BOK Towers Over Bank Community

Tulsa-based BOK Financial Corp., parent of Bank of Oklahoma NA, soars over the Tulsa banking community in many ways.

Headquartered in the 52-story One Williams Center tower, the tallest building in Oklahoma at 667 feet, Bank of Oklahoma NA holds a giant’s share of the banking market in the Tulsa area. As of June 30, 2005, BOK held nearly 27 percent, or nearly $3.6 billion, of the deposits in the Tulsa Metropolitan Statistical Area.

The bank held nearly $13 billion in assets as of year-end 2005, exceeded in the Tulsa market only by national entities Bank of America NA, JPMorgan Chase Bank NA and Bank of the West.

BOK Financial, itself a $16.3 billion corporation, owns full-service banks in six states with 135 branches.

But for all of its commanding presence in the financial field, the pervasive factor management points to as its strength is its people.

“We think that one of our key strategies is to be the employer of choice in the communities where we do business and recognizing that our success is directly attributable to talented employees,” said Stacy Kymes, senior vice president and corporate controller.

Bank Beginnings

The roots of BOK Financial trace to 1910 when Harry Sinclair and other noted Tulsa oilmen founded Exchange National Bank of Tulsa to grant loans for their new oil fields. In 1990, Acquisition Holding Co., formed by former BOK director George Kaiser, purchased the FDIC’s interest and formed BOK Financial Corp.

Since then, the publicly held BOK Financial has reported 15 consecutive years of record earnings growth. In 2005, net income was $201.5 million and earnings per share reached $3.01 — a 12 percent increase over 2004.

Having grown into a regional powerhouse, BOK Financial has a presence in eight states, with full-service banking in six. In addition to Bank of Oklahoma, holdings include Bank of Albuquerque NA; Bank of Arizona NA; Bank of Arkansas NA; Bank of Texas NA; Colorado State Bank & Trust NA; BOSC Inc., the TransFund electronic funds network; Southwest Trust Co. NA and AXIA Investment Management Inc. This year, BOK Financial plans to open a bank in the Kansas City area.

BOk has 29 branches in the Tulsa area and 74 statewide.

A Regional Bank

Although BOK Financial started principally as an Oklahoma bank, 43 percent of its loans and deposits are now in markets outside the state, Kymes said.

“This does not lessen the importance of Oklahoma at all, but it certainly indicates the contribution that the regional banks have made to the growth of BOK Financial,” he said.

“We realized several years ago that, as a company, we were going to be limited from a growth perspective to the extent that the state economy grew,” he said. “We felt that from a long-term perspective we would benefit from a regional diversity, so we began to look outside Oklahoma for opportunities to grow.”

In 1996, BOK Financial entered the Dallas through “a couple of small acquisitions,” he said. “We were able to grow our presence now in Texas to almost $3.5 billion in assets.”

BOK Financial brands itself clearly in each of the states that it enters, Kymes said.

“We have been able to start with a relatively small presence in these markets and grow. Strategically, what we have done is initially establish a loan production office where we will go into a market … that kind of gives us a peek at the market without having to make a large capital investment inside the market,” Kymes said.

Diverse Revenue Stream

One of the hallmarks of BOK Financial is its diversity of fee revenue, Kymes said.

“If you look at most banks our size, the mix of revenues are not nearly as diverse as ours is,” he said. Most banks in our size range are principally dependent on net interest revenue.”

“In our case, we have 44 percent of our total revenue is comprised of other revenue sources so we are not as dependent on spread revenue or net interest revenue to drive earnings for the company. We have broker dealers involved in various diverse activities, including retail brokerage, institutional sales, investment banking and financial risk management,” he said.

BOK Financial also has transaction card, trust and mortgage revenue, Kymes said.

The Kaiser factor

Kymes points to BOK Financial founder George Kaiser for the long-term success of the corporation. Kaiser is president and CEO of Kaiser-Francis Oil Co. and chairman of the board of BOK Financial and the Bank of Oklahoma. He owns two-thirds of BOK Financial.

“George brought great discipline to the credit culture and a very sound and disciplined approach to credit underwriting,” Kymes said. “We have not changed that discipline as we have moved into markets outside Oklahoma.”

Long term, he said Kaiser provided the biggest impact in his entrepreneurial spirit and making decisions based on “solid economics.”

“He (Kaiser) encourages the employees of the bank to think not like bankers, but like entrepreneurs,” he said. “He also provides the kind of significant leadership critical to success by thinking economically instead of based upon what happens to next quarter’s accounting results.”

Beyond Unit Banking

Much of the success of BOK Financial can be attributed to its embracing the changes in the banking culture, said Vane Lucas, senior vice president of consumer management.

The most important change has been in distribution, he said.

When Oklahoma, which had previously been a unit banking state, opened the doors for bank branching in 1992, “we went through a very rapid period of expansion as we were investing to grow our branch network.”

He said that growth has primarily been by acquisitions as well as our expansion into in-store banking, “which we have done certainly more aggressively than anyone else in the state.”

More than 30 of the 70 branches in Oklahoma are now open seven days a week, he said, noting that in Tulsa, BOK has in-store locations in Albertson’s grocery stores and is expanding into Reasor’s.

He also said in other convenience moves, BOK offers free checking and opened its call center, which is located in Tulsa, 24 hours a day, 7 days a week.

The Banking Commodity

The real differentiating characteristic for BOK is its people, said Larry Wagner, senior vice president of human relations

“Banking has really become commoditized,” he said. “There isn’t a lot of significant difference when it comes to products and services between one bank and the next. It’s not a commodity, but it is very close.

“The one characteristic that we have that makes us unique is the women and the men who work here,” Wagner said.

“As one of Tulsa’s biggest employers here, we really know that to remain the force that we are, that we are going to have to be the better than the next guy in attracting and retaining the very best employees.”

BOK employs nearly 2,000 people in Tulsa and nearly 4,000 systemwide. ?

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