How Steve Bradshaw Saved his Oklahoma Bank from the Great Recession

“Typically. when banks have a nonperforming asset, they can’t get rid of it fast enough,” explains Bradshaw. “Our approach is to work it internally. We won’t give someone else the opportunity to buy [an asset] at a fire sale price and earn 20 percent or more when we can work it ourselves.”

The result is a balance sheet with more nonperforming assets but fewer charge-offs—and ultimately a better total shareholder return than like-sized peers. BOK also continues to leverage a formidable legacy of serving the energy sector. Kaiser, who made the bulk of his wealth in oil and gas businesses, still owns about two-thirds of BOK.

“Energy producers know that they’re dealing with a bank that understands the business and isn’t going to run for the hills when commodity prices come down,” says Bradshaw. “You’ve got a lot of [energy] operators out there who have been in this business for 30 years and know what it’s like to have a bank suddenly call them up and say, ‘My board is not comfortable; we need to be out.’

We are usually in for the duration. We grew up in the industry and it’s important to us.” In fact, the bank actually has its own dedicated petroleum engineering staff, which evaluates the reserves of clients to provide guidance on loan amounts and terms. That deep understanding of the capabilities of its clients and the energy space has helped the bank remain the lender of choice in Oklahoma and expand into new markets populated by energy producers.

Together those strengths have enabled BOK to deliver 14.42 percent annual return from January 1992 through March 2014. However, like all financial institutions, the bank is now grappling with the cost of complying with intensifying regulatory requirements—which will translate to an estimated incremental expense of between $10 million and $15 million in 2014 alone. Heightened regulatory requirements are also hitting the bank on another front, adds Bradshaw.