-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LdA7JtbJh1JYVJJsqZGpdqLgn0mRx3PQVWogcZu6dSctyfb6o0cyeDLA1oyVR/yP YomSmZERGQS/irNqEHHpBQ== 0000875357-09-000023.txt : 20100108 0000875357-09-000023.hdr.sgml : 20100108 20090529155154 ACCESSION NUMBER: 0000875357-09-000023 CONFORMED SUBMISSION TYPE: CORRESP PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20090529 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOK FINANCIAL CORP ET AL CENTRAL INDEX KEY: 0000875357 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 731373454 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: CORRESP BUSINESS ADDRESS: STREET 1: BANK OF OKLAHOMA TOWER STREET 2: PO BOX 2300 CITY: TULSA STATE: OK ZIP: 74192 BUSINESS PHONE: 9185953025 MAIL ADDRESS: STREET 1: BANK OF OKLAHOMA TOWER STREET 2: P O BOX 2300 CITY: TULSA STATE: OK ZIP: 74192 CORRESP 1 filename1.txt May 28, 2009 Mr. John Nolan Senior Assistant Chief Accountant United States Securities and Exchange Commission Division of Corporation Finance 100 F Street N.E. Washington, DC 20549 Via EDGAR RE: BOK Financial Corporation Form 10-K for the Fiscal Year Ended December 31, 2008 Form 8-K Dated April 29, 2009 File No. 0-19341 Dear Mr. Nolan: This letter is submitted by BOK Financial Corporation ("the Company") in response to comments received from the Securities and Exchange Commission staff in a letter dated April 30, 2009 regarding the Company's Form 10-K for the fiscal year ended December 31, 2008 filed on February 27, 2009 and the Company's Form 8-K dated April 29, 2009. We appreciate the staff's efforts to assist our compliance with applicable disclosure requirements and to enhance disclosures in our filings. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Non-performing Assets, pages 46-49 Comment No. 1 We note the continued deterioration in the credit quality of your loan portfolio, particularly with respect to commercial and commercial real estate loans. Please revise your disclosure in future filings to comprehensively bridge the gap between significant increases in your non-performing and impaired loans and presumably the increased delinquencies in the remaining portfolio. For example, discuss in general the relationship between your non-performing and impaired loans and the allowance for loan losses, discuss in detail how you measure impairment on your impaired loans and link this information to the increase in your allowance for loan losses and discuss in detail the extent to which your non-performing and impaired loans are collateralized. Also, consider disclosing delinquency information on your portfolio and clearly discuss how the specific change in delinquencies impacts your calculation of the allowance for loan losses. As requested, in future filings beginning June 30, 2009, we will provide a comprehensive discussion of how changes in non-performing and impaired loans affect the allowance for loan losses. We will disclose the carrying value and allowance associated with impaired loans, and charge-offs recognized as reductions of the carrying value of impaired loans. We will also disclose that substantially all non-performing and impaired loans are collateralized and discuss how we measure impairment on impaired loans. Impairment of loans primarily secured by collateral other than real estate is based on estimated cash flows, collateral values or historical statistics in accordance with SFAS No. 114, "Accounting by Creditors for the Impairment of Loans". Impairment of loans primarily secured by real estate is based on appraised value of the collateral. In addition, we will disclose delinquencies in the remaining loan portfolio to the extent they affect the allowance for loan losses. Our experience has shown that there is little direct correlation between loan delinquency status and impairment or non-performance of commercial and commercial real estate loans. As disclosed in our critical accounting policies, impairment of commercial and commercial real estate loans is largely determined by quarterly credit quality reviews by management. These reviews are independent of delinquency status and identify weaknesses or deteriorating trends while the loans are performing. We will disclose and discuss delinquency trends for residential mortgage and consumer loans where delinquency status may have a higher direct correlation with loss exposure. Financial Statements Note (3) Securities, pages 75 - 78 Comment No. 2 In an effort to provide a reader with greater insight to the quality of your investment securities available for sale (AFS) and held-to-maturity (HTM) please provide to us and disclose in future filings the following: o Present in tabular format on a fair value and amortized cost basis, any significant concentrations within your AFS and HTM securities. In this regard, please disaggregate your mortgage-backed securities (e.g. Agency MBS, such as GNMA, FNMA, etc., Non-agency MBS, CMOs, etc.); o Provide a table, consistent with the format above, that presents the investment securities with their respective credit ratings; and o In addition to the information above, provide us with the information through March 31, 2009, if available. We are providing to you in this response and in future filings beginning June 30, 2009, we will include the following disclosures: o A table that disaggregates the amortized cost and fair value of held-to-maturity and available for sale securities for any significant concentrations. We will disaggregate U.S. government agency mortgage-backed securities by agency and privately-issued mortgage-backed securities by type of underlying loan. We will also disaggregate equity securities and mutual funds into relevant components. There are no significant concentrations in the held-to-maturity portfolio and no other significant concentrations in the available for sale portfolio. o A table, consistent with the format above, that presents the respective credit ratings for our investment securities. Rating designation is based on the lowest rating issued by any one the three nationally recognized rating agencies, Moodys, Standard & Poors, or Fitch. o The information provided as of December 31, 2008 and March 31, 2009 is attached to this letter as Appendix A. Comment No 3 The staff notes the company holds $1.6b in mortgage backed securities issued by publicly owned financial institutions in its available for sale portfolio which are fair valued at $1.2b at December 31, 2008. Please provide us a detailed analysis of the securities' impairment as of December 31, 2008 that identifies all available evidence, explains the relative significance of each piece of evidence, and identifies the primary evidence on which you rely to support a realizable value equal to or greater than the carrying value of the investment. Specifically tell us if you considered all available evidence, including information received after year end, affecting the projected cash flows as of the period end. We may have further comment based on your response. The Company's evaluation to determine whether impairment of the mortgage-backed securities issued by publicly-owned financial institutions is temporary or other-than-temporary begins with an assessment of management's ability and intent to hold the securities until fair value recovers, even if recovery extends to maturity. The assessment of ability and intent to hold these securities focuses on liquidity needs, asset / liability management objectives and securities portfolio management objectives. Management concluded that as of the date it completed its assessment, it had both the intent and ability to hold these securities until fair value recovers. The effect of general characteristics of the securities portfolio and current market conditions on impairment is then considered. The Company's portfolio of mortgage-backed securities issued by publicly-owned financial institutions consists primarily of $1.2 billion of Jumbo-A mortgage loans and $393 million of Alt-A mortgage loans. Jumbo-A mortgage loans generally meet government agency underwriting standards, but have loans balances that exceed agency maximums. Alt-A mortgage loans generally do not have sufficient documentation to meet government agency underwriting standards. We attempt to minimize the credit risk of these securities by not investing in pools of sub-prime mortgages or option payment adjustable rate mortgages. In addition, approximately 82% of Alt-A mortgage-backed securities is credit enhanced through investment in senior tranches and 86% of Alt-A mortgage-backed securities represents pools of fixed-rate loans. Gross unrealized losses on mortgage-backed securities issued by publicly-owned financial institutions increased from $163 million at September 30, 2008 to $396 million at December 31, 2008. Market disruption in the fourth quarter of 2008 substantially reduced the number of buyers for these securities. Finally, the quarterly evaluation focuses on specific evidence to determine whether losses are temporary or other than temporary. This evaluation assesses whether it is probable that all amounts due would not be collected according to the security's contractual terms using criteria that is consistent with current loan underwriting. Primary evidence used in this evaluation based on currently available information includes: o the rating of the security, o the adjusted loan-to-value ratio, and o the credit enhancement coverage ratio. Impairment of debt securities is generally considered to be temporary if the security is rated investment grade by all nationally recognized rating agencies who rate the security unless we are aware of evidence to the contrary. At December 31, 2008, approximately $1.4 billion of the mortgage-backed securities issued by publicly-owned financial institutions were rated investment grade by all agencies that rate the security. The remaining $252 million were rated below investment grade by at least one agency that rates the security. The primary evidence used to evaluate impairment of securities rated below investment grade by any one of the rating agencies are adjusted loan-to-value ratio and credit enhancement coverage ratio. As discussed below, each of these are based on an evaluation of data specific to each loan underlying the securities. Each of the aforementioned criteria is given equal weight in our evaluation. Adjusted loan-to-value ratio is an estimate of the collateral value available to support the realizable value of the security. The Company calculates the adjusted loan-to-value ratio for each security using loan-level data that comprises each security. The adjusted loan-to-value ratio is the original loan-to-value ratio adjusted for market-specific home price depreciation and the credit enhancement on the specific tranche of the security that we own. The home price depreciation is derived from the Office of Federal Housing Enterprise Oversight (OFEHO). OFEHO provides historical information on home price depreciation at both the Metropolitan Statistical Area (MSA) and state level. This information is matched to each loan to calculate the home price depreciation. We then accumulate the data from the loan level to determine the adjusted loan-to-value ratio for the security as a whole. The Company believes that an adjusted loan-to-value ratio above 85% provides evidence that the collateral value may not provide sufficient cash flows to support our carrying value. The 85% guideline provides a reasonable cushion for further home price depreciation in future periods based on current loss trend for residential real estate loans and is consistent with underwriting standards we use to originate new residential mortgage loans. Credit enhancement coverage ratio is an estimate of credit enhancement available to absorb current projected losses within the pool of loans that support the security. We acquire the benefit of credit enhancement by investing in super-senior tranches for many of our mortgage-backed securities. Subordinated tranches held by other investors are specifically designed to absorb losses before the super-senior tranches which effectively doubled the typical credit support for these types of bonds. Current projected losses consider depreciation of home prices based on OFHEO data, estimated costs and additional losses to liquidate collateral and delinquency status of the individual loans underlying the security. We believe that a credit enhancement coverage ratio below 1.50 provides evidence that current credit enhancement may not provide sufficient cash flows of the individual loans to support our carrying value at the security level. The credit enhancement coverage ratio guideline of 1.50 times is based on standard underwriting criteria which consider loans with coverage ratios of 1.20 to 1.25 times to be well-secured. Additional evidence we consider is the current loan-to-value ratio and the FICO score of individual borrowers whose loans are still performing within the collateral pool as forward-looking indicators of possible future losses that could affect our evaluation. Evaluation of all of these of factors corroborated our conclusion that as of December 31, 2008, impairment of these securities was temporary. As of December 31, 2008, no securities rated below investment grade had an adjusted loan to value greater than 85% or a coverage ratio below 1.50 times. We considered any significant additional information affecting this analysis available through the date of our filing. The adjusted loan-to-value ratio of one security increased from 82.4% to 85.4% based on information received subsequent to December 31, 2008. This security had a credit enhancement coverage ratio in excess of 1.65 times and we determined that our conclusion regarding other-than-temporary impairment was still proper. Comment No. 4 We note your disclosure that approximately $252m of the company's portfolio of mortgage backed securities are related below investment grade by at least one of the nationally recognized rating agencies and have aggregate unrealized losses at December 31, 2008 of $92 million. In addition, we note your statement that the company expects the number of below investment grade securities to increase as the rating agencies continue their evaluation in a worsening economy. Please tell us how you determined that the securities impairment was temporary at December 31, 2008 considering the fact that the securities were downgraded below investment grade at year end or subsequent to year end. This downgrade appears to be a critical and compelling piece of evidence considering the definition of a below investment grade credit rating states that there is a high or substantial credit risk and that the security has speculative elements or is speculative. As described above in our response to Comment 3, ratings are only one of the criteria used in our evaluation. Of the eight securities that were rated below investment grade by at least one nationally recognized rating agency, five were rated AAA by at least one other nationally recognized rating agency. This highlights the highly subjective nature of the rating of these securities. Limitations generally expressed by the ratings agencies include statements that ratings do not predict specific percentage of default likelihood over any given period of time and that ratings do not opine on expected loss severity of an obligation should the issuer default. While ratings provide some evidence that impairment may be other-than-temporary, all of the factors noted in our response to Comment 3 must be evaluated as primary evidence to reach an appropriate conclusion as to whether the impairment is temporary. A detail listing of the evidence evaluated to determine whether impairment was temporary for each security rated below investment grade by any one of the rating agencies is attached to our response as Appendix B. As we described previously, all of these securities all had an adjusted loan-to-value ratio below 85%. In addition to the adjusted loan-to-value ratio, the coverage ratio for all these securities exceeded 1.50 times. The combination of these factors led us to conclude that it was not probable that all amounts due would not be collected according to the security's contractual terms and that the impairment was temporary. Our statement that we expect an increase in the number of below investment grade securities as rating agencies continue their evaluations in a worsening economy was intended to be an early warning that the number of below investment grade securities may increase. It was not a predictor of further deterioration of securities already rated below investment grade by at least one of the three rating agencies. Note (7) Intangible Assets, page 83 Comment No. 5 We note your disclosure in Critical Accounting Policies and in the notes to the consolidated financial statements regarding goodwill impairment testing performed during the periods presented. Please provide us with a list (in tabular format) and consider disclosing in future filings, the reporting unit's fair value, carrying amounts, and reporting unit goodwill. Our annual impairment testing is performed as of October 1. We also test for goodwill impairment more frequently if conditions indicate that impairment may have been incurred. We will disclose in future filings the fair value, carrying value and related goodwill of our reporting units for any period during which we prepare a goodwill impairment analysis. As of October 1, 2008, our reporting units' fair values, net carrying values and goodwill were (in thousands): Fair Value Carrying Value Goodwill ------------- --------------- ------------- Oklahoma Corporate Banking $ 959,536 $ 475,380 $ 4,581 Oklahoma Consumer Banking 433,360 60,340 2,887 Wealth Management 412,827 156,840 705 Mortgage Banking 17,549 34,140 - Regional Banking Bank of Texas 639,448 489,990 240,122 Colorado State Bank and Trust 181,065 170,620 55,611 Bank of Albuquerque 275,416 115,820 15,273 Bank of Arkansas 45,692 28,520 - Bank of Arizona 97,389 88,420 16,650 Bank of Kansas City 12,546 40,050 - ------------- Total $ 335,829 ============= Carrying value includes goodwill assigned to the reporting unit. Note (19) Fair Value of Financial Instruments, pages 102 - 104 Comment No. 6 We note your use of pricing models (independent and third party) to value financial instruments. Please tell us and revise your future filings to disclose the following: o The number of prices you generally obtain per instrument, and if you obtain multiple prices, how you determine the ultimate fair value used in your financial statements; o Whether, and if so, how and why, you adjust prices obtained from the pricing service; and o If true, please include an affirmative statement that based on your internal review procedures, the fair values provided by the pricing services are consistent with the principals of SFAS No 157. We are furnishing to you and will disclose in future filings that: o We generally obtain a single price for each financial instrument from a pricing service. o We compare the price provided by the pricing service with other sources, including brokers' quotes, sales or purchases of similar instruments and discounted cash flows to establish a basis for reliance on the pricing service values. Significant differences between the pricing service provided value and other sources are discussed with the pricing service to understand the basis for their values. o We do not adjust prices obtained from pricing services unless our evaluation indicates that the service-provided prices are not consistent with the principals of SFAS No. 157. No prices were adjusted at December 31, 2008. o We have evaluated the methodologies employed by the third-party pricing services and determined that the fair values provided are consistent with the principals of SFAS No. 157. Form 8-K dated April 29, 2009 Comment No. 7 We note your presentation of "tangible common equity ratio" in the information furnished under Item 7.01 of the Form 8-K dated April 29, 2009. This ratio appears to be a non-GAAP measure as defined by Regulation G and Item 10(e) of Regulation S-K as it is not required by GAAP, Commission Rules or banking regulatory requirements. We agree that tangible common equity ratio is a non-GAAP measure as defined by Regulation G and Item 10(e) of Regulation S-K. We believe that the tangible common equity ratio is a valuable indicator of a financial institution's capital strength since it eliminates intangible assets and equity that does not benefit common shareholders such as preferred equity and equity provided by the TARP program from shareholders' equity and retains the effect of accumulated other comprehensive income (loss) in shareholders' equity. Accordingly, we plan to provide this non-GAAP ratio in the future. We will comply with the requirements of Regulation G in all future disclosures or public releases of material information to label the tangible common equity ratio as a non-GAAP measure and to provide reconciliation to the most clearly comparable GAAP measure. Further, we will comply with Item 10-(e) of Regulation S-K and provide all disclosures required by Item 10(e)(1)(i) of Regulation S-K in future filings. * * * * * * * * * * We acknowledge that: o The company is responsible for the adequacy and accuracy of the disclosures in the filing; o Staff comments or changes to disclosures in response to staff comments do not foreclose the Commission from taking action with respect to the filing, and o The company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. Please call me at 918-588-8673 if I can be of further assistance. Sincerely, BOK Financial Corporation /s/ John C. Morrow - ---------------------- John C. Morrow Senior Vice President, Chief Accounting Officer Attachments: Appendix A Appendix B Cc: Steven E. Nell, BOK Financial Corporation Tamara Wagman, Dorwart Lawyers Robert Kimbro, Ernst & Young Appendix A Held-to-Maturity and Available for Sale Securities (in thousands) Held-to-Maturity March 31, 2009 December 31, 2008 ------------------------------------------------- ----------------------------------------------- Amortized Fair Gross Unrealized Amortized Fair Gross Unrealized --------------------- -------------------- Cost Value Gains Losses Cost Value Gains Losses ------------------------------------------------------------------------------------------------ Municipal and other tax-exempt $ 244,682 $ 249,136 $ 4,672 $ (218) $ 235,791 $ 239,178 $ 3,736 $ (349) Other debt securities 7,166 7,204 38 - 6,553 6,591 38 - - ---------------------------------------------------------------------------------------------------------------------------------- Total $ 251,848 $ 256,340 $ 4,710 $ (218) $ 242,344 $ 245,769 $ 3,774 $ (349) - ----------------------------------------------------------------------------------------------------------------------------------
Available for Sale March 31, 2009 December 31, 2008 ---------------------------------------------------- ------------------------------------------------ Amortized Fair Gross Unrealized Amortized Fair Gross Unrealized -------------------------- ---------------------- Cost Value Gains Losses Cost Value Gains Losses ----------------------------------------------------------------------------------------------------- U.S.Treasury $ 6,990 $ 7,088 $ 98 $ - $ 6,987 $ 7,126 $ 139 $ - Municipal and other tax-exempt 19,679 20,436 798 (41) 19,537 20,163 664 (38) Mortgage-backed securities U.S. agencies FNMA 2,834,143 2,893,267 63,315 (4,191) 2,194,834 2,225,589 37,855 (7,100) FHLMC 2,196,716 2,250,624 53,908 - 2,222,253 2,254,989 37,577 (4,841) GNMA 190,769 196,257 5,488 - 195,767 200,086 4,319 - Other 273,302 278,731 5,497 (68) 288,041 292,264 4,322 (99) ------------------------------------------------------------------------------------------------------------------------------- Total U.S. agencies 5,494,930 5,618,879 128,208 (4,259) 4,900,895 4,972,928 84,073 (12,040) ------------------------------------------------------------------------------------------------------------------------------- Privately-issued Alt-A loans 373,477 250,706 - (122,771) 393,118 268,545 - (124,573) Jumbo-A loans 1,183,239 926,939 27 (256,327) 1,243,816 972,693 28 (271,151) ------------------------------------------------------------------------------------------------------------------------------- Total privately-issued 1,556,716 1,177,645 27 (379,098) 1,636,934 1,241,238 28 (395,724) ------------------------------------------------------------------------------------------------------------------------------- Total mortgage-backed securities 7,051,646 6,796,524 128,235 (383,357) 6,537,829 6,214,166 84,101 (407,764) Other debt securities 35 35 - - 37 36 - (1) Federal Reserve Bank stock 32,423 32,423 - - 32,380 32,380 - - Federal Home Loan Bank stock 86,172 86,172 - - 61,760 61,760 - - Perpetual preferred stocks 24,464 16,161 - (8,303) 32,472 21,701 - (10,771) Other equity securities and mutual funds 32,250 32,964 2,323 (1,609) 31,421 34,119 2,698 - - ------------------------------------------------------------------------------------------------------------------------------------ Total $7,253,659 $6,991,803 $ 131,454 $(393,310) $6,722,423 $6,391,451 $ 87,602 $(418,574) - ------------------------------------------------------------------------------------------------------------------------------------
Appendix A (cont.) Securities by Credit Ratings (1) March 31, 2009 (in thousands) Held-to-Maturity Not Rated or Below U.S. Government / GSE AAA - AA A - BBB Investment Grade Total --------------------- -------------------- --------------------- ----------------------- -------------------- Amortized Fair Amortized Fair Amortized Fair Amortized Fair Amortized Fair Cost Value Cost Value Cost Value Cost Value Cost Value ------------------------------------------------------------------------------------------------------------- Municipal and other tax-exempt $ - $ - $ 29,669 $ 30,475 $ 53,212 $ 53,770 $ 161,801 $ 164,891 $ 244,682 $ 249,136 Other debt securities - - - - 600 600 6,566 6,604 7,166 7,204 - ------------------------------------------------------------------------------------------------------------------------------------ Total $ - $ - $ 29,669 $ 30,475 $ 53,812 $ 54,370 $ 168,367 $ 171,495 $ 251,848 $ 256,340 - ------------------------------------------------------------------------------------------------------------------------------------
Available for Sale Not Rated or Below U.S. Government / GSE AAA - AA A - BBB Investment Grade Total ---------------------- ---------------------- ------------------- -------------------- ------------------- Amortized Fair Amortized Fair Amortized Fair Amortized Fair Amortized Fair Cost Value Cost Value Cost Value Cost Value Cost Value ---------------------------------------------------------------------------------------------------------- U.S.Treasury $ 6,990 $ 7,088 $ - $ - $ - $ - $ - $ - $ 6,990 $ 7,088 Municipal and other tax-exempt - - 15,950 16,632 1,485 1,528 2,244 2,276 19,679 20,436 Mortgage-backed securiti U.S. agencies FNMA 2,834,143 2,893,267 - - - - - - 2,834,143 2,893,267 FHLMC 2,196,716 2,250,624 - - - - - - 2,196,716 2,250,624 GNMA 190,769 196,257 - - - - - - 190,769 196,257 Other 273,302 278,731 - - - - - - 273,302 278,731 ------------------------------------------------------------------------------------------------------------------------------- Total U.S. agencies 5,494,930 5,618,879 - - - - - - 5,494,930 5,618,879 ------------------------------------------------------------------------------------------------------------------------------- Privately-issued Alt-A loans - - 66,847 58,698 29,235 17,725 277,395 174,283 373,477 250,706 Jumbo-A loans - - 996,215 804,186 27,271 20,192 159,753 102,561 1,183,239 926,939 ------------------------------------------------------------------------------------------------------------------------------- Total privately-issued - - 1,063,062 862,884 56,506 37,917 437,148 276,844 1,556,716 1,177,645 ------------------------------------------------------------------------------------------------------------------------------- Total mortgage-backed securities 5,494,930 5,618,879 1,063,062 862,884 56,506 37,917 437,148 276,844 7,051,646 6,796,524 Other debt securities - - - - - - 35 35 35 35 Federal Reserve Bank stock 32,423 32,423 - - - - - - 32,423 32,423 Federal Home Loan Bank stock 86,172 86,172 - - - - - - 86,172 86,172 Perpetual preferred stocks - - - - 21,824 13,641 2,640 2,520 24,464 16,161 Other equity securities and mutual funds - - - - - - 32,250 32,964 32,250 32,964 - ------------------------------------------------------------------------------------------------------------------------------------ Total $5,620,515 $5,744,562 $1,079,012 $ 879,516 $ 79,815 $ 53,086 $ 474,317 $ 314,639 $ 7,253,659 $6,991,803 - ------------------------------------------------------------------------------------------------------------------------------------
(1) Credit ratings reflect the lowest current credit rating assigned by a nationally recognized rating agency standardized to conform with Standard & Poors primary rating scale. Appendix A (cont.) Securities by Credit Ratings (1) December 31, 2008 (in thousands) Held-to-Maturity Not Rated or Below U.S. Government / GSE AAA - AA A - BBB Investment Grade Total -------------------- ------------------- ------------------- --------------------- ----------------------- Amortized Fair Amortized Fair Amortized Fair Amortized Fair Amortized Fair Cost Value Cost Value Cost Value Cost Value Cost Value ------------------------------------------------------------------------------------------------------------ Municipal and other tax-exempt$ - $ - $ 29,680 $ 30,336 $ 56,997 $ 57,280 $ 149,114 $ 151,562 $ 235,791 $ 239,178 Other debt securities - - - - 600 600 5,953 5,991 6,553 6,591 ------------------------------------------------------------------------------------------------------------ Total $ - $ - $ 29,680 $ 30,336 $ 57,597 $ 57,880 $ 155,067 $ 157,553 $ 242,344 $ 245,769 ------------------------------------------------------------------------------------------------------------
Available for Sale Not Rated or Below U.S. Government / GSE AAA - AA A - BBB Investment Grade Total ----------------------- -------------------- ------------------- ----------------------------------------- Amortized Fair Amortized Fair Amortized Fair Amortized Fair Amortized Fair Cost Value Cost Value Cost Value Cost Value Cost Value ---------------------------------------------------------------------------------------------------------- U.S.Treasury $ 6,987 $ 7,126 $ - $ - $ - $ - $ - $ - $ 6,987 $ 7,126 Municipal and other tax-exempt - - 15,809 16,349 1,485 1,520 2,243 2,294 19,537 20,163 Mortgage-backed securities - - U.S. agencies - - FNMA 2,194,834 2,225,589 - - - - - - 2,194,834 2,225,589 FHLMC 2,222,253 2,254,989 - - - - - - 2,222,253 2,254,989 GNMA 195,767 200,086 - - - - - - 195,767 200,086 Other 288,041 292,264 - - - - - - 288,041 292,264 ------------------------------------------------------------------------------------------------------------------------------- Total U.S. agencies 4,900,895 4,972,928 - - - - - - 4,900,895 4,972,928 ------------------------------------------------------------------------------------------------------------------------------- Privately-issued Alt-A loans - - 70,764 61,504 70,248 46,863 252,106 160,178 393,118 268,545 Jumbo-A loans - - 1,192,020 929,157 51,796 43,536 - - 1,243,816 972,693 ------------------------------------------------------------------------------------------------------------------------------- Total privately-issue - - 1,262,784 990,661 122,044 90,399 252,106 160,178 1,636,934 1,241,238 ------------------------------------------------------------------------------------------------------------------------------- Total mortgage-backed securities 4,900,895 4,972,928 1,262,784 990,661 122,044 90,399 252,106 160,178 6,537,829 6,214,166 Other debt securities - - - - - - 37 36 37 36 Federal Reserve Bank stock 32,380 32,380 - - - - - - 32,380 32,380 Federal Home Loan Bank stock 61,760 61,760 - - - - - - 61,760 61,760 Perpetual preferred stocks - - - - 32,472 21,701 - - 32,472 21,701 Other equity securities and mutual funds - - - - - - 31,421 34,119 31,421 34,119 - ------------------------------------------------------------------------------------------------------------------------------------ Total $5,002,022 $5,074,194 $1,278,593 $1,007,010 $ 156,001 $ 113,620 $ 285,807 $ 196,627 $6,722,423 $6,391,451 - ------------------------------------------------------------------------------------------------------------------------------------
(1) Credit ratings reflect the lowest current credit rating assigned by a nationally recognized rating agency standardized to conform with Standard & Poors primary rating scale. Appendix B BOK Financial Corporation Below Investment Grade Securities December 31, 2008 Current Credit Cover Non-Performing(1) Performing Loan Carrying Unrealized Moody's S&P Fitch Enhance Adj age Avg --------------------------- Name Type Type Value Loss Rating Rating Rating ment LTV Ratio Life FICO Curr LTV FICO Curr LTV - ----------------------------------------------------------------------------------------------------------------------------------- BAFC 2007-E 8A1 Alt-A VARIABLE 34,839,949 (10,533,177) NR AAA CCC 13.9 75.0 2.3 13.0 714 91.94 719 89.83 CMLTI 2007-6 1A4A Alt-A VARIABLE 8,111,538 (4,620,239) NR BB CC 15.2 76.3 2.3 8.8 691 95.73 725 89.09 CWALT 2006-36T2 1A4 Alt-A FIXED 40,345,923 (21,358,552) NR B+ CCC 8.8 77.1 2.0 5.2 700 94.22 704 83.45 CWALT 2006-45T1 1A16 Alt-A FIXED 35,863,027 (17,692,264) Aaa AA BB 14.5 71.7 2.4 4.4 698 90.71 705 81.79 CWALT 2007-2CB 1A3 Alt-A FIXED 47,213,230 (10,142,598) Aaa AAA BB 8.4 68.5 3.5 3.2 695 91.86 718 77.32 RALI 2006-QS14 A7 Alt-A FIXED 42,030,915 (16,216,014) Aaa BB B 14.4 67.8 2.7 2.3 696 89.74 712 80.73 RALI 2007-QS8 A9 Alt-A FIXED 30,999,275 (5,647,885) Aaa A BB 13.0 70.2 3.1 2.5 684 89.23 707 80.11 WFALT 2007-PA4 4A1 Alt-A VARIABLE 12,702,430 (5,717,572) NR B+ CCC 11.7 82.4 1.7 10.5 718 93.59 736 92.03 ------------------------- 252,106,287 (91,928,301) =========================
(1) Loans currently 30 days or more past due, in bankruptcy or in foreclosure. -----END PRIVACY-ENHANCED MESSAGE-----