BOKF Reports ‘Aggressive’ Growth in 2006

Tulsa-based BOK Financial Corp. realized its 16th consecutive year of record earnings in 2006, as well as increased market share throughout the region.
BOK Financial Corp. also had “the most aggressive branch expansion in the company’s history,” Stan Lybarger, president and CEO, told shareholders at the BOKF’s annual meeting April 24.
“Our philosophy is to grow deliberately and focus on long-term value for our shareholders. The focus is on growth and success in all of our markets … in all business lines … and throughout all economic cycles,” Lybarger said.
“Our goal is to grow earnings per share at a materially higher rate than comparable regional banks. We have a long-term EPS growth rate of 16 percent since our inception, and we have enjoyed record earnings every year since 1991.”
In 2006, net income stood strong at $213 million, or $3.16 per share, compared to $201.5 million, or $3.01 per share in 2005. BOKF showed loan and deposit growth of more than 17 percent and 9 percent respectively, and non-interest revenue was up 8 percent.
“We made major investments in talent and new products that slowed our earnings growth compared to our historical growth rates, but will position us well for the future,” Lybarger said.
Last week, BOKF reported first quarter net income of $52.8 million, or 78 cents a share.
When BOK Financial was formed in 1991, it had $2 billion in assets and operated 20 locations in Oklahoma. It now has $18.1 billion in assets in eight states with more than 160 locations and offers mortgage and wealth management services nationwide, Lybarger said.
“We consider talent acquisition a key driver of success,” he said. “Our desire is to recruit the best talent to lead the company. We place a premium on people who possess an intimate knowledge of our markets, a strong track record of success, entrepreneurial skills and a team and customer focus.”
Building on Bank of Oklahoma’s strong market leadership position, loans and deposits in Oklahoma increased 8 percent and 6 percent respectively during 2006, he said. Non-interest revenue was about 50 percent of total revenue.
“Our strategy is generating excellent results in our other markets,” Lybarger said. “In fact, since 2002, the banks outside Oklahoma have accounted for 69 percent of the company’s loan growth, and 84 percent of earnings growth.”
He noted BOKF consolidated existing activities in Kansas into the Bank of Kansas City brand in November 2006 when it opened its first full-service location in Overland Park, Kan.
“We subsequently opened in March of this year our second branch, which is located in the Plaza, in Kansas City, Mo.,” he said.
The bank has $1.3 billion in brokerage assets, $600 million in trust assets, 4,000 mortgage loan customers and $430 million in commercial loan commitments.
Steven Nell, CFO, said BOKF opened loan production offices in Tucson and Salt Lake City recently.
He reported strong results in regional markets outside of Oklahoma, noting regional banks have fueled 69 percent of BOKF’s loan growth and 61 percent of deposit growth since 2002. At year-end, loans outside Oklahoma represented 47 percent of the portfolio – an increase from 34 percent five years ago.
BOKF entered New Mexico in 1997 with a loan production office in Albuquerque. Today, Bank of Albuquerque is the fourth largest bank headquartered in the state, he said.
“As we have more fully developed our business lines, net income has grown at a four year compound average growth rate of 19 percent.”
“Texas continues to be an exciting and successful market for us. Average assets topped $4 billion at year end and have grown at an 11 percent compound annual rate over the past four years, while net income has grown at a 20 percent annual pace,” Nell said.
In March, BOKF acquired Worth Bancorp. in Fort Worth. Worth has assets of approximately $400 million and loans totaling $300 million. At the end of 2006, Bank of Texas had 37 branches, including 24 in the Dallas-Fort Worth Metroplex, and 13 locations in Houston.
Since 2004, Colorado State Bank and Trust has nearly doubled assets and gross revenue, Nell said. In addition, its net income in 2006 was double the 2005 income and up almost 10 times since 2004.
“All of these markets have tremendous upside potential,” Nell said. “For example, in our Texas markets, if we grow deposit market share by just 1 percent, it would represent nearly $2 billion in additional deposits.”
“We have a relatively small market share in all of these growth markets, so as the markets grow and as we earn market share from our competitors, our opportunities for growth are substantial,” Nell said.
“The bulk of our growth has been organic. Since 2002, assets have grown at a 10 percent compound annual rate, with only 1 percent growth from acquisitions. Non-interest income is approximately 50 percent of Bank of Oklahoma’s revenue in 2006, and the regional banks averaged less than 20 percent, indicating a tremendous growth opportunity in our newer markets.” ?

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