TULSA, Okla., July 19 /PRNewswire-FirstCall/ -- Accelerated loan growth
and continued increases in non-interest revenue combined to generate earnings
growth of 11 percent at BOK Financial Corp. (Nasdaq: BOKF) for the second
quarter of 2005.
BOK Financial reported net income of $50.5 million, or 75 cents per
diluted share, for the second quarter of 2005 compared with $45.5 million, or
68 cents per diluted share, for the second quarter of 2004. During the
quarter, the company paid its first quarterly cash dividend on common shares,
of $6.6 million, or 10 cents per share.
The company's performance featured a $429 million increase in loan
balances since March 31, 2005. Outstanding loans totaled $8.5 billion at June
30, 2005. Commercial loans increased $223 million, led by a $104 million
increase in loans to the energy sector of the portfolio. Commercial real
estate loans grew $193 million, including $65 million in Oklahoma and $32
million in Texas. The acquisition of Valley Commerce Bank in Phoenix, which
was completed in the second quarter of 2005, added $70 million of commercial
real estate loans.
"Each of our major markets contributed to loan growth," said President and
CEO Stan Lybarger. "We are especially pleased to report a 14 percent
annualized growth rate in Oklahoma, our most mature market, and a 22 percent
annualized growth rate in Texas. Our efforts in Phoenix are off to a very good
start with a 68 percent annualized growth rate for the first quarter of
operations in addition to the Valley Commerce acquisition."
Net interest revenue increased $7.3 million, or 7 percent, due to an $886
million increase in average earning assets. Average loans increased $793
million, or 11 percent, and average securities increased $179 million compared
with the second quarter of 2004. The growth in average earning assets was
funded primarily by a $389 million increase in deposits and a $594 million
increase in short-term borrowings.
Net interest margin was 3.45 percent compared with 3.46 percent in both
the second quarter of 2004 and the first quarter of 2005. Net interest margin
for the first quarter of 2005 included a 4 basis point benefit from the
collection of foregone interest on a non-performing loan and fees related to a
large loan transaction. This stability in the net interest margin was achieved
despite a highly competitive rate environment and a flattening yield curve.
The company's overall interest rate risk management objective is to position
the balance sheet to be essentially neutral to changes in interest rates.
Additionally, net losses of $1.5 million were recognized during the second
quarter on securities and derivatives as part of the interest rate risk
management program.
Fee and commission revenue rose $6.7 million, or 8 percent, compared with
the second quarter of 2004. Trust revenue increased $2.3 million or 17
percent. Trust assets totaled $26.0 billion compared with $22.9 billion at
June 30, 2004. Service charges on deposit accounts grew $1.4 million, or 6
percent, while transaction card revenue increased $1.2 million, or 7 percent.
Other revenue increased $1.7 million due primarily to fees earned on margin
funds placed as part of the company's derivatives programs.
The company recorded a $2.0 million provision for loan losses during the
second quarter of 2005 compared with provisions of $4.0 million for the second
quarter of 2004 and $2.0 million for the first quarter of 2005. Net charge-
offs totaled $2.3 million compared to $4.9 million for the same period last
year.
"Credit quality continues to be exceptionally strong, which is reflected
in our loan loss provision," said Lybarger. "Although credit quality is
difficult to predict, we do not see any change in this general trend over the
next quarter."
Reserves for credit losses, which include the allowance for loan losses
and a reserve for credit risk on unfunded loans, were 1.50 percent of
outstanding loans and 313 percent of non-performing loans at June 30, 2005.
That compared with combined reserves for credit losses of 1.57 percent of
outstanding loans and 253 percent of non-performing loans at March 31, 2005.
The allowance for loan losses was $109 million at June 30, 2005, or 1.29
percent of outstanding loans, and 269 percent of non-performing loans at June
30, 2005. The allowance for loan losses was 1.35 percent of outstanding loans
and 219 percent of non-performing loans at March 31, 2005. Non-performing
loans totaled $41 million at June 30, 2005, down $9.3 million since March 31,
2005.
The company realized gains of $5.9 million on sales of assets during the
second quarter of 2005. These gains included $4.7 million from the sale of its
interest in an Oklahoma City office building. This gain, net of income taxes,
contributed 4 cents to the second quarter's earnings per share. Additionally,
a net gain of $1.2 million was recognized on the sale of $118 million of loans
from the residential mortgage loan portfolio.
A provision for impairment of mortgage servicing rights of $7.1 million
was recorded during the quarter as mortgage commitment rates decreased 50
basis points. This provision was partially offset by $3.4 million in gains on
securities and derivatives the company holds as an economic hedge. The net
MSR provision of $3.7 million recognized in the second quarter of 2005
generally offsets a net recovery of MSR provision of $3.5 million recognized
in the first quarter of 2005. A net recovery of MSR provision of $752,000 was
recorded during the second quarter of 2004.
Operating expenses, excluding the provision for MSRs, increased 8 percent,
or $9.1 million, compared with last year. Personnel costs increased $5.5
million, or 9 percent. Regular compensation expense increased $4.7 million
due to a 7 percent increase in average compensation per employee and a 5
percent increase in staffing levels.
Also during the second quarter, the company issued $150 million of 10-year
subordinated debt through its lead banking subsidiary and completed the
acquisition of Valley Commerce Bank. Proceeds of the subordinated debt
provided additional capital to support future growth of the company and
permitted repayment of short-term borrowing. Valley Commerce Bank was acquired
on April 6, 2005, for $32 million in cash. The Valley Commerce acquisition
added $93 million in loans and $110 million in deposits.
BOK Financial is a regional financial services company that provides
commercial and consumer banking, investment and trust services, mortgage
origination and servicing, and an electronic funds transfer network. Holdings
include Bank of Albuquerque, N.A., Bank of Arkansas, N.A., Bank of Oklahoma,
N.A., Bank of Texas, N.A., Colorado State Bank and Trust, N.A., Valley
Commerce Bank, N.A., BOSC, Inc., Southwest Trust and the TransFund electronic
funds network. Shares of BOK Financial are traded on the NASDAQ under the
symbol BOKF. For more information, visit our website at http://www.bokf.com .
This news release contains forward-looking statements that are based on
management's beliefs, assumptions, current expectations, estimates and
projections about BOK Financial Corp., the financial services industry and the
economy generally. 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
allowance for credit losses involve judgments as to future events and are
inherently forward-looking statements. Assessments that BOK Financial's
acquisitions and other growth endeavors will be profitable are necessary
statements of belief as to the outcome of future events based in part on
information provided by others which BOK Financial has not independently
verified. These statements are not guarantees of future performance and
involve certain risks, uncertainties, and assumptions which are difficult to
predict with regard to timing, extent, likelihood and degree of occurrence.
Therefore, actual results and outcomes may materially differ from what is
expected, implied or forecasted in such forward-looking statements. Internal
and external factors that might cause such a difference include, but are not
limited to (1) the ability to fully realize expected cost savings from mergers
within the expected time frames, (2) the ability of other companies on which
BOK Financial relies to provide goods and services in a timely and accurate
manner, (3) changes in interest rates and interest rate relationships,
(4) demand for products and services, (5) the degree of competition by
traditional and non-traditional 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 Corp. and its affiliates undertake no
obligation to update, amend, or clarity forward-looking statements, whether as
a result of new information, future events or otherwise.
BOK FINANCIAL CORPORATION
(In thousands, except ratio and per share data)
Period End Balances Average Balances
June 30, Quarter Ended June 30,
BALANCE SHEETS 2005 2004 2005 2004
ASSETS
Cash and due from
banks $653,047 $574,549 $552,600 $507,731
Trading securities 10,588 15,133 11,639 23,513
Funds sold and resell
agreements 27,176 148,035 21,170 16,284
Securities:
Available for sale 4,887,966 4,572,027 4,825,706 4,667,580
Investment 220,401 205,933 220,840 200,160
Total securities 5,108,367 4,777,960 5,046,546 4,867,740
Loans:
Commercial 4,813,921 4,333,701 4,716,278 4,347,041
Commercial real
estate 1,910,535 1,589,542 1,871,830 1,594,192
Residential
mortgage 1,225,061 1,159,433 1,200,340 1,163,186
Consumer 565,163 442,424 553,042 443,838
Total loans 8,514,680 7,525,100 8,341,490 7,548,257
Less reserve for loan
losses (108,885) (114,704) (111,056) (117,109)
Total loans, net 8,405,795 7,410,396 8,230,434 7,431,148
Premises and
equipment, net 174,526 173,798 173,421 173,184
Accrued revenue
receivable 82,868 76,422 75,762 65,789
Intangible assets,
net 260,279 246,539 259,702 247,667
Mortgage servicing
rights, net 46,200 53,000 47,587 50,173
Real estate and other
repossessed assets 5,062 4,776 3,171 5,876
Receivable on
unsettled security
transactions --- 8,018 --- ---
Bankers' acceptances 40,949 18,783 30,176 21,713
Derivative contracts 690,015 294,900 600,341 285,311
Other assets 367,603 199,888 341,985 172,397
TOTAL ASSETS $15,872,475 $14,002,197 $15,394,534 $13,868,526
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand $1,749,948 $1,877,492 $1,586,248 $1,799,249
Interest-bearing
transaction 4,277,000 3,892,166 4,323,513 3,859,706
Savings 160,328 169,826 166,426 173,566
Time 3,713,530 3,670,825 3,710,338 3,565,324
Total deposits 9,900,806 9,610,309 9,786,525 9,397,845
Funds purchased and
repurchase
agreements 2,123,589 1,497,685 2,160,031 1,565,922
Other borrowings 1,059,694 1,016,327 914,968 1,009,871
Subordinated
debentures 297,882 151,538 200,038 152,799
Accrued interest,
taxes, and expense 66,026 49,692 76,719 59,740
Bankers' acceptances 40,949 18,783 30,176 21,713
Due on unsettled
security
transactions 99,664 --- 72,543 733
Derivative contracts 699,637 307,102 614,307 292,019
Other liabilities 103,253 91,686 98,969 92,776
TOTAL LIABILITIES 14,391,500 12,743,122 13,954,276 12,593,418
Shareholders' Equity:
Shareholders'
equity 1,512,012 1,307,039 1,476,106 1,277,036
Unrealized
securities gains
(losses) (31,037) (47,964) (35,848) (1,928)
TOTAL SHAREHOLDERS'
EQUITY 1,480,975 1,259,075 1,440,258 1,275,108
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $15,872,475 $14,002,197 $15,394,534 $13,868,526
BOK FINANCIAL CORPORATION
(In thousands, except ratio and per share data)
For the Quarter For the Six Months
Ended Ended
June 30, June 30,
STATEMENTS OF EARNINGS 2005 2004 2005 2004
Interest revenue $186,334 $147,833 $356,638 $294,170
Interest expense 73,801 42,644 136,511 85,774
Net interest revenue 112,533 105,189 220,127 208,396
Provision for credit losses 2,015 3,987 4,015 11,014
Net interest revenue after
provision for credit losses 110,518 101,202 216,112 197,382
Other operating revenue
Brokerage and trading revenue 10,404 11,166 21,740 21,177
Transaction card revenue 17,979 16,817 34,522 31,541
Trust fees and commissions 16,259 13,939 32,275 27,648
Service charges and fees on
deposit accounts 25,347 23,928 47,520 46,083
Mortgage banking revenue 8,550 7,555 14,128 15,299
Leasing revenue 669 860 1,342 1,747
Other revenue 7,491 5,774 14,215 12,398
Total fees and commissions 86,699 80,039 165,742 155,893
Gain on sale of assets 5,937 35 6,909 719
Gain (loss) on securities, net 2,266 (11,005) (371) (6,728)
Gain (loss) on derivatives, net (311) 201 467 (794)
Total other operating revenue 94,591 69,270 172,747 149,090
Other operating expense
Personnel 65,333 59,810 123,772 118,019
Business promotion 3,870 3,831 8,300 7,181
Contribution of stock to BOK
Charitable Foundation --- --- --- 4,125
Professional fees and services 4,492 3,994 8,111 7,893
Net occupancy and equipment 12,650 11,732 24,744 23,583
Data processing and
communications 16,381 15,270 31,480 29,911
Printing, postage and supplies 3,629 3,130 7,244 6,447
Net (gains) losses and
operating expenses
on repossessed assets 316 (169) 624 (55)
Amortization of intangible
assets 1,808 2,121 3,345 4,259
Mortgage banking costs 3,387 4,433 7,000 10,276
Provision (recovery) for
impairment of mortgage
servicing rights 7,088 (10,865) 1,464 (7,162)
Other expense 7,056 5,705 12,085 10,963
Total other operating expense 126,010 98,992 228,169 215,440
Income before taxes 79,099 71,480 160,690 131,032
Federal and state income tax 28,634 25,947 58,170 46,347
Net Income $50,465 $45,533 $102,520 $84,685
BOK FINANCIAL CORPORATION
(In thousands, except ratio and per share data)
For the Quarter Ended For the Six Months Ended
June 30, June 30,
FINANCIAL DATA 2005 2004 2005 2004
Capital:
Average equity $1,440,258 $1,275,108 $1,425,918 $1,262,988
Period-end equity $1,480,975 $1,259,075 $1,480,975 $1,259,075
Risk-based capital
ratios:
Tier 1 9.85% 9.79%
Total capital 12.55% 11.90%
Leverage ratio 8.07% 7.52%
Common stock:
Book value per share $22.29 $21.03 $22.29 $21.03
Basic earnings per
share $0.79 $0.76 $1.66 $1.42
Diluted earnings per
share $0.75 $0.68 $1.53 $1.27
Period end common shares
outstanding 66,454,330 59,163,047 66,454,330 59,163,047
Average shares
outstanding:
Basic 63,779,343 59,146,624 61,618,602 59,098,913
Diluted 66,986,428 66,719,734 66,967,146 66,688,766
Key ratios:
Return on average
assets 1.31% 1.32% 1.38% 1.24%
Return on average
equity 14.05% 14.36% 14.50% 13.48%
Net interest margin 3.45% 3.46% 3.45% 3.46%
Credit Quality:
Nonperforming assets:
Nonaccrual loans $40,527 $57,610
Real estate and other
repossessed assets 5,062 4,776
Total nonperforming
assets $45,589 $62,386
90 days past due $7,125 $10,280
Gross charge-offs $5,044 $6,672 $10,868 $14,634
Recoveries 2,757 1,752 5,403 3,886
Net charge-offs $2,287 $4,920 $5,465 $10,748
Key ratios:
Reserve for loan losses
to period end loans (A) 1.29% 1.54%
Combined reserves for
credit losses to
period end loans (A) 1.50% 1.73%
Nonperforming assets to
period end loans (A) and
repossessed assets 0.54% 0.84%
Net charge-offs
(annualized) to
average loans (A) 0.11% 0.26% 0.14% 0.29%
Reserve for loan losses
to nonperforming loans 268.67% 199.10%
Combined reserves for
credit losses to
nonperforming loans 312.81% 223.75%
(A) Excluding residential mortgage loans held for sale.
BOK FINANCIAL CORPORATION
(In thousands, except ratio and per share data)
For the Quarter Ended For the Six Months Ended
June 30, June 30,
2005 2004 2005 2004
Other Data:
Average earning
assets, net of
unsettled security
transactions $13,237,745 $12,351,479 $12,997,774 $12,243,409
Average total assets $15,394,534 $13,868,526 $14,982,677 $13,703,162
Average equity $1,440,258 $1,275,108 $1,425,918 $1,262,988
Average loans $8,341,490 $7,548,257 $8,153,378 $7,521,485
Average total
deposits $9,786,525 $9,397,845 $9,724,292 $9,216,104
Average demand
deposits $1,586,248 $1,799,249 $1,740,263 $1,721,443
Loans held for sale
(Period end) $74,410 $79,034 $74,410 $79,034
Loans held for sale
(Average) $47,506 $97,348 $41,476 $84,718
Tax equivalent
adjustment $1,245 $1,089 $2,501 $2,286
Preferred stock
dividends - BOKF $--- $375 $375 $750
Period end common
shares O/S 66,454,330 59,163,047 66,454,330 59,163,047
Period end fully
diluted shares 67,075,671 66,736,157 67,075,671 66,736,157
Number of days in
period 91 91 181 182
Tangible Book Value
per Common Share $18.37 $16.86 $17.53 $16.89
Stock Buy Back
Program:
Stock buy back #
shares 30,000 --- 59,700 ---
Stock buy back
account $1,250,704 $--- $2,439,321 $---
Average price per
share $41.69 $--- $40.86 $---
Mortgage Banking:
Mortgage servicing
portfolio $4,040,178 $4,127,875
Mortgage loan
fundings during
quarter $218,678 $197,150 $337,427 $356,791
Mortgage loan
refinances to
total fundings 24.08% 36.78% 26.99% 39.47%
Trust Assets:
Total trust assets $25,971,994 $22,938,606
SOURCE BOK Financial Corporation
-0- 07/19/2005
/CONTACT: Stacy Kymes, Investor Relations, +1-918-588-6542, or Danny
Boyd, Corporate Communications, +1-918-588-6348, both of BOK Financial
Corporation/
/Web site: http://www.bokf.com /
(BOKF)
CO: BOK Financial Corporation
ST: Oklahoma
IN: FIN
SU: ERN
KS-CD
-- DATU043 --
8660 07/19/200514:35 EDThttp://www.prnewswire.com