Table 1     Consolidated Selected Financial Data
           (Dollars In Thousands Except Per Share Data)

                                                                                December 31,
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                                                          2008          2007           2006         2005         2004
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 Selected Financial Data
    For the year:
      Interest revenue                               $1,061,645    $1,160,737      $ 986,429    $ 769,934    $ 614,284
      Interest expense                                  414,783       616,252        499,741      320,593      191,041
      Net interest revenue                              646,862       544,485        486,688      449,341      423,243
      Provision for credit losses                       202,593        34,721         18,402       12,441       20,439
      Fees and commissions revenue                      414,000       405,622        371,696      344,864      312,227
      Net income                                        153,232       217,664        212,977      201,505      179,023
    Period-end:
      Loans                                          12,876,006    11,940,570     10,651,178    9,088,312    7,888,705
      Assets                                         22,734,648    20,667,701     18,059,624   16,327,069   14,145,660
      Deposits                                       14,982,607    13,459,291     12,386,705   11,375,318    9,674,398
      Subordinated debentures                           398,407       398,273        297,800      295,964      151,594
      Shareholders' equity                            1,846,257     1,935,384      1,721,022    1,539,154    1,398,494
      Nonperforming assets(2)                           342,291       104,159         44,343       40,017       61,112

 Profitability Statistics
    Earnings per share (based on average equivalent shares):
      Basic                                           $    2.28     $    3.24      $    3.19    $    3.14    $    3.00
      Diluted                                              2.27          3.22           3.16         3.01         2.68
    Percentages (based on daily averages):
      Return on average assets                              0.71%         1.14%          1.27%       1.29%        1.28%
      Return on average shareholders' equity                7.87         12.01          13.23       13.78        13.80
      Average shareholders' equity to average assets        9.01          9.53           9.58        9.38         9.25

 Common Stock Performance
    Per Share:
      Book value per common share(5)                  $    27.36    $    28.75     $    25.66   $    23.07   $    23.28
      Market price: December 31 close                      40.40         51.70          54.98        45.43        48.76
      Market range - High close                            60.84         55.57          54.98        49.31        49.18
                   - Low close                             38.48         47.47          44.43        39.79        37.29
      Cash dividends declared                               0.875         0.75           0.55         0.30           -

 Selected Balance Sheet Statistics
    Period-end:
      Tier 1 capital ratio                                  9.40%         9.38%          9.78%        9.84%       10.02%
      Total capital ratio                                  12.81         12.54          11.58        12.10        11.67
      Leverage ratio                                        7.89          8.20           8.79         8.30         7.94
      Tangible common equity ratio(1)                       6.64          7.72           8.22         7.94         8.31
      Reserve for loan losses to nonperforming loans       74.49        133.79         305.37       329.34       189.40
      Reserve for loan losses to loans                      1.81          1.06           1.03         1.14         1.38
      Combined reserves for credit losses to loans (4)      1.93          1.24           1.22         1.37         1.61

 Miscellaneous (at December 31)
    Number of employees (full-time equivalent)             4,300         4,110          3,958        3,825         3,548
    Number of banking locations                              195           189            163          150           149
    Number of TransFund locations                          1,933         1,822          1,649        1,421         1,389
    Trust assets                                     $30,454,512   $36,288,592    $31,704,091  $28,464,745   $24,589,053
    Mortgage loan servicing portfolio(3)               5,983,824     5,481,736      4,988,611    4,492,524     4,486,513
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(1)  Shareholders'  equity less preferred  equity,  intangible assets and equity
     provided  by  the  TARP  Capital  Program  divided  by  total  assets  less
     intangible assets.
(2)  Includes  nonaccrual  loans,  renegotiated  loans and  assets  acquired  in
     satisfaction  of loans.  Excludes  loans past due 90 days or more and still
     accruing.
(3)  Includes outstanding principal for loans serviced for affiliates.
(4)  Includes  reserve for loan losses and reserve for off-balance  sheet credit
     losses.
(5)  Conversion  of Series A preferred  stock added 6.9  million  common  shares
     outstanding in 2005.

13 Management's Assessment of Operations and Financial Condition

Overview

BOK Financial Corporation ("BOK Financial" or "the Company") is a financial holding company that offers full service banking in Oklahoma, Northwest Arkansas, Dallas, Forth Worth and Houston, Texas, Albuquerque, New Mexico, Denver, Colorado, Phoenix, Arizona and Kansas City, Missouri / Kansas. The Company was incorporated in 1990 in Oklahoma and is headquartered in Tulsa, Oklahoma. Activities are governed by the Bank Holding Company Act of 1956, as amended by the Financial Services Modernization Act or Gramm-Leach-Bliley Act of 1999. Principal banking subsidiaries are Bank of Oklahoma, N.A., Bank of Albuquerque, N.A., Bank of Arkansas, N.A., Bank of Texas, N.A., Colorado State Bank and Trust, N.A., Bank of Arizona, N.A. and Bank of Kansas City, N.A. Other subsidiaries include BOSC, Inc. a broker/dealer that engages in retail and institutional securities sales and municipal bond underwriting.

Our overall strategic objective is to emphasize growth in long-term value by building on our leadership position in Oklahoma and expanding into high-growth markets in contiguous states. We have a solid position in Oklahoma and are the state's largest financial institution as measured by deposit market share. At December 31, 2008, 46% of our outstanding loans and 60% of our deposits are attributed to the Oklahoma market. Since 1997, we have expanded into Dallas, Fort Worth and Houston, Texas, Albuquerque, New Mexico, Denver, Colorado, Phoenix, Arizona and Kansas City, Missouri / Kansas. At December 31, 2008, 29% of our outstanding loans and 23% of our deposits are attributed to Texas. None of our other regional markets provide more than 10% of our outstanding loans or deposits. Our acquisition strategy targets quality organizations that have demonstrated solid growth in their business lines. We provide additional growth opportunities by hiring talent to enhance competitiveness, adding locations, and broadening product offerings. Our operating philosophy embraces local decision-making in each of our geographic markets while adhering to common Company standards. We also consider acquisitions of distressed financial institutions in selected markets when opportunities become available.

Our primary focus is to provide a comprehensive range of nationally competitive financial products and services in a personalized and responsive manner. Our products and services include loans and deposits, cash management services, fiduciary services, mortgage banking, and brokerage and trading services to middle-market businesses, financial institutions, and consumers. Commercial banking is a significant part of our business. Our credit culture emphasizes building relationships by making high-quality loans and providing a full range of financial products and services to our customers. Our energy financing expertise enables us to offer commodity derivatives for customers to use in their risk management and positioning activities. Our revenue sources are diverse. Historically, fees and commissions revenue provide 40% - 45% of our total revenue. Approximately 39% of our revenue came from commissions and fees in 2008 due to credit losses incurred on two positions in our customer hedging program.

BOK Financial operates three principal lines of business: commercial banking, consumer banking and wealth management. Our principal lines of business have been re-defined from the previous year to better present the Company's organization as it has grown in markets outside of Oklahoma. Commercial banking includes lending, treasury and cash management services and customer risk management products to small businesses, middle market and larger commercial customers. Commercial banking also includes the TransFund electronic funds network. Consumer banking includes retail lending and deposit services, all mortgage banking activities and our indirect automobile lending products. Wealth management provides fiduciary services, brokerage and trading, private bank services and investment advisory services in all markets.

The financial services industry experienced significant disruptions during 2008. Numerous financial institutions either failed or required a significant amount of government assistance due to credit losses and liquidity shortages. Loan losses, which initially were limited to residential construction loans in certain markets, spread to other commercial real estate loans and commercial loans. Credit spreads on certain financial instruments, such as some mortgage-backed securities, widened extremely due to uncertainty of the underlying cash flows. This uncertainty and lack of trading volumes significantly decreased the fair value of these instruments. Energy prices were extremely volatile during the year. The price of oil exceeded $140 per barrel in mid-year then fell to under $40 per barrel by year end. These market events reduced our net income for 2008, but did not significantly impair our operations.

Performance Summary

BOK Financial's net income for 2008 totaled $153 million or $2.27 per diluted share compared with $218 million or $3.22 per diluted share in 2007.

Highlights of 2008 included:

o Net interest revenue increased $102 million or 19% over 2007. Average earning assets were up $2.0 billion or 12%. Net interest margin was 3.45% for 2008, up 17 basis points over 2007.

14 o Combined reserves for credit losses totaled $248 million or 1.93% of outstanding loans at December 31, 2008, up from $148 million or 1.24% of outstanding loans at December 31, 2007. Provision for credit losses and net charge-offs were $203 million and $102 million, respectively for 2008 and $35 million and $21 million, respectively, for 2007.

o Non-performing assets totaled $342 million or 2.65% of outstanding loans and repossessed assets at December 31, 2008, up from $104 million or 0.87% of outstanding loans and repossessed assets at December 31, 2007.

o Fees and commissions revenue totaled $414 million for 2008 and $406 million for 2007. Net credit losses on derivative contracts related to two bankrupt counterparties reduced fees and commissions revenue by $54 million in 2008.

o The fair value of mortgage servicing rights, net of economic hedging gains or losses decreased $24 million in 2008 and $3 million in 2007. Anticipated prepayment speeds increased significantly during the fourth quarter in response to government programs to lower mortgage interest rates.

o The Company evaluated and elected not to participate in the U.S. Treasury's TARP Capital Purchase Program. Tier 1 and tangible common equity ratios were 9.40% and 6.64%, respectively, at December 31, 2008. Tier 1 and tangible common equity ratios were 9.38% and 7.72%, respectively, at December 31, 2007. The decrease in tangible common equity ratio was due largely to a $182 million after-tax increase in unrealized losses on available for sale securities.

o The Company elected to participate in the FDIC's Temporary Liquidity Guarantee Program. This Program provides full deposit insurance coverage of non-interest bearing, transaction deposit accounts and guarantees certain newly issued senior unsecured debt. The Company has not issued any guaranteed debt under this program.

Net income for the fourth quarter of 2008 totaled $35 million or $0.53 per diluted share compared with $51 million or $0.76 per diluted share for the fourth quarter of 2007.

Highlights of the fourth quarter of 2008 included:

o Net interest revenue totaled $176 million, up $35 million over the fourth quarter of 2007. Net interest margin was 3.57% for the fourth quarter of 2008 and 3.22% for the fourth quarter of 2007.

o Net loans charged off and provision for credit losses were $34 million and $73 million, respectively for the fourth quarter of 2008. Net loans charged off and provision for credit losses were $7.3 million and $13 million, respectively, for the fourth quarter of 2007.

o The fair value of mortgage servicing rights, net of economic hedging gains or losses decreased $11 million in 2008 and $2 million in 2007.

Critical Accounting Policies

Application of Critical Accounting Policies

Preparation of our consolidated financial statements is based on the selection of certain accounting policies, which requires management to make significant assumptions and estimates. The following discussion addresses the most critical areas where these assumptions and estimates could affect financial condition and results of operations. Actual results could differ significantly from these estimates. Application of these critical accounting policies and estimates has been discussed with the appropriate committees of the Board of Directors. Additional accounting policies are described in Note 1 to the Consolidated Financial Statements.

New accounting standards first adopted in 2008 included Statement of Financial Accounting Standards No. 159, "Fair Value Option" ("FAS 159"). FAS 159 provides an option to measure eligible financial assets and financial liabilities at fair value. Certain certificates of deposit that were either currently designated as hedged or had previously been designated as hedged, but no longer met the correlation requirements of Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("FAS 133"), were designated as being reported at fair value. The initial adoption of FAS 159 did not significantly affect the Company's financial statements. In addition, certain certificates of deposit issued subsequent to the adoption of FAS 159 have been designated as reported at fair value. This determination is made when the certificates of deposit are issued based on the Company's intent to swap the interest rate on the certificates from a fixed rate to a LIBOR-based variable rate. The effect of FAS 159 on our 2008 operations is presented in Note 4 to the Consolidated Financial Statements.

15 Reserves for Loan Losses and Off-Balance Sheet Credit Losses

Reserves for loan losses and off-balance sheet credit losses are assessed by management based on an ongoing quarterly evaluation of the probable estimated losses inherent in the portfolio and probable estimated losses on unused commitments to provide financing. A consistent, well-documented methodology has been developed that includes reserves assigned to specific loans and commitments, general reserves that are based on a statistical migration analysis and nonspecific reserves that are based on analysis of current economic conditions, loan concentrations, portfolio growth and other relevant factors.

An independent Credit Administration department is responsible for performing this evaluation for all of our subsidiaries to ensure that the methodology is applied consistently.

Specific reserves for impairment are determined through evaluation of estimated future cash flows, collateral values and historical statistics in accordance with Statement of Financial Accounting Standards No. 114, "Accounting by Creditors for the Impairment of a Loan", regulatory accounting standards and other authoritative literature. Commercial and commercial real estate loans and commitments in excess of $1 million are reviewed for impairment. Significant loans and commitments that exhibit weaknesses or deteriorating trends are individually reviewed quarterly.

General reserves for commercial and commercial real estate loan losses and related commitments not evaluated individually for impairment are determined primarily through an internally developed migration analysis model. The purpose of this model is to determine the probability that each credit relationship in the portfolio has an inherent loss based on historical trends. We use an eight-quarter aggregate accumulation of net losses as a basis for this model. Greater emphasis is placed on loan losses in more recent periods. A minimum reserve level is established for each loan grade based on long-term loss history. This model assigns a general reserve to all commercial loans and leases and commercial real estate loans, excluding loans that have a specific impairment reserve.

Separate models are used to determine the general reserve for residential mortgage loans, excluding residential mortgage loans held for sale, and consumer loans. The general reserve for residential mortgage loans is based on an eight-quarter average percent of loss. General reserves for consumer loans are based on a migration of loans from current status to loss. Separate migration factors are determined by major product line, such as indirect automobile loans and direct consumer loans.

Nonspecific reserves are maintained for risks beyond those factors specific to a particular loan or those identified by the migration models. These factors include trends in the general economy in our primary lending areas, conditions in specific industries where we have a concentration, such as energy, commercial real estate and homebuilders and agriculture, concentrations in large credits and overall growth in the loan portfolio. Evaluation of the nonspecific reserves also considers duration of the business cycle, regulatory examination results, potential errors in the migration analysis models and the underlying data, and other relevant factors. A range of potential losses is determined for each factor identified.

A separate reserve for off-balance sheet credit risk is maintained. The provision for credit losses includes the combined charge to expense for both the reserve for loan losses and the reserve for off-balance sheet credit losses. All losses incurred from lending activities will ultimately be reflected in charge-offs against the reserve for loan losses after funds are advanced against outstanding commitments and after the exhaustion of collection efforts.

Valuation of Mortgage Servicing Rights

We have a significant investment in mortgage servicing rights. These rights are primarily retained from sales of loans we have originated or occasionally purchased from other lenders. Originated mortgage servicing rights are initially recognized at fair value. Fair value is based on market quotes for similar servicing rights, which is a Level 2 input as defined by Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157"). Subsequent changes in fair value are recognized in earnings as they occur.

There is no active market for trading in mortgage servicing rights after origination. We use a cash flow model to determine fair value. Key assumptions and estimates including projected prepayment speeds and assumed servicing costs, earnings on escrow deposits, ancillary income and discount rates, used by this model are based on current market sources. Assumptions used to value our mortgage servicing rights are considered Level 3 inputs as defined by FAS 157 and represent our best estimate of assumptions that market participants would use to value this asset. A separate third party model is used to estimate prepayment speeds based on interest rates, housing turnover rates, estimated loan curtailment, anticipated defaults and other relevant factors. The prepayment model is updated daily for changes in market conditions. We adjusted the prepayment projections determined by this model to better correlate with actual performance of our servicing portfolio. The discount rate is based on benchmark rates for mortgage loans plus a market spread expected by investors in servicing rights. Significant assumptions used to determine the fair value of our mortgage servicing rights are presented in Note 8 to the Consolidated Financial Statements. At least annually, we request estimates of fair value from outside sources to corroborate the results of the valuation model.

The assumptions used in this model are primarily based on mortgage interest rates. Evaluation of the effect of a change in one assumption without considering the effect of that change on other assumptions is not meaningful. Considering all related assumptions, a 50 basis point increase in mortgage interest rates is expected to increase the fair value of our servicing rights by

16 $10 million. A 50 basis point decrease in mortgage interest rates is expected to decrease the fair value of our servicing rights by $11 million.

Intangible Assets

Intangible assets, which consist primarily of goodwill, core deposit intangible assets and other acquired intangibles, for each business unit are evaluated for impairment annually as of October 1st or more frequently if conditions indicate that impairment may have occurred. The evaluation of possible impairment of intangible assets involves significant judgment based upon short-term and long-term projections of future performance.

The fair value of each of our business units is estimated by the discounted future earnings method. Income growth is projected over a seven-year period for each unit and a terminal value is computed. The projected income stream is converted to current fair value by using a discount rate that reflects a rate of return required by a willing buyer. Assumptions used to value our business units are based on growth rates, volatility, discount rate and market risk premium inherent in our current stock price. These assumptions are considered Level 3 inputs as defined by FAS 157 and represent our best estimate of assumptions that market participants would use to determine fair value of the respective business units. The most critical assumptions in our evaluation were a 7.00% expected long-term growth rate, a 0.66% volatility factor for BOK Financial common stock, a 9.36% discount rate and a 11.04% market risk premium.

Approximately $240 million or 72% of total goodwill was attributed to the Texas market and $56 million or 17% of total goodwill was attributed to the Colorado market. We also have $17 million of goodwill in the Arizona market and $15 million of goodwill in the New Mexico market. Because of the large concentration of goodwill in the Texas and Colorado markets, the fair value determined by the discounted future earnings method was corroborated by comparison to the fair value of publicly traded banks of similar size and characteristics. No goodwill impairment was indicated by either valuation method.

The effect of a 10% negative change in assumptions used to evaluate goodwill impairment using the discounted future earnings method was simulated. No impairment was indicated by this simulation.

The current market value of BOK Financial common stock, a primary assumption in our goodwill impairment analysis, is approximately 32% below the market value used in our most recent annual evaluation. The decline in market value is due largely to factors affecting the overall economy and the regional banks sector of the market. It is not due to operating losses, losses of major customers or market share, or other factors specific to BOK Financial. Therefore, we do not believe the decline in market value of our stock to be an event that requires a re-evaluation of our goodwill impairment. Goodwill impairment may be indicated at our next annual evaluation date if the market value of our stock remains at or near current prices, or sooner if we incur significant operating losses or if other factors indicate a significant decline in the value of our business.

Intangible assets with finite lives, such as core deposit intangible assets, are amortized using accelerated methods over their estimated useful lives. Core deposit intangible assets generally have a weighted average life of five years based on the expected lives of the acquired deposit accounts. Such assets are reviewed for impairment whenever events indicate that the remaining carrying amount may not be recoverable.

Valuation of Derivative Instruments

We use interest rate derivative instruments to manage our interest rate risk. We also offer interest rate, commodity, and foreign exchange derivative contracts to our customers. All derivative instruments are carried on the balance sheet at fair value. Fair values for exchange-traded contracts are based on quoted prices. Fair values for over-the-counter interest rate contracts used to manage our interest rate risk are provided either by third-party dealers in the contracts or by quotes provided by independent pricing services. Information used by these third-party dealers or independent pricing services to determine fair values are considered Level 2, observable market inputs as defined by FAS
157. Interest rate, commodity and foreign exchange contracts used in our customer hedging programs are based on valuations generated internally by third-party provided pricing models. These models use Level 2, observable market inputs to estimate fair values. Changes in assumptions used in these pricing models could significantly affect the reported fair values of derivative assets and liabilities, though the net effect of these changes should not significantly affect earnings.

Credit risk is considered in determining the fair value of derivative instruments. Deterioration in the credit rating of customers or dealers reduces the fair value of asset contracts. The reduction in fair value is recognized in earnings during the current period. Deterioration in our credit rating below investment grade would affect the fair value of our derivative liabilities. In the event of a credit down-grade, the fair value of our derivative liabilities would decrease. The reduction in fair value would be recognized in earnings in the current period.

Valuation of Securities

The fair value of our securities portfolio is primarily based on a third-party pricing service. We review the methodologies used by the pricing service and concluded them to be based on Level 2 observable market inputs. Management evaluates the fair

17 values provided by the pricing service against other sources, including brokered quotes, sales or purchases of similar securities, and discounted cash flow analysis.

Other-than-Temporary Impairment

We perform a quarterly evaluation of unrealized losses on investment and available for sale securities to determine whether the losses are temporary or other-than-temporary as required by Statement of Financial Accounting Standards No 115, "Accounting for Certain Investments in Debt and Equity Securities" ("FAS 115"). This evaluation assesses the probability of full recovery of the carrying value of the security and management's ability and intent to hold the security until fair value recovers. Temporary impairment, net of deferred income taxes, is recognized as charges against shareholders' equity as part of other comprehensive income. Other-than-temporary impairment is recognized through a charge against earnings.

. . .