NASDAQ: BOKF
Exhibit 99 (a)
For Further Information Contact: Steven Nell
Chief Financial Officer
BOK Financial Corp.
(918) 588-6319
Danny M. Boyd
Corporate Communications
BOK Financial Corp.
(918) 588-6348
BOK Financial Continues Earnings Growth Trend
Regional Market Share Advances Through Strong Loan Growth
TULSA, Okla. (Tuesday, Oct. 18, 2005) - Strong loan growth in regional
markets contributed to third quarter performance at BOK Financial Corporation.
The company reported net income of $50.8 million, or 76 cents per diluted
share, for the third quarter of 2005, compared with $47.8 million, or 72 cents
per share for the third quarter of 2004. Year-to-date net income for 2005
totaled $153.3 million, up 16 percent over last year. Earnings per share were
$2.29 for the first nine months of 2005 compared with $1.99 last year.
Outstanding loan balances grew $369 million since June 30, 2005, a 17
percent annualized growth rate. Commercial loans increased $208 million,
including $121 million of loans to the services sector of the portfolio and $72
million in energy loans. Commercial real estate loans increased $111 million.
Loans to single family homebuilders grew $64 million while loans secured by
commercial office buildings increased $41 million.
"Texas continues to be a vibrant growth market for the company," said
President and CEO Stan Lybarger. "Annualized loan growth in Texas exceeded 28
percent, up from 22 percent in the second quarter. The company also added $32
million of outstanding loans in the Phoenix market. The third quarter's
successful completion of Bank of Arizona's processing systems conversion will
support further expansion in Arizona."
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Page 2- BOK Financial Earnings
Net interest revenue increased $4.4 million, or 4 percent, compared with
the third quarter of 2004 due to growth in average earning assets. Average
earning assets increased $1.2 billion, or 9 percent, including a 13 percent
increase in average loans. The growth in average earning assets was funded
primarily by a $799 million increase in borrowed funds and a $423 million
increase in deposits.
Net interest margin was 3.32 percent for the third quarter, down 18 basis
points from the third quarter of 2004 and 13 basis points from the second
quarter of 2005. The decreased net interest margin reflected strong loan growth,
primarily over the past two quarters. Loan growth has exceeded deposit growth
over the past six months, resulting in a shift in funding mix from deposits to
short-term borrowed funds. The net spread of this activity generated solid net
interest revenue growth, but reduced the net interest margin eight basis points.
Net interest margin also decreased three basis points due to a $92 million
increase in average margin assets the company carries in support of its energy
derivatives business. Fees earned on margin assets, which totaled $2.4 million
in the third quarter of 2005, are included in non-interest revenue while the
related cost of funds is included in interest expense.
The company continued to position its balance sheet to be essentially
interest rate neutral. Securities and short-term borrowings are used to offset
the asset-sensitive nature of loans and deposits. This strategy mitigates the
effect of changes in interest rates and the flattened yield curve. However,
changes in funding mix and competitive pressure on loan and deposit pricing may
reduce the net interest margin.
Non-interest revenue from fees and commissions increased $12.1 million, or
15 percent compared to the same period last year. This source of revenue
represented 45 percent of total revenue in the third quarter of 2005, compared
with 42 percent in 2004. In addition to the $2.4 million increase in fees earned
on margin assets, mortgage banking and transaction card revenues increased $2.9
million and $1.8 million, respectively. Growth in mortgage banking revenue was
driven by increased volume of loans funded and sold, partially offset by a
continued decline in servicing revenue. Check card and merchant discount fees
provided the growth in transaction card revenue.
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Page 3-BOK Financial Earnings
A $4.0 million provision for credit losses was recorded for the third
quarter of 2005, compared with $5.0 million for the third quarter of 2004 and
$2.0 million for the second quarter of 2005. Net charge-offs totaled $3.3
million in 2005 compared with $4.8 million in 2004 and $2.3 million in the
preceding quarter.
"The company continues to benefit from strong credit quality," said
Lybarger. "Nonperforming and problem loans continue to decline due to general
economic conditions and receipt of payments on problem loans."
Reserves for credit losses, which include the allowance for loan losses and
a reserve for credit risk on unfunded loans, totaled $127 million, or 1.44
percent of outstanding loans and 341 percent of non-performing loans at Sept.
30, 2005. The combined reserves for credit losses were 1.50 percent of
outstanding loans and 313 percent of nonperforming loans at June 30, 2005.
Nonperforming loans totaled $37 million at Sept. 30, 2005, down $3.2 million
since June 30, 2005 due to payments received.
Operating expenses totaled $117.0 million for the third quarter of 2005
compared with $114.2 million for the same period of 2004. The provision for
impairment of mortgage servicing rights decreased $10.6 million as rising
mortgage interest rates increased the value of the servicing rights. Excluding
the provision for mortgage servicing rights, operating expenses increased $13.4
million or 12 percent. Personnel costs increased $6.0 million, or 10 percent.
Regular compensation expense increased $4.8 million, or 14 percent, due to a 7
percent increase in average compensation per employee and a 7 percent increase
in staffing levels. Growth in personnel costs reflected the company's continued
expansion, primarily in Texas and Arizona.
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 Arizona, N.A., Bank of Arkansas,
N.A., Bank of Oklahoma, N.A., Bank of Texas, N.A., Colorado State Bank and
Trust, N.A., BOSC, Inc. 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.
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Page 4-BOK Financial Earnings
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 Corporation 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.
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