BOK Financial Corp. posted a $52 million profit in the second quarter compared with a SemGroup- related loss in the same period a year ago.

Tulsa-based BOK announced Wednesday net income of $52.1 million, or 77 cents a diluted share, compared with a net loss of $1.2 million, or 2 cents a share, in last year's second quarter.

"BOK Financial is pleased to report net interest growth and solid fee revenue for the second quarter of 2009," President and CEO Stan Lybarger said in a statement. "The growth from our diversified revenue sources continues to enhance our strong capital and liquidity position. However, declining loan demand may challenge future net interest revenue and mortgage banking revenue until the economy begins to recover."

The results beat analysts' estimates of $41.4 million in net income, or nearly 60 cents a share, according to Bloomberg News.

Last year, the regional financial services provider was forced to revise second-quarter earnings downward because of credit exposure to SemGroup LP, the Tulsa-based energy company that filed for bankruptcy last July.

As a result, BOK Financial's 2008 second-quarter net income was impacted by $87 million of pre-tax charges for loan and energy derivative credit exposure, which reduced net income for the quarter by approximately $57 million.

Although second-quarter results were an improvement from last year, they were down from the first quarter of 2009, when BOK recorded net income of $55 million, or 81 cents a diluted share.

Net income for the first six months was $107.1 million, or $1.58 a diluted share, compared with $61.1 million, or 90 cents a share, in the first half of 2008.

Growth in net interest revenue drove earnings in the second quarter. Net interest revenue totaled $175.6 million, up $16.6 million from a year earlier, BOK reported.

Fees and commissions revenue, which includes brokerage and trading revenue, transaction card revenue, deposit service charges and other fees, increased for the quarter and first half of the year.

"We're getting better spreads on our loan pricing, and I think that's partially due to the environment we're in.

All credit spreads have increased, and so have ours," said Steven Nell, chief financial officer, in a phone interview.

BOK saw continued strength in its mortgage banking activity, with second-quarter mortgage loan originations totaling $1 billion, which is almost as much as it originates on a normal year, Nell said.

Like other financial institutions, BOK was affected in the quarter by the Federal Deposit Insurance Corp.'s special assessment.

Federal regulators have imposed higher regulatory fees on insured banks to help replenish the deposit insurance fund, a reserve that helps repay depositors if their bank fails.

"We continue to pay the FDIC assessment like we always have, but on top of that they added a special assessment. For our company that was almost $12 million, which we didn't have in the first quarter," Nell said.

Some banking industry analysts say the FDIC could levy another special assessment on financial institutions before the end of the year, Nell said.

Nonaccruing loans for BOK Financial have risen each of the last four quarters and totaled $353 million on June 30, up from $148.6 million at the end of last year's second quarter.

Total nonperforming assets were $445.7 million, up from $181.5 million a year ago. Nonperforming assets increased again but at a slower pace, Nell said.

Approximately $106 million, or 20 percent of loans in the bank company's Arizona market, were nonaccruing at the end of June.

Nell also noted that BOK Financial continues to grow its capital levels and pay a dividend, which are signs of strength.

"Many banks have either suspended or greatly reduced their dividend, and we have not," he said.

In addition to Bank of Oklahoma, BOK Financial has bank holdings in New Mexico, Arizona, Arkansas, Texas, Colorado and the Kansas City area.

Laurie Winslow 581-8466

Originally published by LAURIE WINSLOW World Staff Writer.

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