NASDAQ: BOKF EXHIBIT 99 (a)
For Further Information Contact: Stacy Kymes
Investor Relations
BOK Financial Corp.
(918) 588-6542
Danny Boyd
Corporate Communications
BOK Financial Corp.
(918) 588-6348
BOK Financial Income Up 11 Percent in Second Quarter
Annualized Loan Growth Jumps to 21 Percent, First Cash Dividend Paid
TULSA, Okla. (Tuesday, July 19, 2005) -- Accelerated loan growth and
continued increases in non-interest revenue combined to generate earnings growth
of 11 percent at BOK Financial Corp. 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."
-more-
Page 2: BOK Financial Earnings
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."
-more-
Page 3: BOK Financial Earnings
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.
-more-
Page 4: BOK Financial Earnings
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 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.