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BOK Financial Reports Quarterly Earnings of $86 Million

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TULSA, Okla., Oct. 25, 2017 (GLOBE NEWSWIRE) -- BOK Financial Corporation (NASDAQ:BOKF) reported net income of $85.6 million or $1.31 per diluted share for the third quarter of 2017. Net income was $88.1 million or $1.35 per diluted share for the second quarter of 2017 and $74.3 million or $1.13 per diluted share for the third quarter of 2016.

Steven G. Bradshaw, president and chief executive officer of BOK Financial, stated, "It was another very strong quarter for BOK Financial, and the earnings momentum we've demonstrated in 2017 continued through the third quarter. Net interest margin continued to expand as a result of the June 2017 Federal Reserve rate hike, combined with deposit pricing discipline across the banking industry. This, in turn, translated to record net interest income for the quarter. Our sound credit underwriting and discipline, combined with a benign credit environment, resulted in no loan loss provision for the fourth consecutive quarter. Looking forward to 2018, we see many of the trends we've experienced in 2017 continuing, including a favorable rate environment, strong organic revenue growth, and careful expense management to drive earnings leverage."

Bradshaw continued, "During the third quarter, the company was impacted by two weather events: Hurricane Harvey in Houston, as well as a tornado, which struck one of our facilities in Tulsa. In both cases, employees rallied and worked around the clock to minimize the impact to customers. In addition, employees contributed almost $90,000 to an assistance fund to help their colleagues in Houston recover from the storm, and several employees reported that teammates arrived at their homes the weekend following to help remove debris, pull down damaged drywall, and lend a helping hand. I'm extremely proud of our employees for their heartfelt response and can-do attitude during these events. From a company standpoint, the storms negatively impacted earnings by $2.4 million this quarter."

 Third Quarter 2017 Highlights

  • Net interest revenue totaled $218.5 million for the third quarter of 2017, up $13.2 million over the second quarter of 2017. Net interest margin increased to 3.01 percent for the third quarter of 2017 from 2.89 percent for the second quarter of 2017. Recoveries of foregone interest on non-accruing loans added 6 basis points to net interest margin in the third quarter of 2017. Average earning assets grew by $395 million.

  • Fees and commissions revenue totaled $173.5 million for the third quarter of 2017, compared to $177.5 million for the second quarter of 2017. Mortgage banking revenue decreased $5.4 million due to lower gain on sale margin and mortgage production volumes.

  • Operating expense was $265.9 million for the third quarter of 2017, an increase of $15.0 million over the prior quarter. Personnel expense was up $4.2 million, primarily due to increased incentive compensation expense. Non-personnel expense increased $10.9 million. Deposit insurance expense for the second quarter of 2017 included $5.1 million in credits related to the revision of certain inputs to the assessment calculation filed in previous periods. Net losses and operating expenses of repossessed assets increased $3.8 million primarily due to the write-down of one set of repossessed oil and gas properties.

  • No provision for credit losses was recorded in the third quarter of 2017 or the second quarter of 2017. The company had net charge-offs of $3.4 million in the third quarter of 2017, compared to net charge-offs of $1.7 million in the previous quarter.

  • The combined allowance for credit losses totaled $253 million or 1.47 percent of outstanding loans at September 30, 2017, compared to $256 million or 1.49 percent of outstanding loans at June 30, 2017.

  • Nonperforming assets that are not guaranteed by U.S. government agencies totaled $249 million or 1.46 percent of outstanding loans and repossessed assets at September 30, 2017 and $276 million or 1.62 percent of outstanding loans and repossessed assets at June 30, 2017. The decrease in nonperforming assets was primarily due to nonaccruing energy loans. 

  • Average loans increased $127 million over the previous quarter. Period-end outstanding loan balances totaled $17.2 billion at September 30, 2017, a $23 million increase over June 30, 2017.

  • Average deposits were largely unchanged compared to the previous quarter. Average demand deposit balances grew by $51 million, partially offset by a $28 million decrease in time deposit balances. Period-end deposits were $21.8 billion at September 30, 2017, a $468 million decrease compared to June 30, 2017. 

  • The common equity Tier 1 capital ratio at September 30, 2017 was 11.90 percent. Other regulatory capital ratios were Tier 1 capital ratio, 11.90 percent, total capital ratio, 13.47 percent and leverage ratio, 9.30 percent. At June 30, 2017, the common equity Tier 1 capital ratio was 11.76 percent, the Tier 1 capital ratio was 11.76 percent, total capital ratio was 13.36 percent, and leverage ratio was 9.27 percent.

Net Interest Revenue

Net interest revenue was $218.5 million for the third quarter of 2017, up $13.2 million over the second quarter of 2017.

Net interest margin was 3.01 percent for the third quarter of 2017, an increase of 12 basis points over the second quarter of 2017. Recoveries of foregone interest primarily related to nonaccruing energy loans added 6 basis points to the net interest margin for the third quarter. Net interest margin also increased due to a full quarter's impact on short-term market interest rates from the 25 basis point rate hike by the Federal Reserve in June. Yields on floating-rate earning assets improved, while deposit costs rose modestly. Excluding interest recoveries, the yield on average earning assets was 3.44 percent, an increase of 14 basis points and the loan portfolio yield was 4.20 percent, a 17 basis point increase. The yield on the available for sale securities portfolio increased 6 basis points to 2.17 percent. The yield on interest-bearing cash and cash equivalents increased 25 basis points. Funding costs were 0.75 percent, up 12 basis points. The cost of interest-bearing deposits increased 5 basis points to 0.45 percent as market pricing pressure remained relatively subdued. The cost of other borrowed funds was up 21 basis points to 1.23 percent. The benefit to net interest margin from assets funded by non-interest liabilities increased to 26 basis points from 22 basis points in the second quarter of 2017.

Average earning assets increased $395 million over the third quarter of 2017. Fair value option securities held as an economic hedge of our mortgage servicing rights increased $208 million. Average loan balances grew by $127 million. Available for sale securities increased $44 million, trading securities increased $36 million and restricted equity security balances were up $33 million over the prior quarter. These increases were partially offset by a $42 million decrease in average interest-bearing cash and cash equivalents balances.

Average interest-bearing deposit balances decreased $24 million compared to the second quarter of 2017. The average balance of borrowed funds increased $511 million.

Fees and Commissions Revenue

Fees and commissions revenue totaled $173.5 million for the third quarter of 2017, a decrease of $4.0 million compared to the second quarter of 2017.

Mortgage banking revenue totaled $24.9 million for the third quarter of 2017, a $5.4 million decrease compared to the second quarter of 2017. Revenue from mortgage loan production decreased $5.5 million due to a 54 basis point decrease in gain on sale margin and a $78 million decrease in mortgage loan production, due to market pricing pressure.

Increased transaction card revenue and brokerage and trading revenue was partially offset by lower fiduciary and asset management revenue.

Operating Expense

Total operating expense was $265.9 million for the third quarter of 2017, a $15.0 million increase over the second quarter of 2017, including $1.3 million of expense related to tornado damage sustained on our Tulsa operations center and the impact of the hurricane in the Houston market.

Personnel expense increased $4.2 million primarily due to a $4.7 million increase in incentive compensation expense. Equity compensation expense included charges of $4.0 million from changes in the probability that performance-based awards granted in 2015, 2016 and 2017 will vest and $1.9 million from a $4.93 per share increase in the fair value of BOKF stock. Cash-based incentive compensation expense increased $3.7 million due to continued improvement in performance metrics.

Non-personnel expense increased $10.9 million over the second quarter of 2017. Deposit insurance expense increased $5.3 million. The second quarter included $5.1 million of rebates for years 2013 through 2016. Net losses and operating expenses of repossessed assets increased $3.8 million, primarily due to a $4.7 million write-down of a set of repossessed oil and gas properties.

Loans, Deposits and Capital

Loans

Outstanding loans were $17.2 billion at September 30, 2017, an increase of $23 million over June 30, 2017. Growth in commercial loan balances was partially offset by a decrease in commercial real estate loan balances.

Outstanding commercial loan balances grew by $158 million. Wholesale/retail sector loan balances grew by $114 million. Other commercial and industrial loans increased by $23 million and energy loan balances were up $21 million. Unfunded energy loan commitments were largely unchanged at $2.7 billion. Healthcare sector loan balances increased $18 million. This growth was partially offset by a $27 million decrease in manufacturing service sector loan balances.

Commercial real estate loan balances decreased $170 million compared to June 30, 2017 as a higher than expected number of borrowers refinanced in the long-term permanent markets during the quarter. Loans secured by industrial properties decreased $103 million, primarily in the Texas market partially offset by growth in loans in the Oklahoma market. Loans secured by office buildings decreased $66 million, primarily in the Texas and Colorado markets. Residential land and construction loans decreased $29 million and other commercial real estate loans decreased $22 million. Multifamily residential loans increased $47 million. Growth in the Texas and Oklahoma markets was partially offset by a decrease in the Colorado market.

Deposits

Period-end deposits totaled $21.8 billion at September 30, 2017, a $468 million decrease compared to June 30, 2017. Demand deposit balances decreased $383 million. Wealth management demand deposit balances were elevated at June 30 in anticipation of upcoming debt service payments for corporate trust customers. Interest-bearing transaction account balances decreased $62 million and time deposits decreased $24 million. Wealth Management deposits decreased $363 million and Commercial Banking deposits decreased $218 million. Consumer Banking deposits were largely unchanged compared to the previous quarter. 

Capital

The company's common equity Tier 1 capital ratio was 11.90 percent at September 30, 2017. In addition, the company's Tier 1 capital ratio was 11.90 percent, total capital ratio was 13.47 percent and leverage ratio was 9.30 percent at September 30, 2017. At June 30, 2017, the company's common equity Tier 1 capital ratio was 11.76 percent, Tier 1 capital ratio was 11.76 percent, total capital ratio was 13.36 percent, and leverage ratio was 9.27 percent.

The company's tangible common equity ratio, a non-GAAP measure, was 9.23 percent at September 30, 2017 and 9.24 percent at June 30, 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 $328 million or 1.90 percent of outstanding loans and repossessed assets at September 30, 2017, compared to $365 million or 2.12 percent at June 30, 2017. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $249 million or 1.46 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at September 30, 2017, compared to $276 million or 1.62 percent at June 30, 2017. 

Nonaccruing loans totaled $226 million or 1.31 percent of outstanding loans at September 30, 2017, down from $245 million or 1.43 percent of outstanding loans at June 30, 2017. The decrease in nonaccruing loans was primarily due to a $13 million decrease in energy loans. Nonaccruing wholesale/retail sector loans decreased $8.7 million and nonaccruing service sector loans decreased $6.6 million, partially offset by a $9.0 million increase in nonaccruing other commercial and industrial loans. New nonaccruing loans identified in the third quarter totaled $24 million, offset by $35 million in payments received, $5.8 million in charge-offs and $3.8 million in foreclosures and repossessions. At September 30, 2017, nonaccruing commercial loans totaled $177 million or 1.64 percent of outstanding commercial loans, nonaccruing commercial real estate loans totaled $3.0 million or 0.08 percent of outstanding commercial real estate loans and nonaccruing residential mortgage loans totaled $46 million or 2.34 percent of outstanding residential mortgage loans. 

Approximately $90 million of nonaccruing loans required a specific allowance of $13 million. No specific allowance was necessary for the remaining $136 million of nonaccruing loans based on estimated cash flows or collateral value. At June 30, 2017, $73 million of nonaccruing loans required specific allowances of $9.7 million. No specific allowance was necessary for the remaining $172 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 $285 million at September 30 compared to $327 million at June 30. The decrease largely resulted from energy and service sector potential problem loans, partially offset by an increase in healthcare and other commercial and industrial potential problem loans.

The company had net charge-offs of $3.4 million for the third quarter of 2017, compared to net charge-offs of $1.7 million in the second quarter of 2017. Gross charge-offs totaled $5.8 million for the third quarter, compared to $2.9 million for the previous quarter. Recoveries totaled $2.4 million for the third quarter of 2017 and $1.2 million for the second 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 third quarter of 2017.

The combined allowance for credit losses totaled $253 million or 1.47 percent of outstanding loans and 117 percent of nonaccruing loans at September 30, 2017, excluding residential mortgage loans guaranteed by U.S. government agencies. The allowance for loan losses was $248 million and the accrual for off-balance sheet credit losses was $5.4 million. At June 30, 2017, the combined allowance for credit losses was $256 million or 1.49 percent of outstanding loans and 109 percent of nonaccruing loans, excluding 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. 

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $8.4 billion at September 30, 2017, a $42 million increase compared to June 30, 2017. At September 30, 2017, the available for sale portfolio consisted primarily of $5.3 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $2.9 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. At September 30, 2017, the available for sale securities portfolio had a net unrealized gain of $14 million compared to a $16 million net unrealized gain at June 30, 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 $3.6 million during the third quarter of 2017, including a $639 thousand decrease in the fair value of mortgage servicing rights, a $1.7 million increase in the fair value of securities and derivative contracts held as an economic hedge and $2.5 million of related net interest revenue.

The fair value of mortgage servicing rights decreased by $6.9 million during the second quarter of 2017.  The fair value of securities and interest rate derivative contracts held as an economic hedge of mortgage servicing rights increased by $5.2 million. Related net interest revenue was $2.0 million during the second quarter of 2017.

Conference Call and Webcast

The company will hold a conference call at 9 a.m. Central time on Wednesday, October 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 1-412-317-6671 and referencing conference ID # 13671914.

About BOK Financial Corporation

BOK Financial Corporation 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 (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 September 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)
  Sept. 30, 2017   June 30, 2017   Sept. 30, 2016
ASSETS          
Cash and due from banks $ 547,203     $ 561,587     $ 535,916  
Interest-bearing cash and cash equivalents 1,926,779     2,078,831     2,080,978  
Trading securities 614,117     441,414     546,615  
Investment securities 466,562     490,426     546,457  
Available for sale securities 8,383,199     8,341,041     8,862,283  
Fair value option securities 819,531     445,169     222,409  
Restricted equity securities 347,542     311,033     333,391  
Residential mortgage loans held for sale 275,643     287,259     447,592  
Loans:          
Commercial 10,795,934     10,637,955     10,120,163  
Commercial real estate 3,518,142     3,688,592     3,793,598  
Residential mortgage 1,945,750     1,939,198     1,872,793  
Personal 947,008     917,900     678,232  
Total loans 17,206,834     17,183,645     16,464,786  
Allowance for loan losses (247,703 )   (250,061 )   (245,103 )
Loans, net of allowance 16,959,131     16,933,584     16,219,683  
Premises and equipment, net 320,060     321,038     318,196  
Receivables 314,251     295,042     650,368  
Goodwill 446,697     446,697     382,739  
Intangible assets, net 39,013     40,755     41,977  
Mortgage servicing rights 245,858     245,239     203,621  
Real estate and other repossessed assets, net 32,535     39,436     31,941  
Derivative contracts, net 352,559     280,289     655,078  
Cash surrender value of bank-owned life insurance          314,201     312,774     310,211  
Receivable on unsettled securities sales 230,225     33,177     19,642  
Other assets 370,409     358,741     370,134  
TOTAL ASSETS $   33,005,515     $   32,263,532     $   32,779,231  
           
LIABILITIES AND EQUITY          
Deposits:          
Demand $ 9,185,481     $ 9,568,895     $ 8,681,364  
Interest-bearing transaction 10,025,084     10,087,139     9,824,160  
Savings 465,225     464,318     420,349  
Time 2,172,289     2,196,122     2,169,631  
Total deposits 21,848,079     22,316,474     21,095,504  
Funds purchased 62,356     67,990     109,031  
Repurchase agreements 328,189     396,333     504,573  
Other borrowings 6,241,275     5,232,343     6,533,443  
Subordinated debentures 144,668     144,658     144,631  
Accrued interest, taxes and expense 152,029     133,198     191,276  
Due on unsettled securities purchases 160,781     32,636     677  
Derivative contracts, net 336,327     285,819     573,987  
Other liabilities 217,372     204,536     193,698  
TOTAL LIABILITIES 29,491,076     28,813,987     29,346,820  
Shareholders' equity:          
Capital, surplus and retained earnings 3,482,057     3,414,505     3,302,584  
Accumulated other comprehensive income 6,757     7,964     95,727  
TOTAL SHAREHOLDERS' EQUITY 3,488,814     3,422,469     3,398,311  
Non-controlling interests 25,625     27,076     34,100  
TOTAL EQUITY 3,514,439     3,449,545     3,432,411  
TOTAL LIABILITIES AND EQUITY $ 33,005,515     $ 32,263,532     $ 32,779,231  
                       


 
AVERAGE BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
  Three Months Ended
  Sept. 30, 2017   June 30, 2017   Mar. 31, 2017   Dec. 31, 2016   Sept. 30, 2016
ASSETS                  
Interest-bearing cash and cash equivalents $ 1,965,645     $ 2,007,746     $ 2,087,964     $ 2,032,785     $ 2,047,991  
Trading securities 491,613     456,028     579,549     476,498     366,545  
Investment securities 475,705     499,372     530,936     542,869     552,592  
Available for sale securities 8,428,353     8,384,057     8,567,049     8,766,555     8,862,590  
Fair value option securities 684,571     476,102     416,524     210,733     266,998  
Restricted equity securities 328,677     295,743     312,498     334,114     335,812  
Residential mortgage loans held for sale 256,343     245,401     220,325     345,066     445,930  
Loans:                  
Commercial 10,827,198     10,604,456     10,414,579     10,228,095     10,109,692  
Commercial real estate 3,528,330     3,676,976     3,903,850     3,749,393     3,789,673  
Residential mortgage 1,951,385     1,933,091     1,962,759     1,919,296     1,870,855  
Personal 949,750     915,010     854,637     826,804     677,530  
Total loans 17,256,663     17,129,533     17,135,825     16,723,588     16,447,750  
Allowance for loan losses (250,590 )   (251,632 )   (249,379 )   (246,977 )   (247,901 )
Total loans, net 17,006,073     16,877,901     16,886,446     16,476,611     16,199,849  
Total earning assets 29,636,980     29,242,350     29,601,291     29,185,231     29,078,307  
Cash and due from banks 546,653     530,352     547,104     578,694     511,534  
Derivative contracts, net 238,583     248,168     401,886     681,455     766,671  
Cash surrender value of bank-owned life insurance          313,079     311,310     309,223     309,532     308,670  
Receivable on unsettled securities sales 76,622     79,248     62,641     33,813     259,906  
Other assets 2,196,253     1,957,143     2,032,844     2,172,351     1,721,385  
TOTAL ASSETS $   33,008,170     $   32,368,571     $   32,954,989     $   32,961,076     $   32,646,473  
                   
LIABILITIES AND EQUITY                  
Deposits:                  
Demand $ 9,389,849     $ 9,338,683     $ 9,101,763     $ 9,124,595     $ 8,497,037  
Interest-bearing transaction 10,088,522     10,087,640     10,567,475     9,980,132     9,650,618  
Savings 464,130     461,586     441,254     421,654     420,009  
Time 2,176,820     2,204,422     2,258,930     2,177,035     2,197,350  
Total deposits 22,119,321     22,092,331     22,369,422     21,703,416     20,765,014  
Funds purchased 49,774     63,263     55,508     62,004     68,280  
Repurchase agreements 361,512     427,353     523,561     560,891     522,822  
Other borrowings 6,162,641     5,572,031     5,737,955     6,072,150     6,342,369  
Subordinated debentures 144,663     144,654     144,644     144,635     255,890  
Derivative contracts, net 221,371     178,695     405,444     682,808     747,187  
Due on unsettled securities purchases 145,155     157,438     91,529     77,575     200,574  
Other liabilities 319,092     323,373     299,534     321,404     352,671  
TOTAL LIABILITIES 29,523,529     28,959,138     29,627,597     29,624,883     29,254,807  
Total equity 3,484,641     3,409,433     3,327,392     3,336,193     3,391,666  
TOTAL LIABILITIES AND EQUITY $ 33,008,170     $ 32,368,571     $ 32,954,989     $ 32,961,076     $ 32,646,473  
                                       


 
STATEMENTS OF EARNINGS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except per share data)
  Three Months Ended   Nine Months Ended
  September 30,   September 30,
  2017   2016   2017   2016
               
Interest revenue $ 255,413     $ 209,317     $ 716,984     $ 613,380  
Interest expense 36,961     21,471     92,146     60,350  
Net interest revenue 218,452     187,846     624,838     553,030  
Provision for credit losses     10,000         65,000  
Net interest revenue after provision for credit losses 218,452     177,846     624,838     488,030  
Other operating revenue:              
Brokerage and trading revenue 33,169     38,006     98,556     109,877  
Transaction card revenue 37,826     33,933     105,249     101,237  
Fiduciary and asset management revenue 40,687     34,073     121,126     100,942  
Deposit service charges and fees 23,209     23,668     69,593     68,828  
Mortgage banking revenue 24,890     38,516     80,357     105,500  
Other revenue 13,670     13,080     40,406     38,336  
Total fees and commissions 173,451     181,276     515,287     524,720  
Other gains (losses), net (1,283 )   2,442     8,452     5,309  
Gain on derivatives, net 1,033     2,226     3,824     20,130  
Gain (loss) on fair value option securities, net 661     (3,355 )   1,505     10,367  
Change in fair value of mortgage servicing rights (639 )   2,327     (5,726 )   (41,944 )
Gain on available for sale securities, net 2,487     2,394     4,916     11,684  
Total other operating revenue 175,710     187,310     528,258     530,266  
Other operating expense:              
Personnel 147,910     139,212     428,079     411,987  
Business promotion 7,105     6,839     21,560     19,238  
Professional fees and services 11,887     14,038     35,723     39,955  
Net occupancy and equipment 21,325     20,111     64,074     58,554  
Insurance 6,005     9,390     13,098     23,784  
Data processing and communications 37,327     33,331     108,559     98,150  
Printing, postage and supplies 3,917     3,790     11,908     11,586  
Net losses (gains) and operating expenses of repossessed assets 6,071     (926 )   9,347     1,732  
Amortization of intangible assets 1,744     1,521     5,349     5,304  
Mortgage banking costs 13,450     15,963     38,525     44,039  
Other expense 9,193     14,819     25,308     37,714  
Total other operating expense 265,934     258,088     761,530     752,043  
               
Net income before taxes 128,228     107,068     391,566     266,253  
Federal and state income taxes 42,438     31,956     128,246     83,881  
               
Net income 85,790     75,112     263,320     182,372  
Net income (loss) attributable to non-controlling interests 141     835     1,168     (270 )
Net income attributable to BOK Financial Corporation shareholders          $ 85,649     $ 74,277     $ 262,152     $ 182,642  
               
Average shares outstanding:              
Basic   64,742,822       65,085,392       64,729,391       65,208,774  
Diluted 64,805,172     65,157,841     64,793,893     65,263,566  
               
Net income per share:              
Basic $ 1.31     $ 1.13     $ 4.01     $ 2.77  
Diluted $ 1.31     $ 1.13     $ 4.00     $ 2.76  
                               


 
FINANCIAL HIGHLIGHTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and share data)
  Three Months Ended
  Sept. 30, 2017   June 30, 2017   Mar. 31, 2017   Dec. 31, 2016   Sept. 30, 2016
Capital:                  
Period-end shareholders' equity $ 3,488,814     $ 3,422,469     $ 3,341,744     $ 3,274,854     $ 3,398,311  
Risk weighted assets $ 25,409,728     $ 25,130,802     $ 24,901,019     $ 25,274,848     $ 24,358,385  
Risk-based capital ratios:                  
Common equity tier 1 11.90 %   11.76 %   11.59 %   11.21 %   11.99 %
Tier 1 11.90 %   11.76 %   11.59 %   11.21 %   11.99 %
Total capital 13.47 %   13.36 %   13.25 %   12.81 %   13.65 %
Leverage ratio 9.30 %   9.27 %   8.89 %   8.72 %   9.06 %
Tangible common equity ratio1 9.23 %   9.24 %   8.88 %   8.61 %   9.19 %
                   
Common stock:                  
Book value per share $ 53.30     $ 52.32     $ 51.09     $ 50.12     $ 51.56  
Tangible book value per share 45.88     44.87     43.63     42.53     45.12  
Market value per share:                  
High $ 90.69     $ 88.31     $ 85.25     $ 85.00     $ 70.05  
Low $ 77.10     $ 74.09     $ 73.44     $ 67.11     $ 56.36  
Cash dividends paid $ 28,655     $ 28,652     $ 28,646     $ 28,860     $ 28,181  
Dividend payout ratio 33.46 %   32.50 %   32.42 %   57.69 %   37.94 %
Shares outstanding, net 65,456,786     65,416,403     65,408,019     65,337,432     65,910,454  
Stock buy-back program:                  
Shares repurchased             700,000      
Amount $     $     $     $ 49,021     $  
Average price per share $     $     $     $ 70.03     $  
                   
Performance ratios (quarter annualized):
Return on average assets 1.03 %   1.09 %   1.09 %   0.60 %   0.91 %
Return on average equity 9.83 %   10.46 %   10.86 %   6.03 %   8.80 %
Net interest margin 3.01 %   2.89 %   2.81 %   2.69 %   2.64 %
Efficiency ratio 66.77 %   64.61 %   65.77 %   72.93 %   68.88 %
                   
Reconciliation of non-GAAP measures:
1       Tangible common equity ratio:                  
Total shareholders' equity $ 3,488,814     $ 3,422,469     $ 3,341,744     $ 3,274,854     $ 3,398,311  
Less: Goodwill and intangible assets, net 485,710     487,452     488,294     495,830     424,716  
Tangible common equity $ 3,003,104     $ 2,935,017     $ 2,853,450     $ 2,779,024     $ 2,973,595  
                   
Total assets $ 33,005,515     $ 32,263,532     $ 32,628,932     $ 32,772,281     $ 32,779,231  
Less: Goodwill and intangible assets, net 485,710     487,452     488,294     495,830     424,716  
Tangible assets $ 32,519,805     $ 31,776,080     $ 32,140,638     $ 32,276,451     $ 32,354,515  
                   
Tangible common equity ratio 9.23 %   9.24 %   8.88 %   8.61 %   9.19 %
                   
Other data:                  
Fiduciary assets $ 45,177,185     $ 45,089,153     $ 44,992,920     $ 42,378,053     $ 41,810,943  
Tax equivalent interest $ 4,314     $ 4,330     $ 4,428     $ 4,389     $ 4,455  
Net unrealized gain (loss) on available for sale securities $ 14,061     $ 16,041     $ (5,537 )   $ (14,899 )   $ 159,533  
                   
Mortgage banking:                  
Mortgage production revenue $ 8,329     $ 13,840     $ 8,543     $ 11,937     $ 21,958  
                   
Mortgage loans funded for sale $ 832,796     $ 902,978     $ 711,019     $ 1,189,975     $ 1,864,583  
Add: current period-end outstanding commitments 334,337     362,088     381,732     318,359     630,804  
Less: prior period end outstanding commitments 362,088     381,732     318,359     630,804     965,631  
Total mortgage production volume $ 805,045     $ 883,334     $ 774,392     $ 877,530     $ 1,529,756  
                   
Mortgage loan refinances to mortgage loans funded for sale 38 %   33 %   44 %   63 %   51 %
Gain on sale margin 1.03 %   1.57 %   1.10 %   1.36 %   1.44 %
                   
Mortgage servicing revenue $ 16,561     $ 16,436     $ 16,648     $ 16,477     $ 16,558  
Average outstanding principal balance of mortgage loans service for others 22,079,177     22,055,127     22,006,295     21,924,552     21,514,962  
Average mortgage servicing revenue rates 0.30 %   0.30 %   0.31 %   0.30 %   0.31 %
                   
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net $ 1,025     $ 3,241     $ (450 )   $ (35,868 )   $ 2,268  
Gain (loss) on fair value option securities, net 661     1,984     (1,140 )   (20,922 )   (3,355 )
Gain (loss) on economic hedge of mortgage servicing rights 1,686     5,225     (1,590 )   (56,790 )   (1,087 )
Gain (loss) on changes in fair value of mortgage servicing rights (639 )   (6,943 )   1,856     39,751     2,327  
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue 1,047     (1,718 )   266     (17,039 )   1,240  
Net interest revenue on fair value option securities2 2,543     1,965     1,271     114     861  
Total economic benefit (cost) of changes in the fair value of mortgage servicing rights, net of economic hedges $ 3,590     $ 247     $ 1,537     $ (16,925 )   $ 2,101  

2    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
  Sept. 30, 2017   June 30, 2017   Mar. 31, 2017   Dec. 31, 2016   Sept. 30, 2016
                   
Interest revenue $ 255,413     $ 235,181     $ 226,390     $ 215,737     $ 209,317  
Interest expense 36,961     29,977     25,208     21,539     21,471  
Net interest revenue 218,452     205,204     201,182     194,198     187,846  
Provision for credit losses                 10,000  
Net interest revenue after provision for credit losses 218,452     205,204     201,182     194,198     177,846  
Other operating revenue:                  
Brokerage and trading revenue 33,169     31,764     33,623     28,500     38,006  
Transaction card revenue 37,826     35,296     32,127     34,521     33,933  
Fiduciary and asset management revenue 40,687     41,808     38,631     34,535     34,073  
Deposit service charges and fees 23,209     23,354     23,030     23,365     23,668  
Mortgage banking revenue 24,890     30,276     25,191     28,414     38,516  
Other revenue 13,670     14,984     11,752     12,693     13,080  
Total fees and commissions 173,451     177,482     164,354     162,028     181,276  
Other gains (losses), net (1,283 )   6,108     3,627     (1,279 )   2,442  
Gain (loss) on derivatives, net 1,033     3,241     (450 )   (35,815 )   2,226  
Gain (loss) on fair value option securities, net 661     1,984     (1,140 )   (20,922 )   (3,355 )
Change in fair value of mortgage servicing rights (639 )   (6,943 )   1,856     39,751     2,327  
Gain (loss) on available for sale securities, net 2,487     380     2,049     (9 )   2,394  
Total other operating revenue 175,710     182,252     170,296     143,754     187,310  
Other operating expense:                  
Personnel 147,910     143,744     136,425     141,132     139,212  
Business promotion 7,105     7,738     6,717     7,344     6,839  
Charitable contributions to BOKF Foundation             2,000      
Professional fees and services 11,887     12,419     11,417     16,828     14,038  
Net occupancy and equipment 21,325     21,125     21,624     21,470     20,111  
Insurance 6,005     689     6,404     8,705     9,390  
Data processing and communications 37,327     36,330     34,902     33,691     33,331  
Printing, postage and supplies 3,917     4,140     3,851     3,998     3,790  
Net losses (gains) and operating expenses of repossessed assets 6,071     2,267     1,009     1,627     (926 )
Amortization of intangible assets 1,744     1,803     1,802     1,558     1,521  
Mortgage banking costs 13,450     12,072     13,003     17,348     15,963  
Other expense 9,193     8,558     7,557     9,846     14,819  
Total other operating expense 265,934     250,885     244,711     265,547     258,088  
Net income before taxes 128,228     136,571     126,767     72,405     107,068  
Federal and state income taxes 42,438     47,705     38,103     22,496     31,956  
Net income 85,790     88,866     88,664     49,909     75,112  
Net income (loss) attributable to non-controlling interests 141     719     308     (117 )   835  
Net income attributable to BOK Financial Corporation shareholders  $ 85,649     $ 88,147     $ 88,356     $ 50,026     $ 74,277  
                   
Average shares outstanding:                  
Basic 64,742,822     64,729,752     64,715,964     64,719,018     65,085,392  
Diluted 64,805,172     64,793,134     64,783,737     64,787,728     65,157,841  
Net income per share:                  
Basic $ 1.31     $ 1.35     $ 1.35     $ 0.76     $ 1.13  
Diluted $ 1.31     $ 1.35     $ 1.35     $ 0.76     $ 1.13  
                                       


 
LOANS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
    Sept. 30, 2017   June 30, 2017   Mar. 31, 2017   Dec. 31, 2016   Sept. 30, 2016
Commercial:                    
Energy   $ 2,867,981     $ 2,847,240     $ 2,537,112     $ 2,497,868     $ 2,520,804  
Services   2,967,513     2,958,827     3,013,375     3,108,990     2,936,599  
Healthcare   2,239,451     2,221,518     2,265,604     2,201,916     2,085,046  
Wholesale/retail   1,658,098     1,543,695     1,506,243     1,576,818     1,602,030  
Manufacturing   519,446     546,137     543,430     514,975     499,486  
Other commercial and industrial   543,445     520,538     461,346     490,257     476,198  
Total commercial   10,795,934     10,637,955     10,327,110     10,390,824     10,120,163  
                     
Commercial real estate:                    
Retail   725,865     722,805     745,046     761,888     801,377  
Multifamily   999,009     952,380     922,991     903,272     873,773  
Office   797,089     862,973     860,889     798,888     752,705  
Industrial   591,080     693,635     871,463     871,749     838,021  
Residential construction and land development   112,102     141,592     135,994     135,533     159,946  
Other commercial real estate   292,997     315,207     334,680     337,716     367,776  
Total commercial real estate   3,518,142     3,688,592     3,871,063     3,809,046     3,793,598  
                     
Residential mortgage:                    
Permanent mortgage   1,013,965     989,040     977,743     1,006,820     969,558  
Permanent mortgages guaranteed by U.S. government agencies    187,370     191,729     204,181     199,387     190,309  
Home equity   744,415     758,429     764,350     743,625     712,926  
Total residential mortgage   1,945,750     1,939,198     1,946,274     1,949,832     1,872,793  
                     
Personal   947,008     917,900     847,459     839,958     678,232  
                     
Total   $  17,206,834     $  17,183,645     $  16,991,906     $  16,989,660     $  16,464,786  
                                         


 
LOANS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
  Sept. 30, 2017   June 30, 2017   Mar. 31, 2017   Dec. 31, 2016   Sept. 30, 2016
                   
Bank of Oklahoma:                  
Commercial $ 3,408,973     $ 3,369,967     $ 3,189,183     $ 3,370,259     $ 3,545,924  
Commercial real estate 712,915     667,932     691,332     684,381     795,806  
Residential mortgage 1,405,900     1,398,021     1,404,054     1,407,197     1,401,166  
Personal 322,320     318,016     310,708     303,823     271,420  
Total Bank of Oklahoma 5,850,108     5,753,936     5,595,277     5,765,660     6,014,316  
                   
Bank of Texas:                  
Commercial 4,434,595     4,339,634     4,148,316     4,022,455     3,903,218  
Commercial real estate 1,236,702     1,360,164     1,452,988     1,415,011     1,400,709  
Residential mortgage 229,993     232,074     231,647     233,981     229,345  
Personal 375,173     354,222     312,092     306,748     278,167  
Total Bank of Texas 6,276,463     6,286,094     6,145,043     5,978,195     5,811,439  
                   
Bank of Albuquerque:                  
Commercial 367,747     369,370     407,403     399,256     398,147  
Commercial real estate 319,208     324,405     307,927     284,603     299,785  
Residential mortgage 101,983     103,849     106,432     108,058     110,478  
Personal 12,953     12,439     11,305     11,483     11,333  
Total Bank of Albuquerque 801,891     810,063     833,067     803,400     819,743  
                   
Bank of Arkansas:                  
Commercial 91,051     85,020     88,010     86,577     83,544  
Commercial real estate 80,917     73,943     74,469     73,616     72,649  
Residential mortgage 6,318     6,395     6,829     7,015     6,936  
Personal 10,388     11,993     6,279     6,524     6,757  
Total Bank of Arkansas 188,674     177,351     175,587     173,732     169,886  
                   
Colorado State Bank & Trust:                  
Commercial 1,124,200     1,065,780     998,216     1,018,208     1,013,314  
Commercial real estate 186,427     255,379     266,218     265,264     254,078  
Residential mortgage 63,734     63,346     62,313     59,631     59,838  
Personal 60,513     56,187     49,523     50,372     42,901  
Total Colorado State Bank & Trust          1,434,874     1,440,692     1,376,270     1,393,475     1,370,131  
                   
Bank of Arizona:                  
Commercial 634,809     617,759     643,222     686,253     680,447  
Commercial real estate 706,188     705,858     737,088     747,409     726,542  
Residential mortgage 40,730     37,034     36,737     36,265     39,206  
Personal 55,050     55,528     51,386     52,553     31,205  
Total Bank of Arizona 1,436,777     1,416,179     1,468,433     1,522,480     1,477,400  
                   
Mobank (Kansas City):                  
Commercial 734,559     790,425     852,760     807,816     495,569  
Commercial real estate 275,785     300,911     341,041     338,762     244,029  
Residential mortgage 97,092     98,479     98,262     97,685     25,824  
Personal 110,611     109,515     106,166     108,455     36,449  
Total Mobank (Kansas City) 1,218,047     1,299,330     1,398,229     1,352,718     801,871  
                   
TOTAL BOK FINANCIAL $   17,206,834     $   17,183,645     $   16,991,906     $   16,989,660     $   16,464,786  

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)
  Sept. 30, 2017   June 30, 2017   Mar. 31, 2017   Dec. 31, 2016   Sept. 30, 2016
Bank of Oklahoma:                  
  Demand $ 4,061,612     $ 4,353,421     $ 4,320,666     $ 3,993,170     $ 4,158,273  
  Interest-bearing:                  
  Transaction 5,909,259     5,998,787     6,114,288     6,345,536     5,701,983  
  Savings 265,023     263,664     265,014     241,696     242,959  
  Time 1,131,547     1,170,014     1,189,144     1,118,355     1,091,464  
  Total interest-bearing 7,305,829     7,432,465     7,568,446     7,705,587     7,036,406  
Total Bank of Oklahoma 11,367,441     11,785,886     11,889,112     11,698,757     11,194,679  
                   
Bank of Texas:                  
  Demand 3,094,184     3,121,890     3,091,258     3,137,009     2,734,981  
  Interest-bearing:                  
  Transaction 2,272,987     2,272,185     2,317,576     2,388,812     2,240,040  
  Savings 93,400     91,491     89,640     83,101     84,642  
  Time 521,072     502,128     511,037     535,642     528,380  
  Total interest-bearing 2,887,459     2,865,804     2,918,253     3,007,555     2,853,062  
Total Bank of Texas 5,981,643     5,987,694     6,009,511     6,144,564     5,588,043  
                   
Bank of Albuquerque:                  
  Demand 659,793     612,117     593,117     627,979     584,681  
  Interest-bearing:                  
  Transaction 551,884     558,523     623,677     590,571     555,326  
  Savings 53,532     54,136     53,683     49,963     54,480  
  Time 224,773     229,616     233,506     238,408     244,706  
  Total interest-bearing 830,189     842,275     910,866     878,942     854,512  
Total Bank of Albuquerque 1,489,982     1,454,392     1,503,983     1,506,921     1,439,193  
                   
Bank of Arkansas:                  
  Demand 31,442     40,511     42,622     26,389     32,203  
  Interest-bearing:                  
  Transaction 126,746     129,848     106,804     105,232     313,480  
  Savings 1,876     2,135     2,304     2,192     2,051  
  Time 14,434     14,876     15,067     16,696     17,534  
  Total interest-bearing 143,056     146,859     124,175     124,120     333,065  
Total Bank of Arkansas 174,498     187,370     166,797     150,509     365,268  
                   
Colorado State Bank & Trust:                  
  Demand 540,300     577,617     601,778     576,000     517,063  
  Interest-bearing:                  
  Transaction 628,807     626,343     610,510     616,679     623,055  
  Savings 34,776     35,651     37,801     32,866     31,613  
  Time 231,927     228,458     234,740     242,782     247,667  
  Total interest-bearing 895,510     890,452     883,051     892,327     902,335  
Total Colorado State Bank & Trust          1,435,810     1,468,069     1,484,829     1,468,327     1,419,398  
                   
                   
Bank of Arizona:                  
  Demand 335,740     366,866     342,854     366,755     418,718  
  Interest-bearing:                  
  Transaction 174,010     154,457     180,254     305,099     303,750  
  Savings 4,105     3,638     3,858     2,973     2,959  
  Time 20,831     19,911     26,112     27,765     27,935  
  Total interest-bearing 198,946     178,006     210,224     335,837     334,644  
Total Bank of Arizona 534,686     544,872     553,078     702,592     753,362  
                   
Mobank (Kansas City):                  
  Demand 462,410     496,473     514,278     508,418     235,445  
  Interest-bearing:                  
  Transaction 361,391     346,996     406,105     513,176     86,526  
  Savings 12,513     13,603     13,424     12,679     1,645  
  Time 27,705     31,119     34,242     42,152     11,945  
  Total interest-bearing 401,609     391,718     453,771     568,007     100,116  
Total Mobank (Kansas City) 864,019     888,191     968,049     1,076,425     335,561  
                   
TOTAL BOK FINANCIAL $   21,848,079     $   22,316,474     $   22,575,359     $   22,748,095     $   21,095,504  
                                       


 
NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
  Three Months Ended
   Sept. 30, 2017     June 30, 2017     Mar. 31, 2017     Dec. 31, 2016     Sept. 30, 2016 
                   
TAX-EQUIVALENT ASSETS YIELDS                  
Interest-bearing cash and cash equivalents   1.29 %     1.04 %     0.82 %     0.55 %     0.51 %
Trading securities 3.47 %   3.23 %   3.87 %   3.91 %   2.71 %
Investment securities:                  
  Taxable 5.31 %   5.34 %   5.44 %   5.39 %   5.34 %
  Tax-exempt 2.60 %   2.51 %   2.45 %   2.33 %   2.26 %
Total investment securities 3.86 %   3.76 %   3.70 %   3.60 %   3.51 %
Available for sale securities:                  
  Taxable 2.16 %   2.09 %   2.02 %   1.98 %   1.99 %
  Tax-exempt 5.27 %   6.09 %   5.37 %   5.27 %   5.47 %
Total available for sale securities 2.17 %   2.11 %   2.05 %   2.00 %   2.01 %
Fair value option securities 2.97 %   2.92 %   2.27 %   0.99 %   1.70 %
Restricted equity securities 5.87 %   5.95 %   5.52 %   5.45 %   5.37 %
Residential mortgage loans held for sale 3.36 %   3.92 %   3.35 %   3.31 %   3.28 %
Loans 4.31 %   4.03 %   3.88 %   3.67 %   3.63 %
Allowance for loan losses                  
Loans, net of allowance 4.38 %   4.09 %   3.94 %   3.72 %   3.69 %
Total tax-equivalent yield on earning assets 3.50 %   3.30 %   3.15 %   2.98 %   2.93 %
                   
COST OF INTEREST-BEARING LIABILITIES                
Interest-bearing deposits:                  
  Interest-bearing transaction 0.32 %   0.26 %   0.20 %   0.16 %   0.14 %
  Savings 0.08 %   0.08 %   0.08 %   0.09 %   0.09 %
  Time 1.16 %   1.11 %   1.09 %   1.12 %   1.14 %
Total interest-bearing deposits 0.45 %   0.40 %   0.35 %   0.32 %   0.32 %
Funds purchased 0.92 %   0.61 %   0.47 %   0.28 %   0.19 %
Repurchase agreements 0.15 %   0.06 %   0.02 %   0.02 %   0.04 %
Other borrowings 1.29 %   1.09 %   0.83 %   0.61 %   0.57 %
Subordinated debt 5.68 %   5.55 %   5.68 %   5.51 %   3.84 %
Total cost of interest-bearing liabilities 0.75 %   0.63 %   0.52 %   0.44 %   0.44 %
Tax-equivalent net interest revenue spread 2.75 %   2.67 %   2.63 %   2.54 %   2.49 %
Effect of noninterest-bearing funding sources and other          0.26 %   0.22 %   0.18 %   0.15 %   0.15 %
Tax-equivalent net interest margin 3.01 %   2.89 %   2.81 %   2.69 %   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 -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratios)
  Three Months Ended
  Sept. 30, 2017   June 30, 2017   Mar. 31, 2017   Dec. 31, 2016   Sept. 30, 2016
Nonperforming assets:                  
Nonaccruing loans:                  
Commercial $ 176,900     $ 197,157     $ 156,825     $ 178,953     $ 176,464  
Commercial real estate 2,975     3,775     4,475     5,521     7,350  
Residential mortgage 45,506     44,235     46,081     46,220     52,452  
Personal 255     272     235     290     686  
Total nonaccruing loans 225,636     245,439     207,616     230,984     236,952  
Accruing renegotiated loans guaranteed by U.S. government agencies 69,440     80,624     83,577     81,370     80,306  
Real estate and other repossessed assets 32,535     39,436     42,726     44,287     31,941  
Total nonperforming assets $ 327,611     $ 365,499     $ 333,919     $ 356,641     $ 349,199  
Total nonperforming assets excluding those guaranteed by U.S. government agencies        $ 249,280     $ 275,823     $ 240,234     $ 263,425     $ 253,461  
                   
Nonaccruing loans by loan class:                  
Commercial:                  
Energy $ 110,683     $ 123,992     $ 110,425     $ 132,499     $ 142,966  
Services 1,174     7,754     7,713     8,173     8,477  
Wholesale / retail 1,893     10,620     11,090     11,407     2,453  
Manufacturing 9,059     9,656     5,907     4,931     274  
Healthcare 24,446     24,505     909     825     855  
Other commercial and industrial 29,645     20,630     20,781     21,118     21,439  
Total commercial 176,900     197,157     156,825     178,953     176,464  
Commercial real estate:                  
Residential construction and land development 1,924     2,051     2,616     3,433     3,739  
Retail 289     301     314     326     1,249  
Office 275     396     413     426     882  
Multifamily     10     24     38     51  
Industrial         76     76     76  
Other commercial real estate 487     1,017     1,032     1,222     1,353  
Total commercial real estate 2,975     3,775     4,475     5,521     7,350  
Residential mortgage:                  
Permanent mortgage 24,623     23,415     24,188     22,855     25,956  
Permanent mortgage guaranteed by U.S. government agencies 8,891     9,052     10,108     11,846     15,432  
Home equity 11,992     11,768     11,785     11,519     11,064  
Total residential mortgage 45,506     44,235     46,081     46,220     52,452  
Personal 255     272     235     290     686  
Total nonaccruing loans $ 225,636     $ 245,439     $ 207,616     $ 230,984     $ 236,952  
                   
Performing loans 90 days past due1 $ 253     $ 1,414     $ 95     $ 5     $ 3,839  
                   
Gross charge-offs $ (5,825 )   $ (2,872 )   $ (2,153 )   $ (1,651 )   $ (8,101 )
Recoveries 2,437     1,214     2,900     2,813     2,038  
Net recoveries (charge-offs) $ (3,388 )   $ (1,658 )   $ 747     $ 1,162     $ (6,063 )
                   
Provision for credit losses $     $     $     $     $ 10,000  
                   
Allowance for loan losses to period end loans 1.44 %   1.46 %   1.46 %   1.45 %   1.49 %
Combined allowance for credit losses to period end loans 1.47 %   1.49 %   1.52 %   1.52 %   1.56 %
Nonperforming assets to period end loans and repossessed assets 1.90 %   2.12 %   1.96 %   2.09 %   2.12 %
Net charge-offs (annualized) to average loans 0.08 %   0.04 %   (0.02 )%   (0.03 )%   0.15 %
Allowance for loan losses to nonaccruing loans1 114.28 %   105.78 %   125.92 %   112.33 %   110.65 %
Combined allowance for credit losses to nonaccruing loans1 116.78 %   108.51 %   130.70 %   117.46 %   115.67 %

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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