BOK FINANCIAL THRIFT PLAN FOR SALARIED EMPLOYEES
FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULE
DECEMBER 31, 2007 and 2006
WITH
REPORTS OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRMS
CONTENTS
Report of Independent Registered Public Accounting Firm -
Tullius Taylor Sartain & Sartain LLP................................1
Report of Independent Registered Public Accounting Firm -
Ernst & Young LLP...................................................2
Statements of Net Assets Available for Benefits
December 31, 2007 and 2006..........................................3
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2007........................................4
Notes to Financial Statements...........................................5
Supplemental Schedule
Form 5500 Schedule H, Line 4i - Schedule of Assets
(Held at End of Year) December 31, 2007.......................12
1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To Plan Administrative Committee
BOK Financial Thrift Plan for Salaried Employees
We have audited the accompanying statement of net assets available for benefits
of BOK Financial Thrift Plan for Salaried Employees (the Plan) as of December
31, 2007, and the related statement of changes in net assets available for
benefits. 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 audit.
We conducted our audit in accordance with the auditing 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. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides 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 as of
December 31, 2007, and the changes in net assets available for benefits, in
conformity with accounting principles generally accepted in the United States of
America.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental Schedule of Assets (Held at End of
Year) as of December 31, 2007, is presented for the purpose of additional
analysis and is not a required part of the basic financial statements, but is
supplementary information required by the United States 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 the audit 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/ TULLIUS TAYLOR SARTAIN & SARTAIN LLP
Tulsa, Oklahoma
June 26, 2008
2
Report of Independent Registered Public Accounting Firm
The Plan Administrative Committee
BOK Financial Thrift Plan for Salaried Employees
We have audited the accompanying statement of net assets available for benefits
of the BOK Financial Thrift Plan for Salaried Employees (the Plan) as of
December 31, 2006. This financial statement is the responsibility of the Plan's
management. Our responsibility is to express an opinion on this financial
statement based on our audit.
We conducted our audit 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 audit
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 statement, assessing the accounting
principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statement referred to above present fairly, in all
material respects, the net assets available for benefits of the Plan at December
31, 2006, in conformity with U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
Tulsa, Oklahoma
June 27, 2007
3
BOK FINANCIAL THRIFT PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2007 and 2006
2007 2006
---------------------------------------
Assets
Investments, at fair value (See Note 3) $ 189,950,281 $ 172,093,693
Cash 991,473 962,144
Employer contribution receivable 952,891 868,500
Due from broker 230,746 28,149
Accrued interest receivable 119,306 123,864
---------------------------------------
Total assets 192,244,697 174,076,350
Liabilities
Due to broker 1,135,463 925,312
---------------------------------------
Net assets available for benefits $ 191,109,234 $ 173,151,038
=======================================
See notes to financial statements.
4
BOK FINANCIAL THRIFT PLAN FOR SALARIED EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended December 31, 2007
Additions to net assets:
Investment income:
Interest and dividends $ 3,260,264
Net appreciation in fair value of investments 6,600,271
--------------------
9,860,535
Contributions:
Participants 15,321,527
Employer 10,511,422
Rollovers 2,601,586
--------------------
28,434,535
--------------------
Total additions 38,295,070
Deductions from net assets:
Benefit payments 20,051,147
Administrative expenses 5,717
Net transfers out of the plan 280,010
--------------------
Total deductions 20,336,874
--------------------
Net increase 17,958,196
Net assets available for benefits:
Beginning of year 173,151,038
--------------------
End of year $ 191,109,234
====================
See notes to financial statements.
5
BOK FINANCIAL THRIFT PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
Note 1 - Description of Plan
The following description of the BOK Financial Thrift Plan for Salaried
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 salaried employees of BOK
Financial Corporation (BOKF) and its subsidiaries and affiliates (collectively,
the Employer or Company). 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. All new eligible employees are automatically enrolled in the Plan at
a 3% 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).
Bank of Oklahoma N.A. (Plan Administrator) holds and manages the assets of the
Plan, maintains participant account records and makes distributions to Plan
participants.
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 6% 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). Participants may also make Roth 401(k) contributions to
the Plan not to exceed the annual legal limit. Participants who attained age 50
on or before December 31, 2007, were allowed to make a pre-tax catch-up
contribution of an additional $5,000 above the maximum allowable by federal
regulation.
Participants may elect investment in any of 11 registered investment companies,
the Bank of Oklahoma, N.A. Managed Allocation Portfolios (MAP), which are
collective investment funds, the Bank of Oklahoma, N.A. Strategic Allocation
Fund (SAF) which is a collective investment fund, self-directed common stocks,
bonds, or registered investment companies, and BOKF Common Stock. During 2007,
the Employer authorized the following modifications to the investment selections
available to participants: (a) removal of the MAP Conservative, Balanced,
6
Moderate Growth, Growth and Aggressive Growth funds and (b) addition of the MAP
2010, 2020, 2030, 2040, and 2050 funds.
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 2007, the
entire matching contribution of $9,556,522 was made in cash.
The Employer matching contribution ranged from $.50 to $2.00 for each dollar of
the participant's contributions, up to 6% of compensation, based on each
participant's years of service as follows:
Years of Service Matching Percentage
------------------------------------------------- -----------------------------
Less than four years 50%
At least four, but less than ten years 100%
At least ten, but less than fifteen years 150%
Fifteen or more years 200%
Matching contributions for the 2007 plan year are limited to a certain dollar
amount (ranging from $6,750 to $27,000) based on the participant's years of
service. The Company also makes a special contribution for eligible participants
making less than $40,000. This special contribution (Qualified Non-Elective
Contribution) is $750 for participants making less than $30,000 and phases out
for participants making $30,000 to $40,000. The special contribution for the
2007 plan year was $954,900.
The Employer may, at its sole discretion, make an additional discretionary
contribution to the Plan. There was no discretionary contribution in 2007.
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.
Vesting
Participants vest in Employer matching contributions based upon years of
service, as defined by the Plan. Participants are 100% vested upon completion of
five years of service and are immediately vested in their deferred (pre-tax),
Roth 401(k) and after-tax contributions, and the actual earnings thereon.
7
Participant Loans
Participants may borrow against their accounts in amounts of not less than
$1,000 and not to exceed the lesser of $50,000 or 50% 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. Repayment is made
by payroll withholdings, and the maximum number of loans a participant may have
outstanding at one time is two. 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% to 13% at December 31, 2007.
Payment of benefits
A participant, who terminated employment with a vested account balance of less
than $1,000, excluding rollover contributions, will receive a lump-sum payment.
If the participant's vested balance exceeds $1,000, but is less than $5,000
(excluding rollover contributions), and the participant has not elected to
receive payment directly, transfer to another eligible retirement plan or a
direct rollover, the Plan will pay the distribution in a direct rollover to an
individual retirement account designated by the Plan Administrator. Balances
over $5,000 are not distributed without the participant's consent. Prior to May
1, 2007, in lieu of lump-sum payment, a participant who terminated employment
after his or her 65th birthday or attaining age 60 and completing ten years of
service, was 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. Effective May 1, 2007, only lump-sum payments are allowed.
Forfeitures
At December 31, 2007 and 2006 forfeited nonvested accounts totaled $94,723 and
$22,617, respectively. These accounts will be used to reduce future employer
contributions. In 2007, employer contributions were reduced by $20,808 from
forfeited nonvested accounts.
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% vested in their accounts.
Note 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.
8
Administrative expenses
The Employer pays all administrative expenses except for loan origination fees
and fees related to self-directed common stocks, bonds and registered investment
companies, which are paid by the participants.
Investment valuation and income recognition
Shares of registered investment companies are valued at fair value based on
published market prices. BOKF Common Stock, other common stocks and bonds are
valued at the quoted market price.
MAP and SAF fund values are reported at fair values as determined and reported
daily by the fund sponsors. These fair values are based on quoted market prices
of the securities held by the funds. 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.
As described in Financial Accounting Standards Board Staff Position, AAG INV-1
and SOP 94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held
by Certain Investment Companies Subject to the AICPA Investment Company Guide
and Defined-Contribution Health and Welfare and Pension Plans (the FSP),
investment contracts held by a defined-contribution plan are required to be
reported at fair value. However, contract value is the relevant measurement
attribute for that portion of the net assets available for benefits of a
defined-contribution plan attributable to fully benefit-responsive contracts
because contract value is the amount participants would receive if they were to
initiate permitted transactions under the terms of the Plan. Contract value
represents contributions made, plus earnings, less withdrawals and
administrative expenses. The Plan's investments include the SEI Stable Asset
Fund, a collective trust that invests in a variety of fully benefit-responsive
investment contracts.
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.
Reclassifications
Certain prior year amounts have been reclassified to conform with the 2007
presentation.
Effects of recently issued Statements of Financial Accounting Standards
In September 2006, the FASB issued Statement No. 157, Fair Value Measurements
(FAS 157). This statement defines fair value, establishes a framework for
measuring fair value and expands
9
disclosures about fair value measurements. FAS 157 is effective for the Plan in
2008. The Plan's financial statements will not be materially impacted by
adoption of FAS 157.
Note 3 - Investments
The following presents investments that represent 5% or more of the Plan's net
assets:
December 31,
------------------------------------------
2007 2006
-------------------- ---------------------
BOKF Common Stock $ 23,607,005 $ 24,683,494
American Performance Cash Management Fund 11,103,959 7,530,587
SEI Stable Asset Fund 8,726,114 9,827,325
Neuberger and Berman Genesis Trust Fund 27,318,900 23,080,679
Dodge and Cox Stock Fund 28,388,284 29,640,539
Vanguard Institutional Index 20,815,268 20,663,716
American Growth Fund of America 9,714,604 7,294,052
Bank of Oklahoma, N.A. International Strategic
Allocation Fund 12,310,271 9,535,140
The Plan's investments are held by a bank-administered trust fund at Bank of
Oklahoma, N.A. Trust Division (the Trustee). During 2007, the Plan's investments
(including investments purchased and sold, as well as held during the year)
appreciated (depreciated) in fair value as follows:
Net Appreciation
(Depreciation)
in Fair Value
of Investments
------------------------
BOKF Common Stock $ (1,064,819)
Registered investment companies 6,894,178
Self-directed common stocks (85,521)
Self-directed registered investment companies 67,550
Self-directed bonds (4,836)
Collective investment trusts 793,719
------------------------
$ 6,600,271
========================
Participants should refer to the fund prospectus or other investment document
for information on a fund's investment risk, objective, fees and expenses.
10
Note 4 - Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service
(IRS) 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
Administrator believes the Plan is being operated in compliance with the
applicable requirements of the Code and, therefore, believes that the Plan, as
amended, is qualified and the related trust is tax-exempt.
Note 5 - Reconciliation of Financial Statements to the Form 5500
The following reconciles net assets available for benefits per the financial
statements to the Form 5500:
December 31,
---------------------------------------------
2007 2006
---------------------- ----------------------
Net assets available for benefits per the financial
statements $ 191,109,234 $ 173,151,038
Less: benefits payable (2,845) (335)
---------------------- ----------------------
Net assets available for benefits per the Form 5500 $ 191,106,389 $ 173,150,703
====================== ======================
The following is a reconciliation of benefit payments per the financial
statements to the Form 5500:
Year Ended
December 31,
2007
-------------------
Benefit payments per the financial statements $ 20,051,147
Add: benefits payable at end of year 2,845
Less: benefits payable at beginning of year (335)
-------------------
Benefit payments to participants per the Form 5500 $ 20,053,657
===================
Benefits payable are recorded on the Form 5500 for payments to participants that
have been processed and approved for payment prior to December 31, but not yet
paid.
11
Note 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.
Note 7 - Related Parties
The Plan holds investments in various funds that are part of the American
Performance Funds mutual fund family (AP Funds). AP Funds is a diversified,
open-ended investment company established in 1987 as a business trust under the
Investment Company Act of 1940. Affiliates of BOKF offer 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. Affiliates of
BOKF are also service providers to the AP Funds in the following capacities:
Cavanal Hill Investment Management, Inc. (Cavanal Hill), formerly AXIA
Investment Management, Inc., a wholly owned subsidiary of Bank of Oklahoma, N.A.
(BOk), serves as investment advisor and administrator to the AP Funds; BOk
serves as custodian for the AP Funds; BOSC, Inc., a wholly owned subsidiary of
BOKF, serves as distributor for the AP Funds. Participants should refer to the
AP Funds prospectuses for additional information.
A portion of the Plan's assets are invested in BOKF stock. Since BOKF is the
Plan Sponsor, investments involving BOKF stock qualify as party-in-interest
transactions.
The Plan is 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. Effective September 22, 2006, the Plan
was authorized to include the Bank of Oklahoma, N.A. International Strategic
Allocation Fund (SAF) as an international investment option. Cavanal Hill serves
as investment advisor and BOk serves as custodian and administrator to the MAP
Funds and SAF.
All of the above transactions are exempt from prohibited transaction rules.
Note 8 - Subsequent Event
In April 2008, the Employer authorized the following modifications to the
investment selections available to participants: (a) removal of the Hotchkis &
Wiley Mid Cap Value Fund and (b) addition of the Columbia Mid Cap Value Fund Z.
SUPPLEMENTAL SCHEDULE
12
BOK FINANCIAL THRIFT PLAN FOR SALARIED EMPLOYEES
FORM 5500 SCHEDULE H; LINE 4i--SCHEDULE OF ASSETS
(HELD AT END OF YEAR)
EIN: 73-0780382 PLAN #: 002
December 31, 2007
(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 $ 23,607,005
* American Performance Funds Cash Management Fund 11,103,959
Intermediate Bond Fund 8,898,330
SEI Funds Stable Asset Fund 8,726,114
American Balanced Fund 5,655,031
Growth Fund of America 9,714,604
Neuberger and Berman Genesis Trust Fund 27,318,900
Dodge and Cox Stock Fund 28,388,284
Vanguard Institutional Index 20,815,268
Mid-Cap Index 1,802,753
Hotchkis and Wiley Midcap Value Fund 3,802,581
T Rowe Price New Horizons 2,635,888
* Bank of Oklahoma, N.A. Managed Allocation
Portfolio (MAP) MAP 2010 Fund 3,779,674
MAP 2020 Fund 5,235,754
MAP 2030 Fund 4,513,460
MAP 2040 Fund 4,557,193
MAP 2050 Fund 518,241
* Bank of Oklahoma, N.A. Strategic Allocation International Strategic Allocation
Fund (SAF) Fund 12,310,271
Self-directed common stocks, bonds and Common stocks, bonds and registered
registered investment companies investment companies 1,546,241
* Participant loans Interest rates ranging from 4.00% to
13.00% 5,020,730
-------------------
$ 189,950,281
===================
*Indicates Party-in-interest to the Plan.
Column (d) is not applicable as all investments are participant directed.