EXHIBIT 99 (a)
NASDAQ: BOKF
For Further Information Contact: Steven Nell
Chief Financial Officer
(918)588-6319
Danny M. Boyd
Corporate Communications
(918)588-6348
BOK Financial Reports Record Earnings for 15th Consecutive Year
Fourth Quarter Shows Strong Loan and Deposit Growth
TULSA, Okla. (Tuesday, Jan. 31, 2006) - BOK Financial Corporation announced
its 15th consecutive year of record earnings with reported net income of $201.5
million, or $3.01 per diluted share, for the year ended Dec. 31, 2005. Net
income for 2005 increased $22.5 million, or 13 percent over the previous year.
Growth in net interest revenue and fees and commissions revenue both
contributed to the increase in net income. Net interest revenue increased $26.1
million, or 6 percent, for the year due primarily to an 11 percent increase in
average outstanding loans. Fees and commissions revenue grew $33.0 million, or
11 percent, as business lines continued to expand. Operating expenses increased
$27.9 million, or 6 percent, due to higher personnel and data processing costs.
The provision for credit losses for 2005 was $12.4 million, $8.0 million less
than 2004 as credit quality continued to be strong.
"Loan growth and increased revenue from our fee-based sources of income
were important contributors to our success in 2005," said President and CEO Stan
Lybarger. "Although rising short-term interest rates and narrowing margins
currently present a challenge, the company is positioned for long-term growth
and we expect our earnings growth trend to continue."
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Net income for the fourth quarter of 2005 totaled $48.2 million, or $0.72
per diluted share, compared with $46.6 million, or $0.70 per diluted share, for
the fourth quarter of 2004.
Net interest revenue for the fourth quarter of 2005 increased $9.9 million,
or 9 percent, compared with the same period of 2004. Average earning assets
increased $1.3 billion, including a $1.1 billion increase in average outstanding
loans. The growth in earning assets was funded primarily by a $1.1 billion
increase in deposits.
Outstanding loans for the company grew at an annualized rate of 12 percent
during the fourth quarter. Commercial loans grew at an 18 percent annualized
rate while commercial real estate loans grew at a 4 percent rate. Energy,
manufacturing and agriculture sectors of the portfolio provided much of the
commercial loan growth.
Loans in markets outside of Oklahoma increased at a combined annualized
rate of 25 percent during the fourth quarter and represented 41 percent of total
outstanding loans at year-end. Loans in the Texas market grew at an 18 percent
rate. Annualized loan growth in New Mexico and Arizona was 24 percent and 39
percent, respectively. Loans in both the Colorado and Arkansas markets grew 49
percent.
"Fourth quarter loan growth was strong in all regional markets," Lybarger
said. "Regional markets contributed nearly 45 percent to our earnings and
continue to grow in importance to the company."
Total deposits increased $976 million during the fourth quarter, a 38
percent annualized growth rate. Demand deposits and interest bearing transaction
accounts grew at annualized rates of 25 percent and 82 percent, respectively.
The flat yield curve during the fourth quarter led many customers to
shorter-term deposit products. Liquidity provided by these deposits was used to
reduce short-term borrowings by $836 million. Total deposits in the regional
markets increased at a 48 percent annual rate during the fourth quarter,
including strong growth in both Texas and Colorado.
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Net interest margin for the fourth quarter of 2005 was 3.34 percent,
compared with 3.38 percent for the fourth quarter of 2004 and 3.32 percent for
the third quarter of 2005. Improvement in the net interest margin for the fourth
quarter of 2005 compared with the preceding quarter was primarily driven by a
$370 million increase in average loans, which are generally higher-yielding than
other earning assets, and a $648 million increase in average deposits, which
generally are lower-costing than other funding sources. Net interest margin for
the fourth quarter of 2005 was reduced 3 basis points by $299 million of average
margin assets the company carries in support of its derivatives business. Fees
earned on margin assets, which totaled $3.4 million for the fourth quarter of
2005, are included in non-interest revenue while the related cost of funds is
included in interest expense.
Fees and commissions revenue increased $11.1 million, or 14 percent, and
represented 43 percent of total revenue for the fourth quarter of 2005.
Transaction card fees and trust revenue grew $2.4 million, or 14 percent, and
$1.7 million, or 12 percent, respectively. Transaction card revenue growth was
driven by merchant discounts and check card fees. Trust assets, which are the
basis for much of the growth in trust fees, totaled $28.5 billion at Dec. 31,
2005, compared with $24.6 billion a year ago.
The provision for credit losses was $4.5 million for the fourth quarter of
2005 compared with $4.4 million for the fourth quarter of 2004 and $4.0 million
for the third quarter of 2005. Net charge-offs totaled $7.4 million for the
fourth quarter of 2005, compared with $6.4 million for the fourth quarter of
2004 and $3.3 million for the third quarter of 2005. BOK Financial had reserved
this credit exposure in prior periods. Consequently, no additional provision for
credit losses was recognized at the time of charge-off.
Fourth quarter loan charge-offs were higher than losses in the first three
quarters, but there is no expectation of a trend toward higher charge-offs in
the near term. Instead, we see a gradual migration toward more normal loan loss
levels over time. Non-performing loans ended the year at the lowest level since
1999.
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Reserves for credit losses, which include the allowance for loan losses and
a reserve for credit risk on unfunded loan commitments, totaled $124 million, or
1.37 percent of outstanding loans and 495 percent of non-performing loans at
Dec. 31, 2005. Reserves for credit losses were 1.44 percent of outstanding loans
and 341 percent of non-performing loans at Sept. 30, 2005. Nonperforming loans
totaled $25 million at Dec. 31, 2005, down $12 million since the beginning of
the fourth quarter.
Operating expenses totaled $123.9 million for the fourth quarter of 2005, a
$12.3 million, or 11 percent, increase from the same period of 2004. Personnel
costs grew $6.5 million or 11 percent. Regular compensation expense increased
$4.7 million or, 12 percent, due to a 5 percent increase in average compensation
per full-time equivalent employee and a 7 percent increase in staffing.
Personnel expense for the fourth quarter of 2005 included a $384,000 charge for
the curtailment of the company's pension plan. As previously announced, accruals
for future service under the defined-benefit pension plan will be discontinued
and enhancements to the defined-contribution thrift plan will become effective
April 1, 2006. Data processing and communications expense grew $2.9 million, or
19 percent, due to increases of $1.5 million in data processing systems costs
and $1.4 million in transaction card processing costs. Both increases reflected
growth in processing volumes.
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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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.