While BOK Financial continued to increase geographic diversification through expansion into Texas and New Mexico, geographic concentration subjects the loan portfolio to the general economic conditions in Oklahoma. Table 14 reflects the distribution of the major loan categories among BOK Financial’s principal market areas. 2001 2000 1999 1998 1997 Oklahoma: Commercial $2,606,977 $2,480,825 — $2,172,268 $1,785,961 $1,399,900 Commercial real estate 739,419 768,232 704,999 538,529 363,329 Residential mortgage 642,116 458,395 376,806 427,004 459,646 Consumer 314,060 250,298 236,565 266,453 272.197 Total Oklahoma $4,302,572 $3,957,750  $3,490,638 __ $3,017,947 $2,495,072 Texas: Commercial $ 775,788 $ 549,505: $ 383,460. $. 154,593 $ 120.672 Commercial real estate 380,602 299,357 227,748 105,208 69,950 Residential mortgage 136,181 122,082 102,888 58,185 50.639 Consumer 85,347 53,397 50.923 23.431 23,666 Total Texas $1.377,918 51.024341 $ 765,019 .$ 341,417 $:.264.927 Albuquerque: Commercial $ 219,257 $ 167,023. $ 63,370 $ 13,480 $ 450 Commercial real estate 136,425 118,492 87,759 45.331 10,138 Residential mortgage 85,309 101,920 103,684 109,741 - Consumer 8,200 6,107 5,410 3,038 = Total Albuquerque $ 449,191 $ 393.542. $ 260,223 $ 171,590 - $10,588 Northwest Arkansas: Commercial $ 72,728 $ 50.680  $ 45,603. $ 35,239 . $ 28,435 Commercial real estate 85,329 84,413 74,036 71,501 48,343 Residential mortgage 5,567 4,548 4.737 6.029 5,247 Consumer 2,073 2.588 3,233 3,376 3,409 Total Northwest Arkansas . $_ 165,697 $ 142,229 $127,609 $ 116,145 $ 85,434 Table 14 Loans by Principal Market Area (In Thousands) Other Derivatives with Credit Risk During 2001 BOK Financial developed a program that permits its energy-producing customers to hedge against price fluctuations through energy option and swap contracts. These contracts are executed between BOK and its customers. Offsetting contracts are executed between BOk and selected energy dealers to minimize the risk of changes in energy prices. The dealer contracts are identical to the customer contracts, except for a fixed pricing spread paid to BOk as compensation for administrative costs, credit risk and profit. This program creates credit risk for potential amounts December 31, 2001, other assets included $28 million and due to BOk from the customers and dealers. Customer credit —_ other liabilities included $29 million of energy contracts. risk is monitored through existing lending policies and The primary counterparties on asset contracts were Bank of procedures. The value of energy production is evaluated Montreal, $10.6 million; Goldman Sachs, $5.7 million; across a range of prices to determine a maximum exposure Morgan Stanley, $5.6 million and J. P. Morgan Chase, $5.4 BOk is willing to have individually to any customer or collectively to all energy producers. Dealer credit risk is of the counterparties may result in BOK Financial monitored through existing policies and procedures used to recognizing a loss as the fair value of the affected contracts evaluate counterparty risk. This evaluation considers all relationships between BOK Financial and each counterparty. Individual limits are established by management and approved by the Risk Oversight Committee of the Board of Directors. Margin collateral is required if the exposure to a counterparty exceeds established limits. BOK Financial had no energy contracts with Enron Corp. BOK Financial carries the energy contracts at fair value in other assets and other liabilities. Changes in fair value are recorded in income. Closing prices on the New York Mercantile Exchange are used to determine fair value. At December 31, 2001, other assets included $28 million and The primary counterparties on asset contracts were Bank of Montreal, $10.6 million; Goldman Sachs, $5.7 million; Morgan Stanley, $5.6 million and J. P. Morgan Chase, $5.4 million. A deterioration in the credit standing of one or more of the counterparties may result in BOK Financial recognizing a loss as the fair value of the affected contracts may no longer move in tandem with the offsetting contracts. 20