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As filed with the Securities and Exchange Commission on March 27, 1997
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year ended December 31, 1996 Commission File No. 0-19341
BOK FINANCIAL CORPORATION
Incorporated in the State I.R.S. Employer Identification
of Oklahoma No.73-1373454
Bank of Oklahoma Tower
P.O. Box 2300
Tulsa, Oklahoma 74192
Registrant's Telephone Number,
Including Area Code (918) 588-6000
SECURITIES REGISTERED PURSUANT TO SECTION 12(b)
OF THE ACT: (NONE)
SECURITIES REGISTERED PURSUANT TO SECTION 12(g)
OF THE ACT:
COMMON STOCK ($.00006 Par Value)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-X is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
State the aggregate market value of the voting stock held by non-affiliates
of the Registrant: $117,691,489 as of February 28, 1997.
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest practicable date: 21,161,789 shares of
common stock ($.00006 par value) as of February 28, 1997.
List hereunder the following documents if incorporated by reference and the
part of Form 10-K in which the document is incorporated:
Part I - Annual Report to Shareholders For Fiscal Year Ended December 31,
1996 (designated portions only)
Part II - Annual Report to Shareholders For Fiscal Year Ended December 31,
1996 (designated portions only)
Part III - Proxy Statement for Annual Meeting of Shareholders scheduled for
April 29, 1997 (designated portions only)
Part IV - Annual Report to Shareholders For Fiscal Year Ended December 31,
1996 (designated portions only)
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1
BOK FINANCIAL CORPORATION
FORM 10-K ANNUAL REPORT
INDEX
ITEM PAGE
PART I
1. Business 2
2. Properties 7
3. Legal Proceedings 7
4. Submission of Matters to a Vote of Security Holders 7
PART II
5. Market for Registrant's Common Equity and Related Stockholder Matters 7
6. Selected Financial Data 8
7. Management's Discussion and Analysis of Financial Condition and 8
Results of Operations
8. Financial Statements and Supplementary Data 8
9. Changes in and Disagreements with Accountants on Accounting and 8
Financial Disclosure
PART III
10. Directors and Executive Officers of the Registrant 8
11. Executive Compensation 8
12. Security Ownership of Certain Beneficial Owners and Management 8
13. Certain Relationships and Related Transactions 8
PART IV
14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 9-13
Signatures 14
2
PART I
ITEM 1 - BUSINESS
GENERAL DEVELOPMENT OF BUSINESS
BOK Financial Corporation ("BOK Financial") was incorporated under the laws of
the State of Oklahoma on October 24, 1990. Active operations as a bank holding
company commenced on June 7, 1991 with the acquisition of the preferred stock
("BOk Preferred Stock") of Bank of Oklahoma, National Association ("BOk") from
the Federal Deposit Insurance Corporation ("FDIC") and the conversion of the BOk
Preferred Stock into 99.99% of the common stock of BOk. BOK Financial is
regulated by the Board of Governors of the Federal Reserve System pursuant to
the Bank Holding Company Act of 1956, as amended ("BHCA").
BOK Financial operates primarily through BOk, BOk's subsidiaries and Citizens
Bank of Northwest Arkansas, National Association ("CBNWA"). The existing and
future activities of BOK Financial and its subsidiaries are limited by the BHCA,
which prohibits a bank holding company from engaging in any business other than
banking, managing or controlling banks, and furnishing and performing certain
bank-related services and activities.
Shares disclosed in the following transactions have not been restated for
subsequent stock dividends.
On June 7, 1991, BOK Financial paid $60.75 million to the FDIC for the BOk
Preferred Stock. To finance this acquisition, BOK Financial issued preferred
stock totaling $15.0 million at $6.00 per share and common stock ("Common
Stock") totaling $46.0 million at $5.75 per share to George B. Kaiser
("Kaiser"), BOK Financial's principal shareholder. Kaiser purchased an
additional $10.0 million of BOK Financial Common Stock at $5.75 per share, and
BOK Financial contributed the $10.0 million to BOk as additional capital. Per
share amounts reflect a 1-for-100 reverse stock split effective December 17,
1991 ("reverse stock split").
Following a bidding process conducted by the Resolution Trust Corporation
("RTC"), BOK Financial, through the mortgage banking subsidiary of BOk,
BancOklahoma Mortgage Corp. ("BOMC"), acquired on June 10, 1991 approximately
$1.0 billion of mortgage servicing rights and certain other assets of Maxim
Mortgage Corporation ("Maxim"). Maxim was formerly a subsidiary of Sooner
Federal Savings and Loan Association, which had failed and had been placed under
the control of the RTC.
Also following a bidding process by the RTC, BOK Financial acquired on August 9,
1991 certain assets and assumed certain liabilities, primarily deposits, of
eight branches of Continental Federal Savings and Loan Association of Oklahoma
City, Oklahoma. BOK Financial assumed deposits of approximately $214.5 million
and paid the RTC a premium of $4.1 million. Kaiser acquired an additional $20.0
million of BOK Financial's Common Stock at $5.75 per share (after effect of the
reverse stock split), and BOK Financial contributed the $20.0 million to BOk to
facilitate the purchase.
On March 27, 1992, CBNWA acquired certain assets and assumed the deposits and
certain obligations of two branches of the failed Home Federal Savings & Loan
Association from the RTC for $1.1 million.
On July 16, 1992, Bank of Oklahoma, N.A., South, an unconsolidated banking
subsidiary, was merged into BOk.
On November 13, 1992, BOK Financial purchased Southwest Trustcorp, Inc. and its
subsidiary, The Trust Company of Oklahoma, Oklahoma City, in exchange for
400,000 shares of Common Stock valued at $4.6 million.
On December 31, 1992, BOK Financial acquired certain assets and assumed $502.9
million of deposits and other liabilities of 19 branches of the Sooner Division
of First Gibraltar Bank, FSB of Irving, Texas for a purchase price of $16.5
million.
On May 7, 1993, BOK Financial issued 343,295 common shares valued at $6.9
million and paid $3.9 million to acquire Sand Springs Bancshares, Inc. and its
subsidiary, Sand Springs State Bank.
Also on May 7, 1993, BOK Financial issued 1,183,691 common shares to acquire
Brookside Bancshares, Inc. and its subsidiary, Brookside State Bank, in a
pooling-of-interests transaction. Financial information of BOK Financial for
1992 and 1991 has been restated to reflect this acquisition.
On October 9, 1993, BOK Financial acquired certain assets and assumed the
deposits and certain obligations of two branches of the failed Heartland Federal
Savings & Loan Association from the FDIC for $5.1 million.
On May 2, 1994, BOK Financial acquired Plaza National Bank, Bartlesville,
Oklahoma for $11.7 million.
On June 13, 1994, BOK Financial acquired Texas Commerce Trust Company - Sherman,
National Association, Sherman, Texas, a national association limited to trust
powers only, for $6.1 million.
3
On October 7, 1994, BOK Financial acquired Northwest Bank of Enid, Enid,
Oklahoma for $8.2 million.
On November 14, 1994, BOK Financial issued 1,380,017 common shares to acquire
Citizens Holding Company and its subsidiaries, Citizens Bank of Muskogee and
Citizens Bank of Northwest Arkansas, in a pooling-of-interests. Financial
information of BOK Financial for 1993 and 1992 has been restated to reflect this
acquisition.
On February 12, 1997, BOK Financial acquired Park Cities Bancshares, Inc. and
its subsidiary, First National Bank of Park Cities, in Dallas, Texas for $50.0
million.
On March 4, 1997, BOK Financial acquired First TexCorp., Inc. and its
subsidiary, First Texas Bank, in Dallas, Texas for $39.3 million.
Developments relating to individual aspects of the business of BOK Financial are
described under "Narrative Description of Business" and "Services Offered" on
pages 3 and 4 of this report. Additional discussion of BOK Financial's
activities during the current year is incorporated by reference to "Management's
Assessment of Operations and Financial Condition" (pages 6 - 18) in BOK
Financial's 1996 Annual Report to Shareholders. Additional information regarding
BOK Financial's acquisitions is incorporated by reference to Note 2 of "Notes to
Consolidated Financial Statements" (page 28 ) in BOK Financial's 1996 Annual
Report to Shareholders.
NARRATIVE DESCRIPTION OF BUSINESS
BOK Financial is a bank holding company, and as such, its activities are limited
by the BHCA to banking, certain bank-related services and activities, and
managing or controlling banks. BOK Financial's banking and bank-related
activities are primarily performed through BOk and CBNWA; nonbank subsidiary
operations are not significant. As of December 31, 1996, BOK Financial and its
subsidiaries had 2,102 full-time equivalent employees. Following is a
description of the more significant services offered by BOK Financial and the
competitive and regulatory environments in which it operates.
SERVICES OFFERED
COMMERCIAL BANKING SERVICES
BOK Financial, through BOk and CBNWA, provides a wide range of financial
services to commercial and industrial customers, including depository, lending
and other financial services such as cash management, leasing and international
collections. The loan portfolio is comprised primarily of real estate and
commercial loans. The commercial loan portfolio is diversified and distributed
among various commercial and industrial customers, including energy-related,
manufacturing, trade and service industries.
CORRESPONDENT BANKING SERVICES
BOK Financial provides a broad range of financial services to banks, savings and
loans, credit unions and other financial institutions in Oklahoma and
surrounding states. BOK Financial works closely with community financial
institutions, assisting them in satisfying the demands of their customers and
trade areas by engaging in loan participations and providing other financial
services.
CONSUMER BANKING SERVICES
At December 31, 1996, BOk had 65 banking locations, with 45 locations in the
Tulsa and Oklahoma City areas. CBNWA had 4 locations in northwest Arkansas.
Services offered include deposit accounts, installment loans, student loans,
bank card accounts, personal lines of credit, debit cards, an automated 24-hour
telephone loan application service, a 24-hour telephone branch and telephone and
personal computer based bill paying services New services planned for 1997
include interactive video kiosks for consumer lending and other transactions.
The BancOklahoma Investment Center makes available, through representatives in
most BOk branches, a full range of mutual funds, annuities and securities.
TransFund, BOk's network of automated teller machines, consists of 635 locations
across Oklahoma, Arkansas, southwest Missouri, northern Texas and southern
Kansas.
INVESTMENT AND MONEY MARKET ACTIVITIES
BOk provides securities brokerage, and trading services for corporations,
governmental units, individual customers and correspondent banks. Securities
include money market instruments, U.S. Government and municipal bonds, corporate
stocks and bonds, and mutual funds. The public finance department provides
bank-elegible underwriting financial advisory, private placement and
term-financing services for governmental and corporate entities. BOK Financial
recently announced its entrance into merchant banking which will provide a broad
range of financial services outside those traditionally associated with banking,
including financial advisory
4
services to both public and corporate sectors, leasing and mezzanine financing,
and underwriting of municipal revenue bonds, mortgage backed debt, consumer
receivables, and commercial paper.
MORTGAGE BANKING
BOMC, through its own locations as well as BOk's branch network, offered a full
array of mortgage options from federally sponsored programs to "jumbo loans" on
higher priced houses. BOMC is the largest originator of mortgage loans in
Oklahoma and has a servicing portfolio of approximately $5.9 billion, including
$243 million serviced for BOk. Effective January 1, 1997, these mortgage banking
activities were transferred to BOk.
TRUST AND ASSET MANAGEMENT SERVICES
BOk's trust subsidiaries (BancOklahoma Trust Company ("BOTC") in Oklahoma and
Alliance Trust Company N.A. in Texas) offer a variety of services to both
corporate and individual customers in Oklahoma and Texas. Individual financial
trust services include personal trust management, administration of estates and
management of individual investment and custodial accounts. For corporate
clients, the services include management, administration and recordkeeping of
pension plans, thrift plans, 401(k) plans and master trust plans, including a
state-of-the-art system for employee benefit plan recordkeeping. BOk's trust
division also serves as transfer agent and registrar for corporate securities,
paying agent for municipalities and governmental agencies and indenture trustee
of bond issues. BOTC serves as an investment advisor to the American Performance
Funds, a family of proprietary mutual funds distributed by the Winsbury Company
of Columbus, Ohio. At December 31, 1996, trust subsidiaries were responsible for
approximately $7.5 billion in assets. Effective March 22, 1997, BOTC was merged
into BOk.
FOREIGN OPERATIONS
BOK Financial does not engage in operations in foreign countries, nor does it
lend to foreign governments.
COMPETITION
The banking industry in Oklahoma is highly competitive. BOK Financial competes
with other banks in obtaining deposits, making loans and providing additional
services related to banking. There are approximately 332 banks located in
Oklahoma, of which approximately 38 are located in the Tulsa County and
surrounding metropolitan area and approximately 55 are located in the Oklahoma
County and surrounding metropolitan area. BOK Financial is also in competition
with other businesses engaged in extending credit or accepting deposits, such as
major retail establishments, major brokerage firms, savings and loan
associations, credit unions, finance companies, small loan companies, insurance
companies and loan production offices of major banks located within and outside
Oklahoma.
Limited branch banking as permitted in Oklahoma is increasing competition.
Generally, a bank may establish two new branch offices within the town or city
where the bank is located or in nearby areas not already served by a bank or
branch, and may acquire an unlimited number of existing banks and convert them
and their branches into branch offices. Within its primary markets, BOk has 23
locations in the Tulsa area and 22 locations in the Oklahoma City area, the
state's largest financial markets. Subject to regulatory approval, BOk is
considering various locations for additional facilities. Like BOk, other banks
are taking advantage of the bank branching laws to establish additional
facilities. These additional banking offices are further increasing competition.
Limited branch banking is, on the other hand, permitting banks to compete more
effectively with savings and loan associations, credit unions and other
financial institutions that may establish offices more freely than banks, some
of which are not subject to comparable regulatory restrictions on their
activities.
Oklahoma also permits the acquisition of an unlimited number of wholly-owned
bank subsidiaries so long as aggregate deposits at the time of acquisition in a
multibank holding company do not exceed 12.25% of all deposits in Oklahoma
financial institutions insured by the federal government, exclusive of credit
union deposits. Based on the latest statistical data available (as of June 30,
1996), BOK Financial could acquire additional bank subsidiaries so long as the
aggregate deposits of all Oklahoma subsidiaries do not exceed approximately $4.1
billion. Deposits of BOk were $3.1 billion and $3.2 billion at June 30, and
December 31, 1996, respectively.
Oklahoma also permits out-of-state bank holding companies to acquire banks and
bank holding companies located in the state and, subject to certain limitations,
make additional acquisitions within the state. During the last few years the
Oklahoma banking industry has been consolidated into fewer but larger banks. In
1996, two "super-regional" holding companies announced significant acquisitions
in Oklahoma. The consolidation over the past several years has brought about a
highly competitive environment, in which many customers have access to national
and regional financial institutions for many products and services.
5
On September 29, 1994, the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994 ("Riegle-Neal") was signed into law. In summary,
commencing one year after passage, qualifying bank holding companies will be
permitted to acquire banks in any state. As of June 1, 1997, qualifying banks
may be able to engage in interstate branching by merging banks in different
states. States " opt-out" of interstate branching by enacting specific
legislation prior to June 1, 1997, in which case out-of-state banks would
generally not be able to branch into that state, and banks headquartered in that
state would not be permitted to branch into other states. States may also opt
into interstate branching earlier than 1997 with specific legislation. The law
imposes a 10% nationwide deposit cap and a 30% state deposit cap; however, the
states' authority is preserved to impose a lower, nondiscriminatory deposit cap.
Oklahoma elected to "opt-in" to interstate branching effective May 1997 and
established a 12.25% deposit cap. It is anticipated that the total number of
Oklahoma banks may decrease and national and regional bank presence in the state
may increase. Over the near-term, these changes are expected to increase
competition with a greater number of products and services available to Oklahoma
customers. Over the long-term, the number of competitors could decrease,
depending on the extent of consolidations nationwide, but competition could
continue to increase as a result of the remaining institutions needing to be
stronger, more innovative and more aggressive to retain a significant presence
in a consolidated environment.
Additional legislation, judicial and administrative decisions also may affect
the ability of banks to compete with each other as well as with other
businesses. These statutes and decisions may tend to make the operations of
various financial institutions more similar and increase competition among banks
and other financial institutions or limit the ability of banks to compete with
other businesses. Management currently cannot predict whether and, if so, when
any such changes might occur or the impact any such changes would have upon the
income or operations of BOK Financial or its subsidiaries, or upon the Oklahoma
regional banking environment.
SUPERVISION AND REGULATION
Bank holding companies and banks are extensively regulated under both federal
and state law. The following information, to the extent it describes statutory
or regulatory provisions, is qualified in its entirety by reference to the
particular statutory and regulatory provisions. It is not possible to predict
the changes, if any, that may be made to existing banking laws and regulations
or whether such changes, if made, would have a materially adverse effect on the
business and prospects of BOK Financial, BOk and CBNWA.
BOK FINANCIAL
As a bank holding company, BOK Financial is subject to regulation under the BHCA
and to supervision by the Board of Governors of the Federal Reserve System (the
"Reserve Board"). Under the BHCA, BOK Financial is required to file with the
Reserve Board an annual report and such other additional information as the
Reserve Board may require. The Reserve Board may also make examinations of BOK
Financial and its subsidiaries.
The BHCA requires the prior approval of the Reserve Board in any case where a
bank holding company proposes to acquire control of more than five percent of
the voting shares of any bank, unless it already controls a majority of such
voting shares. Additionally, approval must also be obtained before a bank
holding company may acquire all or substantially all of the assets of another
bank or before it may merge or consolidate with another bank holding company.
The BHCA further provides that the Reserve Board shall not approve any such
acquisition, merger or consolidation that will substantially lessen competition,
tend to create a monopoly or be in restraint of trade, unless it finds the
anti-competitive effects of the proposed transaction are clearly outweighed in
the public interest by the probable effect of the transaction in meeting the
convenience and needs of the community to be served.
The BHCA presently prohibits the Reserve Board from approving an application
from a bank holding company to acquire shares of a bank located outside the
state in which the operations of the holding company's banking subsidiaries are
principally conducted, unless such an acquisition is specifically authorized by
statute of the state in which the bank whose shares are to be acquired is
located, but Riegle-Neal permits interstate banking as of September 29, 1995, as
discussed above in "Competition".
The BHCA also prohibits a bank holding company, with certain exceptions, from
acquiring more than five percent of the voting shares of any company that is not
a bank and from engaging in any business other than banking or managing or
controlling banks. Under the BHCA, the Reserve Board is authorized to approve
the ownership of shares by a bank holding company in any company whose
activities the Reserve Board has determined to be so closely related to banking
or to managing or controlling banks as to be a proper incident thereto. In
making such determinations, the Reserve Board weighs the Community Reinvestment
Act activities of the bank holding company and the expected benefit to the
public, such as greater convenience, increased competition or gains in
efficiency, against the possible adverse effects, such as undue concentration of
resources, decreased or unfair competition, conflicts of interest or unsound
banking practices. The Reserve Board has by regulation determined that certain
activities are closely related to banking within the meaning of the BHCA. These
activities include operating a mortgage company, finance company, credit card
company
6
or factoring company; performing certain data processing operations; servicing
loans and other extensions of credit; providing investment and financial advice;
acting as an insurance agent for certain types of credit-related insurance;
owning and operating savings and loan associations; and leasing personal
property on a full-payout, nonoperating basis.
A bank holding and its subsidiaries are further prohibited under the BHCA from
engaging in certain tie-in arrangements in connection with the provision of any
credit, property or services. Thus, a subsidiary of a bank holding company may
not extend credit, lease or sell property, furnish any services or fix or vary
the consideration for these activities on the condition that (1) the customer
obtain or provide some additional credit, property or services from or to the
bank holding company or any subsidiary thereof or (2) the customer may not
obtain some other credit, property or services from a competitor, except to the
extent reasonable conditions are imposed to insure the soundness of credit
extended.
The Federal Deposit Insurance Corporation Improvement Act of 1991 established
five capital rating tiers ranging from "well capitalized" to "critically
undercapitalized". A financial institution is considered to be well capitalized
if its Leverage, Tier 1 and Total Capital ratios are at 5%, 6% and 10%,
respectively. Any institution experiencing significant growth or acquiring other
institutions or branches is expected to maintain capital ratios above the well
capitalized level. At December 31, 1996, BOK Financial's Leverage, Tier 1 and
Total Capital ratios were 7.46%, 10.49% and 11.74%, respectively.
BOK AND CBNWA
BOk and CBNWA are national banking associations and are subject to the National
Banking Act and other federal statutes governing national banks. Under federal
law, the Office of the Comptroller of the Currency ("Comptroller") charters,
regulates and serves as the primary regulator of national banks. In addition,
the Comptroller must approve certain corporate or structural changes, including
an increase or decrease in capitalization, payment of dividends, change of place
of business, establishment of a branch and establishment of an operating
subsidiary. The Comptroller performs its functions through national bank
examiners who provide the Comptroller with information concerning the soundness
of a national bank, the quality of management and directors, and compliance with
applicable laws, rules and regulations. The National Banking Act authorizes the
Comptroller to examine every national bank as often as necessary. Although the
Comptroller has primary supervisory responsibility for national banks, such
banks must also comply with Reserve Board rules and regulations as members of
the Federal Reserve System.
CBNWA is also subject to certain consumer-protection laws incorporated in the
Arkansas Constitution, which, among other restrictions, limit the maximum
interest rate on general loans to five percent above the Federal Reserve
Discount Rate. The rate on consumer loans is five percent above the discount
rate or seventeen percent, whichever is lower.
BOk and CBNWA are insured by the FDIC and are required to pay certain fees and
premiums to the Bank Insurance Fund ("BIF"). The BIF has implemented a
risk-related insurance system for determining premiums to be paid by a bank.
Each bank is placed in one of nine risk categories based on its level of capital
and supervisory rating with the well-capitalized banks with the highest
supervisory rating paying a premium of 0.00% of deposits and the critically
undercapitalized banks paying up to 0.27% of deposits. Also, approximately 21%
of BOK Financial's total deposits at December 31, 1996 were acquired through
Oakar transactions and are insured through the Savings Association Insurance
Fund ("SAIF"). The Deposit Insurance Funds Act of 1996 was enacted on September
30, 1996, which recapitalized the SAIF and implemented a risk-related insurance
system identical to the BIF system discussed above. In addition, the Deposit
Insurance Fund Act of 1996 implemented an additional assessment on BIF and SAIF
deposits, the Financing Corporation ("FICO") Quarterly Payment, which is not
tied to the BIF risk classification. The FICO BIF annual rate is 1.296 basis
points and the FICO SAIF annual rate is 6.48 basis points.
Applicable federal statutes and regulations require national banks to meet
certain leverage and risk-based capital requirements. At December 31, 1996,
BOk's and CBNWA's leverage and risk-based capital ratios were well above the
required minimum ratios.
7
GOVERNMENTAL POLICIES AND ECONOMIC FACTORS
The operations of BOK Financial and its subsidiaries are affected by legislative
changes and by the policies of various regulatory authorities and, in
particular, the credit policies of the Reserve Board. An important function of
the Reserve Board is to regulate the national supply of bank credit. Among the
instruments of monetary policy used by the Reserve Board to implement its
objectives are: open market operations in U.S. Government securities; changes in
the discount rate on bank borrowings; and changes in reserve requirements on
bank deposits. The effect of such policies in the future on the business and
earnings of BOK Financial and its subsidiaries cannot be predicted with
certainty.
The Oklahoma economy, BOK Financial's primary market, continues to generate job
growth. Certain economic indicators show that employment growth within the state
has now exceeded U.S. employment growth for fifteen consecutive months, although
wage and salary growth in Oklahoma only slightly exceeded the growth rate
observed nationally. With Oklahoma's economy tied more closely with the national
economy than in the past, a downturn in the national economy could have an
adverse impact on BOK Financial's financial position and results of operations.
ITEM 2 - PROPERTIES
BOK Financial, through BOk, BOk's subsidiaries and CBNWA, owns improved real
estate that was carried at $31.0 million, net of depreciation and amortization,
as of December 31, 1996. BOK Financial conducts its operations through a total
of 65 banking and 4 nonbanking locations in Oklahoma, 4 banking locations in
Arkansas and 2 nonbanking locations in Texas as of December 31, 1996. BOk's
facilities are suitable for their respective uses and present needs.
The information set forth in Notes 6 and 13 of "Notes to Consolidated Financial
Statements" (pages 32 and 38, respectively) of BOK Financial's 1996 Annual
Report to Shareholders provides further discussion related to properties and is
incorporated herein by reference.
ITEM 3 - LEGAL PROCEEDINGS
None.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the three months ended December 31,
1996.
PART II
ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
BOK Financial's $.00006 par value common stock is traded over-the-counter and is
reported on the facilities of the National Association of Securities Dealers
Automated Quotation system ("NASDAQ"), with the symbol BOKF. At December 31,
1996, common shareholders of record numbered 1,674 with 21,131,895 shares
outstanding.
During 1996, BOK Financial declared a 3% stock dividend in respect of its Common
Stock payable in shares of Common Stock. The dividend was payable on November
27, 1996 to shareholders of record on November 18, 1996. BOK Financial's
quarterly market information follows:
First Second Third Fourth
--------------- -------------- -------------- ---------------
1996:
Low $19.25 $20.00 $21.25 $23.25
High 23.25 22.75 23.75 28.00
1995:
Low $19.75 $20.25 $21.50 $19.00
High 22.25 22.75 25.25 24.50
8
The information set forth under the captions "Table 1 - Consolidated Selected
Financial Data" (page 5), "Table 5 - Selected Quarterly Financial Data" (page
11) and Note 15 of "Notes to Consolidated Financial Statements" (page 39) of BOK
Financial's 1996 Annual Report to Shareholders is incorporated herein by
reference.
ITEM 6 - SELECTED FINANCIAL DATA
The information set forth under the caption "Table 1 - Consolidated Selected
Financial Data" (page 5) of BOK Financial's 1996 Annual Report to Shareholders
is incorporated herein by reference.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information set forth under the captions "Management's Assessment of
Operations and Financial Condition" (pages 6 - 18), "Annual Financial Summary -
Unaudited" (pages 44 - 45) and "Quarterly Financial Summary -Unaudited" (pages
46 - 47) of BOK Financial's 1996 Annual Report to Shareholders is incorporated
herein by reference.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The supplementary data regarding quarterly results of operations set forth under
the caption "Table 5 Selected Quarterly Financial Data" (page 11) of BOK
Financial's 1996 Annual Report to Shareholders is incorporated herein by
reference.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information set forth under the captions "Election of Directors" and
"Executive Compensation" in BOK Financial's 1997 Annual Proxy Statement for its
Annual Meeting of Shareholders scheduled for April 29, 1997 ("1997 Annual Proxy
Statement") is incorporated herein by reference.
ITEM 11 - EXECUTIVE COMPENSATION
The information set forth under the caption "Executive Compensation" in BOK
Financial's 1997 Annual Proxy Statement is incorporated herein by reference.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information set forth under the captions "Security Ownership of Certain
Beneficial Owners and Management" and "Election of Directors" in BOK Financial's
1997 Annual Proxy Statement is incorporated herein by reference.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information set forth under the caption "Certain Transactions" in BOK
Financial's 1997 Annual Proxy Statement is incorporated herein by reference.
The information set forth under Notes 3, 5 and 9 of "Notes to Consolidated
Financial Statements" (pages 29, 31, and 34, respectively) of BOK Financial's
1996 Annual Report to Shareholders is incorporated herein by reference.
9
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(A)(1) List of Financial Statements filed.
The following financial statements and reports included in BOK Financial's
Annual Report to Shareholders for the Fiscal Year Ended December 31, 1996 are
incorporated by reference in Parts I and II of this Annual Report on Form 10-K.
Exhibit 13
1996 Annual Report
Description Page Number
- ------------------------------------------ ------------------
Consolidated Selected Financial Data 5
Selected Quarterly Financial Data 11
Report of Management on Financial Statements 19
Report of Independent Auditors 19
Consolidated Statements of Earnings 20
Consolidated Balance Sheets 21
Consolidated Statements of Changes in Shareholders' Equity 22-23
Consolidated Statements of Cash Flows 24
Notes to Consolidated Financial Statements 25-43
Annual Financial Summary - Unaudited 44-45
Quarterly Financial Summary - Unaudited 46-47
Appendix A 48
(A)(2) LIST OF FINANCIAL STATEMENT SCHEDULES FILED.
The schedules to the consolidated financial statements required by
Regulation S-X are not required under the related instructions or are
inapplicable and are therefore omitted.
(A)(3) LIST OF EXHIBITS FILED.
Exhibit Number Description of Exhibit
- -------------- ----------------------
3.0 The Articles of Incorporation of BOK Financial,
incorporated by reference to (i) Amended and Restated
Certificate of Incorporation of BOK Financial filed
with the Oklahoma Secretary of State on May 28, 1991,
filed as Exhibit 3.0 to S-1 Registration Statement No.
33-90450, and (ii) Amendment attached as Exhibit A to
Information Statement and Prospectus Supplement filed
November 20, 1991.
3.1 Bylaws of BOK Financial, incorporated by reference to
Exhibit 3.1 of S-1 Registration Statement No.33-90450.
4.0 The rights of the holders of the Common Stock and
Preferred Stock of BOK Financial are set forth in its
Certificate of Incorporation.
10.0 Purchase and Sale Agreement dated October 25, 1990,
among BOK Financial, Kaiser, and the FDIC, incorporated
by reference to Exhibit 2.0 of S-1 Registration
Statement No. 33-90450.
10
10.1 Amendment to Purchase and Sale Agreement effective
March 29, 1991, among BOK Financial, Kaiser, and the
FDIC, incorporated by reference to Exhibit 2.2 of S-1
Registration Statement No. 33-90450
10.2 Letter agreement dated April 12, 1991, among BOK
Financial, Kaiser, and the FDIC, incorporated by
reference to Exhibit 2.3 of S-1 Registration Statement
No. 33-90450.
10.3 Second Amendment to Purchase and Sale Agreement
effective April 15, 1991, among BOK Financial, Kaiser,
and the FDIC, incorporated by reference to Exhibit 2.4
of S-1 Registration Statement No. 33-90450.
10.4 Employment agreements.
10.4(a) Employment Agreement between BOk and Stanley A.
Lybarger, incorporated by reference to Exhibit 10.4(a)
of Form 10-K for the fiscal year ended December 31,
1991.
10.5 Director indemnification agreement dated June 30, 1987,
between BOk and Kaiser, incorporated by reference to
Exhibit 10.5 of S-1 Registration Statement No.
33-90450. Substantially similar director
indemnification agreements were executed between BOk
and the following:
Date of Agreement
James E. Barnes June 30, 1987
William H. Bell June 30, 1987
James S. Boese June 30, 1987
Dennis L. Brand June 30, 1987
Chester E. Cadieux June 30, 1987
William B. Cleary June 30, 1987
Glenn A. Cox June 30, 1987
William E. Durrett June 30, 1987
Leonard J. Eaton, Jr. June 30, 1987
William B. Fader December 5, 1990
Gregory J. Flanagan June 30, 1987
Jerry L. Goodman June 30, 1987
David A. Hentschel July 7, 1987
Philip N. Hughes July 8, 1987
Thomas J. Hughes, III June 30, 1987
William G. Kerr June 30, 1987
Philip C. Lauinger, Jr. June 30, 1987
Stanley A. Lybarger December 5, 1990
Patricia McGee Maino June 30, 1987
Robert L. Parker, Sr. June 30, 1987
James A. Robinson June 30, 1987
William P. Sweich June 30, 1987
10.6 Capitalization and Stock Purchase Agreement dated May
20, 1991, between BOK Financial and Kaiser,
incorporated by reference to Exhibit 10.6 of S-1
Registration Statement No. 33-90450.
10.7 BOK Financial Corporation 1991 Special Stock Option
Plan, incorporated by reference to
Exhibit 4.0 of S-8 Registration Statement No. 33-44122.
10.7.1 BOK Financial Corporation 1992 Stock Option Plan,
incorporated by reference to Exhibit 4.0 of S-8
Registration Statement No. 33-55312.
10.7.2 BOK Financial Corporation 1993 Stock Option Plan,
incorporated by reference to Exhibit 4.0 of S-8
Registration Statement No. 33-70102.
10.7.3 BOK Financial Corporation 1994 Stock Option Plan,
incorporated by reference to Exhibit 4.0 of S-8
Registration Statement No. 33-79834.
11
10.7.4 BOK Financial Corporation 1994 Stock Option Plan
(Typographical Error Corrected January 16, 1995),
incorporated by reference to Exhibit 10.7.4 of Form
10-K for the fiscal year ended December 31, 1994
10.7.5 BOK Financial Corporation Directors' Stock
Compensation Plan, incorporated by reference to Exhibit
4.0 of S-8 Registration Statement No. 33-79836.
10.7.6 Bank of Oklahoma Thrift Plan (Amended and Restated
Effective as of January 1, 1995), incorporated by
reference to Exhibit 10.7.6 of Form 10-K for the year
ended December 31, 1994.
10.7.7 Trust Agreement for the Bank of Oklahoma Thrift Plan
(December 30, 1994), incorporated by reference to
Exhibit 10.7.7 of Form 10-K for the year ended December
31, 1994.
10.8 Lease Agreement between One Williams Center Co. and
National Bank of Tulsa (predecessor to BOk) dated June
18, 1974, incorporated by reference to Exhibit 10.9 of
S-1 Registration Statement No. 33-90450.
10.9 Lease Agreement between Security Capital Real Estate
Fund and BOk dated January 1, 1988, incorporated by
reference to Exhibit 10.10 of S-1 Registration
Statement No. 33-90450.
10.10 Asset Purchase Agreement (OREO and other assets)
between BOk and Phi-Lea-Em Corporation dated April 30,
1991, incorporated by reference to Exhibit 10.11 of S-1
Registration Statement No. 33-90450.
10.11 Asset Purchase Agreement (Tanker Assets) between BOk
and Green River Exploration Company dated April 30,
1991, incorporated by reference to Exhibit 10.12 of S-1
Registration Statement No. 33-90450.
10.12 Asset Purchase Agreement (Recovery Rights) between BOk
and Kaiser dated April 30, 1991, incorporated by
reference to Exhibit 10.13 of S-1 Registration
Statement No. 33-90450.
10.13 Purchase and Assumption Agreement dated August 7, 1992
among First Gibraltar Bank, FSB, Fourth Financial
Corporation and BOk, as amended, incorporated by
reference to Exhibit 10.14 of Form 10-K for the fiscal
year ended December 31, 1992.
10.13.1 Allocation Agreement dated August 7, 1992 between
BOk and Fourth Financial Corporation, incorporated by
reference to Exhibit 10.14.1 of Form 10-K for the
fiscal year ended December 31, 1992.
10.14 Merger Agreement among BOK Financial, BOKF Merger
Corporation Number Two, Brookside Bancshares, Inc., The
Shareholders of Brookside Bancshares, Inc. and
Brookside State Bank dated December 22, 1992, as
amended, incorporated by reference to Exhibit 10.15 of
Form 10-K for the fiscal year ended December 31, 1992.
10.14.1 Agreement to Merge between BOk and Brookside State
Bank dated January 27, 1993, incorporated by reference
to Exhibit 10.15.1 of Form 10-K for the fiscal year
ended December 31, 1992.
10.15 Merger Agreement among BOK Financial, BOKF Merger
Corporation Number Three, Sand Springs Bancshares,
Inc., The Shareholders of Sand Springs Bancshares, Inc.
and Sand Springs State Bank dated December 22, 1992, as
amended, incorporated by reference to Exhibit 10.16 of
Form 10-K for the fiscal year ended December 31, 1992.
10.15.1 Agreement to Merge between BOk and Sand Springs
State Bank dated January 27, 1993, incorporated by
reference to Exhibit 10.16.1 of Form 10-K for the
fiscal year ended December 31, 1992.
12
10.16 Partnership Agreement between Kaiser-Francis Oil
Company and BOK Financial dated December 1, 1992,
incorporated by reference to Exhibit 10.16 of Form 10-K
for the fiscal year ended December 31, 1993.
10.16.1 Amendment to Partnership Agreement between
Kaiser-Francis Oil Company and BOK Financial dated May
17, 1993, incorporated by reference to Exhibit 10.16.1
of Form 10-K for the fiscal year ended December 31,
1993.
10.17 Purchase and Assumption Agreement between BOk and
FDIC, Receiver of Heartland Federal Savings and Loan
Association dated October 9, 1993, incorporated by
reference to Exhibit 10.17 of Form 10-K for the fiscal
year ended December 31, 1993.
10.18 Merger Agreement among BOk, Plaza National Bank and
The Shareholders of Plaza National Bank dated December
20, 1993, incorporated by reference to Exhibit 10.18 of
Form 10-K for the fiscal year ended December 31, 1993.
10.18.1 Amendment to Merger Agreement among BOk, Plaza
National Bank and The Shareholders of Plaza National
Bank dated January 14, 1994, incorporated by reference
to Exhibit 10.18.1 of Form 10-K for the fiscal year
ended December 31, 1993.
10.19 Stock Purchase Agreement between Texas Commerce Bank,
National Association and BOk dated March 11, 1994,
incorporated by reference to Exhibit 10.19 of Form 10-K
for the fiscal year ended December 31, 1993.
10.20 Merger Agreement among BOK Financial Corporation, BOKF
Merger Corporation Number Four, Citizens Holding
Company and others dated May 11, 1994, incorporated by
reference to Exhibit 10.20 of Form 10-K for the fiscal
year ended December 31, 1994.
10.21 Stock Purchase and Merger Agreement among Northwest
Bank of Enid, BOk and The Shareholders of Northwest
Bank of Enid effective as of May 16, 1994, incorporated
by reference to Exhibit 10.21 of Form 10-K for the
fiscal year ended December 31, 1994.
10.22 Agreement and Plan of Merger among BOK Financial
Corporation, BOKF Merger Corporation Number Five and
Park Cities Bancshares, Inc. dated October 3, 1996,
incorporated by reference to Exhibit C of S-4
Registratioin Statement No. 333-16337.
10.23 Agreement and Plan of Merger among BOK Financial
Corporation and First TexCorp., Inc. dated December 18,
1996, incorporated by reference to Exhibit 10.24 of S-4
Registration Statement No. 333-16337.
11.0 Statement regarding the computation of per share
earnings.
13.0 Annual Report to Shareholders for the fiscal year ended
December 31, 1996. Such report, except for those
portions thereof which are expressly incorporated by
reference in this filing, is furnished for the
information of the Commission and is not deemed to be
"filed" as part of this Annual Report on Form 10-K.
21.0 Subsidiaries of BOK Financial.
23.0 Consent of independent auditors - Ernst & Young LLP.
27.0 Financial Data Schedule
99.0 Additional Exhibits.
99.1 Undertakings incorporated by reference into S-8
Registration Statement No. 33-44121 for Bank of
Oklahoma Master Thrift Plan and Trust, incorporated by
reference to Exhibit 99.1 of Form 10-K for the fiscal
year ended December 31, 1993.
99.2 Undertakings incorporated by reference into S-8
Registration Statement No. 33-44122 for BOK Financial
Corporation 1991 Special Stock Option Plan,
incorporated by reference to Exhibit 99.2 of Form 10-K
for the fiscal year ended December 31, 1993.
99.3 Undertakings incorporated by reference into S-8
Registration Statement No. 33-55312 for BOK Financial
Corporation 1992 Stock Option Plan, incorporated by
reference to Exhibit 99.3 of Form 10-K for the fiscal
year ended December 31, 1993.
13
99.4 Undertakings incorporated by reference into S-8
Registration Statement No. 33-70102 for BOK Financial
Corporation 1993 Stock Option Plan, incorporated by
reference to Exhibit 99.4 of Form 10-K for the fiscal
year ended December 31, 1993.
99.5 Undertakings incorporated by reference into S-8
Registration Statement No. 33-79834 for BOK Financial
Corporation 1994 Stock Option Plan, incorporated by
reference to Exhibit 99.5 of Form 10-K for the fiscal
year ended December 31, 1994.
99.6 Undertakings incorporated by reference into S-8
Registration Statement No. 33-79836 for BOK Financial
Corporation Directors' Stock Compensation Plan,
incorporated by reference to Exhibit 99.6 of Form 10-K
for the fiscal year ended December 31, 1994.
(B) Reports on Form 8-K
None.
(C) Exhibits Required by Item 601 of Regulation S-K
The exhibits listed in response to Item 14(A)(3) are filed as part of this
report.
(D) Financial Statement Schedules
None.
14
SIGNATURES
Pursuant to the requirements of Section 13 and 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
BOK FINANCIAL CORPORATION
DATE: March 25, 1997 BY: /s/George B. Kaiser
---------------------
George B. Kaiser,
Chairman of the Board of Directors
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below on March 25, 1997 , by the following persons on behalf of
the Registrant and in the capacities indicated.
OFFICERS
/s/George B. Kaiser /s/Stanley A. Lybarger
- -------------------------------- ----------------------------
George B. Kaiser, Stanley A. Lybarger,
Chairman of the Board of Directors Director, President and
Chief Executive Officer
/s/James A. White /s/John C. Morrow
- ------------------------------ ----------------------------
James A. White, John C. Morrow
Executive Vice President and Senior Vice President and
Chief Financial Officer/Treasurer Coontroller, Financial Accounting
DIRECTORS
/s/ V. Burns Hargis
- ------------------------------- --------------------------------
W. Wayne Allen V. Burns Hargis
/s/ Keith E. Bailey /s/ E. Carey Joullian, IV
- ------------------------------- --------------------------------
Keith E. Bailey E. Carey Joullian, IV
/s/ Robert J. LaFortune
- ------------------------------- --------------------------------
James E. Barnes Robert J. LaFortune
/s/ Sharon J. Bell
- ------------------------------- --------------------------------
Sharon J. Bell Philip C. Lauinger, Jr.
/s/Glenn A. Cox /s/ David R. Lopez
- -------------------------------- --------------------------------
Glenn A. Cox David R. Lopez
- ------------------------------- --------------------------------
Ralph S. Cunningham Frank A. McPherson
/s/ Nancy J. Davies
- ------------------------------- --------------------------------
Nancy J. Davies Robert L. Parker, Sr.
/s/ Dr. Robert H. Donaldson /s/ James W. Pielsticker
- ------------------------------- --------------------------------
Dr. Robert H. Donaldson James W. Pielsticker
- ------------------------------- --------------------------------
William E. Durrett James A. Robinson
/s/ James O. Goodwin
- ------------------------------- --------------------------------
James O. Goodwin L. Francis Rooney, III
/s/ Robert L. Zemanek
--------------------------------
Robert L. Zemanek