The 29th richest person in America in 2010, according to Forbes magazine, is George Kaiser of Tulsa, Oklahoma. Now worth $9.4 billion, Kaiser got his start in his father's oil business, and the rest is history.

Kaiser's biggest move came in 1991 when he bought $61 million in Bank of Oklahoma preferred stock from the FDIC. Today, as Chairman, he still owns 60% of BOK Financial (Nasdaq:BOKF), the holding company established by Kaiser back in 1991. Since then, BOK Financial has expanded into seven bordering states, including Texas and Colorado. When Kaiser first bought in, earnings were around $9 million. Today, they are $247 million. A lot has changed, and all for the better. (For more on how to analyze a bank, check out Analyzing A Bank's Financial Statements.)

TUTORIAL: Investing 101

Through a combination of acquisitions and organic growth, it's now the 21st-largest publicly traded bank holding company in America, with assets totaling $24 billion in 2010. Its two biggest markets in terms of market share are Oklahoma and Albuquerque with 12.2% and 9.9% respectively. However, its biggest potential could be down in Texas, where it has 51 branches in the Dallas and Houston metropolitan areas with another 14 in Denver and seven in Phoenix and Kansas City combined. These are some of the fastest growing markets in the country, and although the recession has slowed growth, it eventually will resume and when it does, Kaiser and CEO Stan Lybarger will pounce. (For more about market share, check out Which Is Better: Dominance Or Innovation?)

A Good Year
Despite lackluster loan growth due to consumer and business reluctance to add to their debt levels, 2010 was a record year for the company. Net income was $247 million, 23% higher than in 2009 and 13% higher than the previous record of $218 million set in 2007. Highlights of the successful year included increased brokerage and mortgage banking revenue, lower loan losses, total deposits grew and book value per share increased. Since Kaiser's involvement, earnings per share have grown at a compounded annual rate of 13%. In 2008, while many banks were losing money, it maintained profitability and never took a dime in TARP money, the largest commercial bank not participating. Of its 20-closest peers by size, 13 have still not returned to usual profit levels, and four haven't made a profit in either of the last two years. Shareholders can be proud of the company's accomplishments in a difficult time. (To read more on TARP, check out Liquidity And Toxicity: Will TARP Fix The Financial System?)

BOK Financial and Peers
Company P/E P/B P/S P/CF
BOK Financial (Nasdaq:BOKF) 14.0 1.4 2.8 9.4
Cullen/Frost Bankers (NYSE:CFR) 17.3 1.8 4.3 8.5
Commerce Bancshares (Nasdaq:CBSH) 16.5 1.8 3.5 5.4
Tranzact Financial (NYSE:TFS) 16.5 1.5 3.1 12.0
Popular (Nasdaq:BPOP) -52.6 0.9 1.1 17.2

BOK's stock isn't "dirt cheap" at current prices, but it is trading below its five-year average for P/E, P/B, P/S and P/CF. In terms of price-to-earnings, only once in the last decade has it traded for a lower multiple, and that was in 2002, when it averaged 12.7-times. Its current P/B ratio has never been lower. Yet, its stock over the past decade has still outperformed the S&P 500 by 7.3% annually and its peers by 8.4%. Only once since 2005 has it traded below $40. On the upside, while it jumped above $60 in April, 2008, it hasn't gotten close since. If it continues to deliver solid results, the price resistance will be broken soon enough. (For more on evaluation, see How To Choose The Best Stock Valuation Method.)

Bottom Line
BOK Financial is a conservatively run bank. The fact that it said no to TARP money is very commendable indeed. However, there's one thing that really stands out for me and that's George Kaiser's ownership. If BOK Financial is good enough for him, it should be for the rest of us mere mortals. (To help determine in a stock is right for you, see Equity Valuation In Good Times And Bad.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Economics

    Investing Opportunities as Central Banks Diverge

    After the Paris attacks investors are focusing on central bank policy and its potential for divergence: tightened by the Fed while the ECB pursues easing.
  2. Stock Analysis

    The Biggest Risks of Investing in Pfizer Stock

    Learn the biggest potential risks that may affect the price of Pfizer's stock, complete with a fundamental analysis and review of other external factors.
  3. Stock Analysis

    Allstate: How Being Boring Earns it Billions (ALL)

    A summary of what Allstate Insurance sells and whom it sells it to including recent mergers and acquisitions that have helped boost its bottom line.
  4. Options & Futures

    Cyclical Versus Non-Cyclical Stocks

    Investing during an economic downturn simply means changing your focus. Discover the benefits of defensive stocks.
  5. Markets

    PEG Ratio Nails Down Value Stocks

    Learn how this simple calculation can help you determine a stock's earnings potential.
  6. Investing Basics

    How to Deduct Your Stock Losses

    Held onto a stock for too long? Selling at a loss is never ideal, but it is possible to minimize the damage. Here's how.
  7. Investing

    What’s the Difference Between Duration & Maturity?

    We look at the meaning of two terms that often get confused, duration and maturity, to set the record straight.
  8. Economics

    Is Wall Street Living in Denial?

    Will remaining calm and staying long present significant risks to your investment health?
  9. Stock Analysis

    When Will Dick's Sporting Goods Bounce Back? (DKS)

    Is DKS a bargain here?
  10. Investing News

    How AT&T Evolved into a Mobile Phone Giant

    A third of Americans use an AT&T mobile phone. How did it evolve from a state-sponsored monopoly, though antitrust and a technological revolution?
  1. What does low working capital say about a company's financial prospects?

    When a company has low working capital, it can mean one of two things. In most cases, low working capital means the business ... Read Full Answer >>
  2. Do nonprofit organizations have working capital?

    Nonprofit organizations continuously face debate over how much money they bring in that is kept in reserve. These financial ... Read Full Answer >>
  3. Can a company's working capital turnover ratio be negative?

    A company's working capital turnover ratio can be negative when a company's current liabilities exceed its current assets. ... Read Full Answer >>
  4. Does working capital measure liquidity?

    Working capital is a commonly used metric, not only for a company’s liquidity but also for its operational efficiency and ... Read Full Answer >>
  5. How do I read and analyze an income statement?

    The income statement, also known as the profit and loss (P&L) statement, is the financial statement that depicts the ... Read Full Answer >>
  6. Can working capital be too high?

    A company's working capital ratio can be too high in the sense that an excessively high ratio is generally considered an ... Read Full Answer >>

You May Also Like

Trading Center