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BOK Financial Reports Quarterly Earnings of $88 Million

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TULSA, Okla., July 26, 2017 (GLOBE NEWSWIRE) -- BOK Financial Corporation (NASDAQ:BOKF) reported net income of $88.1 million or $1.35 per diluted share for the second quarter of 2017. Net income was $88.4 million or $1.35 per diluted share for the first quarter of 2017 and $65.8 million or $1.00 per diluted share for the second quarter of 2016.

Steven G. Bradshaw, president and chief executive officer of BOK Financial, stated, "It was another very strong quarter for BOK Financial, with net income up 34 percent compared to the second quarter of 2016 and 63 percent compared to the first half of 2016. Profit growth was driven by higher net interest margin and net interest income combined with continued careful expense management, as total expenses are essentially flat compared to last year. At the same time, credit quality remains sound, resulting in us recording no provision for credit losses for the third consecutive quarter."

Bradshaw continued, "I want to commend all of our employees for their dedication to the company, as evidenced by BOK Financial being named one of the most respected banks in America in an annual survey by Reputation Institute and American Banker magazine. The survey ranks BOK Financial highest in the areas that are very important to us, including corporate citizenship, governance, workplace, ethical behavior and fairness in the way we conduct business. This validates that we have a strong and effective culture and that our employees show pride in our company and their work."

Second Quarter 2017 Highlights

  • Net interest revenue totaled $205.2 million for the second quarter of 2017, up $4.0 million over the first quarter of 2017. Net interest margin increased to 2.89 percent for the second quarter of 2017 from 2.81 percent for the first quarter of 2017. Average earning assets decreased $359 million compared to the first quarter of 2017.

  • Fees and commissions revenue totaled $177.5 million for the second quarter of 2017, a $13.1 million increase over the prior quarter. Mortgage banking revenue was up $5.1 million. Fiduciary and asset management revenue grew by $3.2 million and transaction card revenue increased $3.2 million.

  • Operating expense was $250.9 million for the second quarter of 2017, an increase of $6.2 million over the prior quarter. Personnel expense was up $7.3 million over the prior quarter, primarily due to certain performance-based equity awards. Non-personnel expense decreased $1.1 million. Deposit insurance expense decreased primarily due to $5.1 million in credits received during the second quarter of 2017 related to revision of certain inputs to the assessment calculation filed in previous periods. Combined, all other non-personnel expense increased $4.0 million.

  • Income tax expense was $47.7 million or 34.9 percent of net income before taxes for the second quarter of 2017, compared to $38.1 million or 30.1 percent in the first quarter of 2017. The effective tax rate was 33.7 percent for the second quarter of 2017 and 33.2 percent for the first quarter of 2017, excluding a change in accounting for the tax effect of equity compensation. Tax expense may fluctuate based on the time period when equity awards vest as a result of this change.

  • No provision for credit losses was recorded in the second quarter of 2017 or the first quarter of 2017. The company had net charge-offs of $1.7 million in the second quarter of 2017, compared to a net recovery of $747 thousand in the previous quarter.

  • The combined allowance for credit losses totaled $256 million or 1.49 percent of outstanding loans at June 30, 2017 compared to $258 million or 1.52 percent of outstanding loans at March 31, 2017.

  • Nonperforming assets that are not guaranteed by U.S. government agencies totaled $276 million or 1.62 percent of outstanding loans and repossessed assets at June 30, 2017 and $240 million or 1.43 percent of outstanding loans and repossessed assets at March 31, 2017. The increase in nonperforming assets was primarily due to nonaccruing healthcare and energy loans.

  • Average loans were largely unchanged compared to the previous quarter. Period-end outstanding loan balances totaled $17.2 billion at June 30, 2017, an increase of $192 million over March 31, 2017.

  • Average deposits decreased $277 million compared to the previous quarter. Average demand deposit balances grew by $237 million, offset by a $480 million decrease in average interest-bearing transaction deposits and a $55 million decrease in time deposit balances. Period-end deposits were $22.3 billion at June 30, 2017, a $259 million decrease compared to March 31, 2017.

  • The common equity Tier 1 capital ratio at June 30, 2017 was 11.76 percent. Other regulatory capital ratios were Tier 1 capital ratio, 11.76 percent, total capital ratio, 13.37 percent and leverage ratio, 9.26 percent. At March 31, 2017, the common equity Tier 1 capital ratio was 11.59 percent, the Tier 1 capital ratio was 11.59 percent, total capital ratio was 13.25 percent, and leverage ratio was 8.89 percent.

  • The company paid a regular quarterly cash dividend of $29 million or $0.44 per common share during the second quarter of 2017. On July 25, 2017, the board of directors approved a quarterly cash dividend of $0.44 per common share payable on or about August 25, 2017 to shareholders of record as of August 11, 2017.

Net Interest Revenue

Net interest revenue was $205.2 million for the second quarter of 2017, up $4.0 million over the first quarter of 2017.

Net interest margin was 2.89 percent for the second quarter of 2017, an increase of 8 basis points over the first quarter of 2017, due largely to the impact of an increase in short-term market interest rates. The Federal Reserve's 25 basis point hikes in March and June increased yields on floating-rate earning assets, but had minimal impact on deposit costs. The yield on average earning assets was 3.30 percent, an increase of 15 basis points. The loan portfolio yield increased 15 basis points to 4.03 percent. The yield on the available for sale securities portfolio increased 6 basis points to 2.11 percent. The yield on interest-bearing cash and cash equivalents increased 22 basis points. Funding costs were 0.63 percent, up 11 basis points. Growth in the cost of interest-bearing deposits increased 5 basis points to 0.40 percent as market pricing pressure remained relatively subdued. 

Steven Nell, chief financial officer, added, "We are encouraged that net interest margins continue to migrate back to pre–Great Recession levels. The banking industry still has a lot of ground to make up after a decade of near-zero interest rates. To date, we are seeing limited deposit price competition across our footprint, and we are hopeful that this rational behavior will continue."

Average earning assets decreased $359 million compared to the second quarter of 2017. The average balance of the available for sale securities portfolio decreased $183 million. Average trading securities portfolio balances decreased $124 million and interest-bearing cash and cash equivalents balances decreased $80 million. These decreases were partially offset by a $60 million increase in the average balance of fair value option securities held as an economic hedge of our mortgage servicing rights.

Average interest-bearing deposit balances decreased $514 million compared to the first quarter of 2017. The average balance of borrowed funds decreased $254 million.

Fees and Commissions Revenue

Fees and commissions revenue totaled $177.5 million for the second quarter of 2017, an increase of $13.1 million over the first quarter of 2017.

Mortgage banking revenue totaled $30.3 million for the second quarter of 2017, a $5.1 million increase over the first quarter of 2017. Revenue from mortgage loan production increased $5.3 million. Mortgage production volume increased $109 million in response to lower primary mortgage interest rates and normal seasonality. Gain on sale margin improved 47 basis points over the first quarter of 2017, primarily due to increased retail margins and improved pipeline hedging performance.

Fiduciary and asset management revenue grew by $3.2 million to $41.8 million, primarily due to an annual assessment of tax preparation fees and a $96 million increase in the value of fiduciary assets under management.

Transaction card revenue was up $3.2 million, primarily due to a seasonal increase in transaction volumes and a full quarter's impact of TransFund's expansion into the Arizona market.

Brokerage and trading revenue decreased $1.9 million primarily due to a $1.0 million decrease in trading revenue and an $862 thousand decrease in retail brokerage revenue. Institutional trading volumes were lower compared to the prior quarter, primarily due to customer anticipation of future interest rate increases. Implementation of the fiduciary rule during the second quarter slowed retail sales activity.

Other Gains, Net

Other gains totaled $6.1 million primarily due to a $5.7 million gain on sale of a merchant banking investment during the second quarter of 2017. Other gains totaled $3.6 million in the first quarter of 2017.

Operating Expense

Total operating expense was $250.9 million for the second quarter of 2017, a $6.2 million increase over the first quarter of 2017.

Personnel expense increased $7.3 million. Incentive compensation expense increased $7.1 million. Share-based compensation expense was up $5.8 million related to adjustments in the vesting assumptions of certain performance-based awards that were granted in January 2015 and a $5.86 per share increase in the fair value of BOK Financial common shares. Cash-based incentive compensation expense increased $1.1 million. A $2.6 million increase in employee healthcare costs were offset by a $2.2 million seasonal decrease in payroll tax expense.

Non-personnel expense decreased $1.1 million compared to the first quarter of 2017. Deposit insurance expense decreased $5.7 million. In conjunction with ongoing cost reduction efforts, management performed a comprehensive review of inputs into the deposit insurance assessment calculation that resulted in $5.1 million of rebates for years 2013 through 2016. Data processing and communication expense increased $1.4 million primarily due to increased transaction activity. Net losses and operating expenses of repossessed assets increased $1.3 million primarily due to increased operating expenses related to repossessed oil and gas properties. This increased expense was offset by revenue from these properties included in other revenue.

Loans, Deposits and Capital

Loans

Outstanding loans were $17.2 billion at June 30, 2017, an increase of $192 million over March 31, 2017. Growth in commercial loan balances was partially offset by a decrease in commercial real estate loan balances.

Outstanding commercial loan balances increased $311 million, primarily due to growth in energy loan balances. Unfunded energy loan commitments were largely unchanged at $2.7 billion. Other commercial and industrial loans increased by $59 million and wholesale/retail sector loan balances increased by $37 million. This growth was offset by a $55 million decrease in service sector loan balances and a $44 million decrease in healthcare sector loan balances.

Commercial real estate loan balances decreased $182 million from March 31, 2017. Loans secured by industrial properties decreased $178 million. Retail sector loans decreased $22 million, primarily in the Oklahoma, Arizona and Texas markets, partially offset by growth in the Kansas/Missouri and Colorado markets. Multifamily residential loans increased $29 million. Growth in the Texas market was partially offset by a decrease in the Kansas/Missouri market.

Deposits

Period-end deposits totaled $22.3 billion at June 30, 2017, a $259 million decrease compared to March 31, 2017. Interest-bearing transaction account balances decreased $272 million and time deposits decreased $48 million, partially offset by a $62 million increase in demand deposit balances. Wealth Management deposits grew by $207 million and Commercial Banking deposits decreased $344 million. Consumer Banking deposits were largely unchanged compared to the previous quarter. 

Capital

The company's common equity Tier 1 capital ratio was 11.76 percent at June 30, 2017. In addition, the company's Tier 1 capital ratio was 11.76 percent, total capital ratio was 13.37 percent and leverage ratio was 9.26 percent at June 30, 2017. At March 31, 2017, the company's common equity Tier 1 capital ratio was 11.59 percent, Tier 1 capital ratio was 11.59 percent, total capital ratio was 13.25 percent, and leverage ratio was 8.89 percent.

The company's tangible common equity ratio, a non-GAAP measure, was 9.24 percent at June 30, 2017 and 8.88 percent at March 31, 2017. 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 $365 million or 2.12 percent of outstanding loans and repossessed assets at June 30, 2017, compared to $334 million or 1.96 percent at March 31, 2017. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $276 million or 1.62 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at June 30, 2017, compared to $240 million or 1.43 percent at March 31, 2017. 

Nonaccruing loans totaled $245 million or 1.43 percent of outstanding loans at June 30, 2017, up from $208 million or 1.22 percent of outstanding loans at March 31, 2017. The increase in nonaccruing loans was primarily due to a $24 million increase in healthcare loans and a $14 million increase in energy loans. New nonaccruing loans identified in the second quarter totaled $59 million, offset by $15 million in payments received, $2.9 million in charge-offs and $2.3 million in foreclosures and repossessions. Additionally, $618 thousand was returned to accruing status based on improved credit risk and performance. At June 30, 2017, nonaccruing commercial loans totaled $197 million or 1.85 percent of outstanding commercial loans, nonaccruing commercial real estate loans totaled $3.8 million or 0.10 percent of outstanding commercial real estate loans and nonaccruing residential mortgage loans totaled $44 million or 2.28 percent of outstanding residential mortgage loans. 

Approximately $73 million of nonaccruing loans required a specific allowance of $9.7 million. No specific allowance was necessary for the remaining $172 million of nonaccruing loans based on estimated cash flows or collateral value. At March 31, 2017, $52 million of nonaccruing loans required specific allowances of $3.5 million. No specific allowance was necessary for the remaining $156 million of nonaccruing 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, totaled $327 million at June 30 compared to $413 million at March 31. The decrease largely resulted from energy, manufacturing and service sector potential problem loans, partially offset by an increase in other commercial and industrial potential problem loans.

The company had net charge-offs of $1.7 million for the second quarter of 2017, compared to a net recovery of $747 thousand in the first quarter of 2017. Gross charge-offs totaled $2.9 million for the second quarter, compared to $2.2 million for the previous quarter. Recoveries totaled $1.2 million for the second quarter of 2017 and $2.9 million for the first quarter of 2017.

Based on an evaluation of all credit factors, including changes in nonaccruing and potential problem loans, overall loan portfolio growth and net charge-offs, the company determined that no provision for credit losses was necessary during the first and second quarter of 2017.

The combined allowance for credit losses totaled $256 million or 1.49 percent of outstanding loans and 109 percent of nonaccruing loans at June 30, 2017, excluding residential mortgage loans guaranteed by U.S. government agencies. The allowance for loan losses was $250 million and the accrual for off-balance sheet credit losses was $6.4 million. At March 31, 2017, the combined allowance for credit losses was $258 million or 1.52 percent of outstanding loans and 131 percent of nonaccruing loans, excluding loans guaranteed by U.S. government agencies. The allowance for loan losses was $249 million and the accrual for off-balance sheet credit losses was $9.4 million.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $8.3 billion at June 30, 2017, a $96 million decrease compared to March 31, 2017. At June 30, 2017, the available for sale portfolio consisted primarily of $5.4 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $2.8 billion of commercial mortgage-backed securities fully backed by U.S. government agencies.

At June 30, 2017, the available for sale securities portfolio had a net unrealized gain of $16 million compared to a net unrealized loss of $5.5 million at March 31, 2017, primarily due to changes in interest rates. The $7.3 million net unrealized loss on residential mortgage-backed securities issued by U.S. government agencies at March 31, 2017 improved to a net unrealized gain of $995 thousand at June 30, 2017. Commercial mortgage-backed securities had a net unrealized loss of $6.5 million at June 30, 2017, a $12 million improvement compared to March 31, 2017.

The company also maintains a portfolio of financial instruments consisting primarily of 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.

The net economic benefit of the changes in fair value of mortgage servicing rights and related economic hedges was $247 thousand during the second quarter of 2017, including a $6.9 million decrease in the fair value of mortgage servicing rights, a $5.2 million increase in the fair value of securities and derivative contracts held as an economic hedge and $2.0 million of related net interest revenue.

The fair value of mortgage servicing rights increased by $1.9 million during the first quarter of 2017 primarily due to an increase in residential mortgage rates. The fair value of securities and interest rate derivative contracts held as an economic hedge of mortgage servicing rights decreased by $1.7 million.

Conference Call and Webcast

The company will hold a conference call at 9 a.m. Central time on Wednesday, July 26, 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 1-412-317-6671 and referencing conference ID # 13666185.

About BOK Financial Corporation

BOK Financial Corporation is a $32 billion regional financial services company based in Tulsa, Oklahoma. The company's stock is publicly traded on NASDAQ under the Global Select market listings (symbol: BOKF). BOK Financial's holdings include BOKF, NA, 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, Mobank, 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 June 30, 2017 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 and 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)
  June 30, 2017   Mar. 31, 2017   June 30, 2016
ASSETS          
Cash and due from banks $ 561,587     $ 546,575     $ 498,713  
Interest-bearing cash and cash equivalents 2,078,831     2,220,640     1,907,838  
Trading securities 441,414     677,156     211,622  
Investment securities 490,426     519,402     560,711  
Available for sale securities 8,341,041     8,437,291     8,830,689  
Fair value option securities 445,169     441,714     263,265  
Restricted equity securities 311,033     283,936     319,639  
Residential mortgage loans held for sale 287,259     248,707     430,728  
Loans:          
Commercial 10,637,955     10,327,110     10,356,437  
Commercial real estate 3,688,592     3,871,063     3,581,966  
Residential mortgage 1,939,198     1,946,274     1,880,923  
Personal 917,900     847,459     587,423  
Total loans 17,183,645     16,991,906     16,406,749  
Allowance for loan losses (250,061 )   (248,710 )   (243,259 )
Loans, net of allowance 16,933,584     16,743,196     16,163,490  
Premises and equipment, net 321,038     325,546     315,199  
Receivables 295,042     394,394     173,638  
Goodwill 446,697     445,738     382,739  
Intangible assets, net 40,755     42,556     43,372  
Mortgage servicing rights 245,239     249,403     190,747  
Real estate and other repossessed assets, net 39,436     42,726     24,054  
Derivative contracts, net 280,289     304,727     883,673  
Cash surrender value of bank-owned life insurance 312,774     310,537     307,860  
Receivable on unsettled securities sales 33,177     9,921     142,820  
Other assets 358,741     384,767     319,653  
TOTAL ASSETS $ 32,263,532     $ 32,628,932     $ 31,970,450  
           
LIABILITIES AND EQUITY          
Deposits:          
Demand $ 9,568,895     $ 9,506,573     $ 8,424,609  
Interest-bearing transaction 10,087,139     10,359,214     9,668,869  
Savings 464,318     465,724     419,262  
Time 2,196,122     2,243,848     2,247,061  
Total deposits 22,316,474     22,575,359     20,759,801  
Funds purchased 67,990     47,629     56,780  
Repurchase agreements 396,333     508,352     472,683  
Other borrowings 5,232,343     5,238,947     5,830,736  
Subordinated debentures 144,658     144,649     371,812  
Accrued interest, taxes and expense 133,198     140,235     197,742  
Due on unsettled securities purchases 32,636     137,069     11,757  
Derivative contracts, net 285,819     276,422     719,159  
Other liabilities 204,536     189,376     147,242  
TOTAL LIABILITIES 28,813,987     29,258,038     28,567,712  
Shareholders' equity:          
Capital, surplus and retained earnings 3,414,505     3,346,965     3,251,201  
Accumulated other comprehensive income (loss) 7,964     (5,221 )   117,632  
TOTAL SHAREHOLDERS' EQUITY 3,422,469     3,341,744     3,368,833  
Non-controlling interests 27,076     29,150     33,905  
TOTAL EQUITY 3,449,545     3,370,894     3,402,738  
TOTAL LIABILITIES AND EQUITY $ 32,263,532     $ 32,628,932     $ 31,970,450  


AVERAGE BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
  Three Months Ended
  June 30, 2017   Mar. 31, 2017   Dec. 31, 2016   Sept. 30, 2016   June 30, 2016
ASSETS                  
Interest-bearing cash and cash equivalents $ 2,007,746     $ 2,087,964     $ 2,032,785     $ 2,047,991     $ 2,022,028  
Trading securities 456,028     579,549     476,498     366,545     237,808  
Investment securities 499,372     530,936     542,869     552,592     562,391  
Available for sale securities 8,384,057     8,567,049     8,766,555     8,862,590     8,890,112  
Fair value option securities 476,102     416,524     210,733     266,998     368,434  
Restricted equity securities 295,743     312,498     334,114     335,812     319,136  
Residential mortgage loans held for sale 245,401     220,325     345,066     445,930     401,114  
Loans:                  
Commercial 10,604,456     10,414,579     10,228,095     10,109,692     10,265,782  
Commercial real estate 3,676,976     3,903,850     3,749,393     3,789,673     3,550,611  
Residential mortgage 1,933,091     1,962,759     1,919,296     1,870,855     1,864,458  
Personal 915,010     854,637     826,804     677,530     582,281  
Total loans 17,129,533     17,135,825     16,723,588     16,447,750     16,263,132  
Allowance for loan losses (251,632 )   (249,379 )   (246,977 )   (247,901 )   (245,448 )
Total loans, net 16,877,901     16,886,446     16,476,611     16,199,849     16,017,684  
Total earning assets 29,242,350     29,601,291     29,185,231     29,078,307     28,818,707  
Cash and due from banks 530,352     547,104     578,694     511,534     507,085  
Derivative contracts, net 248,168     401,886     681,455     766,671     823,584  
Cash surrender value of bank-owned life insurance 311,310     309,223     309,532     308,670     306,318  
Receivable on unsettled securities sales 79,248     62,641     33,813     259,906     49,568  
Other assets 1,957,143     2,032,844     2,172,351     1,721,385     1,480,780  
TOTAL ASSETS $ 32,368,571     $ 32,954,989     $ 32,961,076     $ 32,646,473     $ 31,986,042  
                   
LIABILITIES AND EQUITY                  
Deposits:                  
Demand $ 9,338,683     $ 9,101,763     $ 9,124,595     $ 8,497,037     $ 8,162,134  
Interest-bearing transaction 10,087,640     10,567,475     9,980,132     9,650,618     9,590,855  
Savings 461,586     441,254     421,654     420,009     417,122  
Time 2,204,422     2,258,930     2,177,035     2,197,350     2,297,621  
Total deposits 22,092,331     22,369,422     21,703,416     20,765,014     20,467,732  
Funds purchased 63,263     55,508     62,004     68,280     70,682  
Repurchase agreements 427,353     523,561     560,891     522,822     611,264  
Other borrowings 5,572,031     5,737,955     6,072,150     6,342,369     6,076,028  
Subordinated debentures 144,654     144,644     144,635     255,890     232,795  
Derivative contracts, net 178,695     405,444     682,808     747,187     791,313  
Due on unsettled securities purchases 157,438     91,529     77,575     200,574     93,812  
Other liabilities 323,373     299,534     321,404     352,671     298,170  
TOTAL LIABILITIES 28,959,138     29,627,597     29,624,883     29,254,807     28,641,796  
Total equity 3,409,433     3,327,392     3,336,193     3,391,666     3,344,246  
TOTAL LIABILITIES AND EQUITY $ 32,368,571     $ 32,954,989     $ 32,961,076     $ 32,646,473     $ 31,986,042  


STATEMENTS OF EARNINGS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except per share data)
  Three Months Ended   Six Months Ended
  June 30,   June 30,
  2017   2016   2017   2016
               
Interest revenue $ 235,181     $ 202,267     $ 461,571     $ 404,063  
Interest expense 29,977     19,655     55,185     38,879  
Net interest revenue 205,204     182,612     406,386     365,184  
Provision for credit losses     20,000         55,000  
Net interest revenue after provision for credit losses 205,204     162,612     406,386     310,184  
Other operating revenue:              
Brokerage and trading revenue 31,764     39,530     65,387     71,871  
Transaction card revenue 35,296     34,950     67,423     67,304  
Fiduciary and asset management revenue 41,808     34,813     80,439     66,869  
Deposit service charges and fees 23,354     22,618     46,384     45,160  
Mortgage banking revenue 30,276     34,884     55,467     66,984  
Other revenue 14,984     13,352     26,736     25,256  
Total fees and commissions 177,482     180,147     341,836     343,444  
Other gains, net 6,108     1,307     9,735     2,867  
Gain on derivatives, net 3,241     10,766     2,791     17,904  
Gain on fair value option securities, net 1,984     4,279     844     13,722  
Change in fair value of mortgage servicing rights (6,943 )   (16,283 )   (5,087 )   (44,271 )
Gain on available for sale securities, net 380     5,326     2,429     9,290  
Total other operating revenue 182,252     185,542     352,548     342,956  
Other operating expense:              
Personnel 143,744     139,213     280,169     272,775  
Business promotion 7,738     6,703     14,455     12,399  
Professional fees and services 12,419     14,158     23,836     25,917  
Net occupancy and equipment 21,125     19,677     42,749     38,443  
Insurance 689     7,129     7,093     14,394  
Data processing and communications 36,330     32,802     71,232     64,819  
Printing, postage and supplies 4,140     3,889     7,991     7,796  
Net losses and operating expenses of repossessed assets 2,267     1,588     3,276     2,658  
Amortization of intangible assets 1,803     2,624     3,605     3,783  
Mortgage banking costs 12,072     15,746     25,075     28,076  
Other expense 8,558     7,856     16,115     22,895  
Total other operating expense 250,885     251,385     495,596     493,955  
Net income before taxes 136,571     96,769     263,338     159,185  
Federal and state income taxes 47,705     30,497     85,808     51,925  
               
Net income 88,866     66,272     177,530     107,260  
Net income (loss) attributable to non-controlling interests 719     471     1,027     (1,105 )
Net income attributable to BOK Financial Corporation shareholders $ 88,147     $ 65,801     $ 176,503     $ 108,365  
               
Average shares outstanding:              
Basic 64,729,752     65,245,887     64,722,744     65,271,214  
Diluted 64,793,134     65,302,926     64,788,322     65,317,177  
               
Net income per share:              
Basic $ 1.35     $ 1.00     $ 2.70     $ 1.64  
Diluted $ 1.35     $ 1.00     $ 2.69     $ 1.64  


FINANCIAL HIGHLIGHTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and share data)
  Three Months Ended
  June 30, 2017   Mar. 31, 2017   Dec. 31, 2016   Sept. 30, 2016   June 30, 2016
Capital:                  
Period-end shareholders' equity $ 3,422,469     $ 3,341,744     $ 3,274,854     $ 3,398,311     $ 3,368,833  
Risk weighted assets $ 25,127,604     $ 24,901,019     $ 25,274,848     $ 24,358,385     $ 24,191,016  
Risk-based capital ratios:                  
Common equity tier 1 11.76 %   11.59 %   11.21 %   11.99 %   11.86 %
Tier 1 11.76 %   11.59 %   11.21 %   11.99 %   11.86 %
Total capital 13.37 %   13.25 %   12.81 %   13.65 %   13.51 %
Leverage ratio 9.26 %   8.89 %   8.72 %   9.06 %   9.06 %
Tangible common equity ratio1 9.24 %   8.88 %   8.61 %   9.19 %   9.33 %
                                       
Common stock:                                      
Book value per share $ 52.32     $ 51.09     $ 50.12     $ 51.56     $ 51.15  
Tangible book value per share 44.87     43.63     42.53     45.12     44.68  
Market value per share:                                      
High $ 88.31     $ 85.25     $ 85.00     $ 70.05     $ 65.14  
Low $ 74.09     $ 73.44     $ 67.11     $ 56.36     $ 51.00  
Cash dividends paid $ 28,652     $ 28,646     $ 28,860     $ 28,181     $ 28,241  
Dividend payout ratio 32.50 %   32.42 %   57.69 %   37.94 %   42.92 %
Shares outstanding, net 65,416,403     65,408,019     65,337,432     65,910,454     65,866,317  
Stock buy-back program:                                      
Shares repurchased         700,000         305,169  
Amount $     $     $ 49,021     $     $ 17,771  
Average price per share $     $     $ 70.03     $     $ 58.23  
                                       
Performance ratios (quarter annualized):                                      
Return on average assets 1.09 %   1.09 %   0.60 %   0.91 %   0.83 %
Return on average equity 10.46 %   10.86 %   6.03 %   8.80 %   8.00 %
Net interest margin 2.89 %   2.81 %   2.69 %   2.64 %   2.63 %
Efficiency ratio 64.61 %   65.77 %   72.93 %   68.88 %   68.16 %
                                       
Reconciliation of non-GAAP measures:                                      
1      Tangible common equity ratio:                                      
Total shareholders' equity $ 3,422,469     $ 3,341,744     $ 3,274,854     $ 3,398,311     $ 3,368,833  
                                       
Less: Goodwill and intangible assets, net 487,452     488,294     495,830     424,716     426,111  
Tangible common equity $ 2,935,017     $ 2,853,450     $ 2,779,024     $ 2,973,595     $ 2,942,722  
                                       
Total assets $ 32,263,532     $ 32,628,932     $ 32,772,281     $ 32,779,231     $ 31,970,450  
Less: Goodwill and intangible assets, net 487,452     488,294     495,830     424,716     426,111  
Tangible assets $ 31,776,080     $ 32,140,638     $ 32,276,451     $ 32,354,515     $ 31,544,339  
                                       
Tangible common equity ratio 9.24 %   8.88 %   8.61 %   9.19 %   9.33 %
                                       
Other data:                                      
Fiduciary assets $ 45,089,153     $ 44,992,920     $ 42,378,053     $ 41,810,943     $ 40,496,583  
Tax equivalent interest $ 4,330     $ 4,428     $ 4,389     $ 4,455     $ 4,372  
Net unrealized gain (loss) on available for sale securities $ 16,041     $ (5,537 )   $ (14,899 )   $ 159,533     $ 195,385  
                                       
                                       
Mortgage banking:                                      
Mortgage production revenue $ 13,840     $ 8,543     $ 11,937     $ 21,958     $ 19,086  
                                       
Mortgage loans funded for sale $ 902,978     $ 711,019     $ 1,189,975     $ 1,864,583     $ 1,818,844  
Add: current period-end outstanding commitments 362,088     381,732     318,359     630,804     965,631  
Less: prior period end outstanding commitments 381,732     318,359     630,804     965,631     902,986  
Total mortgage production volume $ 883,334     $ 774,392     $ 877,530     $ 1,529,756     $ 1,881,489  
                                       
Mortgage loan refinances to mortgage loans funded for sale 33 %   44 %   63 %   51 %   44 %
Gain on sale margin 1.57 %   1.10 %   1.36 %   1.44 %   1.01 %
                                       
Mortgage servicing revenue $ 16,436     $ 16,648     $ 16,477     $ 16,558     $ 15,798  
Average outstanding principal balance of mortgage loans service for others 22,055,127     22,006,295     21,924,552     21,514,962     20,736,525  
Average mortgage servicing revenue rates 0.30 %   0.31 %   0.30 %   0.31 %   0.31 %
                   
Gain (loss) on mortgage servicing rights, net of economic hedge:                                      
Gain (loss) on mortgage hedge derivative contracts, net $ 3,241     $ (528 )   $ (35,868 )   $ 2,268     $ 10,766  
Gain (loss) on fair value option securities, net 1,984     (1,140 )   (20,922 )   (3,355 )   4,279  
Gain (loss) on economic hedge of mortgage servicing rights 5,225     (1,668 )   (56,790 )   (1,087 )   15,045  
Gain (loss) on changes in fair value of mortgage servicing rights (6,943 )   1,856     39,751     2,327     (16,283 )
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue (1,718 )   188     (17,039 )   1,240     (1,238 )
Net interest revenue on fair value option securities2 1,965     1,271     114     861     1,348  
Total economic benefit (cost) of changes in the fair value of mortgage servicing rights, net of economic hedges $ 247     $ 1,459     $ (16,925 )   $ 2,101     $ 110  

Actual interest earned on fair value option securities less internal transfer-priced cost of funds.


QUARTERLY EARNINGS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and per share data)
  Three Months Ended
  June 30, 2017   Mar. 31, 2017   Dec. 31, 2016   Sept. 30, 2016   June 30, 2016
                   
Interest revenue $ 235,181     $ 226,390     $ 215,737     $ 209,317     $ 202,267  
Interest expense 29,977     25,208     21,539     21,471     19,655  
Net interest revenue 205,204     201,182     194,198     187,846     182,612  
Provision for credit losses             10,000     20,000  
Net interest revenue after provision for credit losses 205,204     201,182     194,198     177,846     162,612  
Other operating revenue:                  
Brokerage and trading revenue 31,764     33,623     28,500     38,006     39,530  
Transaction card revenue 35,296     32,127     34,521     33,933     34,950  
Fiduciary and asset management revenue 41,808     38,631     34,535     34,073     34,813  
Deposit service charges and fees 23,354     23,030     23,365     23,668     22,618  
Mortgage banking revenue 30,276     25,191     28,414     38,516     34,884  
Other revenue 14,984     11,752     12,693     13,080     13,352  
Total fees and commissions 177,482     164,354     162,028     181,276     180,147  
Other gains (losses), net 6,108     3,627     (1,279 )   2,442     1,307  
Gain (loss) on derivatives, net 3,241     (450 )   (35,815 )   2,226     10,766  
Gain (loss) on fair value option securities, net 1,984     (1,140 )   (20,922 )   (3,355 )   4,279  
Change in fair value of mortgage servicing rights (6,943 )   1,856     39,751     2,327     (16,283 )
Gain (loss) on available for sale securities, net 380     2,049     (9 )   2,394     5,326  
Total other operating revenue 182,252     170,296     143,754     187,310     185,542  
Other operating expense:                  
Personnel 143,744     136,425     141,132     139,212     139,213  
Business promotion 7,738     6,717     7,344     6,839     6,703  
Charitable contributions to BOKF Foundation         2,000          
Professional fees and services 12,419     11,417     16,828     14,038     14,158  
Net occupancy and equipment 21,125     21,624     21,470     20,111     19,677  
Insurance 689     6,404     8,705     9,390     7,129  
Data processing and communications 36,330     34,902     33,691     33,331     32,802  
Printing, postage and supplies 4,140     3,851     3,998     3,790     3,889  
Net losses (gains) and operating expenses of repossessed assets 2,267     1,009     1,627     (926 )   1,588  
Amortization of intangible assets 1,803     1,802     1,558     1,521     2,624  
Mortgage banking costs 12,072     13,003     17,348     15,963     15,746  
Other expense 8,558     7,557     9,846     14,819     7,856  
Total other operating expense 250,885     244,711     265,547     258,088     251,385  
Net income before taxes 136,571     126,767     72,405     107,068     96,769  
Federal and state income taxes 47,705     38,103     22,496     31,956     30,497  
Net income 88,866     88,664     49,909     75,112     66,272  
Net income (loss) attributable to non-controlling interests 719     308     (117 )   835     471  
Net income attributable to BOK Financial Corporation shareholders $ 88,147     $ 88,356     $ 50,026     $ 74,277     $ 65,801  
                   
Average shares outstanding:                  
Basic 64,729,752     64,715,964     64,719,018     65,085,392     65,245,887  
Diluted 64,793,134     64,783,737     64,787,728     65,157,841     65,302,926  
Net income per share:                  
Basic $ 1.35     $ 1.35     $ 0.76     $ 1.13     $ 1.00  
Diluted $ 1.35     $ 1.35     $ 0.76     $ 1.13     $ 1.00  


LOANS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
    June 30, 2017   Mar. 31, 2017   Dec. 31, 2016   Sept. 30, 2016   June 30, 2016
Commercial:                    
Energy   $ 2,847,240     $ 2,537,112     $ 2,497,868     $ 2,520,804     $ 2,818,656  
Services   2,958,827     3,013,375     3,108,990     2,936,599     2,830,864  
Healthcare   2,221,518     2,265,604     2,201,916     2,085,046     2,051,146  
Wholesale/retail   1,543,695     1,506,243     1,576,818     1,602,030     1,532,957  
Manufacturing   546,137     543,430     514,975     499,486     595,403  
Other commercial and industrial   520,538     461,346     490,257     476,198     527,411  
Total commercial   10,637,955     10,327,110     10,390,824     10,120,163     10,356,437  
                     
Commercial real estate:                    
Retail   722,805     745,046     761,888     801,377     795,419  
Multifamily   952,380     922,991     903,272     873,773     787,200  
Office   862,973     860,889     798,888     752,705     769,112  
Industrial   693,635     871,463     871,749     838,021     645,586  
Residential construction and land development   141,592     135,994     135,533     159,946     157,576  
Other commercial real estate   315,207     334,680     337,716     367,776     427,073  
Total commercial real estate   3,688,592     3,871,063     3,809,046     3,793,598     3,581,966  
                     
Residential mortgage:                    
Permanent mortgage   989,040     977,743     1,006,820     969,558     969,007  
Permanent mortgages guaranteed by U.S. government agencies   191,729     204,181     199,387     190,309     192,732  
Home equity   758,429     764,350     743,625     712,926     719,184  
Total residential mortgage   1,939,198     1,946,274     1,949,832     1,872,793     1,880,923  
                     
Personal   917,900     847,459     839,958     678,232     587,423  
                     
Total   $ 17,183,645     $ 16,991,906     $ 16,989,660     $ 16,464,786     $ 16,406,749  


LOANS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
  June 30, 2017   Mar. 31, 2017   Dec. 31, 2016   Sept. 30, 2016   June 30, 2016
                   
Bank of Oklahoma:                  
Commercial $ 3,369,967     $ 3,189,183     $ 3,370,259     $ 3,545,924     $ 3,698,215  
Commercial real estate 667,932     691,332     684,381     795,806     781,458  
Residential mortgage 1,398,021     1,404,054     1,407,197     1,401,166     1,415,766  
Personal 318,016     310,708     303,823     271,420     246,229  
Total Bank of Oklahoma 5,753,936     5,595,277     5,765,660     6,014,316     6,141,668  
                   
Bank of Texas:                  
Commercial 4,339,634     4,148,316     4,022,455     3,903,218     3,901,632  
Commercial real estate 1,360,164     1,452,988     1,415,011     1,400,709     1,311,408  
Residential mortgage 232,074     231,647     233,981     229,345     222,548  
Personal 354,222     312,092     306,748     278,167     233,304  
Total Bank of Texas 6,286,094     6,145,043     5,978,195     5,811,439     5,668,892  
                   
Bank of Albuquerque:                  
Commercial 369,370     407,403     399,256     398,147     398,427  
Commercial real estate 324,405     307,927     284,603     299,785     322,956  
Residential mortgage 103,849     106,432     108,058     110,478     114,226  
Personal 12,439     11,305     11,483     11,333     10,569  
Total Bank of Albuquerque 810,063     833,067     803,400     819,743     846,178  
                   
Bank of Arkansas:                  
Commercial 85,020     88,010     86,577     83,544     81,227  
Commercial real estate 73,943     74,469     73,616     72,649     69,235  
Residential mortgage 6,395     6,829     7,015     6,936     6,874  
Personal 11,993     6,279     6,524     6,757     7,025  
Total Bank of Arkansas 177,351     175,587     173,732     169,886     164,361  
                   
Colorado State Bank & Trust:                  
Commercial 1,065,780     998,216     1,018,208     1,013,314     1,076,620  
Commercial real estate 255,379     266,218     265,264     254,078     237,569  
Residential mortgage 63,346     62,313     59,631     59,838     59,425  
Personal 56,187     49,523     50,372     42,901     35,064  
Total Colorado State Bank & Trust 1,440,692     1,376,270     1,393,475     1,370,131     1,408,678  
                   
Bank of Arizona:                  
Commercial 617,759     643,222     686,253     680,447     670,814  
Commercial real estate 705,858     737,088     747,409     726,542     639,112  
Residential mortgage 37,034     36,737     36,265     39,206     38,998  
Personal 55,528     51,386     52,553     31,205     24,248  
Total Bank of Arizona 1,416,179     1,468,433     1,522,480     1,477,400     1,373,172  
                   
Mobank:                  
Commercial 790,425     852,760     807,816     495,569     529,502  
Commercial real estate 300,911     341,041     338,762     244,029     220,228  
Residential mortgage 98,479     98,262     97,685     25,824     23,086  
Personal 109,515     106,166     108,455     36,449     30,984  
Total Mobank 1,299,330     1,398,229     1,352,718     801,871     803,800  
                   
TOTAL BOK FINANCIAL $ 17,183,645     $ 16,991,906     $ 16,989,660     $ 16,464,786     $ 16,406,749  

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)
  June 30, 2017   Mar. 31, 2017   Dec. 31, 2016   Sept. 30, 2016   June 30, 2016
Bank of Oklahoma:                  
Demand $ 4,353,421     $ 4,320,666     $ 3,993,170     $ 4,158,273     $ 4,020,181  
Interest-bearing:                  
Transaction 5,998,787     6,114,288     6,345,536     5,701,983     5,741,302  
Savings 263,664     265,014     241,696     242,959     247,984  
Time 1,170,014     1,189,144     1,118,355     1,091,464     1,167,271  
Total interest-bearing 7,432,465     7,568,446     7,705,587     7,036,406     7,156,557  
Total Bank of Oklahoma 11,785,886     11,889,112     11,698,757     11,194,679     11,176,738  
                   
Bank of Texas:                  
Demand 3,121,890     3,091,258     3,137,009     2,734,981     2,677,253  
Interest-bearing:                  
Transaction 2,272,185     2,317,576     2,388,812     2,240,040     2,035,634  
Savings 91,491     89,640     83,101     84,642     83,862  
Time 502,128     511,037     535,642     528,380     516,231  
Total interest-bearing 2,865,804     2,918,253     3,007,555     2,853,062     2,635,727  
Total Bank of Texas 5,987,694     6,009,511     6,144,564     5,588,043     5,312,980  
                   
Bank of Albuquerque:                  
Demand 612,117     593,117     627,979     584,681     530,853  
Interest-bearing:                  
Transaction 558,523     623,677     590,571     555,326     573,690  
Savings 54,136     53,683     49,963     54,480     49,200  
Time 229,616     233,506     238,408     244,706     250,068  
Total interest-bearing 842,275     910,866     878,942     854,512     872,958  
Total Bank of Albuquerque 1,454,392     1,503,983     1,506,921     1,439,193     1,403,811  
                   
Bank of Arkansas:                  
Demand 40,511     42,622     26,389     32,203     30,607  
Interest-bearing:                  
Transaction 129,848     106,804     105,232     313,480     278,335  
Savings 2,135     2,304     2,192     2,051     1,853  
Time 14,876     15,067     16,696     17,534     18,911  
Total interest-bearing 146,859     124,175     124,120     333,065     299,099  
Total Bank of Arkansas 187,370     166,797     150,509     365,268     329,706  
                   
Colorado State Bank & Trust:                  
Demand 577,617     601,778     576,000     517,063     528,124  
Interest-bearing:                  
Transaction 626,343     610,510     616,679     623,055     625,240  
Savings 35,651     37,801     32,866     31,613     31,509  
Time 228,458     234,740     242,782     247,667     254,164  
Total interest-bearing 890,452     883,051     892,327     902,335     910,913  
Total Colorado State Bank & Trust 1,468,069     1,484,829     1,468,327     1,419,398     1,439,037  
                   
                   
Bank of Arizona:                  
Demand 366,866     342,854     366,755     418,718     396,837  
Interest-bearing:                  
Transaction 154,457     180,254     305,099     303,750     302,297  
Savings 3,638     3,858     2,973     2,959     3,198  
Time 19,911     26,112     27,765     27,935     28,681  
Total interest-bearing 178,006     210,224     335,837     334,644     334,176  
Total Bank of Arizona 544,872     553,078     702,592     753,362     731,013  
                   
Mobank:                  
Demand 496,473     514,278     508,418     235,445     240,755  
Interest-bearing:                  
Transaction 346,996     406,105     513,176     86,526     112,371  
Savings 13,603     13,424     12,679     1,645     1,656  
Time 31,119     34,242     42,152     11,945     11,735  
Total interest-bearing 391,718     453,771     568,007     100,116     125,762  
Total Mobank 888,191     968,049     1,076,425     335,561     366,517  
                   
TOTAL BOK FINANCIAL $ 22,316,474     $ 22,575,359     $ 22,748,095     $ 21,095,504     $ 20,759,802  



NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
  Three Months Ended
  June 30, 2017   Mar. 31, 2017   Dec. 31, 2016   Sept. 30, 2016   June 30, 2016
                   
TAX-EQUIVALENT ASSETS YIELDS                  
Interest-bearing cash and cash equivalents 1.04 %   0.82 %   0.55 %   0.51 %   0.51 %
Trading securities 3.23 %   3.87 %   3.91 %   2.71 %   1.89 %
Investment securities:                            
Taxable 5.34 %   5.44 %   5.39 %   5.34 %   5.41 %
Tax-exempt 2.51 %   2.45 %   2.33 %   2.26 %   2.25 %
Total investment securities 3.76 %   3.70 %   3.60 %   3.51 %   3.52 %
Available for sale securities:                            
Taxable 2.09 %   2.02 %   1.98 %   1.99 %   2.01 %
Tax-exempt 6.09 %   5.37 %   5.27 %   5.47 %   5.06 %
Total available for sale securities 2.11 %   2.05 %   2.00 %   2.01 %   2.04 %
Fair value option securities 2.92 %   2.27 %   0.99 %   1.70 %   2.19 %
Restricted equity securities 5.95 %   5.52 %   5.45 %   5.37 %   4.84 %
Residential mortgage loans held for sale 3.92 %   3.35 %   3.31 %   3.28 %   3.53 %
Loans 4.03 %   3.88 %   3.67 %   3.63 %   3.58 %
Allowance for loan losses                            
Loans, net of allowance 4.09 %   3.94 %   3.72 %   3.69 %   3.63 %
Total tax-equivalent yield on earning assets 3.30 %   3.15 %   2.98 %   2.93 %   2.91 %
                             
COST OF INTEREST-BEARING LIABILITIES                            
Interest-bearing deposits:                            
Interest-bearing transaction 0.26 %   0.20 %   0.16 %   0.14 %   0.14 %
Savings 0.08 %   0.08 %   0.09 %   0.09 %   0.10 %
Time 1.11 %   1.09 %   1.12 %   1.14 %   1.16 %
Total interest-bearing deposits 0.40 %   0.35 %   0.32 %   0.32 %   0.33 %
Funds purchased 0.61 %   0.47 %   0.28 %   0.19 %   0.19 %
Repurchase agreements 0.06 %   0.02 %   0.02 %   0.04 %   0.05 %
Other borrowings 1.09 %   0.83 %   0.61 %   0.57 %   0.57 %
Subordinated debt 5.55 %   5.68 %   5.51 %   3.84 %   1.52 %
Total cost of interest-bearing liabilities 0.63 %   0.52 %   0.44 %   0.44 %   0.41 %
Tax-equivalent net interest revenue spread 2.67 %   2.63 %   2.54 %   2.49 %   2.50 %
Effect of noninterest-bearing funding sources and other 0.22 %   0.18 %   0.15 %   0.15 %   0.13 %
Tax-equivalent net interest margin 2.89 %   2.81 %   2.69 %   2.64 %   2.63 %

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 -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratios)
  Three Months Ended
  June 30, 2017   Mar. 31, 2017   Dec. 31, 2016   Sept. 30, 2016   June 30, 2016
Nonperforming assets:                  
Nonaccruing loans:                  
Commercial $ 197,157     $ 156,825     $ 178,953     $ 176,464     $ 181,989  
Commercial real estate 3,775     4,475     5,521     7,350     7,780  
Residential mortgage 44,235     46,081     46,220     52,452     57,061  
Personal 272     235     290     686     354  
Total nonaccruing loans 245,439     207,616     230,984     236,952     247,184  
Accruing renegotiated loans guaranteed by U.S. government agencies 80,624     83,577     81,370     80,306     78,806  
Real estate and other repossessed assets 39,436     42,726     44,287     31,941     24,054  
Total nonperforming assets $ 365,499     $ 333,919     $ 356,641     $ 349,199     $ 350,044  
Total nonperforming assets excluding those guaranteed by U.S. government agencies $ 275,823     $ 240,234     $ 263,425     $ 253,461     $ 251,497  
                   
Nonaccruing loans by loan class:                  
Commercial:                  
Energy $ 123,992     $ 110,425     $ 132,499     $ 142,966     $ 168,145  
Services 7,754     7,713     8,173     8,477     9,388  
Wholesale / retail 10,620     11,090     11,407     2,453     2,772  
Manufacturing 9,656     5,907     4,931     274     293  
Healthcare 24,505     909     825     855     875  
Other commercial and industrial 20,630     20,781     21,118     21,439     516  
Total commercial 197,157     156,825     178,953     176,464     181,989  
Commercial real estate:                  
Residential construction and land development 2,051     2,616     3,433     3,739     4,261  
Retail 301     314     326     1,249     1,265  
Office 396     413     426     882     606  
Multifamily 10     24     38     51     65  
Industrial     76     76     76     76  
Other commercial real estate 1,017     1,032     1,222     1,353     1,507  
Total commercial real estate 3,775     4,475     5,521     7,350     7,780  
Residential mortgage:                  
Permanent mortgage 23,415     24,188     22,855     25,956     27,228  
Permanent mortgage guaranteed by U.S. government agencies 9,052     10,108     11,846     15,432     19,741  
Home equity 11,768     11,785     11,519     11,064     10,092  
Total residential mortgage 44,235     46,081     46,220     52,452     57,061  
Personal 272     235     290     686     354  
Total nonaccruing loans $ 245,439     $ 207,616     $ 230,984     $ 236,952     $ 247,184  
                   
                                       
Performing loans 90 days past due1 $ 1,414     $ 95     $ 5     $ 3,839     $ 2,899  
                                       
Gross charge-offs $ (2,872 )   $ (2,153 )   $ (1,651 )   $ (8,101 )   $ (8,845 )
Recoveries 1,214     2,900     2,813     2,038     1,386  
Net recoveries (charge-offs) $ (1,658 )   $ 747     $ 1,162     $ (6,063 )   $ (7,459 )
                   
Provision for credit losses $     $     $     $ 10,000     $ 20,000  
Allowance for loan losses to period end loans 1.46 %   1.46 %   1.45 %   1.49 %   1.48 %
Combined allowance for credit losses to period end loans 1.49 %   1.52 %   1.52 %   1.56 %   1.54 %
Nonperforming assets to period end loans and repossessed assets 2.12 %   1.96 %   2.09 %   2.12 %   2.13 %
Net charge-offs (annualized) to average loans 0.04 %   (0.02 )%   (0.03 )%   0.15 %   0.18 %
Allowance for loan losses to nonaccruing loans1 105.78 %   125.92 %   112.33 %   110.65 %   106.95 %
Combined allowance for credit losses to nonaccruing loans1 108.51 %   130.70 %   117.46 %   115.67 %   110.93 %

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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