Bank of Oklahoma, the Sooner State's biggest wholesale bank, is remaking itself into a super community bank.

The $3.9 billion bank, owned by Tulsa-based BOK Financial Corp., has bought three rural banks in Oklahoma and Arkansas to launch a community banking division at a company that has always been primarily a commercial lender in the state's biggest cities, Tulsa and Oklahoma City.

"Prior to 1994, we were predominantly an Oklahoma City and Tulsa organization," said Wayne D. Stone, head of the bank's Oklahoma City office. "So we basically identified a dozen markets where we could get into that had significant upside potential in market share."

Analysts predict more merger and acquisition activity from Bank of Oklahoma this year.

"They're a pretty aggressive acquirer," said William Baldwin, head of research at Rauscher Pierce Refsnes Inc. in Dallas. "I think they want to be a much larger retail bank if they can keep their acquisitions in-state and in contiguous states, especially Arkansas."

In the last two years, Oklahoma has been the key new battleground for out-of-state holding companies. Fourth Financial Corp. of Wichita, Kan., and St. Louis-based Boatmen's Bancshares have invested heavily in buying up retail franchises in the Sooner State in recent years.

To protect its franchise, Bank of Oklahoma is trying to play the out-of- staters' game, especially in the nonmetropolitan areas of the state. The strategy makes sense: Only Fourth Financial is buying banks in rural markets, so competition isn't as keen. In addition, Oklahoma still has a glut of rural community banks.

Mr. Stone cited as an example Enid, a northern city where there are seven financial institutions in a market of 53,000 people. Bank of Oklahoma bought Northwest Bank of Enid in 1994 and hopes to do another acquisition in the market this year.

"In none of the four markets we entered do we have the No. 1 market share," Mr. Stone said. "If you go in being No.1 in the market, there's not much way to go but down. We're No. 2 in all those markets, which gives us room to grow."

The decision-making at its community bank division is local, with each market having its own charter, executives, and board.

The bank has an interesting history. It was saved from insolvency in 1990 by oil man George B. Kaiser, who owns 78% of the bank. Not a banker by trade, Mr. Kaiser has won kudos for turning the bank around with his own capital. The millionaire, described by Mr. Baldwin as "a very hands-on guy," doesn't take a salary in his positions as chairman and chief executive.

He's done wonders at BOK. The company has earned better than 1.27% return on assets and 19% return on equity in each of the last three years.

But much of the momentum at Bank of Oklahoma has been tied to the perceived value of its stock, with which it hopes to acquire banks. Mr. Stone admitted that its acquisition drive has slowed somewhat, but didn't attribute it to the sometimes volatile nature of its thinly traded common stock. He said the bank has called on or bid on banks in five other markets, without success.

"I think we're coming across people who are still on the fence as to whether they are going to acquire or be acquired," he said. "It's a matter of trying to convince bankers who already own bank stock to take a stock that's a better bank stock."

Mr. Baldwin said the bank's acquisition drive depends on Mr. Kaiser's powers of persuasion.

"The next 12 to 24 months are going to be interesting," he said. "Mr. Kaiser isn't going to be satisfied with just 8% to 10% growth. But it's all a matter of if he can continue to sell people on his game plan and get them to accept stock."

The work ahead is significant. Right now, Mr. Stone said, the bank's business balance is 55% in Tulsa, 30% in Oklahoma City, and 15% in the rest of the state. In the next five years, the bank wants it an even one-third in each market.

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