Market Overview

BOK Financial Reports Annual and Quarterly Earnings for 2016

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TULSA, Okla., Jan. 25, 2017 (GLOBE NEWSWIRE) -- BOK Financial Corporation (Nasdaq: BOKF) reported net income of $232.7 million or $3.53 per diluted share for the year ended December 31, 2016. Net income for the year ended December 31, 2015 was $288.6 million or $4.21 per diluted share.

Net income for fourth quarter of 2016 totaled $50.0 million or $0.76 per diluted share. Unusual items that impacted fourth quarter earnings included:

  • A $17.0 million decrease in the fair value of mortgage servicing rights, net of economic hedges, which reduced earnings per share (EPS) by $0.18 per share; and a $5.0 million decrease in the net fair value of trading portfolio positions, which reduced EPS by $0.05 per share. Both of these items were a result of the unexpected 85 basis point increase in the 10-year U.S. Treasury interest rate and related interest rates primarily due to the market's reaction to the outcome of the presidential election.
  • Expenses related to the completion of the Mobank acquisition totaled $4.7 million or $0.05 per share.
  • Severance and other expenses related to the fourth quarter staff reductions totaled $5.0 million or $0.05 per share.

Steven G. Bradshaw, president and chief executive officer, noted, "In 2016 we achieved record net interest income and fees and commissions revenue, generated strong loan growth despite a significant reduction in energy loan outstandings, and worked through a protracted commodities downturn with performance near the top of our peer group of energy banks. We also completed the acquisition of MBT Bancshares (Mobank) in Kansas City and are already capitalizing on our opportunities in that important growth market. Finally, we adjusted our mortgage servicing rights hedging strategy to reduce volatility in a rising rate environment going forward. While the impact of changing interest rates, expense items associated with the Mobank acquisition, and other unusual expense items reduced profitability, I am as confident in our business prospects today as I have been in years. We believe we are well-positioned to continue to grow revenues and energize earnings growth in 2017."

Bradshaw continued, "During the year we repurchased 1,005,169 shares at an average price of $66.45, including 700,000 shares in the fourth quarter at $70.03 per share. We also increased our dividend for the 11th consecutive year and deployed $102 million of capital for the Mobank acquisition. We will continue to deploy capital in a smart and disciplined fashion through a combination of organic growth, acquisitions, dividends, and more limited share buybacks."

Fourth Quarter 2016 Highlights

  • Net interest revenue totaled $194.2 million for the fourth quarter of 2016, up $6.4 million over the third quarter of 2016. Net interest margin was 2.63 percent, compared to 2.64 percent in the third quarter of 2016. Average earning assets increased $107 million over the prior quarter.
  • Fees and commissions revenue totaled $162.0 million for the fourth quarter of 2016. Excluding the impact of the change in interest rates above, fees and commissions revenue decreased $14.3 million compared to the third quarter of 2016. Mortgage banking revenue decreased $10.1 million due primarily to a decrease in outstanding loan commitments related to rising interest rates and normal seasonality. Brokerage and trading revenue decreased $4.6 million primarily due to lower gains from trading of securities and related derivative contracts and decreased volumes of derivative contracts sold to our mortgage banking customers related to changes in interest rates.
  • Operating expense was $265.5 million for the fourth quarter, largely unchanged compared to the prior quarter, excluding the unusual items noted above. Personnel expense decreased $4.6 million and non-personnel expense increased $3.6 million.
  • No provision for credit losses was recorded in the fourth quarter, compared to $10.0 million for the third quarter of 2016. The decrease in the provision for credit losses was due to improving credit metric trends, largely driven by energy price stability. The company had a net recovery of $1.2 million in the fourth quarter of 2016, compared to net charge-offs of $6.1 million in the third quarter.
  • The combined allowance for credit losses totaled $257 million or 1.52 percent of outstanding loans at December 31, 2016, compared to $256 million or 1.56 percent of outstanding loans at September 30, 2016. The December 31, 2016 coverage ratio was unchanged at 1.56 percent, excluding the effect of the Mobank acquisition.
  • Nonperforming assets that are not guaranteed by U.S. government agencies totaled $263 million or 1.56 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at December 31, 2016 and $253 million or 1.55 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at September 30, 2016.
  • Average loans increased $276 million over the previous quarter, including $162 million related to the Mobank acquisition. The remaining increase was primarily due to growth in the personal and commercial loan portfolios. Period-end outstanding loan balances were $17.0 billion at December 31, 2016, an increase of $525 million over September 30, 2016. The Mobank acquisition added $485 million to loans at December 31, 2016. Excluding the impact of the acquisition, personal loans grew by $126 million, partially offset by a $72 million decrease in commercial real estate balances.
  • Average deposits increased $938 million over the previous quarter. Growth in demand deposit and interest-bearing transaction account balances was partially offset by a decrease in time deposits. Period end deposits grew by $1.7 billion over September 30, 2016 to $22.7 billion at December 31, 2016, including the addition of $624 million in Mobank deposits.
  • The common equity Tier 1 capital ratio was 11.27 percent at December 31. In addition, the Company's Tier 1 capital ratio was 11.27 percent, total capital ratio was 12.87 percent and leverage ratio was 8.72 percent. At September 30, 2016, the common equity Tier 1 capital ratio was 11.99 percent, the Tier 1 capital ratio was 11.99 percent, total capital ratio was 13.65 percent and leverage ratio was 9.06 percent. The decrease in capital ratios was primarily due to the purchase of Mobank and share repurchases during the fourth quarter.
  • The company paid a regular quarterly cash dividend of $29 million or $0.44 per common share during the fourth quarter of 2016. On January 31, 2017, the board of directors is expected to approve a quarterly cash dividend of $0.44 per common share payable on or about February 24, 2017 to shareholders of record as of February 10, 2017.

Net Interest Revenue

Net interest revenue was $194.2 million for the fourth quarter of 2016, an increase of $6.4 million over the third quarter of 2016.

Net interest margin was 2.63 percent for the fourth quarter of 2016, compared to 2.64 percent for the third quarter of 2016. The yield on average earning assets was 2.92 percent, a decrease of 1 basis point over the prior quarter. The loan portfolio yield increased 4 basis points to 3.67 percent, excluding the impact of $2.5 million of loan fees recognized in the fourth quarter of 2016. The yield on the available for sale securities portfolio decreased 1 basis point to 2.00 percent. Funding costs were unchanged compared to the prior quarter at 0.44 percent.

Average earning assets increased $107 million during the fourth quarter of 2016, including $244 million related to the Mobank acquisition. Average loan balances increased $276 million primarily due to commercial and personal loan growth and include $162 million related to the Mobank acquisition. Average trading securities balances increased $110 million. This growth was offset by a $101 million decrease in mortgage loans held for sale, a $96 million decrease in available for sale securities and a $56 million decrease in fair value option securities held as an economic hedge of our mortgage servicing rights. Average interest-bearing deposits increased $938 million over the third quarter of 2016, including $206 million related to the Mobank acquisition. The average balance of borrowed funds decreased $238 million.

Fees and Commissions Revenue

Fees and commissions revenue totaled $162.0 million for the fourth quarter of 2016, a $19.2 million decrease compared to the third quarter of 2016.

Mortgage banking revenue totaled $28.4 million for the fourth quarter of 2016, a decrease of $10.1 million compared to the third quarter of 2016 due primarily to a decrease in outstanding loan commitments related to rising interest rates and normal seasonality. Outstanding mortgage loan commitments at December 31 decreased $312 million or 50 percent from September 30. Average primary mortgage interest rates were 38 basis points higher than in the third quarter of 2016. Margins on loans produced through retail delivery channels were unchanged from the previous quarter. Margins on loans produced through the HomeDirect online delivery channel narrowed.

Mortgage loans funded for sale during the fourth quarter decreased $675 million or 36 percent compared to the previous quarter. This decrease was primarily due to the company's strategic decision to exit the correspondent lending channel after careful consideration of continued pressure on margin due to the competitive landscape and increasing regulatory costs. Mortgage loans funded for sale from our retail and HomeDirect online channel were largely unchanged compared to the prior quarter.

Brokerage and trading revenue totaled $28.5 million for the fourth quarter of 2016, a decrease of $9.5 million compared to the previous quarter. Trading revenue decreased $6.3 million, including $5.0 million related to the unexpected increase in interest rates primarily related to the market's reaction to the outcome of the presidential election. Customer hedging revenue and retail brokerage fees also decreased compared to the prior quarter, partially offset by increased loan syndication fees.

Transaction card revenue grew by $588 thousand and fiduciary and asset management revenue increased $462 thousand, partially offset by a $303 thousand decrease in deposit service charges compared to the third quarter.

Operating Expenses

Total operating expenses were $265.5 million for the fourth quarter of 2016, an increase of $7.5 million over the third quarter of 2016. Severance and other expenses related to the fourth quarter staff reductions totaled $5.0 million. Expenses related to the completion of the Mobank acquisition totaled $4.7 million for the fourth quarter and $1.3 million for the third quarter. The third quarter of 2016 included a $5.0 million accrual related to a legal settlement. The discussion following excludes the impact of these items.

Personnel costs decreased $4.6 million compared to the previous quarter. Employee benefits expense decreased $2.7 million primarily due to updated actuarial assumptions. Regular salary expense decreased $2.3 million. Incentive compensation expense increased $382 thousand.

Non-personnel expense increased $8.6 million over the third quarter of 2016. Net losses and operating expenses of repossessed assets were $1.6 million for the fourth quarter, compared to a net gain of $926 thousand in the third quarter. The fourth quarter included a $2.0 million contribution to the BOKF Foundation. Mortgage banking costs increased $1.4 million over the third quarter primarily due to an increase in residential mortgage repurchase accruals. Occupancy and equipment expense increased $1.4 million over the third quarter primarily due to property lease termination costs and software costs.

Loans, Deposits and Capital

Loans

Outstanding loans were $17.0 billion at December 31, 2016, an increase of $525 million over September 30, including $485 million of loans from the Mobank acquisition.

Outstanding commercial loan balances increased $271 million over September 30, 2016. The Mobank acquisition added $289 million of commercial loans, primarily in the service sector. Service sector loan balances grew by $172 million. Healthcare sector loans saw strong growth, up $117 million over the prior quarter. Wholesale/retail sector loan balances decreased $25 million and energy sector loans decreased $23 million compared to September 30, 2016.

Unfunded energy loan commitments grew by $424 million in the fourth quarter to $2.7 billion. All other unfunded commercial loan commitments totaled $4.8 billion at December 31, 2016, an increase of $367 million over September 30, 2016.

Commercial real estate loans increased $15 million over September 30, 2016. The Mobank acquisition added $87 million in commercial real estate loan balances. Loans secured by office buildings increased $46 million, primarily in the Arizona market. Loans secured by industrial facilities grew by $34 million, primarily in the Texas market. Multifamily residential loans increased $29 million primarily in the Kansas City and Texas markets, partially offset by a decrease in the Oklahoma market. Retail sector loans decreased $39 million and other commercial real estate loans decreased $30 million, both primarily in the Oklahoma market. Residential construction and land development loans decreased $24 million, primarily in the Arizona market. Unfunded commercial real estate loan commitments totaled $1.1 billion at December 31, 2016, a $127 million decrease compared to September 30, 2016.

Personal loans were $840 million, an increase of $162 million over the prior quarter primarily due to growth in private bank loans and the addition of $36 million of loans from the Mobank acquisition.

Deposits

Period-end deposits totaled $22.7 billion at December 31, 2016, an increase of $1.7 billion over September 30, 2016, primarily due to normal seasonality and temporary customer activity. The Mobank acquisition added $624 million in deposits. Interest-bearing transaction account balances grew by $1.0 billion, demand deposit balances increased $554 million and time deposits increased $52 million. Among the lines of business, Wealth Management deposits increased $442 million and Commercial Banking deposits increased $389 million, partially offset by a $174 million decrease in Consumer Banking deposits.

Capital

The company's common equity Tier 1 capital ratio was 11.27 percent at December 31, 2016. In addition, the Company's Tier 1 capital ratio was 11.27 percent, total capital ratio was 12.87 percent and leverage ratio was 8.72 percent at December 31, 2016. At September 30, 2016, the Company's common equity Tier 1 capital ratio was 11.99 percent, Tier 1 capital ratio was 11.99 percent, total capital ratio was 13.65 percent and leverage ratio was 9.06 percent. The decrease in all capital ratios was due to deployment of $152 million of capital for the Mobank acquisition and share repurchases.

The company's tangible common equity ratio, a non-GAAP measure, was 8.61 percent at December 31, 2016 and 9.19 percent at September 30, 2016. The tangible common equity ratio is primarily based on total shareholders' equity which includes unrealized gains and losses on available for sale securities. The Company has elected to exclude unrealized gains and losses from available for sale securities from its calculation of Tier 1 capital for regulatory capital purposes, consistent with the treatment under the previous capital rules.

Credit Quality

Nonperforming assets totaled $357 million or 2.09 percent of outstanding loans and repossessed assets at December 31, 2016 compared to $349 million or 2.12 percent of outstanding loans and repossessed assets at September 30, 2016. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $263 million or 1.56 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at December 31, 2016 and $253 million or 1.55 percent at September 30, 2016.

Excluding loans guaranteed by U.S. government agencies, nonaccruing loans totaled $219 million or 1.31 percent of outstanding loans at December 31, 2016 compared to $222 million or 1.36 percent of outstanding loans at September 30, 2016. New nonaccruing loans identified in the fourth quarter totaled $50 million, offset by $37 million in payments received, $14 million in foreclosures and repossessions and $1.7 million in charge-offs. At December 31, 2016, nonaccruing commercial loans totaled $179 million or 1.72 percent of outstanding commercial loans, including $132 million or 5.30 percent of energy loans. Nonaccruing commercial real estate loans totaled $5.5 million or 0.14 percent of outstanding commercial real estate loans.

Potential problem loans, which are defined as performing loans that, based on known information, cause management concern as to the borrowers' ability to continue to perform, decreased to $399 million at December 31, 2016 from $478 million at September 30, 2016. Potential problem energy loans decreased $53 million to $308 million. Potential problem wholesale/retail sector loans decreased $14 million and other commercial and industrial potential problem loans decreased $10 million.

The company had a $1.2 million net recovery in the fourth quarter of 2016, compared to net charge-offs of $6.1 million for the third quarter of 2016. Gross charge-offs totaled $1.7 million for the fourth quarter, compared to $8.1 million for the previous quarter. Recoveries totaled $2.8 million for the fourth quarter of 2016 and $2.0 million for the third quarter of 2016.

After evaluating all credit factors, the company determined that no provision for credit losses was necessary during the fourth quarter of 2016 based on continued improvement in credit metrics compared to the prior quarter. The combined allowance for credit losses totaled $257 million or 1.52 percent of outstanding loans and 117.46 percent of nonaccruing loans, excluding loans guaranteed by U.S. Government agencies, at December 31, 2016. The allowance for loan losses was $246 million and the accrual for off-balance sheet credit losses was $11 million.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $8.7 billion at December 31, 2016 and $8.9 billion at September 30, 2016. At December 31, 2016, the available for sale portfolio consisted primarily of $5.5 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $3.0 billion of commercial mortgage-backed securities fully backed by U.S. government agencies.

The available for sale securities portfolio had a net unrealized loss of $15 million at December 31, 2016, compared to a net unrealized gain of $160 million at September 30, 2016. The decrease in the net unrealized gain was primarily due to an increase in interest rates during the fourth quarter. Net unrealized gains on residential mortgage-backed securities issued by U.S. government agencies at September 30, 2016 decreased $113 million during the fourth quarter to a net unrealized loss of $15 million at December 31, 2016. Commercial mortgage-backed securities had a net unrealized loss of $18 million at December 31, 2016, compared to a net unrealized gain of $44 million at September 30, 2016.

The Company also maintains a portfolio of U.S. Treasury securities, residential mortgage-backed securities issued by U.S. government agencies and interest rate derivative contracts as an economic hedge of the changes in the fair value of our mortgage servicing rights. Changes in the fair value of mortgage servicing rights are highly dependent on primary mortgage interest rates offered to borrowers and other factors. Changes in the fair value of securities and interest rate derivatives are highly dependent on secondary mortgage rates, or rates required by investors. Changes in the spread between primary and secondary mortgage rates cannot be effectively hedged and can cause significant earnings volatility.

The fair value of our mortgage servicing rights increased by $40 million due primarily to an increase in residential mortgage interest rates during the fourth quarter of 2016. The fair value of securities and interest rate derivative contracts held as an economic hedge decreased by $57 million. Since mid-year 2016, the company maintained an economic hedge of its MSRs to reduce the impact of a 50 basis point decrease in long-term interest rates within its board-approved risk tolerance levels. This hedge position increased exposure to long-term interest rates. The significant increase in long-term interest rates following the presidential election resulted in a loss on this hedge, partially offset by an increase in the fair value of the MSR.

The fair value of mortgage servicing rights, net of economic hedge, increased by $1.2 million in the third quarter, primarily due to changes in short term interest rates and a decrease in average secondary mortgage rates.

Conference Call and Webcast

The Company will hold a conference call at 9 a.m. Central time on Wednesday, January 25, 2017 to discuss the financial results with investors. The live audio webcast and presentation slides will be available on the company's website at www.bokf.com. The conference call can also be accessed by dialing 1-201-689-8471. A conference call and webcast replay will also be available shortly after conclusion of the live call at www.bokf.com or by dialing 1-858-384-5517 and referencing replay PIN number 13652831.

About BOK Financial Corporation

BOK Financial is a $33 billion regional financial services company based in Tulsa, Oklahoma. The Company's stock is publicly traded on NASDAQ under the Global Select market listings (Nasdaq: BOKF). BOK Financial's holdings include BOKF, NA, Missouri Bank and Trust Company of Kansas City dba Mobank, BOK Financial Securities, Inc. and The Milestone Group, Inc. BOKF, NA operates TransFund, Cavanal Hill Investment Management, BOK Financial Asset Management, Inc. and seven banking divisions: Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas and Colorado State Bank and Trust. Through its subsidiaries, the Company provides commercial and consumer banking, investment and trust services, mortgage origination and servicing, and an electronic funds transfer network. For more information, visit www.bokf.com.

The Company will continue to evaluate critical assumptions and estimates, such as the appropriateness of the allowance for credit losses and asset impairment as of December 31, 2016 through the date its financial statements are filed with the Securities and Exchange Commission and will adjust amounts reported if necessary.

This news release contains forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about BOK Financial, the financial services industry and the economy generally. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "plans," "projects," "will," "intends," variations of such words and similar expressions are intended to identify such forward-looking statements. Management judgments relating to and discussion of the provision and allowance for credit losses, allowance for uncertain tax positions, accruals for loss contingencies and valuation of mortgage servicing rights involve judgments as to expected events and are inherently forward-looking statements. Assessments that BOK Financial's acquisitions and other growth endeavors will be profitable are necessary statements of belief as to the outcome of future events based in part on information provided by others which BOK Financial has not independently verified. These statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions which are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what is expected, implied or forecasted in such forward-looking statements. Internal and external factors that might cause such a difference include, but are not limited to changes in commodity prices, interest rates, interest rate relationships, demand for products and services, the degree of competition by traditional and nontraditional competitors, changes in banking regulations, tax laws, prices, levies and assessments, the impact of technological advances, and trends in customer behavior as well as their ability to repay loans. BOK Financial and its affiliates undertake no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events, or otherwise.


BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
    Dec. 31, 2016   Sept. 30, 2016   Dec. 31, 2015
ASSETS            
Cash and due from banks   $ 620,846     $ 535,916     $ 573,699  
Interest-bearing cash and cash equivalents   1,916,651     2,080,978     2,069,900  
Trading securities   337,628     546,615     122,404  
Investment securities   546,145     546,457     597,836  
Available for sale securities   8,676,829     8,862,283     9,042,733  
Fair value option securities   77,046     222,409     444,217  
Restricted equity securities   307,240     333,391     273,684  
Residential mortgage loans held for sale   301,897     447,592     308,439  
Loans:            
Commercial   10,390,824     10,120,163     10,252,531  
Commercial real estate   3,809,046     3,793,598     3,259,033  
Residential mortgage   1,949,832     1,872,793     1,876,893  
Personal   839,958     678,232     552,697  
Total loans   16,989,660     16,464,786     15,941,154  
Allowance for loan losses   (246,159 )   (245,103 )   (225,524 )
Loans, net of allowance   16,743,501     16,219,683     15,715,630  
Premises and equipment, net   325,849     318,196     306,490  
Receivables   772,952     650,368     163,480  
Goodwill   448,899     382,739     385,461  
Intangible assets, net   46,931     41,977     43,909  
Mortgage servicing rights, net   247,073     203,621     218,605  
Real estate and other repossessed assets, net   44,287     31,941     30,731  
Derivative contracts, net   689,872     655,078     586,270  
Cash surrender value of bank-owned life insurance   308,430     310,211     303,335  
Receivable on unsettled securities sales   7,188     19,642     40,193  
Other assets   353,017     370,134     249,112  
TOTAL ASSETS   $ 32,772,281     $ 32,779,231     $ 31,476,128  
             
LIABILITIES AND EQUITY            
Deposits:            
Demand   $ 9,235,720     $ 8,681,364     $ 8,296,888  
Interest-bearing transaction   10,865,105     9,824,160     9,998,954  
Savings   425,470     420,349     386,252  
Time   2,221,800     2,169,631     2,406,064  
Total deposits   22,748,095     21,095,504     21,088,158  
Funds purchased   57,929     109,031     491,192  
Repurchase agreements   668,661     504,573     722,444  
Other borrowings   4,846,072     6,533,443     4,837,879  
Subordinated debentures   144,640     144,631     226,350  
Accrued interest, taxes, and expense   146,704     191,276     119,584  
Due on unsettled securities purchases   6,508     677     16,897  
Derivative contracts, net   664,531     573,987     581,701  
Other liabilities   182,784     193,698     124,284  
TOTAL LIABILITIES   29,465,924     29,346,820     28,208,489  
Shareholders' equity:            
Capital, surplus and retained earnings   3,285,821     3,302,584     3,208,969  
Accumulated other comprehensive income (loss)   (10,967 )   95,727     21,587  
TOTAL SHAREHOLDERS' EQUITY   3,274,854     3,398,311     3,230,556  
Non-controlling interests   31,503     34,100     37,083  
TOTAL EQUITY   3,306,357     3,432,411     3,267,639  
TOTAL LIABILITIES AND EQUITY   $ 32,772,281     $ 32,779,231     $ 31,476,128  


AVERAGE BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
    Three Months Ended
    Dec. 31, 2016   Sept. 30, 2016   June 30, 2016   March 31, 2016   Dec. 31, 2015
ASSETS                    
Interest-bearing cash and cash equivalents   $ 2,032,785     $ 2,047,991     $ 2,022,028     $ 2,052,840     $ 1,995,945  
Trading securities   476,498     366,545     237,808     188,100     150,402  
Investment securities   542,869     552,592     562,391     587,465     602,369  
Available for sale securities   8,766,555     8,862,590     8,890,112     8,951,435     8,971,090  
Fair value option securities   210,733     266,998     368,434     450,478     435,449  
Restricted equity securities   334,114     335,812     319,136     294,529     262,461  
Residential mortgage loans held for sale   345,066     445,930     401,114     289,743     310,425  
Loans:                    
Commercial   10,228,095     10,109,692     10,265,782     10,268,793     10,024,756  
Commercial real estate   3,749,393     3,789,673     3,550,611     3,364,076     3,186,629  
Residential mortgage   1,919,296     1,870,855     1,864,458     1,865,742     1,835,195  
Personal   826,804     677,530     582,281     493,382     540,418  
Total loans   16,723,588     16,447,750     16,263,132     15,991,993     15,586,998  
Allowance for loan losses   (246,977 )   (247,901 )   (245,448 )   (234,116 )   (207,156 )
Total loans, net   16,476,611     16,199,849     16,017,684     15,757,877     15,379,842  
Total earning assets   29,185,231     29,078,307     28,818,707     28,572,467     28,107,983  
Cash and due from banks   578,694     511,534     507,085     505,522     514,629  
Derivative contracts, net   681,455     766,671     823,584     632,102     657,780  
Cash surrender value of bank-owned life insurance   309,532     308,670     306,318     304,141     301,793  
Receivable on unsettled securities sales   33,813     259,906     49,568     115,101     62,228  
Other assets   2,172,351     1,721,385     1,480,780     1,379,138     1,435,763  
TOTAL ASSETS   $ 32,961,076     $ 32,646,473     $ 31,986,042     $ 31,508,471     $ 31,080,176  
                     
LIABILITIES AND EQUITY                    
Deposits:                    
Demand   $ 9,124,595     $ 8,497,037     $ 8,162,134     $ 8,105,756     $ 8,312,961  
Interest-bearing transaction   9,980,132     9,650,618     9,590,855     9,756,843     9,527,491  
Savings   421,654     420,009     417,122     397,479     382,284  
Time   2,177,035     2,197,350     2,297,621     2,366,543     2,482,714  
Total deposits   21,703,416     20,765,014     20,467,732     20,626,621     20,705,450  
Funds purchased   62,004     68,280     70,682     112,211     73,220  
Repurchase agreements   560,891     522,822     611,264     662,640     623,921  
Other borrowings   6,072,150     6,342,369     6,076,028     5,583,917     4,957,175  
Subordinated debentures   144,635     255,890     232,795     226,368     226,332  
Derivative contracts, net   682,808     747,187     791,313     544,722     632,699  
Due on unsettled securities purchases   77,575     200,574     93,812     158,050     248,811  
Other liabilities   321,404     352,671     298,170     268,705     251,953  
TOTAL LIABILITIES   29,624,883     29,254,807     28,641,796     28,183,234     27,719,561  
Total equity   3,336,193     3,391,666     3,344,246     3,325,237     3,360,615  
TOTAL LIABILITIES AND EQUITY   $ 32,961,076     $ 32,646,473     $ 31,986,042     $ 31,508,471     $ 31,080,176  


STATEMENTS OF EARNINGS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except per share data)
    Three Months Ended   Year Ended
    Dec. 31,   Dec. 31,
    2016   2015   2016   2015
                 
Interest revenue   $ 215,737     $ 196,782     $ 829,117     $ 766,828  
Interest expense   21,539     15,521     81,889     63,474  
Net interest revenue   194,198     181,261     747,228     703,354  
Provision for credit losses       22,500     65,000     34,000  
Net interest revenue after provision for credit losses   194,198     158,761     682,228     669,354  
Other operating revenue:                
Brokerage and trading revenue   28,500     30,255     138,377     129,556  
Transaction card revenue   34,521     32,319     135,758     128,621  
Fiduciary and asset management revenue   34,535     31,165     135,477     126,153  
Deposit service charges and fees   23,365     22,813     92,193     90,431  
Mortgage banking revenue   28,414     22,907     133,914     126,002  
Other revenue   12,693     14,233     51,029     49,883  
Total fees and commissions   162,028     153,692     686,748     650,646  
Other gains (losses), net   (1,279 )   2,329     4,030     5,702  
Gain (loss) on derivatives, net   (35,815 )   (732 )   (15,685 )   430  
Loss on fair value option securities, net   (20,922 )   (4,127 )   (10,555 )   (3,684 )
Change in fair value of mortgage servicing rights   39,751     7,416     (2,193 )   (4,853 )
Gain (loss) on available for sale securities, net   (9 )   2,132     11,675     12,058  
Total other-than-temporary impairment losses       (1,662 )       (2,443 )
Portion of loss recognized in other comprehensive income       (65 )       624  
Net impairment losses recognized in earnings       (1,727 )       (1,819 )
Total other operating revenue   143,754     158,983     674,020     658,480  
Other operating expense:                
Personnel   141,132     131,104     553,119     515,298  
Business promotion   7,344     8,416     26,582     27,851  
Charitable contributions to BOKF Foundation   2,000         2,000     796  
Professional fees and services   16,828     10,357     56,783     40,123  
Net occupancy and equipment   21,470     19,356     80,024     76,016  
Insurance   8,705     5,415     32,489     20,375  
Data processing and communications   33,691     31,248     131,841     122,383  
Printing, postage and supplies   3,998     3,108     15,584     13,498  
Net losses and operating expenses of repossessed assets   1,627     343     3,359     1,446  
Amortization of intangible assets   1,558     1,090     6,862     4,359  
Mortgage banking costs   17,348     11,442     61,387     38,813  
Other expense   9,846     8,547     47,560     35,233  
Total other operating expense   265,547     230,426     1,017,590     896,191  
                 
Net income before taxes   72,405     87,318     338,658     431,643  
Federal and state income taxes   22,496     26,242     106,377     139,384  
                 
Net income   49,909     61,076     232,281     292,259  
Net income (loss) attributable to non-controlling interests   (117 )   1,475     (387 )   3,694  
Net income attributable to BOK Financial Corporation shareholders   $ 50,026     $ 59,601     $ 232,668     $ 288,565  
                 
Average shares outstanding:                
Basic   64,719,018     66,378,380     65,085,627     67,594,689  
Diluted   64,787,728     66,467,729     65,143,898     67,691,658  
                 
Net income per share:                
Basic   $ 0.76     $ 0.89     $ 3.53     $ 4.22  
Diluted   $ 0.76     $ 0.89     $ 3.53     $ 4.21  


FINANCIAL HIGHLIGHTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and share data)
  Three Months Ended
  Dec. 31, 2016
 
Sept. 30, 2016
  June 30, 2016
  March 31, 2016   Dec. 31, 2015
Capital:                  
Period-end shareholders' equity $ 3,274,854     $ 3,398,311     $ 3,368,833     $ 3,321,555     $ 3,230,556  
Risk weighted assets $ 25,152,718     $ 24,358,385     $ 24,191,016     $ 23,707,824     $ 23,429,899  
Risk-based capital ratios1:                  
Common equity tier 1 11.27 %   11.99 %   11.86 %   12.00 %     N/A  
Tier 1 11.27 %   11.99 %   11.86 %   12.00 %   12.13 %
Total capital 12.87 %   13.65 %   13.51 %   13.21 %   13.30 %
Leverage ratio 8.72 %   9.06 %   9.06 %   9.12 %   9.25 %
Tangible common equity ratio2 8.61 %   9.19 %   9.33 %   9.34 %   9.02 %
                   
Common stock:                  
Book value per share $ 50.12     $ 51.56     $ 51.15     $ 50.21     $ 49.03  
Tangible book value per share 42.53     45.12     44.68     43.73     42.51  
Market value per share:                  
High $ 85.00     $ 70.05     $ 65.14     $ 60.16     $ 74.73  
Low $ 67.11     $ 56.36     $ 51.00     $ 43.74     $ 58.25  
Cash dividends paid $ 28,860     $ 28,181     $ 28,241     $ 28,294     $ 28,967  
Dividend payout ratio 57.69 %   37.94 %   42.92 %   66.47 %   48.60 %
Shares outstanding, net 65,337,432     65,910,454     65,866,317     66,155,103     65,894,032  
                   
Stock buy-back program:                  
Shares repurchased 700,000         305,169         1,874,074  
Amount $ 49,021     $     $ 17,771     $     $ 119,780  
Average price per share $ 70.03     $     $ 58.23     $     $ 63.91  
                   
Performance ratios (quarter annualized):                                              
Return on average assets   0.60 %       0.91     0.83 %       0.54 %     0.76
Return on average equity   6.03 %       8.80     8.00 %       5.21
%     7.12
Net interest margin   2.63 %       2.64     2.63 %       2.65
%     2.64
Efficiency ratio   72.93 %       68.88     68.16 %       68.84
%     67.73
                   
1 Risk-based capital ratios March 31, 2015 and thereafter calculated under revised regulatory capital rules issued July 2013 and effective for the Company January 1, 2015. Previous risk-based capital ratios presented are calculated in accordance with then current regulatory capital rules. 
                   
Reconciliation of non-GAAP measures:
2  Tangible common equity ratio:                  
Total shareholders' equity $ 3,274,854     $ 3,398,311       $  3,368,833       $ 3,321,555      $ 3,230,556  
Less: Goodwill and intangible assets, net 495,830         424,716       $  426,111         428,733       429,370  
Tangible common equity $ 2,779,024     $ 2,973,595       $  2,942,722       $ 2,892,822     $ 2,801,186  
                                         
Total assets $ 32,772,281     $ 32,779,231       $  31,970,450       $ 31,413,945     $ 31,476,128  
Less: Goodwill and intangible assets, net 495,830         424,716          426,111          428,733       429,370  
Tangible assets $ 32,276,451     $ 32,354,515       $  31,544,339       $  30,985,212     $  31,046,758  
                                         
Tangible common equity ratio 8.61 %       9.19 %       9.33 %       9.34 %     9.02 %
                                               
                                               
                                               
Other data:                                              
Fiduciary assets 41,781,564       $    41,222,162        39,924,734       $ 39,113,305     $ 38,333,638  
Tax equivalent adjustment 4,389       $    4,455        4,372       $ 4,385      3,222  
Net unrealized gain (loss) on available for sale securities (14,899 )     $    159,533        195,385       $ 155,236     38,109  
                                               
Mortgage banking:                                              
Mortgage servicing portfolio 21,997,568       $    21,851,536       21,178,387       $ 20,294,662     19,678,226  
Mortgage commitments 318,359       $    630,804        965,631       $ 902,986     601,147  
Mortgage loans funded for sale 1,189,975       $    1,864,583        1,818,844       $ 1,244,015     1,365,431  
Mortgage loan refinances to total fundings   63 %         51       44       49     41
Mortgage loans sold 1,347,607       $    1,873,709        1,742,582       $ 1,239,391     1,424,527  
                                               
Net realized gains on mortgage loans sold 21,523       $    23,110        15,865       $ 8,449     13,573  
Change in net unrealized gain on mortgage loans held for sale   (9,586 )         (1,152 )        3,221         8,198       (5,615 )
Total production revenue   11,937            21,958          19,086         16,647       7,958  
Servicing revenue   16,477            16,558          15,798         15,453        14,949  
Total mortgage banking revenue 28,414       $    38,516        34,884          32,100      22,907  
                                               
Gain (loss) on mortgage servicing rights, net of economic hedge:
                                     
Gain (loss) on mortgage hedge derivative contracts, net $ (35,868 )     $    2,268       $  10,766       $  7,138     $ (732 )
Gain (loss) on fair value option securities, net   (20,922 )         (3,355 )        4,279          9,443       (4,127 )
Gain (loss) on economic hedge of mortgage servicing rights   (56,790 )         (1,087 )        15,045          16,581       (4,859 )
Gain (loss) on changes in fair value of mortgage servicing rights   39,751            2,327         (16,283 )       (27,988 )      7,416  
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges $ (17,039 )     $    1,240       $ (1,238 )     $ (11,407 )   $  2,557  
                                               
Net interest revenue on fair value option securities $ 114       $    861       $  1,348       $  2,033     $  2,137  



QUARTERLY EARNINGS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and per share data)
  Three Months Ended
  Dec. 31, 2016   Sept. 30, 2016   June 30, 2016   March 31, 2016   Dec. 31, 2015
                   
Interest revenue $ 215,737     $ 209,317     $ 202,267     $ 201,796     $ 196,782  
Interest expense 21,539     21,471     19,655     19,224     15,521  
Net interest revenue 194,198     187,846     182,612     182,572     181,261  
Provision for credit losses     10,000     20,000     35,000     22,500  
Net interest revenue after provision for credit losses 194,198     177,846     162,612     147,572     158,761  
Other operating revenue:                  
Brokerage and trading revenue 28,500     38,006     39,530     32,341     30,255  
Transaction card revenue 34,521     33,933     34,950     32,354     32,319  
Fiduciary and asset management revenue 34,535     34,073     34,813     32,056     31,165  
Deposit service charges and fees 23,365     23,668     22,618     22,542     22,813  
Mortgage banking revenue 28,414     38,516     34,884     32,100     22,907  
Other revenue 12,693     13,080     13,352     11,904     14,233  
Total fees and commissions 162,028     181,276     180,147     163,297     153,692  
Other gains (losses), net (1,279 )   2,442     1,307     1,560     2,329  
Gain (loss) on derivatives, net (35,815 )   2,226     10,766     7,138     (732 )
Gain (loss) on fair value option securities, net (20,922 )   (3,355 )   4,279     9,443     (4,127 )
Change in fair value of mortgage servicing rights 39,751     2,327     (16,283 )   (27,988 )   7,416  
Gain on available for sale securities, net (9 )   2,394     5,326     3,964     2,132  
Total other-than-temporary impairment losses                 (1,662 )
Portion of loss recognized in (reclassified from) other comprehensive income                 (65 )
Net impairment losses recognized in earnings                 (1,727 )
Total other operating revenue 143,754     187,310     185,542     157,414     158,983  
Other operating expense:                  
Personnel 141,132     139,212     139,213     133,562     131,104  
Business promotion 7,344     6,839     6,703     5,696     8,416  
Contribution to BOKF Foundation 2,000                  
Professional fees and services 16,828     14,038     14,158     11,759     10,357  
Net occupancy and equipment 21,470     20,111     19,677     18,766     19,356  
Insurance 8,705     9,390     7,129     7,265     5,415  
Data processing and communications 33,691     33,331     32,802     32,017     31,248  
Printing, postage and supplies 3,998     3,790     3,889     3,907     3,108  
Net losses (gains) and operating expenses of repossessed assets 1,627     (926 )   1,588     1,070     343  
Amortization of intangible assets 1,558     1,521     2,624     1,159     1,090  
Mortgage banking costs 17,348     15,963     15,746     12,330     11,442  
Other expense 9,846     14,819     7,856     15,039     8,547  
Total other operating expense 265,547     258,088     251,385     242,570     230,426  
Net income before taxes 72,405     107,068     96,769     62,416     87,318  
Federal and state income taxes 22,496     31,956     30,497     21,428     26,242  
Net income 49,909     75,112     66,272     40,988     61,076  
Net income (loss) attributable to non-controlling interests (117 )   835     471     (1,576 )   1,475  
Net income attributable to BOK Financial Corporation shareholders $ 50,026     $ 74,277     $ 65,801     $ 42,564     $ 59,601  
                   
Average shares outstanding:                  
Basic 64,719,018     65,085,392     65,245,887     65,296,541     66,378,380  
Diluted 64,787,728     65,157,841     65,302,926     65,331,428     66,467,729  
Net income per share:                  
Basic $ 0.76     $ 1.13     $ 1.00     $ 0.64     $ 0.89  
Diluted $ 0.76     $ 1.13     $ 1.00     $ 0.64     $ 0.89  


LOANS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
    Dec. 31, 2016   Sept. 30, 2016   June 30, 2016   March 31, 2016   Dec. 31, 2015
Commercial:                    
Services   3,108,990     2,936,599     2,830,864     2,728,891     2,784,276  
Energy   $ 2,497,868     $ 2,520,804     $ 2,818,656     $ 3,029,420     $ 3,097,328  
Healthcare   2,201,916     2,085,046     2,051,146     1,995,425     1,883,380  
Wholesale/retail   1,576,818     1,602,030     1,532,957     1,451,846     1,422,064  
Manufacturing   514,975     499,486     595,403     600,645     556,729  
Other commercial and industrial   490,257     476,198     527,411     482,198     508,754  
Total commercial   10,390,824     10,120,163     10,356,437     10,288,425     10,252,531  
                     
Commercial real estate:                    
Multifamily   903,272     873,773     787,200     733,689     751,085  
Industrial   871,749     838,021     645,586     564,467     563,169  
Office   798,888     752,705     769,112     695,552     637,707  
Retail   761,888     801,377     795,419     810,522     796,499  
Residential construction and land development   135,533     159,946     157,576     171,949     160,426  
Other real estate   337,716     367,776     427,073     394,328     350,147  
Total commercial real estate   3,809,046     3,793,598     3,581,966     3,370,507     3,259,033  
                     
Residential mortgage:                    
Permanent mortgage   1,006,820     969,558     969,007     948,405     945,336  
Permanent mortgages guaranteed by U.S. government agencies   199,387     190,309     192,732     197,350     196,937  
Home equity   743,625     712,926     719,184     723,554     734,620  
Total residential mortgage   1,949,832     1,872,793     1,880,923     1,869,309     1,876,893  
                     
Personal   839,958     678,232     587,423     494,325     552,697  
                     
Total   $ 16,989,660     $ 16,464,786     $ 16,406,749     $ 16,022,566     $ 15,941,154  


LOANS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
  Dec. 31, 2016   Sept. 30, 2016   June 30, 2016   March 31, 2016   Dec. 31, 2015
                   
Bank of Oklahoma:                  
  Commercial $ 3,370,259     $ 3,545,924     $ 3,698,215     $ 3,656,034     $ 3,782,687  
  Commercial real estate 684,381     795,806     781,458     747,689     739,829  
  Residential mortgage 1,407,197     1,401,166     1,415,766     1,411,409     1,409,114  
  Personal 303,823     271,420     246,229     204,158     255,387  
  Total Bank of Oklahoma 5,765,660     6,014,316     6,141,668     6,019,290     6,187,017  
                   
Bank of Texas:                  
  Commercial 4,022,455     3,903,218     3,901,632     3,936,809     3,908,425  
  Commercial real estate 1,415,011     1,400,709     1,311,408     1,211,978     1,204,202  
  Residential mortgage 233,981     229,345     222,548     217,539     219,126  
  Personal 306,748     278,167     233,304     210,456     203,496  
  Total Bank of Texas 5,978,195     5,811,439     5,668,892     5,576,782     5,535,249  
                   
Bank of Albuquerque:                  
  Commercial 399,256     398,147     398,427     402,082     375,839  
  Commercial real estate 284,603     299,785     322,956     323,059     313,422  
  Residential mortgage 108,058     110,478     114,226     117,655     120,507  
  Personal 11,483     11,333     10,569     10,823     11,557  
  Total Bank of Albuquerque 803,400     819,743     846,178     853,619     821,325  
                   
Bank of Arkansas:                  
  Commercial 86,577     83,544     81,227     79,808     92,359  
  Commercial real estate 73,616     72,649     69,235     66,674     69,320  
  Residential mortgage 7,015     6,936     6,874     7,212     8,169  
  Personal 6,524     6,757     7,025     918     819  
  Total Bank of Arkansas 173,732     169,886     164,361     154,612     170,667  
                   
Colorado State Bank & Trust:                  
  Commercial 1,018,208     1,013,314     1,076,620     1,030,348     987,076  
  Commercial real estate 265,264     254,078     237,569     219,078     223,946  
  Residential mortgage 59,631     59,838     59,425     52,961     53,782  
  Personal 50,372     42,901     35,064     24,497     23,384  
  Total Colorado State Bank & Trust 1,393,475     1,370,131     1,408,678     1,326,884     1,288,188  
                   
Bank of Arizona:                  
  Commercial 686,253     680,447     670,814     656,527     606,733  
  Commercial real estate 747,409     726,542     639,112     605,383     507,523  
  Residential mortgage 36,265     39,206     38,998     40,338     44,047  
  Personal 52,553     31,205     24,248     18,372     31,060  
  Total Bank of Arizona 1,522,480     1,477,400     1,373,172     1,320,620     1,189,363  
                   
Bank of Kansas City / Mobank:                  
  Commercial 807,816     495,569     529,502     526,817     499,412  
  Commercial real estate 338,762     244,029     220,228     196,646     200,791  
  Residential mortgage 97,685     25,824     23,086     22,195     22,148  
  Personal 108,455     36,449     30,984     25,101     26,994  
  Total Bank of Kansas City / Mobank 1,352,718     801,871     803,800     770,759     749,345  
                   
TOTAL BOK FINANCIAL $ 16,989,660     $ 16,464,786     $ 16,406,749     $ 16,022,566     $ 15,941,154  

Loans attributed to a geographical region may not always represent the location of the borrower or the collateral.

 
DEPOSITS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
  Dec. 31, 2016   Sept. 30, 2016   June 30, 2016   March 31, 2016   Dec. 31, 2015
Bank of Oklahoma:                  
  Demand $ 3,993,170     $ 4,158,273     $ 4,020,181     $ 3,813,128     $ 4,133,520  
  Interest-bearing:                  
  Transaction 6,345,536     5,701,983     5,741,302     5,706,067     5,971,819  
  Savings 241,696     242,959     247,984     246,122     226,733  
  Time 1,118,355     1,091,464     1,167,271     1,198,022     1,202,274  
  Total interest-bearing 7,705,587     7,036,406     7,156,557     7,150,211     7,400,826  
Total Bank of Oklahoma 11,698,757     11,194,679     11,176,738     10,963,339     11,534,346  
                   
Bank of Texas:                  
  Demand 3,137,009     2,734,981     2,677,253     2,571,883     2,627,764  
  Interest-bearing:                  
  Transaction 2,388,812     2,240,040     2,035,634     2,106,905     2,132,099  
  Savings 83,101     84,642     83,862     83,263     77,902  
  Time 535,642     528,380     516,231     530,657     549,740  
  Total interest-bearing 3,007,555     2,853,062     2,635,727     2,720,825     2,759,741  
Total Bank of Texas 6,144,564     5,588,043     5,312,980     5,292,708     5,387,505  
                   
Bank of Albuquerque:                  
  Demand 627,979     584,681     530,853     557,200     487,286  
  Interest-bearing:                  
  Transaction 590,571     555,326     573,690     560,684     563,723  
  Savings 49,963     54,480     49,200     47,187     43,672  
  Time 238,408     244,706     250,068     259,630     267,821  
  Total interest-bearing 878,942     854,512     872,958     867,501     875,216  
Total Bank of Albuquerque 1,506,921     1,439,193     1,403,811     1,424,701     1,362,502  
                   
Bank of Arkansas:                  
  Demand 26,389     32,203     30,607     31,318     27,252  
  Interest-bearing:                  
  Transaction 105,232     313,480     278,335     265,803     202,857  
  Savings 2,192     2,051     1,853     1,929     1,747  
  Time 16,696     17,534     18,911     21,035     24,983  
  Total interest-bearing 124,120     333,065     299,099     288,767     229,587  
Total Bank of Arkansas 150,509     365,268     329,706     320,085     256,839  
                   
Colorado State Bank & Trust:                  
  Demand 576,000     517,063     528,124     413,506     497,318  
  Interest-bearing:                  
  Transaction 616,679     623,055     625,240     610,077     616,697  
  Savings 32,866     31,613     31,509     33,108     31,927  
  Time 242,782     247,667     254,164     271,475     296,224  
  Total interest-bearing 892,327     902,335     910,913     914,660     944,848  
Total Colorado State Bank & Trust 1,468,327     1,419,398     1,439,037     1,328,166     1,442,166  
                   
                   
Bank of Arizona:                  
  Demand 366,755     418,718     396,837     341,828     326,324  
  Interest-bearing:                  
  Transaction 305,099     303,750     302,297     313,825     358,556  
  Savings 2,973     2,959     3,198     3,277     2,893  
  Time 27,765     27,935     28,681     29,053     29,498  
  Total interest-bearing 335,837     334,644     334,176     346,155     390,947  
Total Bank of Arizona 702,592     753,362     731,013     687,983     717,271  
                   
Bank of Kansas City / Mobank:                  
  Demand 508,418     235,445     240,754     221,812     197,424  
  Interest-bearing:                  
  Transaction 513,176     86,526     112,371     146,405     153,203  
  Savings 12,679     1,645     1,656     1,619     1,378  
  Time 42,152     11,945     11,735     31,502     35,524  
  Total interest-bearing 568,007     100,116     125,762     179,526     190,105  
Total Bank of Kansas City / Mobank 1,076,425     335,561     366,516     401,338     387,529  
                   
TOTAL BOK FINANCIAL $ 22,748,095     $ 21,095,504     $ 20,759,801     $ 20,418,320     $ 21,088,158  



NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
  Three Months Ended
  Dec. 31, 2016   Sept. 30, 2016   June 30, 2016   March 31, 2016   Dec. 31, 2015
                   
TAX-EQUIVALENT ASSETS YIELDS                  
Interest-bearing cash and cash equivalents 0.55 %   0.51 %   0.51 %   0.53 %   0.29 %
Trading securities 1.74 %   2.71 %   1.89 %   2.47 %   2.86 %
Investment securities:                            
  Taxable 5.39 %   5.34 %   5.41 %   5.53 %   5.41 %
  Tax-exempt 2.33 %   2.26 %   2.25 %   2.22 %   1.53 %
Total investment securities 3.60 %   3.51 %   3.52 %   3.51 %   3.03 %
Available for sale securities:                            
  Taxable 1.98 %   1.99 %   2.01 %   2.06 %   2.02 %
  Tax-exempt 5.27 %   5.47 %   5.06 %   4.95 %   4.22 %
Total available for sale securities 2.00 %   2.01 %   2.04 %   2.08 %   2.04 %
Fair value option securities 0.99 %   1.70 %   2.19 %   2.38 %   2.32 %
Restricted equity securities 5.45 %   5.37 %   4.84 %   5.85 %   5.95 %
Residential mortgage loans held for sale 3.31 %   3.28 %   3.53 %   3.75 %   3.85 %
Loans 3.67 %   3.63 %   3.58 %   3.57 %   3.55 %
Allowance for loan losses                            
Loans, net of allowance 3.72 %   3.69 %   3.63 %   3.63 %   3.60 %
Total tax-equivalent yield on earning assets 2.92 %   2.93 %   2.91 %   2.92 %   2.86 %
                             
COST OF INTEREST-BEARING LIABILITIES                            
Interest-bearing deposits:                            
  Interest-bearing transaction 0.16 %   0.14 %   0.14 %   0.14 %   0.09 %
  Savings 0.09 %   0.09 %   0.10 %   0.09 %   0.09 %
  Time 1.12 %   1.14 %   1.16 %   1.21 %   1.26 %
Total interest-bearing deposits 0.32 %   0.32 %   0.33 %   0.34 %   0.32 %
Funds purchased 0.28 %   0.19 %   0.19 %   0.27 %   0.11 %
Repurchase agreements 0.02 %   0.04 %   0.05 %   0.05 %   0.04 %
Other borrowings 0.61 %   0.57 %   0.57 %   0.56 %   0.38 %
Subordinated debt 5.51 %   3.84 %   1.52 %   1.26 %   1.13 %
Total cost of interest-bearing liabilities 0.44 %   0.44 %   0.41 %   0.40 %   0.34 %
Tax-equivalent net interest revenue spread 2.48 %   2.49 %   2.50 %   2.52 %   2.52 %
Effect of noninterest-bearing funding sources and other 0.15 %   0.15 %   0.13 %   0.13 %   0.12 %
Tax-equivalent net interest margin 2.63 %   2.64 %   2.63 %   2.65 %   2.64 %

Yield calculations are shown on a tax equivalent basis at the statutory federal and state rates for the periods presented. The yield calculations exclude security trades that have been recorded on trade date with no corresponding interest income and the unrealized gains and losses. The yield calculation also includes average loan balances for which the accrual of interest has been discontinued and are net of unearned income. Yield/rate calculations are generally based on the conventions that determine how interest income and expense is accrued.

 
CREDIT QUALITY INDICATORS
BOK FINANCIAL CORPORATION
(in thousands, except ratios)
    Three Months Ended
    Dec. 31, 2016   Sept. 30, 2016   June 30, 2016   March 31, 2016   Dec. 31, 2015
Nonperforming assets:                    
Nonaccruing loans:                    
Commercial   $ 178,953     $ 176,464     $ 181,989     $ 174,652     $ 76,424  
Commercial real estate   5,521     7,350     7,780     9,270     9,001  
Residential mortgage   46,220     52,452     57,061     57,577     61,240  
Personal   290     686     354     331     463  
Total nonaccruing loans   230,984     236,952     247,184     241,830     147,128  
Accruing renegotiated loans guaranteed by U.S. government agencies   81,370     80,306     78,806     77,597     74,049  
Real estate and other repossessed assets:   44,287     31,941     24,054     29,896     30,731  
Total nonperforming assets   $ 356,641     $ 349,199     $ 350,044     $ 349,323     $ 251,908  
Total nonperforming assets excluding those guaranteed by U.S. government agencies   $ 263,425     $ 253,461     $ 251,497     $ 252,176     $ 155,959  
                     
Nonaccruing loans by loan portfolio sector:                    
Commercial:                    
Services   $ 8,173     $ 8,477     $ 9,388     $ 9,512     $ 10,290  
Energy   $ 132,499     $ 142,966     $ 168,145     $ 159,553     $ 61,189  
Healthcare   825     855     875     1,023     1,072  
Wholesale/retail   11,407     2,453     2,772     3,685     2,919  
Manufacturing   4,931     274     293     312     331  
Other commercial and industrial   21,118     21,439     516     567     623  
Total commercial   178,953     176,464     181,989     174,652     76,424  
Commercial real estate:                    
Multifamily   38     51     65     250     274  
Industrial   76     76     76     76     76  
Office   426     882     606     629     651  
Retail   326     1,249     1,265     1,302     1,319  
Residential construction and land development   3,433     3,739     4,261     4,789     4,409  
Other commercial real estate   1,222     1,353     1,507     2,224     2,272  
Total commercial real estate   5,521     7,350     7,780     9,270     9,001  
Residential mortgage:                    
Permanent mortgage   22,855     25,956     27,228     27,497     28,984  
Permanent mortgage guaranteed by U.S. government agencies   11,846     15,432     19,741     19,550     21,900  
Home equity   11,519     11,064     10,092     10,530     10,356  
Total residential mortgage   46,220     52,452     57,061     57,577     61,240  
Personal   290     686     354     331     463  
Total nonaccruing loans   $ 230,984     $ 236,952     $ 247,184     $ 241,830     $ 147,128  
                     
                     
Performing loans 90 days past due1   $ 5     $ 3,839     $ 2,899     $ 8,019     $ 1,207  
                     
Gross charge-offs   $ (1,651 )   $ (8,101 )   $ (8,845 )   $ (23,991 )   $ (4,851 )
Recoveries   2,813     2,038     1,386     1,519     1,870  
Net recoveries (charge-offs)   $ 1,162     $ (6,063 )   $ (7,459 )   $ (22,472 )   $ (2,981 )
                     
Provision for credit losses   $     $ 10,000     $ 20,000     $ 35,000     $ 22,500  
                     
Allowance for loan losses to period end loans   1.45 %   1.49 %   1.48 %   1.46 %   1.41 %
Combined allowance for credit losses to period end loans   1.52 %   1.56 %   1.54 %   1.50 %   1.43 %
Nonperforming assets to period end loans and repossessed assets   2.09 %   2.12 %   2.13 %   2.18 %   1.58 %
Net charge-offs (annualized) to average loans   (0.03 )%   0.15 %   0.18 %   0.56 %   0.08 %
Allowance for loan losses to nonaccruing loans1   112.33 %   110.65 %   106.95 %   104.89 %   180.09 %
Combined allowance for credit losses to nonaccruing loans1   117.46 %   115.67 %   110.93 %   107.87 %   181.46 %
                     
1  Excludes residential mortgage loans guaranteed by agencies of the U.S. government.

 

For Further Information Contact:
Joseph Crivelli
Investor Relations
(918) 595-3027
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