237
Cash and cash equivalents at beginning of period 426,855 471,425
- --------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 468,941 $ 430,188
- --------------------------------------------------------------------------------------------
Cash paid for interest $ 76,726 $ 60,762
- --------------------------------------------------------------------------------------------
Cash paid for taxes $ 2,896 $ 8,550
- --------------------------------------------------------------------------------------------
Net loans transferred to repossessed real estate
and other assets $ 869 $ 840
- --------------------------------------------------------------------------------------------
Payment of preferred stock dividends in common stock $ 375 $ 375
- --------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>20
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.,
Swiss Avenue State Bank, and Mid-Cities National Bank. Certain prior period
balances have been reclassified to conform with the current period presentation.
(2) MORTGAGE BANKING ACTIVITIES
At March 31, 2000, BOk owned the rights to service 96,953 mortgage loans with
outstanding principal balances of $7.0 billion, including $106.9 million
serviced for BOk. The weighted average interest rate and remaining term was
7.45% and 272 months, respectively.
Activity in capitalized mortgage servicing rights and related valuation
allowance during the three months ending March 31, 2000 is as follows:
<TABLE>
Capitalized Mortgage Servicing Rights
------------------------------------------------------------------------------
Valuation Hedging
Purchased Originated Total Allowance (Gain)/Loss Net
--------------- ------------ ------------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at
December 31, 1999 $ 74,912 $ 28,815 $ 103,727 $ - $ 10,407 $114,134
Additions 147 1,361 1,508 - 1,508
Amortization expense (2,501) (810) (3,311) (376) (3,687)
Realized hedge losses - - - 4,389 4,389
Unrealized hedge losses - - - (3,346) (3,346)
- ----------------------------- ---------- -- ---------- ----------- -------------- -- ---------- ---------
Balance at March 31, 2000 $ 72,558 $ 29,366 $ 101,924 $ - $ 11,074 $112,998
- ----------------------------- ---------- -- ---------- ----------- -------------- -- ---------- ---------
Estimated fair value of
mortgage servicing
rights (1) $ 83,051 $ 38,935 $ 121,986 $121,986
- ----------------------------- ---------- -- ---------- ----------- -------------- -- ---------- ---------
(1) Excludes approximately $8.6 million of loan servicing rights on mortgage
loans originated prior to the adoption of FAS 122.
</TABLE>
Stratification of the mortgage loan servicing portfolio, outstanding principal
of loans serviced, and related hedging information by interest rate at March 31,
2000 follows (in thousands):
<TABLE>
< 6.50% 6.50% - 7.49% 7.50% - 8.49% => 8.50% Total
---------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cost less accumulated amortization 8,896 60,643 29,602 2,783 101,924
Deferred hedge losses - 8,650 2,424 - 11,074
- -------------------------------------------------------------------------------------------
Adjusted cost 8,896 69,293 32,026 2,783 112,998
Fair value 10,373 71,820 34,720 5,073 121,986
- -------------------------------------------------------------------------------------------
Impairment - - - - -
- -------------------------------------------------------------------------------------------
Outstanding principal of loans
serviced (in millions) (1) 594 3,727 1,828 286 6,435
- -------------------------------------------------------------------------------------------
(1) Excludes outstanding principal of $475.7 million for loans serviced for
which there is no capitalized mortgage servicing rights.
</TABLE>
<PAGE>21
(3) 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,
------------------------------
2000 1999
-------------- ----------
Proceeds $ 36,300 $ 453,566
Gross realized gains 30 1,681
Gross realized losses 47 1,411
Related federal and state income tax
expense (benefit) (4) 86
(4) 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,
2000 1999
---------------------------
Numerator:
Net income $ 24,813 $ 21,237
Preferred stock dividends (375) (375)
- --------------------------------------------------------------------------------
Numerator for basic earnings per share - income
available to common stockholders 24,438 20,862
- --------------------------------------------------------------------------------
Effect of dilutive securities:
Preferred stock dividends 375 375
- --------------------------------------------------------------------------------
Numerator for diluted earnings per share - income
available to common stockholders after
assumed conversion $ 24,813 $ 21,237
- --------------------------------------------------------------------------------
Denominator:
Denominator for basic earnings per share
-weighted average shares 49,101,720 48,911,086
Effect of dilutive securities:
Employee stock options 324,675 742,631
Convertible preferred stock 6,149,365 6,149,365
- --------------------------------------------------------------------------------
Dilutive potential common shares 6,474,040 6,819,996
- --------------------------------------------------------------------------------
Denominator for diluted earnings per share - adjusted
weighted average shares and assumed conversions 55,575,760 55,803,082
- --------------------------------------------------------------------------------
Basic earnings per share $ 0.50 $ 0.43
- --------------------------------------------------------------------------------
Diluted earnings per share $ 0.45 $ 0.38
- --------------------------------------------------------------------------------
(1) Excludes employee stock options with exercise
price greater than current market price 181,756 -
<PAGE>22
(6) REPORTABLE SEGMENTS
Reportable segments reconciliation to the Consolidated Financial Statements for
the three months ended March 31, 2000 is as follows:
<TABLE>
Other Other
Net Interest Operating Operating Average
Revenue Revenue Expense Assets
-------------- -------------- --------------- ------------
<S> <C> <C> <C> <C>
Total reportable lines of business $ 59,970 $ 33,910 $ 61,078 $ 8,429,639
Total non-reportable lines of business 132 12,472 9,437 29,507
Unallocated items:
Tax-equivalent adjustment (1,867) - - -
Funds management 6,438 309 3,435 189,302
Eliminations and all others, net (995) 117 666 (280,292)
----------------------------------------------------------
BOK Financial consolidated $ 63,678 $ 46,808 $ 74,616 $ 8,368,156
============== ============== =============== ============
</TABLE>
Reportable segments reconciliation to the Consolidated Financial Statements for
the three months ended March 31, 1999 is as follows:
<TABLE>
Other Other
Net Interest Operating Operating Average
Revenue Revenue Expense Assets
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Total reportable lines of business $ 46,386 $ 34,820 $ 52,458 $ 6,870,860
Total non-reportable lines of business 22 11,077 8,156 60,758
Unallocated items:
Tax-equivalent adjustment (2,334) - - -
Funds management 8,085 283 3,339 149,275
Eliminations and all others, net (148) 1,011 873 (84,076)
--------------------------------------------------------
BOK Financial consolidated $ 52,011 $ 47,191 $ 64,826 $ 6,996,817
============== ============= ============== =============
</TABLE>
(7) 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.
<PAGE>23
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------
QUARTERLY FINANCIAL SUMMARY - UNAUDITED
Consolidated Daily Average Balances, Average Yields and Rates
(In Thousands Except Share Data)
For Three months ended
-------------------------------------------------------------------------------------
March 31, 2000 December 31, 1999
------------------------------------------ -------------------------------------
Average Revenue/ Yield Average Revenue/ Yield
Balance Expense(1) /Rate Balance Expense(1) /Rate
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Taxable securities $ 2,547,499 40,275 6.36% $ 2,453,800 $ 38,381 6.21%
Tax-exempt securities(1) 260,593 4,602 7.10 259,760 4,656 7.11
- ------------------------------------------------------------------------------------------------------------------------------
Total securities 2,808,092 44,877 6.43 2,713,560 43,037 6.29
- ------------------------------------------------------------------------------------------------------------------------------
Trading securities 14,593 360 9.92 17,845 390 8.67
Funds sold 47,782 703 5.92 37,650 552 5.82
Loans(2) 4,650,020 101,271 8.76 4,480,283 97,563 8.64
Less reserve for loan losses 77,808 76,166
- ------------------------------------------------------------------------------------------------------------------------------
Loans, net of reserve 4,572,212 101,271 8.91 4,404,117 97,563 8.79
- ------------------------------------------------------------------------------------------------------------------------------
Total earning assets 7,442,679 147,211 7.96 7,173,172 141,542 7.83
- ------------------------------------------------------------------------------------------------------------------------------
Cash and other assets 925,477 963,257
- ------------------------------------------------------------------------------------------------------------------------------
Total assets $ 8,368,156 $ 8,136,429
- ------------------------------------------------------------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Transaction deposits $ 1,856,644 12,801 2.77% $ 1,885,730 12,639 2.66%
Savings deposits 155,848 672 1.73 159,442 721 1.79
Other time deposits 2,364,126 32,563 5.54 2,206,956 29,109 5.23
- ------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits 4,376,618 46,036 4.23 4,252,128 42,469 3.96
- ------------------------------------------------------------------------------------------------------------------------------
Other borrowings 2,216,244 33,116 6.01 2,071,787 29,715 5.69
Subordinated debenture 148,663 2,514 6.80 148,620 2,387 6.37
- ------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 6,741,525 81,666 4.87 6,472,535 74,571 4.57
- ------------------------------------------------------------------------------------------------------------------------------
Demand deposits 954,307 977,825
Other liabilities 111,079 132,646
Shareholders' equity 561,245 553,423
- ------------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' $ 8,368,156 $ 8,136,429
Equity
- ------------------------------------------------------------------------------------------------------------------------------
Tax-Equivalent Net Interest Revenue (1) 65,545 3.08% 66,971 3.26%
Tax-Equivalent Net Interest Revenue (1)
To Earning Assets 3.54 3.70
Less tax-equivalent adjustment (1) 1,867 1,828
- ------------------------------------------------------------------------------------------------------------------------------
Net Interest Revenue 63,678 65,143
Provision for loan losses 2,639 2,255
Other operating revenue 46,791 46,721
Other operating expense 74,616 74,257
- ------------------------------------------------------------------------------------------------------------------------------
Income Before Taxes 33,214 35,352
Federal and state income tax 8,401 12,155
- ------------------------------------------------------------------------------------------------------------------------------
Net Income $ 24,813 $ 23,197
- ------------------------------------------------------------------------------------------------------------------------------
Earnings Per Share:
Net Income
Basic $ 0.50 $ 0.46
- ------------------------------------------------------------------------------------------------------------------------------
Diluted $ 0.45 $ 0.42
- ------------------------------------------------------------------------------------------------------------------------------
(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.
</TABLE>
<PAGE>24
<TABLE>
- --------------------------------------------------------------------------------------------------------------------------
For Three months ended
- --------------------------------------------------------------------------------------------------------------------------
September 30, 1999 June 30, 1999 March 31, 1999
- --------------------------------------------------------------------------------------------------------------------------
Average Revenue/ Yield Average Revenue/ Yield Average Revenue/ Yield
Balance Expense(1) /Rate Balance Expense(1) /Rate Balance Expense(1) /Rate
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 2,456,120 $ 37,735 6.10% $ 2,418,685 $ 35,841 5.94% $ 2,198,972 $ 32,944 6.08%
275,749 5,219 7.51 295,095 5,742 7.80 324,297 6,168 7.71
- --------------------------------------------------------------------------------------------------------------------------
2,731,869 42,954 6.24 2,713,780 41,583 6.15 2,523,269 39,112 6.29
- --------------------------------------------------------------------------------------------------------------------------
27,606 393 5.65 50,190 812 6.49 54,907 696 5.14
37,558 495 5.23 63,353 759 4.81 34,962 413 4.79
4,256,430 89,882 8.38 3,822,018 77,330 8.12 3,617,162 72,683 8.15
74,539 70,968 67,428
- --------------------------------------------------------------------------------------------------------------------------
4,181,891 89,882 8.53 3,751,050 77,330 8.27 3,549,734 72,683 8.30
- --------------------------------------------------------------------------------------------------------------------------
6,978,924 133,724 7.60 6,578,373 120,484 7.35 6,162,872 112,904 7.43
- --------------------------------------------------------------------------------------------------------------------------
890,977 831,059 833,945
- --------------------------------------------------------------------------------------------------------------------------
$ 7,869,901 $ 7,409,432 $ 6,996,817
- --------------------------------------------------------------------------------------------------------------------------
$ 1,858,386 12,278 2.62% $ 1,655,457 11,035 2.67% $ 1,463,556 10,558 2.93%
167,875 779 1.84 162,874 742 1.83 155,634 729 1.90
2,046,295 26,236 5.09 1,822,915 22,643 4.98 1,854,590 23,152 5.06
- --------------------------------------------------------------------------------------------------------------------------
4,072,556 39,293 3.83 3,641,246 34,420 3.79 3,473,780 34,439 4.02
- --------------------------------------------------------------------------------------------------------------------------
2,065,207 27,681 5.32 1,978,349 25,000 5.07 1,715,715 21,799 5.15
148,576 2,373 6.34 148,275 2,253 6.09 148,482 2,321 6.34
- --------------------------------------------------------------------------------------------------------------------------
6,286,339 69,347 4.38 5,767,870 61,673 4.29 5,337,977 58,559 4.45
- --------------------------------------------------------------------------------------------------------------------------
969,289 1,008,502 1,042,679
77,574 89,319 83,315
536,699 543,741 532,846
- --------------------------------------------------------------------------------------------------------------------------
$ 7,869,901 $ 7,409,432 $ 6,996,817
- --------------------------------------------------------------------------------------------------------------------------
64,377 3.22% 58,811 3.06% 54,345 2.98%
3.05
3.66 3.59 3.58
1,990 2,228 2,334
- --------------------------------------------------------------------------------------------------------------------------
62,387 56,583 52,011
2,142 2,538 3,430
44,835 49,431 47,465
70,755 70,678 64,826
- --------------------------------------------------------------------------------------------------------------------------
34,325 32,798 31,220
11,589 10,742 9,983
- --------------------------------------------------------------------------------------------------------------------------
$ 22,736 $ 22,056 $ 21,237
- --------------------------------------------------------------------------------------------------------------------------
$ 0.46 $ 0.44 $ 0.43
- --------------------------------------------------------------------------------------------------------------------------
$ 0.41 $ 0.39 $ 0.38
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>25
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K (A) Exhibits:
No. 27.0 Financial Data Schedule filed herewith electronically.
No. 27.1 Restated 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
March 31, 2000.
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, 2000 /s/ Steven E. Nell
------------- ---------------------------
Steven E. Nell
Senior Vice President and
Corporate Controller
/s/ John C. Morrow
---------------------------
John C. Morrow
Senior Vice President and Director
of Financial Accounting & Reporting
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from BOK
Financial Corporation's 10-Q for the period ended March 31, 2000 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000875357
<NAME> BOK Financial Corporation
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Dec-31-2000
<PERIOD-END> Mar-31-2000
<CASH> 438,256
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 30,685
<TRADING-ASSETS> 15,043
<INVESTMENTS-HELD-FOR-SALE> 2,604,584
<INVESTMENTS-CARRYING> 206,365
<INVESTMENTS-MARKET> 204,519
<LOANS> 4,719,799
<ALLOWANCE> 77,828
<TOTAL-ASSETS> 8,549,645
<DEPOSITS> 5,511,228
<SHORT-TERM> 1,893,818
<LIABILITIES-OTHER> 87,476
<LONG-TERM> 456,445
13
12
<COMMON> 3
<OTHER-SE> 576,920
<TOTAL-LIABILITIES-AND-EQUITY> 8,549,645
<INTEREST-LOAN> 101,038
<INTEREST-INVEST> 43,243
<INTEREST-OTHER> 1,063
<INTEREST-TOTAL> 145,344
<INTEREST-DEPOSIT> 46,036
<INTEREST-EXPENSE> 81,666
<INTEREST-INCOME-NET> 63,678
<LOAN-LOSSES> 2,639
<SECURITIES-GAINS> (17)
<EXPENSE-OTHER> 74,616
<INCOME-PRETAX> 33,214
<INCOME-PRE-EXTRAORDINARY> 24,813
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 24,813
<EPS-BASIC> 0.50
<EPS-DILUTED> 0.45
<YIELD-ACTUAL> 3.54
<LOANS-NON> 18,602
<LOANS-PAST> 9,704
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 70,997
<ALLOWANCE-OPEN> 76,234
<CHARGE-OFFS> 2,264
<RECOVERIES> 1,219
<ALLOWANCE-CLOSE> 77,828
<ALLOWANCE-DOMESTIC> 77,828
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
