11-K 1 finstmthourly.txt THRIFT PLAN FINANCIAL STATEMENTS - HOURLY 2005 FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE BOK Financial Thrift Plan for Hourly Employees As of December 31, 2005 and 2004, and for the Year Ended December 31, 2005 BOK Financial Thrift Plan for Hourly Employees Financial Statements and Supplemental Schedule As of December 31, 2005 and 2004, and for the Year Ended December 31, 2005 Contents Report of Independent Registered Public Accounting Firm...................1 Audited Financial Statements Statements of Net Assets Available for Benefits...........................2 Statement of Changes in Net Assets Available for Benefits.................3 Notes to Financial Statements.............................................4 Supplemental Schedule Schedule H; Line 4i--Schedule of Assets (Held at End of Year).............11 1 Report of Independent Registered Public Accounting Firm The Plan Administrative Committee BOK Financial Thrift Plan for Hourly Employees We have audited the accompanying statements of net assets available for benefits of the BOK Financial Thrift Plan for Hourly Employees as of December 31, 2005 and 2004, and the related statement of changes in net assets available for benefits for the year ended December 31, 2005. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2005 and 2004, and the changes in its net assets available for benefits for the year ended December 31, 2005, in conformity with U.S. generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2005, is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ Ernst & Young LLP Tulsa, Oklahoma June 29, 2006 2 BOK Financial Thrift Plan for Hourly Employees Statements of Net Assets Available for Benefits December 31 2005 2004 ------------------------------------ Assets Investments: BOK Financial Corporation Common Stock $ 95,002 $ 102,964 American Performance Funds: Growth Equity Fund - 19,498 Cash Management Fund 142,085 89,500 Intermediate Bond Fund 34,857 29,203 SEI Stable Asset Fund 128,099 21,022 American Advantage International Equity Fund - 17,851 American Balanced Fund 21,532 17,866 Neuberger and Berman Genesis Trust Fund 89,126 59,506 Dodge and Cox Stock Fund 125,884 99,180 Vanguard Institutional Index 84,259 49,495 American Growth Fund of America 24,424 56 Goldman Sachs Growth Opportunity Fund 455 126 Hochkis and Wiley Midcap Valuation Fund 1,512 570 T. Rowe Price New Horizons 6,243 298 American Beacon International Fund 27,934 - Bank of Oklahoma, N.A. Managed Allocation Portfolios (MAP): MAP Conservative Fund 655 - MAP Balanced Fund 174,720 - MAP Moderate Growth Fund 9,397 - MAP Growth Fund 4,116 - MAP Aggressive Growth Fund 8,517 - Participant Loans 7,993 13,123 ------------------------------------ Total investments 986,810 520,258 Cash 15,078 9,024 Accrued interest receivable 556 620 ------------------------------------ Total assets 1,002,444 529,902 Liabilities Due to broker 9,032 5,697 ------------------------------------ Net assets available for benefits $ 993,412 $ 524,205 ====================================
See accompanying notes. 3 BOK Financial Thrift Plan for Hourly Employees Statement of Changes in Net Assets Available for Benefits Year ended December 31, 2005 Additions Investment income: Interest and dividends $ 14,776 Net appreciation in fair value of investments 29,077 ------------------ 43,853 Contributions: Participant 209,318 Employer 45,411 Rollover 188,010 Transfers into the Plan 103,710 ------------------ Total additions 590,302 Deductions Benefit payments 121,095 Net increase 469,207 Net assets available for benefits, at beginning of year 524,205 ------------------ Net assets available for benefits, at end of year $ 993,412 ================== See accompanying notes. 4 BOK Financial Thrift Plan for Hourly Employees Notes to Financial Statements December 31, 2005 1. Description of Plan The following description of the BOK Financial Thrift Plan for Hourly Employees (the Plan) provides only general information. Participants should refer to the Summary Plan Description or the Plan document for a more complete description of the Plan's provisions. General The Plan is a defined contribution plan covering all employees of BOK Financial Corporation (BOKF) and its subsidiaries and affiliates (collectively, the Employer or Company) who have attained age 21 and one year of service (equivalent to 1,000 hours) and who are compensated on an hourly basis, except those covered under a collective bargaining agreement and those treated as independent contractors. Effective April 1, 2003, an eligible employee may enter the Plan on the first day of the month following the date the employee is credited with one full month of service. Additionally, as of April 1, 2003, all new eligible employees are automatically enrolled in the Plan at a three percent contribution rate unless the employee designates on the enrollment form not to participate or to participate at another allowable contribution rate. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA). Contributions Participants may elect to contribute a percentage of their compensation up to the maximum allowable by federal regulation (as defined by the Plan) on a pre-tax basis pursuant to a salary reduction agreement filed with the Plan administrator. In addition, participants may make after-tax contributions which shall not exceed 5 percent of each participant's compensation, however, the combination of pre-tax and after-tax contributions cannot be more than the annual legal limit on the total amount that may be contributed to this type of plan (as defined by the plan). For participants who attained age 50 on or before December 31, 2005, such participants were allowed to make a pre-tax catch-up contribution of an additional $4,000 above the maximum allowable by federal regulation. Participants may elect investment in any of 12 mutual funds, the Bank of Oklahoma, N.A. Managed Allocation Portfolios (MAP), self-directed common stocks or registered investment companies, and BOKF Common Stock. During 2005, the Employer authorized the following modification to the investment selections available to participants: (a) removal of the American Performance Growth Equity Fund and (b) addition of the American Beacon International and MAP Funds. 5 BOK Financial Thrift Plan for Hourly Employees Notes to Financial Statements (continued) 1. Description of Plan (continued) The Employer contributes a matching contribution to the Plan. The matching contribution may be made in cash or in shares of BOKF Common Stock. In 2005, the entire matching contribution of $45,411 was made in cash. For 2005, the Employer matching contribution ranges from $.40 to $1.00 for each dollar of the participant's contribution, up to five percent of compensation, based on each participant's years of service as follows: Years of Service Matching Percentage ------------------------------------------------- ------------------------------ Less than four years 40% At least four, but less than ten years 60% At least ten, but less than fifteen years 80% Fifteen or more years 100% The Employer may in its sole discretion, make an additional discretionary contribution to the Plan. There was no discretionary contribution in 2005. During 2005, rollovers and transfers into the Plan were $188,010 and $103,710, respectively. The rollovers relate primarily to one participant that rolled over the participant's balance in a previous employer's plan and the transfers relate primarily to one employee that transferred from salaried to hourly status. Participant Accounts Each participant's account is credited with the participant's contribution and allocations of (a) the Employer's contribution and (b) Plan earnings and charged with administrative expenses, if applicable. Allocations are based on participant earnings or account balances, as defined by the Plan. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. 6 BOK Financial Thrift Plan for Hourly Employees Notes to Financial Statements (continued) 1. Description of Plan (continued) Vesting Participants vest in Employer matching contributions based upon years of service, as defined by the Plan. Participants are 100 percent vested upon completion of five years of service and are immediately vested in their deferred (pre-tax) contributions, after-tax contributions, and the actual earnings thereon. Participant Loans Participants may borrow against their accounts in amounts not less than $1,000 and not to exceed the lesser of $50,000 or 50 percent of the participant's vested account balance. Loans will bear interest based on the current banking prime rate when the loan is requested and may not exceed a five-year term, unless the proceeds are used to acquire the primary residence of the participant, in which case the maximum term may be 25 years. The loans are secured by the balance in the participant's account. Interest rates are based on the Chase prime rate and range from 4.00 percent to 7.00 percent at December 31, 2005. Repayment is made by payroll withholdings. Payment of Benefits A participant who terminated employment with a vested account balance less than $1,000 ($5,000 prior to March 28, 2005), excluding rollover contributions, will receive a lump-sum payment. If the participant has a vested balance which exceeds $1,000 ($5,000 prior to March 28, 2005), excluding rollover contributions, and has not elected payment to another eligible retirement plan in a direct rollover or to receive payment directly, the Plan will pay the distribution in a direct rollover to an individual retirement account designated by the Plan Administrator. In lieu of lump-sum payment, a participant who terminates employment after his or her 65th birthday or attaining age 50 and completing ten years of service, shall be entitled to elect monthly, quarterly, semi-annual or annual installment payments to be paid over a period not to exceed 10 years from the benefit commencement date. The installments may be accelerated at the direction of the participant. Forfeitures Forfeited balances of terminated participants' nonvested accounts are utilized to pay administrative costs or to reduce future Employer contributions. During 2005, forfeitures of $1,729 were used to reduce Employer matching contributions. Additionally, at 7 BOK Financial Thrift Plan for Hourly Employees Notes to Financial Statements (continued) 1. Description of Plan (continued) December 31, 2005 and 2004 forfeitures outstanding that will be used to reduce future Employer matching contributions were $5,990 and $5,822, respectively. Plan Termination The Employer expects to continue the Plan indefinitely. However, the Employer reserves the right to discontinue the Plan or to amend the Plan, in whole or in part, from time-to-time. In the event of Plan termination, participants will become 100 percent vested in their accounts. 2. Summary of Significant Accounting Policies Basis of Accounting The financial statements of the Plan are prepared on the accrual basis of accounting. Benefit payments are recorded when paid. Administrative Expenses The Employer pays all administrative expenses of the Plan, except for loan origination fees, which are paid by the participants. Investment Valuation and Income Recognition Shares of registered investment companies are valued at published market prices which represent the net asset value of shares held by the Plan at year-end. The BOKF Common Stock is valued at the quoted market price. The MAP fund values are obtained from the MAP annual audited financial statements. The MAP funds are reported at market value. Participant loans receivable are valued at their outstanding balances which approximates fair value. Purchases and sales of securities are recorded on a trade-date basis. Dividend income is recorded on the ex-dividend date. Interest income is recorded on the accrual basis. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 8 BOK Financial Thrift Plan for Hourly Employees Notes to Financial Statements (continued) 3. Investments The Plan's investments are held by a bank administered trust fund at Bank of Oklahoma, N.A. Trust Division (the Trustee). During 2005, the Plan's investments (including investments purchased and sold, as well as held during the year) appreciated (depreciated) in fair value as determined by quoted market prices for BOKF Common Stock and published market prices for registered investment companies as follows: Net Appreciation (Depreciation) in Fair Value of Investments -------------------------- BOK Financial Corporation Common Stock $ (4,330) Registered investment companies 28,126 Collective Investment trusts 5,281 -------------------------- $ 29,077 ========================== The fair value of all individual investments, including those that represent five percent or more of the Plan's net assets are separately identified in the statements of net assets available for benefits. 4. Income Tax Status The Plan has received a determination letter from the Internal Revenue Service dated April 1, 2002, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code) and, therefore, the related trust is exempt from taxation. Subsequent to this determination by the Internal Revenue Service, the Plan was amended. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The plan sponsor has indicated that it will take the necessary steps, if any, to bring the Plan's operations into compliance with the Code. 9 BOK Financial Thrift Plan for Hourly Employees Notes to Financial Statements (continued) 5. Reconciliation of Financial Statements to the Form 5500 The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500: December 31 2005 2004 ----------------- ---------------- Net assets available for benefits per the financial statements $ 993,412 $ 524,205 Less: Benefits payable - (17,955) ----------------- ---------------- Net assets available for benefits per the Form 5500 $ 993,412 $ 506,250 ================= ================
The following is a reconciliation of benefit payments per the financial statements to the Form 5500: Year ended December 31, 2005 ------------------- Benefit payments per financial statements $ 121,095 Add: Benefits payable at end of year - Less: Benefits payable at beginning of year (17,955) ------------------- Benefit payments to participants per the Form 5500 $ 103,140 =================== Benefits payable are recorded on the Form 5500 for payments to participants who requested payment prior to December 31, but had not been paid as of that date. 6. Risks and Uncertainties The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants' account balances and the amounts reported in the statements of net assets available for benefits. 10 BOK Financial Thrift Plan for Hourly Employees Notes to Financial Statements (continued) 7. Related Parties BOK Investment Advisors, Inc. (BOKIA), a wholly owned subsidiary of Bank of Oklahoma, N.A. (BOK), serves as investment advisor to American Performance Funds (AP Funds). AP Funds is a diversified, open-ended, investment company established in 1987 as a business trust under the Investment Act of 1940. BOk serves as custodian for AP Funds. Effective July 1, 2004, BOKIA began serving as the AP Funds administrator. BOK Financial offers the AP Funds products to customers and employees, in the ordinary course of business, through its brokerage and trading, employee benefit plan and trust services, as well as to the public. Additionally, a portion of the Plan's assets are invested in Company stock. Since the Company is the Plan Sponsor, investments involving Company stock qualify as party-in-interest transactions. All of these transactions are exempt from prohibited transaction rules. Effective January 1, 2005, the Plan was authorized to include Bank of Oklahoma, N.A. Managed Allocation Portfolio (MAP) Funds as investment options. The MAP Funds include five different managed funds designed to meet different risk tolerances and years to retirement. The portfolios are comprised of different asset classes, capitalizations and investment styles. BOKIA also services as investment advisor to the MAP Funds. 8. Subsequent Events Effective April 1, 2006, the Company matching contribution changed as a result of modifications to both the Plan and the BOK Financial Pension Plan. The Company will begin matching participant contributions up to 6% of the employee's compensation. Additionally, the Employer match will range from $.50 to $2.00 for each dollar of the participant's contribution based on the participant's years of service. Matching contributions for the 2006 plan year are limited to a certain dollar amount (ranging from $6,050 to $22,550) based on the participant's year of service. The Company will also make a special contribution for participants making less than $40,000. This special contribution is $750 for participants making less than $30,000 and phases out for participants making $30,000 to $40,000. In addition to the contribution changes, the limit on after-tax contributions will change to 6% of the participant's compensation. Supplemental Schedule 11 BOK Financial Thrift Plan for Hourly Employees EIN: 73-0780382 Plan #: 004 Schedule H; Line 4i--Schedule of Assets (Held at End of Year) December 31, 2005 (c) (b) Description of Investments (e) Identity of Issue, Including Maturity Date, Rate Current (a) Borrower, Lessor or Similar Party of Interest, or Maturity Value Value ---------------------------------------------------------------------------------------------------------- * BOK Financial Corporation BOKF Common Stock $ 95,002 * American Performance Funds Cash Management Fund 142,085 Intermediate Bond Fund 34,857 SEI Funds Stable Asset Fund 128,099 American Balanced Fund 21,532 Neuberger and Berman Genesis Trust Fund 89,126 Dodge and Cox Stock Fund 125,884 Vanguard Institutional Index 84,259 American Growth Fund of America 24,424 American Beacon International Fund 27,934 Goldman Sachs Growth Opportunity Fund 455 Hochkis and Wiley Midcap Valuation Fund 1,512 T. Rowe Price New Horizons 6,243 * Bank of Oklahoma N.A., Managed Allocation Portfolios MAP Conservative Fund 655 MAP Balanced Fund 174,720 MAP Moderate Growth Fund 9,397 MAP Growth Fund 4,116 MAP Aggressive Growth Fund 8,517 * Participant Loans Interest rates ranging from 4.00 percent to 7.00 percent 7,993 ------------------- $ 986,810 ===================
*Indicates Party-in-interest to the Plan Column (d) is not applicable as all investments are participant directed.