BOK FINANCIAL CORPORATION | 2006 ANNUAL REPORT B A L A N C E Geography Revenue Strategy Robust Markets 2 / Financial Highlights (Dollars In Thousands Except Per Share Data) For the year: Net income Period-end: Assets Loans Deposits Shareholders’ equity Nonperforming assets1 Profitability Statistics Earnings per share (based on average equivalent shares): Basic Diluted Percentages (based on daily averages): Return on average assets Return on average shareholders’ equity Common Stock Performance Per Share: Book value per common share Market price: December 31 close Selected Balance Sheet Statistics Period-end: 2006 2005 2004 $ 212,977 $ 201,505 $ 179,023 18,059,624 10,715,803 12,386,705 1,721,022 35,652 16,327,069 9,139,978 11,375,318 1,539,154 33,638 14,145,660 7,928,967 9,674,398 1,398,494 56,423 $ $ 3.19 3.16 1.27 % 13.23 25.66 54.98 $ $ 3.14 3.01 1.29 % 13.78 23.07 45.43 $ $ 3.00 2.68 1.28 % 13.80 23.28 48.76 Tier 1 capital ratio Reserve for loan losses to nonperforming loans Combined reserves for credit losses to loans2, 3 9.78 % 403.07 1.22 9.84 % 412.83 1.37 10.02 % 206.26 1.61 Miscellaneous (at December 31) Number of banking locations Number of TransFund locations 163 1,649 150 1,421 149 1,389 1 2 3 Includes nonaccrual loans, renegotiated loans and assets acquired in satisfaction of loans. Excludes loans past due 90 days or more and still accruing. Excludes residential mortgage loans held for sale. Includes reserve for loan losses and reserve for off-balance sheet credit losses. 3 / Letter To Our Shareholders BALANCE Since 1991, we have grown from a $2 billion bank focused in one state to an $18.1 billion regional financial services company with operations in eight states. We have consistently produced superior results - in each of our geographic markets, through our revenue sources and with our growth strategy. Some may refer to our approach as diversification. We call it balance. Balance - because our entire footprint generates positive results, though each of our regional markets has unique characteristics. Balance - because our varied revenue streams work together to produce earnings, despite sometimes unfavorable market conditions. Balance - because though we value near term results, our strategy emphasizes long term shareholder value through all economic cycles. CONSISTENT DELIVERY OF RESULTS BOK Financial has delivered 16 consecutive years of record earnings. 4 / In 2006, our net income was $213 million, or $3.16 per share, compared to $201.5 million, or $3.01 per share in 2005. We experienced outstanding loan and deposit growth in 2006. Competitive pricing slowed net interest income and fee-based revenue growth compared to our historical rates. Despite the fiercely competitive pricing environment, the net interest margin for the year was down only three basis points. In addition, asset quality metrics for 2006 were exceptionally strong, reflecting the condition of our loan portfolio. Our definition of success focuses on long term growth rather than short term earnings. For this reason, we make investments in people and technology that may lower short term earnings, yet will significantly enhance long term returns. This approach has resulted in 16% annual growth in earnings per share since the company’s inception. This year we made important investments in our company to support two key strategies - recruiting top talent and delivering nationally competitive products and services. We are proud to have appointed experienced professionals to lead BOKF's International Banking, Wealth Management and Treasury Services. Each of these business lines represents opportunities for strong growth and our new leadership is tasked with adding significant revenue as our company continues to grow. Our goal with product development is to make business easier for our clients. In 2006, we introduced new products and services in Consumer Banking, Wealth Management and Treasury Services and expanded our branch network. In each case, we deliver improved capability and efficiency to our customers. EFFECTIVE MARKET EXPANSION Since we began our regional expansion in 1997, each of the markets has generated strong results and continues to provide substantial growth potential. Our seven subsidiary banks are located in some of the largest and fastest growing cities in the nation, including Phoenix, Denver, Dallas-Fort Worth and Houston. Our strategy is working. Since 2002, markets outside Oklahoma have accounted for 69% of loan growth. Regional banking’s relative contribution to net income has grown from 26% in 2002 to 43% in 2006 as we continue to achieve geographic balance. Our regional expansion continued with the launch of Bank of Kansas City in November 2006. Since 1998, we have operated numerous successful business lines in this market which we consolidated into the Bank of Kansas City brand. The bank has $1.3 billion in investor assets, $600 million in trust assets, services 4,000 mortgage loan customers and has $430 million in commercial loan commitments. Our corporate food and agribusiness lending segment is also headquartered in Kansas City. Our balanced approach has been successful over the last 16 years and we remain confident that our shareholders will benefit as we continue to build on our strong Oklahoma franchise and invest in our newer markets. Our balanced approach is not just a strategy; it's a fundamental business principle for our company. Our board and senior officers own a significant amount of stock and compensation is based more on performance than tenure. We are committed to shareholder results because we, ourselves, are shareholders. 5 / We're proud of our balanced strategy and we owe gratitude for our success to our 4,000 employees, our customers and the communities we serve. Chairman President and Chief Executive Officer At year end, loans outside Oklahoma represented 47% of the portfolio - impressive growth from just 34% only five years ago. Balanced Geography STRONG ROOTS BOK Financial's original franchise, Bank of Oklahoma, traces its beginnings to Our performance in the regional banks has been exceptional. We first entered New Exchange National Bank founded in 1910. Formed during the oil boom, the bank Mexico in 1997 with a loan production office in Albuquerque; today Bank of focused on energy lending which remains an important specialization and is 16% Albuquerque is the fourth largest bank in the state. As we have more fully of BOK Financial's diversified loan portfolio. However, significant expertise in developed our business lines, net income in this market has grown at a four year healthcare, manufacturing and agribusiness now compliments our lending compound annual rate of 19%. The return on average invested capital in 2006 capabilities. Bank of Oklahoma is one of seven bank subsidiaries operated by was 20%. We've enjoyed similar success in Texas, our largest single presence BOKF, and clearly leads the state's market with 75 locations, including 34 InStore outside Oklahoma, with average assets of $3.7 billion. Loans and deposits in branches, plus a network of nearly 1,200 ATMs in Oklahoma. Texas have grown at a 14% compound annual rate over the past four years. Bank of Texas’ net income has grown at an annual rate of 20% during this time. Since Bank of Oklahoma consistently generates strong results across all business lines. our first year with full service banking in Colorado, loans and deposits have grown The commercial loan portfolio in Oklahoma grew 7% in 2006 to $4.2 billion and at compound rates of 23% and 42%, respectively. The best is yet to come as we deposits grew 6% to $7.1 billion. Oklahoma, our original market, has our continue to increase our brand recognition and add to our fee based revenue in complete line of products and services, including Treasury Services, International, our less mature markets. Mortgage, Private Financial Services, Trust, personal and institutional investments and Financial Risk Management (energy, interest rate and cattle hedging). Non- LOCAL LEADERSHIP interest income represents approximately half of total revenue - a stronger To assure success in each market, we recruit the best local talent. This strategy is percentage than our less mature regional markets that haven’t yet achieved the a clear differentiator for BOK Financial because our customers receive a rare 7 / level of fee based revenues that distinguishes the Oklahoma franchise. STRATEGIC EXPANSION combination of customized solutions and responsive service coupled with nationally competitive products and services. Administrative and operational functions are centralized, yet marketing and client service functions are handled A solid growth plan underpins our ability to generate and sustain recurring locally to ensure timely client service. earnings and economic value. BOK Financial began mapping its regional expansion outside of Oklahoma in 1996 and continues today with the recent PROMISING FUTURE opening of Bank of Kansas City. We also opened loan production offices in Tucson We expect our growth trend to continue, because we are well positioned in strong and Salt Lake City in 2006. Tucson loan volumes have already exceeded our markets where our focus is to grow profitability. Loans have grown at an 11% expectations. In total, regional banks have fueled 69% of BOKF's loan growth and compound annual rate over the last 5 years - 10% organic growth. Non-interest 61% of deposit growth since 2002. At year end, loans outside Oklahoma income was approximately half of Bank of Oklahoma's revenue in 2006 while the represented 47% of the portfolio - impressive growth from just 34% five years regional banks averaged less than 20%, indicating a tremendous growth ago. Deposits outside Oklahoma have grown from 34% in 2002 to 43% at year end. opportunity in our newer markets. To facilitate growth, we began an accelerated branching program in 2006 and plan to continue the pace during the next Our markets are as diverse as they are dynamic. With locations in eight states, our three years. footprint includes an attractive balance of Sunbelt, Midwest and Rocky Mountain states. Our markets are among the strongest metropolitan areas in the United States with diverse demographics and robust economies. Non-interest revenue accounts for 43% of total revenue, well above the peer group average of 32%. Balanced Revenue COMMERCIAL AND RETAIL BANKING BOKF provides an array of commercial services for growing companies - and manufacturing. Our commercial and consumer real estate business has equipment financing and leasing, cash management, interest rate hedging and proven results and offers excellent potential, especially considering the high- international banking. Primarily serving the small business and middle market growth markets we serve. niche, our diversified lending units include energy, agribusiness, healthcare and real estate. Commercial loans grew at an annualized rate of 12% over the STRONG INTEREST AND NON-INTEREST REVENUE last five years. Though many of our peers have increased commercial real Non-interest revenue accounts for 43% of BOKF's total revenue, well above our estate loans as a percent of total loans, through disciplined management and peer group's average of 32%. Our peer group consists of 26 publicly traded monitoring, our concentration of commercial real estate has remained relatively banks, 13 immediately larger and 13 immediately smaller in asset size. In consistent for the last five years. Our commercial business is balanced by strong results in the Consumer addition to providing growth and stability to our revenue stream, the strength of our fee-based business delivers an effective competitive edge. Division. As a percentage of net income, the Oklahoma Consumer Division's Our diverse fee base is evenly distributed, providing stability during all contribution has grown from 4% in 2002 to 17% in 2006. Consumer Banking economic cycles. Service charges are the largest component at 28% of non- in our regional markets was also a significant contributor to the net income interest revenue, followed by transaction card revenue at 21%. Service charges growth in the regional banks. Consumer is a significant source of funding for have grown at a five year annualized rate of 15%. Transaction card revenue is BOK Financial. Consumer related deposits represent almost 60% of the bank’s primarily generated by TransFund, our electronic funds transfer network. Still total deposits. To facilitate continued growth in loans and deposits, we have the 10th largest ATM network, we recently added nearly 150 new ATMs in five 9 / accelerated our branching program. DIVERSE BUSINESS LINES AND CLIENT BASE Diverse business lines are a key to sustained revenue. In addition to traditional states, bringing the total count to over 1,600. TransFund also processes card transactions for over 7,000 merchant locations and supports debit card programs for more than 360 financial institutions in 13 states. consumer and commercial banking services, we are one of Oklahoma's leading Trust and brokerage revenue are 32% of non-interest revenue. At year end, mortgage lenders, originating and servicing all types of traditional mortgages. Trust had nearly $32 billion in assets under management. Investment services Private Banking, Personal Trust and Investment Services operate jointly as part include broker-dealer BOSC which also provides financial risk management and of an overall Wealth Management strategy to help clients accumulate, preserve public financing and AXIA Investment Advisors which manages $5.8 billion in and transfer their wealth. Our Trust group also includes Corporate Trust and mutual funds and separately managed accounts and offers equity, fixed-income Retirement and Institutional Trust Services. Our commercial clients benefit and cash management strategies throughout the U.S. from our comprehensive group of cash management products delivered by Treasury Services, hedging services offered by Financial Risk Management and Our Mortgage Division originated loans totaling $874 million in 2006 - down trade finance and letters of credit provided by International Banking. due to the rising interest rate environment - and contributed 7% of non- interest revenue. Interest rate sensitivity can make the mortgage business With the expanse of our regional markets and various business lines, BOK volatile, however, the industry's counter-cyclical nature allows this division to Financial serves an array of industries. Our roots in energy lending are enjoy strong returns when other fee business slows, providing stability during complemented by growth in health care and a strong portfolio in agribusiness economic swings. Our strategy has generated 16 consecutive years of record earnings since the company formed in 1991 and a 16% annual growth in earnings per share. Balanced Strategy BUILDING SHAREHOLDER VALUE In 2006, total assets for BOK Financial increased nearly 11% over 2005 to $18 corporate capture which allows clients to conveniently deposit checks from any billion, while the loan portfolio grew 17%. Our objective is to profitably grow location, rural or urban. We launched ARC to allow customers to convert checks assets, yet our focus is long term shareholder value. As a result, we don’t compromise credit quality. Our disciplined underwriting standards have to ACH transactions, improving cost effectiveness and efficiency. And, we added Positive Payee and SafeCheq, two measures to enhance security authentication maintained a high quality loan portfolio. Net charge-offs in 2006 decreased to for commercial customers. 13 basis points of average loans, while nonperforming assets decreased to 26 basis points. Though these low levels will not be sustainable in the long term, credit trends continue to be positive for the portfolio. COMMUNITY APPROACH Our company, our people and our clients are only as strong as our communities. Our commitment to the community is visible in every market we serve. In Our strategy is an effective balance of growth, both organically and through addition to BOK Financial’s monetary support to many organizations, our acquisition. Since January 1999, we’ve completed eight acquisitions and have employees contributed more than 24,000 hours of community service. This considered many more. Our disciplined approach to acquisitions requires an volunteer activity included reading to children, providing financial literacy appropriate rate of return over our projected time horizon. In the last year, the instruction and serving on boards and committees. In all, we contributed to rich pricing in our markets has prevented us from being a successful bidder. We more than 440 non-profit agencies and community organizations. will continue to pursue acquisition opportunities that will benefit our shareholders and our customers. RESPONSIVE CUSTOMER SERVICE AND NATIONALLY COMPETITIVE PRODUCTS We also provide ongoing financial service and counsel. Through our innovative Adopt-An-Agency program, BOK Financial has partnered with key community 11 / organizations in each of our markets to provide asset management opportunities for low-to-moderate income families and individuals. Because local market veterans lead our regional banks, we are able to offer highly responsive advice and counsel to our clients. We recognize that banking has MOVING FORWARD become a commodity-like business and it's the quality of our service that makes Our strategy has generated 16 consecutive years of record earnings since the us the right choice for our clients. Because BOK Financial is a powerful regional company formed in 1991 – a 16% annualized growth in earnings per share. In financial services corporation, we are able to offer nationally competitive products addition to achieving strong financial results, we have focused on continuing to and services. build upon a firm foundation that will consistently deliver superior results as our organization grows along with our clients and our communities. That effort The result is a rare combination of attentive client service and effective business includes continuing to attract and retain talented people, continually improving solutions that few banks can offer, regardless of size. our broad set of products and services and expanding branch networks. For example, our Treasury Services customers now benefit from one of the latest Our balanced approach has generated a long history of success and provides the wire transfer deadlines in the country – 4:55 p.m. Central – an advantage that is foundation for a bright future. competitive with any national bank, coast to coast. We implemented remote BOK Financial Corporation Board of Directors Gregory S. Allen 1 President & CEO Advance Food Co., Inc. Robert G. Greer 2 Vice Chairman Bank of Texas, N.A. Thomas L. Kivisto 1 President & CEO SemGroup, LP C. Fred Ball, Jr. 2 Chairman & CEO Bank of Texas, N.A. Sharon J. Bell 1 Managing Partner Rogers & Bell Peter C. Boylan, III 1 CEO Boylan Partners, LLC Chester Cadieux, III 1 President & CEO QuikTrip Corporation 12 / David F. Griffin 1 President & General Manager Griffin Communications, L.L.C. David L. Kyle 1 Chairman ONEOK, Inc. V. Burns Hargis 1 Vice Chairman BOK Financial Corporation and Bank of Oklahoma, N.A. E. Carey Joullian, IV 1 President & CEO Mustang Fuel Corporation George B. Kaiser 1 Chairman BOK Financial Corporation and Bank of Oklahoma, N.A. Robert J. LaFortune Personal Investments Stanley A. Lybarger 1,2 President & CEO BOK Financial Corporation and Bank of Oklahoma, N.A. Steven J. Malcolm 1 Chairman, President & CEO The Williams Companies, Inc. William E. Durrett Senior Chairman American Fidelity Corp. Judith Z. Kishner 1 Manager Zarrow Family Office, L.L.C. Paula Marshall 1 CEO Bama Companies 1 Director of BOK Financial Corporation and Bank of Oklahoma, N.A. 2 Director of BOK Financial Corporation and Bank of Texas, N.A. Bank of Albuquerque, N.A. Board of Directors Adelmo Archuleta Owner, Professional Engineer Molzen-Corbin & Associates Suzanne Barker-Kalangis, Esq. Partner, Modrall, Sperling, Roehl, Harris and Sisk P.A. Steven G. Bradshaw Senior Executive Vice President BOK Financial Corporation Charles E. Cotter Executive Vice President BOK Financial Corporation Rudy A. Davalos Athletic Director University of New Mexico William E. Garcia Retired Senior Manager, Public Affairs Intel Corporation Bank of Arizona, N.A. Board of Directors Charles E. Cotter Executive Vice President BOK Financial Corporation Scott D. LeMarr President Polo Cristi Companies Steven E. Nell Executive Vice President & CFO BOK Financial Corporation Don Parker Executive Vice President Bank of Oklahoma, N.A. Robert M. Goodman Vice Chairman Bank of Albuquerque, N.A. Thomas D. Growney President Tom Growney Equipment, Inc. Larry F. Levy Senior Vice President Bank of Albuquerque, N.A. W. Jeffrey Pickryl Senior Executive Vice President BOK Financial Corporation Mark E. Sauters Senior Vice President Bank of Albuquerque, N.A. Michael D. Sivage Chief Executive Officer STH Investments, Inc. W. Jeffrey Pickryl Senior Executive Vice President BOK Financial Corporation David Ralston Chairman Bank of Arizona, N.A. Dr. David Righi Physician Valley Anesthesiology Consultants Scott Schaefer President Bank of Arizona, N.A. Paul A. Sowards President Bank of Albuquerque, N.A. Jennifer S. Thomas Executive Vice President Bank of Albuquerque, N.A. James F. Ulrich Chairman & CEO Bank of Albuquerque, N.A. Dale Updegrove Senior Vice President Bank of Albuquerque, N.A. James A. Sharp, Jr. Owner Oval Transportation Services Dr. Anthony T. Yeung Surgeon Arizona Institute for Minimally Invasive Spine Care 13 / Bank of Arkansas, N.A. Board of Directors John W. Anderson Senior Vice President Bank of Oklahoma, N.A. Jett C. Cato Executive Vice President & COO Bank of Arkansas, N.A. Jeff D. Cude Senior Vice President Bank of Arkansas, N.A. Bank of Kansas City, N.A. Board of Directors Peter H. Arendt Senior Vice President Bank of Kansas City, N.A. 14 / Steven G. Bradshaw Senior Executive Vice President BOK Financial Corporation Daniel H. Ellinor Senior Executive Vice President Bank of Oklahoma, N.A. Lawrence L. Daniel Executive Vice President Bank of Arkansas, N.A. Jeffrey R. Dunn Chairman, President & CEO Bank of Arkansas, N.A. Mark W. Funke President Bank of Oklahoma, N.A. Oklahoma City Scott S. Heady Senior Vice President Bank of Kansas City, N.A. Marc C. Maun Chairman & CEO Bank of Kansas City, N.A. Steven E. Nell Executive Vice President & CFO BOK Financial Corporation Bank of Texas, N.A. Board of Directors C. Thomas Abbott Vice Chairman Bank of Texas, N.A. - Dallas C. Fred Ball, Jr. Chairman & CEO Bank of Texas, N.A. - Dallas Steven G. Bradshaw Senior Executive Vice President BOK Financial Corporation H. Lynn Craft President & CEO Baptist Foundation of Texas Charles W. Eisemann Personal Investments Robert G. Greer Vice Chairman Bank of Texas, N.A. - Houston Douglas D. Hawthorne President & CEO Texas Health Resources Bill D. Henry Chairman & CEO McQuery Henry Bowles Troy, LLP Richard W. Jochetz President Bank of Texas, N.A. - Houston James M. Johnston Vice Chairman Bank of Texas, N.A. - Dallas Stanley A. Lybarger President & CEO BOK Financial Corporation Albert W. Niemi, Jr. Dean, Cox School of Business Southern Methodist University Don Parker Executive Vice President Bank of Oklahoma, N.A. W. Jeffrey Pickryl Senior Executive Vice President BOK Financial Corporation Colorado State Bank and Trust, N.A. Board of Directors Aaron K. Azari Executive Vice President CSBT George P. Caulkins, III Principal Greendeck Capital Ralph W. Christie, Jr. Chairman, President & CEO Merrick & Company Joel H. Farkas Chairman JF Companies Thomas M. Foncannon Senior Vice President Bank of Oklahoma, N.A. H. James Holloman Executive Vice President Bank of Oklahoma, N.A. Richard H. Lewis Personal Investments Kirk MacDonald CEO Interactive Marketing & Innovation Thomas S. Swiley President & COO Bank of Texas, N.A. - Dallas Robert B. Trainer Chief Financial Officer Gyrodata, Inc. Tom E. Turner Retired Chairman Bank of Texas, N.A. - Dallas Lissa Walls Vahldiek Executive Southern Newspapers, Inc. John C. Vogt Personal Investments Randall Walker Chairman Bank of Texas, N.A. - Houston W. Jeffrey Pickryl Senior Executive Vice President BOK Financial Corporation William J. Sullivan Executive Vice President CSBT Gregory K. Symons Chairman & CEO CSBT 15 / Shareholder Information Corporate Headquarters: Bank of Oklahoma Tower P.O. Box 2300 Tulsa, Oklahoma 74192 (918) 588-6000 Independent Auditors: Ernst & Young LLP 1700 One Williams Center Tulsa, Oklahoma 74172 (918) 560-3600 Legal Counsel: Frederic Dorwart Lawyers Old City Hall 124 E. Fourth St. Tulsa, Oklahoma 74103-5010 (918) 583-9922 16 / Common Shares: Traded NASDAQ National Market NASDAQ Symbol: BOKF Number of common shareholders of record at December 31, 2006: 1,196 Market Makers: Alternate Display Facility Archipelago Stock Exchange Automated Trading Desk B-Trade Services LLC BMO Capital Markets U.S. Citadel Derivatives Group LLC Citigroup Global Markets Inc. Credit Research & Trading Domestic Securities, Inc. E*Trade Capital Markets LLC Friedman, Billings, Ramsey & Co., Inc. Goldman Sachs Research Howe Barnes Investments Jefferies & Company, Inc. Keefe, Bruyette & Woods, Inc. Knight Equity Markets, L.P. Lehman Brothers Equity Research Merrill Lynch Morgan Stanley Nasdaq Execution Services LLC National Stock Exchange Sandler O'Neill & Partners Stephens Inc. Stifel Nicolaus and Company, Incorporated SunTrust Capital Markets Inc Susquehanna Financial Group LLP UBS Securities LLC Transfer Agent, Registrar and Dividend Disbursing Agent Computershare Investor Services, LLC P.O. Box 43078 Providence, RI 02940-3078 (800) 568-3476 www.computershare.com Copies of BOK Financial Corporation’s Annual Report to Shareholders, Quarterly Reports and Form 10-K to the Securities and Exchange Commission are available without charge upon written request. Analysts, shareholders and other investors seeking financial information about BOK Financial Corporation are invited to contact Stacy C. Kymes, Senior Vice President, (918) 588-6752. Information about BOK Financial is also readily available at our website: www.bokf.com BOK FINANCIAL CORPORATION | FORM 10-K www.bokf.com