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BOK Financial Reports 2017 Fourth Quarter and Full Year Results

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TULSA, Okla., Jan. 24, 2018 (GLOBE NEWSWIRE) -- BOK Financial Corporation (NASDAQ:BOKF) reported net income of $334.6 million or $5.11 per diluted share for the year ended December 31, 2017. Net income for the year ended December 31, 2016 was $232.7 million or $3.53 per diluted share.

Net income for fourth quarter of 2017 totaled $72.5 million or $1.11 per diluted share compared to $85.6 million or $1.31 per diluted share for the third quarter of 2017 and $50.0 million or $0.76 per diluted share for the fourth quarter of 2016.

The Tax Cuts and Jobs Act ("the Act") signed into law on December 22, 2017 resulted in an $11.7 million or $0.18 per share reduction in net income for the fourth quarter. A decrease in the federal corporate tax rate from 35% to 21% required us to revalue deferred tax assets and liabilities. Provisions of the Act also limit the deductibility of certain other expenses.

Steven G. Bradshaw, president and chief executive officer, stated, "The fourth quarter wrapped up a very strong year for BOK Financial, in which we delivered our strongest earnings performance in the past five years. While we benefited from a healthy interest rate environment, the key to earnings leverage was maintaining expense discipline throughout the year. In addition, the benign credit environment combined with our strong underwriting minimized credit costs during the year. Finally, our wealth management business delivered record financial results in 2017 and surpassed $80 billion of assets under management and administration for the first time in company history, leading our diverse set of fee based businesses."

Bradshaw continued, "Now that we have clarity on tax reform and healthcare, we believe the stage is set for stronger loan growth in 2018. In the fourth quarter our healthcare business grew at its strongest pace in over a year, and we are already seeing an increase in client loan demand in our commercial and industrial business. In addition, energy banking continues to benefit from the company's long-term commitment to our energy borrowers, and our private banking division remains among our fastest-growing lending segments."

"The write-down of our deferred tax asset was necessitated by expected lower future tax rates and negatively impacted fourth quarter earnings. However, we believe the passage of tax reform will be beneficial to economic growth across our footprint, drive increased loan demand in many of our businesses, and provide a material benefit to future profitability," Bradshaw concluded.

Fourth Quarter 2017 Highlights

  • Net interest revenue totaled $216.9 million for the fourth quarter of 2017, compared to $218.5 million for the third quarter of 2017. Net interest margin was 2.97 percent, compared to 3.01 percent in the third quarter of 2017. Recoveries of foregone interest on nonaccruing loans added $4.7 million and 6 basis points to net interest margin in the third quarter. Average earning assets increased $122 million over the prior quarter.

  • Fees and commissions revenue totaled $168.2 million for the fourth quarter of 2017, compared to $173.5 million for the third quarter of 2017. Transaction card revenue decreased $3.3 million and other revenue decreased $1.9 million. Fiduciary and asset management revenue grew $1.1 million.

  • Operating expense was $264.0 million for the fourth quarter, a $1.9 million decrease compared to the prior quarter. Personnel costs decreased $2.6 million, partially offset by a $634 thousand increase in non-personnel expense.

  • The Company recorded a $7.0 million negative provision for credit losses in the fourth quarter, due to continued improvement in credit metric trends. No provision for credit losses was recorded in the third quarter of 2017. The company had net charge-offs of $11.7 million or 27 basis points of average loans on an annualized basis in the fourth quarter of 2017, compared to net charge-offs of $3.4 million or 8 basis points of average loans on annualized basis in the third quarter.  For the full year, net charge-offs were $16.0 million or 9 basis points of average loans in 2017 and $34.8 million or 21 basis points of average loans in 2016.

  • The combined allowance for credit losses totaled $234 million or 1.37 percent of outstanding loans at December 31, 2017, compared to $253 million or 1.47 percent of outstanding loans at September 30, 2017.

  • Nonperforming assets that are not guaranteed by U.S. government agencies totaled $207 million or 1.22 percent of outstanding loans and repossessed assets at December 31, 2017 compared to $249 million or 1.46 percent of outstanding loans and repossessed assets at September 30, 2017. The decrease in nonperforming assets was primarily due to nonaccruing energy, other commercial and industrial and healthcare sector loans.

  • Average loan balances were largely unchanged compared to the previous quarter. Growth in residential mortgage and personal loans was offset by decreased commercial and commercial real estate loan balances. Period-end outstanding loan balances were $17.2 billion at December 31, 2017, a $53 million decrease compared to September 30, 2017.

  • Average deposits were largely unchanged compared to the previous quarter. Growth in interest-bearing transaction and demand deposit account balances was partially offset by a decrease in time deposits. Period end deposits increased $213 million over September 30, 2017 to $22.1 billion at December 31, 2017.

  • The common equity Tier 1 capital ratio was 11.95 percent at December 31, 2017. In addition, the Company's Tier 1 capital ratio was 11.95 percent, total capital ratio was 13.43 percent and leverage ratio was 9.31 percent. At September 30, 2017, the common equity Tier 1 capital ratio was 11.90 percent, the Tier 1 capital ratio was 11.90 percent, total capital ratio was 13.47 percent and leverage ratio was 9.30 percent.

  • The company repurchased 80,000 common shares at an average price of $92.54 per share during the fourth quarter of 2017. No shares were repurchased during the third quarter of 2017.

Tax Cuts and Jobs Act

Fourth quarter and full year 2017 earnings included an $11.7 million or $0.18 per diluted share charge as a result of the Tax Cuts and Jobs Act which was signed into law on December 22, 2017. The write-down of net deferred tax assets from a federal and state statutory tax rate of 38.9 percent to 25.5 percent totaled $9.5 million, including $6.4 million of deferred tax assets related to unrealized losses on available for sale securities. In addition, the charge included $2.2 million to write-off deferred tax assets related to the compensation of certain executive officers that will no longer be deductible.

We currently expect that the federal and state effective tax rate for 2018 will be between 22 percent and 23 percent, compared to 33.8 percent for 2017, excluding the tax effects of equity compensation arrangements and similar discrete items. 

Net Interest Revenue

Net interest revenue was $216.9 million for the fourth quarter of 2017, a decrease of $1.6 million compared to the third quarter of 2017.

Net interest margin was 2.97 percent for the fourth quarter of 2017, compared to 3.01 percent for the third quarter of 2017. Recoveries of foregone interest primarily related to nonaccruing energy loans added $4.7 million to net interest revenue and 6 basis points to net interest margin for the third quarter. Excluding the impact of interest recoveries in the third quarter, the yield on average earning assets was 3.49 percent, a 5 basis point increase over the prior quarter and the yield on the loan portfolio increased 9 basis points to 4.29 percent. The yield on the available for sale securities portfolio increased 4 basis points to 2.21 percent. Funding costs were 0.79 percent, up 4 basis points. The cost of interest-bearing deposits increased 3 basis points to 0.48 percent as market pricing pressure remained relatively subdued. The cost of other borrowed funds was up 5 basis points to 1.28 percent.

Average earning assets increased $122 million during the fourth quarter of 2017. Fair value option securities held as an economic hedge of our mortgage servicing rights increased $108 million. Average trading securities balances increased $69 million. This growth was partially offset by a $76 million decrease in average loan balances primarily due to lower commercial and commercial real estate balances, partially offset by growth in residential mortgage and personal loans. Average interest-bearing deposits increased $14 million over the third quarter of 2017. The average balance of borrowed funds increased $124 million.

Fees and Commissions Revenue

Fees and commissions revenue totaled $168.2 million for the fourth quarter of 2017, a $5.3 million decrease compared to the third quarter of 2017.

Fiduciary and asset management revenue grew $1.1 million or 3 percent over the third quarter of 2017.  Total assets under management or in custody totaled $81.8 billion, up 5 percent since September 30 due to a combination of net cash inflows and higher asset valuation.

Mortgage banking revenue totaled $24.4 million, unchanged from the previous quarter. Production volume was down 9 percent from the previous quarter due primarily to the effect of higher interest rates. The impact of decreased production volume on revenue was offset by improved pricing margin.

Transaction card revenue decreased $3.3 million compared to the third quarter of 2017 primarily due to a customer early termination fee received in the third quarter. Additionally, other revenue decreased $1.9 million primarily as a result of the sale of a consolidated merchant banking investment. Other expense also decreased as a result of the sale.

Operating Expenses

Total operating expenses were $264.0 million for the fourth quarter of 2017, a decrease of $1.9 million compared to the third quarter of 2017.

Personnel costs decreased $2.6 million compared to the previous quarter. Employee benefits expense decreased $1.8 million primarily due to lower pension costs. Regular salary expense decreased $798 thousand while incentive compensation expense remained relatively flat.

Non-personnel expense increased $634 thousand over the third quarter of 2017. Professional fees increased $3.1 million primarily due to project costs related to the new online account opening product. The fourth quarter also included a $2.0 million contribution to the BOKF Foundation. Net losses and operating expenses of repossessed assets decreased $5.7 million. A $4.7 million write-down of a set of oil and gas properties was recognized in the third quarter.

Loans, Deposits and Capital

Loans

Outstanding loans were $17.2 billion at December 31, 2017, a $53 million decrease compared to September 30. Decreased commercial and commercial real estate loan balances were partially offset by growth in residential mortgage and personal loans.

Outstanding commercial loan balances decreased $62 million compared to September 30, 2017. Wholesale/retail sector loan balances decreased $187 million and manufacturing sector loan balances decreased $23 million. Healthcare sector loans grew by $75 million over the prior quarter and energy sector loans were up $62 million over September 30, 2017.

Unfunded energy loan commitments grew by $182 million in the fourth quarter to $2.9 billion. All other unfunded commercial loan commitments totaled $4.8 billion at December 31, 2017, largely unchanged compared to September 30, 2017.

Commercial real estate loans decreased by $38 million compared to September 30, 2017 due primarily to continued pay-down activity as borrowers took advantage of favorable long-term rates and refinanced into the permanent market. Retail sector loans decreased by $34 million, multifamily residential loans decreased by $19 million and loans secured by industrial facilities decreased by $18 million. Loans secured by office buildings increased $35 million. Unfunded commercial real estate loan commitments totaled $1.2 billion at December 31, 2017, a $112 million increase over September 30, 2017.

Residential mortgage loans grew by $28 million and personal loans were up $19 million over the prior quarter.

Deposits

Period-end deposits totaled $22.1 billion at December 31, 2017, a $213 million increase over September 30, 2017. Interest-bearing transaction account balances grew by $225 million and demand deposit balances increased $58 million, partially offset by a $74 million decrease in time deposits. Among the lines of business, Commercial Banking deposits increased $220 million and Wealth Management deposits increased $163 million, partially offset by a $147 million decrease in Consumer Banking deposits.

Capital

The company's common equity Tier 1 capital ratio was 11.95 percent at December 31, 2017. In addition, the Company's Tier 1 capital ratio was 11.95 percent, total capital ratio was 13.43 percent and leverage ratio was 9.31 percent at December 31, 2017. At September 30, 2017, the Company's common equity Tier 1 capital ratio was 11.90 percent, Tier 1 capital ratio was 11.90 percent, total capital ratio was 13.47 percent and leverage ratio was 9.30 percent.

The company's tangible common equity ratio, a non-GAAP measure, was 9.50 percent at December 31, 2017 and 9.23 percent at September 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.

Credit Quality

Nonperforming assets totaled $290 million or 1.69 percent of outstanding loans and repossessed assets at December 31, 2017, down from $328 million or 1.90 percent of outstanding loans and repossessed assets at September 30, 2017. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $207 million or 1.22 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at December 31, 2017 and $249 million or 1.46 percent at September 30, 2017.

Nonaccruing loans totaled $188 million or 1.10 percent of outstanding loans at December 31, 2017, compared to $226 million or 1.31 percent of outstanding loans at September 30, 2017. New nonaccruing loans identified in the fourth quarter totaled $33 million, offset by $53 million in payments received, $14.7 million in charge-offs and $1.9 million in foreclosures and repossessions. At December 31, 2017, nonaccruing commercial loans totaled $137 million or 1.28 percent of outstanding commercial loans. Nonaccruing commercial real estate loans were only $2.9 million or 0.08 percent of outstanding commercial real estate loans. Nonaccruing residential mortgage loans not guaranteed by U.S. government agencies totaled $38 million or 2.15 percent of outstanding residential mortgage loans.

At December 31, 2017, approximately $51 million of nonaccruing loans required a specific allowance of $8.8 million. No specific allowance was necessary for the remaining $137 million of nonaccruing loans based on estimated cash flows or collateral value. At September 30, 2017, $90 million of nonaccruing loans required a specific allowance of $13 million and no specific allowance was necessary on the remaining $136 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, decreased to $241 million at December 31, 2017 from $285 million at September 30, 2017. This decrease largely resulted from energy loans, partially offset by an increase in services and healthcare sector loans.

The company had net charge-offs of $11.7 million or 27 basis points of average loans on an annualized basis for the fourth quarter of 2017, compared to net charge-offs of $3.4 million or 8 basis points of average loans on annualized basis for the third quarter of 2017. Gross charge-offs totaled $14.7 million for the fourth quarter, compared to $5.8 million for the previous quarter. Recoveries totaled $3.1 million for the fourth quarter of 2017 and $2.4 million for the third quarter of 2017.

After evaluating all credit factors, including continued improvement in nonaccruing and potential problem loans, the company determined that a $7.0 million negative provision for credit losses was appropriate during the fourth quarter of 2017. No provision for credit losses was recorded in the third quarter of 2017.

The combined allowance for credit losses totaled $234 million or 1.37 percent of outstanding loans and 131 percent of nonaccruing loans, excluding loans guaranteed by U.S. government agencies, at December 31, 2017. The allowance for loan losses was $231 million and the accrual for off-balance sheet credit losses was $3.7 million. At September 30, 2017, the combined allowance for credit losses was $253 million or 1.47 percent of outstanding loans and 117 percent of nonaccruing loans, excluding 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.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $8.3 billion at December 31, 2017 and $8.4 billion at September 30, 2017. At December 31, 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 $2.8 billion of commercial mortgage-backed securities fully backed by U.S. government agencies.

The available for sale securities portfolio had a net unrealized loss of $47 million at December 31, 2017, compared to a net unrealized gain of $14 million at September 30, 2017. The increase in net unrealized loss was primarily due to an increase in interest rates during the fourth quarter.

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 held 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 $1.3 million during the fourth quarter of 2017, including a $5.9 million increase in the fair value of mortgage servicing rights, a $7.3 million decrease in the fair value of securities and derivative contracts held as an economic hedge and $2.7 million of related net interest revenue.

The fair value of mortgage servicing rights, net of economic hedge, increased by $1.0 million in the third quarter. The fair value of securities and interest rate derivative contracts held as an economic hedge of mortgage servicing rights increased by $1.7 million. Related net interest revenue was $2.5 million during the third quarter of 2017.

Conference Call and Webcast

The Company will hold a conference call at 9 a.m. Central time on Wednesday, January 24, 2018 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 replay PIN number 13675236.

About BOK Financial Corporation

BOK Financial 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 December 31, 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, interest rate relationships, demand for products and services, the degree of competition by traditional and nontraditional competitors, changes in banking regulations, tax laws, prices, levies and assessments, the impact of technological advances, and trends in customer behavior as well as their ability to repay loans. BOK Financial and its affiliates undertake no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events, or otherwise. 

 
BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
    Dec. 31, 2017   Sept. 30, 2017   Dec. 31, 2016
ASSETS            
Cash and due from banks   $ 602,510     $ 547,203     $ 620,846  
Interest-bearing cash and cash equivalents   1,714,544     1,926,779     1,916,651  
Trading securities   462,676     614,117     337,628  
Investment securities   461,793     466,562     546,145  
Available for sale securities   8,321,578     8,383,199     8,676,829  
Fair value option securities   755,054     819,531     77,046  
Restricted equity securities   320,189     347,542     307,240  
Residential mortgage loans held for sale   221,378     275,643     301,897  
Loans:            
Commercial   10,733,975     10,795,934     10,390,824  
Commercial real estate   3,479,987     3,518,142     3,809,046  
Residential mortgage   1,973,686     1,945,750     1,949,832  
Personal   965,776     947,008     839,958  
Total loans   17,153,424     17,206,834     16,989,660  
Allowance for loan losses   (230,682 )   (247,703 )   (246,159 )
Loans, net of allowance   16,922,742     16,959,131     16,743,501  
Premises and equipment, net   317,335     320,060     325,849  
Receivables   442,897     314,251     772,952  
Goodwill   447,430     446,697     448,899  
Intangible assets, net   28,658     39,013     46,931  
Mortgage servicing rights, net   252,867     245,858     247,073  
Real estate and other repossessed assets, net   28,437     32,535     44,287  
Derivative contracts, net   220,502     352,559     689,872  
Cash surrender value of bank-owned life insurance   316,498     314,201     308,430  
Receivable on unsettled securities sales   75,980     230,225     7,188  
Other assets   359,092     370,409     353,017  
TOTAL ASSETS   $ 32,272,160     $ 33,005,515     $ 32,772,281  
             
LIABILITIES AND EQUITY            
Deposits:            
Demand   $ 9,243,338     $ 9,185,481     $ 9,235,720  
Interest-bearing transaction   10,250,393     10,025,084     10,865,105  
Savings   469,158     465,225     425,470  
Time   2,098,416     2,172,289     2,221,800  
Total deposits   22,061,305     21,848,079     22,748,095  
Funds purchased   58,628     62,356     57,929  
Repurchase agreements   516,335     328,189     668,661  
Other borrowings   5,134,897     6,241,275     4,846,072  
Subordinated debentures   144,677     144,668     144,640  
Accrued interest, taxes, and expense   164,895     152,029     146,704  
Due on unsettled securities purchases   151,198     160,781     6,508  
Derivative contracts, net   171,963     336,327     664,531  
Other liabilities   349,928     217,372     182,784  
TOTAL LIABILITIES   28,753,826     29,491,076     29,465,924  
Shareholders' equity:            
Capital, surplus and retained earnings   3,524,991     3,482,057     3,285,821  
Accumulated other comprehensive income (loss)   (29,624 )   6,757     (10,967 )
TOTAL SHAREHOLDERS' EQUITY   3,495,367     3,488,814     3,274,854  
Non-controlling interests   22,967     25,625     31,503  
TOTAL EQUITY   3,518,334     3,514,439     3,306,357  
TOTAL LIABILITIES AND EQUITY   $ 32,272,160     $ 33,005,515     $ 32,772,281  
                         


 
AVERAGE BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
  Three Months Ended
  Dec. 31, 2017   Sept. 30, 2017   June 30, 2017   March 31, 2017   Dec. 31, 2016
ASSETS                  
Interest-bearing cash and cash equivalents $ 1,976,395     $ 1,965,645     $ 2,007,746     $ 2,087,964     $ 2,032,785  
Trading securities 560,321     491,613     456,028     579,549     476,498  
Investment securities 462,869     475,705     499,372     530,936     542,869  
Available for sale securities 8,435,916     8,428,353     8,384,057     8,567,049     8,766,555  
Fair value option securities 792,647     684,571     476,102     416,524     210,733  
Restricted equity securities 337,673     328,677     295,743     312,498     334,114  
Residential mortgage loans held for sale 257,927     256,343     245,401     220,325     345,066  
Loans:                  
Commercial 10,751,235     10,827,198     10,604,456     10,414,579     10,228,095  
Commercial real estate 3,485,583     3,528,330     3,676,976     3,903,850     3,749,393  
Residential mortgage 1,976,860     1,951,385     1,933,091     1,962,759     1,919,296  
Personal 967,329     949,750     915,010     854,637     826,804  
Total loans 17,181,007     17,256,663     17,129,533     17,135,825     16,723,588  
Allowance for loan losses (246,143 )   (250,590 )   (251,632 )   (249,379 )   (246,977 )
Total loans, net 16,934,864     17,006,073     16,877,901     16,886,446     16,476,611  
Total earning assets 29,758,612     29,636,980     29,242,350     29,601,291     29,185,231  
Cash and due from banks 576,737     546,653     530,352     547,104     578,694  
Derivative contracts, net 292,961     238,583     248,168     401,886     681,455  
Cash surrender value of bank-owned life insurance 315,034     313,079     311,310     309,223     309,532  
Receivable on unsettled securities sales 49,219     76,622     79,248     62,641     33,813  
Other assets 2,459,552     2,196,253     1,957,143     2,032,844     2,172,351  
TOTAL ASSETS $ 33,452,115     $ 33,008,170     $ 32,368,571     $ 32,954,989     $ 32,961,076  
                   
LIABILITIES AND EQUITY                  
Deposits:                  
Demand $ 9,417,351     $ 9,389,849     $ 9,338,683     $ 9,101,763     $ 9,124,595  
Interest-bearing transaction 10,142,744     10,088,522     10,087,640     10,567,475     9,980,132  
Savings 466,496     464,130     461,586     441,254     421,654  
Time 2,134,469     2,176,820     2,204,422     2,258,930     2,177,035  
Total deposits 22,161,060     22,119,321     22,092,331     22,369,422     21,703,416  
Funds purchased 63,713     49,774     63,263     55,508     62,004  
Repurchase agreements 424,617     361,512     427,353     523,561     560,891  
Other borrowings 6,209,903     6,162,641     5,572,031     5,737,955     6,072,150  
Subordinated debentures 144,673     144,663     144,654     144,644     144,635  
Derivative contracts, net 288,408     221,371     178,695     405,444     682,808  
Due on unsettled securities purchases 218,684     145,155     157,438     91,529     77,575  
Other liabilities 425,667     319,092     323,373     299,534     321,404  
TOTAL LIABILITIES 29,936,725     29,523,529     28,959,138     29,627,597     29,624,883  
Total equity 3,515,390     3,484,641     3,409,433     3,327,392     3,336,193  
TOTAL LIABILITIES AND EQUITY $ 33,452,115     $ 33,008,170     $ 32,368,571     $ 32,954,989     $ 32,961,076  
                                       


 
STATEMENTS OF EARNINGS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except per share data)
  Three Months Ended   Year Ended
  Dec. 31,   Dec. 31,
  2017   2016   2017   2016
               
Interest revenue $ 255,767     $ 215,737     $ 972,751     $ 829,117  
Interest expense 38,904     21,539     131,050     81,889  
Net interest revenue 216,863     194,198     841,701     747,228  
Provision for credit losses (7,000 )       (7,000 )   65,000  
Net interest revenue after provision for credit losses 223,863     194,198     848,701     682,228  
Other operating revenue:              
Brokerage and trading revenue 33,045     28,500     131,601     138,377  
Transaction card revenue1 29,536     29,682     119,988     116,452  
Fiduciary and asset management revenue 41,767     34,535     162,893     135,477  
Deposit service charges and fees1 27,685     28,204     112,075     111,499  
Mortgage banking revenue 24,362     28,414     104,719     133,914  
Other revenue 11,762     12,693     52,168     51,029  
Total fees and commissions 168,157     162,028     683,444     686,748  
Other gains (losses), net 552     (1,279 )   9,004     4,030  
Gain (loss) on derivatives, net (3,045 )   (35,815 )   779     (15,685 )
Loss on fair value option securities, net (4,238 )   (20,922 )   (2,733 )   (10,555 )
Change in fair value of mortgage servicing rights 5,898     39,751     172     (2,193 )
Gain (loss) on available for sale securities, net (488 )   (9 )   4,428     11,675  
Total other operating revenue 166,836     143,754     695,094     674,020  
Other operating expense:              
Personnel 145,329     141,132     573,408     553,119  
Business promotion 7,317     7,344     28,877     26,582  
Charitable contributions to BOKF Foundation 2,000     2,000     2,000     2,000  
Professional fees and services 15,344     16,828     51,067     56,783  
Net occupancy and equipment 22,403     21,470     86,477     80,024  
Insurance 6,555     8,705     19,653     32,489  
Data processing and communications 38,411     33,691     146,970     131,841  
Printing, postage and supplies 3,781     3,998     15,689     15,584  
Net losses and operating expenses of repossessed assets 340     1,627     9,687     3,359  
Amortization of intangible assets 1,430     1,558     6,779     6,862  
Mortgage banking costs 14,331     17,348     52,856     61,387  
Other expense 6,746     9,846     32,054     47,560  
Total other operating expense 263,987     265,547     1,025,517     1,017,590  
               
Net income before taxes 126,712     72,405     518,278     338,658  
Federal and state income taxes 54,347     22,496     182,593     106,377  
               
Net income 72,365     49,909     335,685     232,281  
Net income (loss) attributable to non-controlling interests (127 )   (117 )   1,041     (387 )
                               
Net income attributable to BOK Financial Corporation shareholders $ 72,492     $ 50,026     $ 334,644     $ 232,668  
               
Average shares outstanding:              
Basic 64,793,005     64,719,018     64,745,364     65,085,627  
Diluted 64,843,179     64,787,728     64,806,284     65,143,898  
               
Net income per share:              
Basic $ 1.11 2   $ 0.76     $ 5.11 2   $ 3.53  
Diluted $ 1.11 2   $ 0.76     $ 5.11 2   $ 3.53  
                               
1   Checkcard revenue was reclassified from transaction card revenue to deposit service charges and fees.
2   EPS decreased $0.18 due to tax reform.
                               


 
FINANCIAL HIGHLIGHTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and share data)
  Three Months Ended
  Dec. 31, 2017   Sept. 30, 2017   June 30, 2017   March 31, 2017   Dec. 31, 2016
Capital:                  
Period-end shareholders' equity $ 3,495,367     $ 3,488,814     $ 3,422,469     $ 3,341,744     $ 3,274,854  
Risk weighted assets $ 25,733,711     $ 25,409,728     $ 25,130,802     $ 24,901,019     $ 25,274,848  
Risk-based capital ratios:                  
Common equity tier 1 11.95 %   11.90 %   11.76 %   11.59 %   11.21 %
Tier 1 11.95 %   11.90 %   11.76 %   11.59 %   11.21 %
Total capital 13.43 %   13.47 %   13.36 %   13.25 %   12.81 %
Leverage ratio 9.31 %   9.30 %   9.27 %   8.89 %   8.72 %
Tangible common equity ratio1 9.50 %   9.23 %   9.24 %   8.88 %   8.61 %
                   
Common stock:                  
Book value per share $ 53.45     $ 53.30     $ 52.32     $ 51.09     $ 50.12  
Tangible book value per share 46.17     45.88     44.87     43.63     42.53  
Market value per share:                  
High $ 93.97     $ 90.69     $ 88.31     $ 85.25     $ 85.00  
Low $ 79.67     $ 77.10     $ 74.09     $ 73.44     $ 67.11  
Cash dividends paid $ 29,328     $ 28,655     $ 28,652     $ 28,646     $ 28,860  
Dividend payout ratio 40.46 %   33.46 %   32.50 %   32.42 %   57.69 %
Shares outstanding, net 65,394,937     65,456,786     65,416,403     65,408,019     65,337,432  
                   
Stock buy-back program:                  
Shares repurchased 80,000                 700,000  
Amount $ 7,403     $     $     $     $ 49,021  
Average price per share $ 92.54     $     $     $     $ 70.03  
                   
Performance ratios (quarter annualized):
Return on average assets 0.86 %   1.03 %   1.09 %   1.09 %   0.60 %
Return on average equity 8.24 %   9.83 %   10.46 %   10.86 %   6.03 %
Net interest margin 2.97 %   3.01 %   2.89 %   2.81 %   2.69 %
Efficiency ratio 66.89 %   66.77 %   64.61 %   65.77 %   72.93 %
                   
Reconciliation of non-GAAP measures:
1      Tangible common equity ratio:                  
Total shareholders' equity $ 3,495,367     $ 3,488,814     $ 3,422,469     $ 3,341,744     $ 3,274,854  
Less: Goodwill and intangible assets, net 476,088     485,710     487,452     488,294     495,830  
Tangible common equity $ 3,019,279     $ 3,003,104     $ 2,935,017     $ 2,853,450     $ 2,779,024  
                   
Total assets $ 32,272,160     $ 33,005,515     $ 32,263,532     $ 32,628,932     $ 32,772,281  
Less: Goodwill and intangible assets, net 476,088     485,710     487,452     488,294     495,830  
Tangible assets $ 31,796,072     $ 32,519,805     $ 31,776,080     $ 32,140,638     $ 32,276,451  
                   
Tangible common equity ratio 9.50 %   9.23 %   9.24 %   8.88 %   8.61 %
                   
Other data:                  
Fiduciary assets $ 48,761,477     $ 45,177,185     $ 45,089,153     $ 44,992,920     $ 42,378,053  
Tax equivalent adjustment $ 4,131     $ 4,314     $ 4,330     $ 4,428     $ 4,389  
Net unrealized gain (loss) on available for sale securities $ (47,497 )   $ 14,061     $ 16,041     $ (5,537 )   $ (14,899 )
                   
Mortgage banking:                  
Mortgage production revenue $ 7,786     $ 8,329     $ 13,840     $ 8,543     $ 11,937  
Mortgage loans funded for sale $ 840,080     $ 832,796     $ 902,978     $ 711,019     $ 1,189,975  
Add: current period-end outstanding commitments 222,919     334,337     362,088     381,732     318,359  
Less: prior period end outstanding commitments 334,337     362,088     381,732     318,359     630,804  
Total mortgage production volume $ 728,662     $ 805,045     $ 883,334     $ 774,392     $ 877,530  
                   
Mortgage loan refinances to mortgage loans funded for sale 47 %   38 %   33 %   44 %   63 %
Gain on sale margin 1.07 %   1.03 %   1.57 %   1.10 %   1.36 %
Mortgage servicing revenue $ 16,576     $ 16,561     $ 16,436     $ 16,648     $ 16,477  
Average outstanding principal balance of mortgage loans serviced for others 22,054,877     22,079,177     22,055,127     22,006,295     21,924,552  
Average mortgage servicing revenue rates 0.30 %   0.30 %   0.30 %   0.31 %   0.30 %
                   
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net $ (3,057 )   $ 1,025     $ 3,241     $ (528 )   $ (35,868 )
Gain (loss) on fair value option securities, net (4,238 )   661     1,984     (1,140 )   (20,922 )
Gain (loss) on economic hedge of mortgage servicing rights (7,295 )   1,686     5,225     (1,668 )   (56,790 )
Gain (loss) on changes in fair value of mortgage servicing rights 5,898     (639 )   (6,943 )   1,856     39,751  
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue (1,397 )   1,047     (1,718 )   188     (17,039 )
Net interest revenue on fair value option securities2 2,656     2,543     1,965     1,271     114  
Total economic benefit (cost) of changes in the fair value of mortgage servicing rights, net of economic hedges $ 1,259     $ 3,590     $ 247     $ 1,459     $ (16,925 )
                                       
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
  Dec. 31, 2017   Sept. 30, 2017   June 30, 2017   March 31, 2017   Dec. 31, 2016
                   
Interest revenue $ 255,767     $ 255,413     $ 235,181     $ 226,390     $ 215,737  
Interest expense 38,904     36,961     29,977     25,208     21,539  
Net interest revenue 216,863     218,452     205,204     201,182     194,198  
Provision for credit losses (7,000 )                
Net interest revenue after provision for credit losses 223,863     218,452     205,204     201,182     194,198  
Other operating revenue:                  
Brokerage and trading revenue 33,045     33,169     31,764     33,623     28,500  
Transaction card revenue1 29,536     32,844     30,228     27,380     29,682  
Fiduciary and asset management revenue 41,767     40,687     41,808     38,631     34,535  
Deposit service charges and fees1 27,685     28,191     28,422     27,777     28,204  
Mortgage banking revenue 24,362     24,890     30,276     25,191     28,414  
Other revenue 11,762     13,670     14,984     11,752     12,693  
Total fees and commissions 168,157     173,451     177,482     164,354     162,028  
Other gains (losses), net 552     (1,283 )   6,108     3,627     (1,279 )
Gain (loss) on derivatives, net (3,045 )   1,033     3,241     (450 )   (35,815 )
Gain (loss) on fair value option securities, net (4,238 )   661     1,984     (1,140 )   (20,922 )
Change in fair value of mortgage servicing rights 5,898     (639 )   (6,943 )   1,856     39,751  
Gain (loss) on available for sale securities, net (488 )   2,487     380     2,049     (9 )
Total other operating revenue 166,836     175,710     182,252     170,296     143,754  
Other operating expense:                  
Personnel 145,329     147,910     143,744     136,425     141,132  
Business promotion 7,317     7,105     7,738     6,717     7,344  
Contribution to BOKF Foundation 2,000                 2,000  
Professional fees and services 15,344     11,887     12,419     11,417     16,828  
Net occupancy and equipment 22,403     21,325     21,125     21,624     21,470  
Insurance 6,555     6,005     689     6,404     8,705  
Data processing and communications 38,411     37,327     36,330     34,902     33,691  
Printing, postage and supplies 3,781     3,917     4,140     3,851     3,998  
Net losses and operating expenses of repossessed assets 340     6,071     2,267     1,009     1,627  
Amortization of intangible assets 1,430     1,744     1,803     1,802     1,558  
Mortgage banking costs 14,331     13,450     12,072     13,003     17,348  
Other expense 6,746     9,193     8,558     7,557     9,846  
Total other operating expense 263,987     265,934     250,885     244,711     265,547  
Net income before taxes 126,712     128,228     136,571     126,767     72,405  
Federal and state income taxes 54,347     42,438     47,705     38,103     22,496  
Net income 72,365     85,790     88,866     88,664     49,909  
Net income (loss) attributable to non-controlling interests (127 )   141     719     308     (117 )
Net income attributable to BOK Financial Corporation shareholders $ 72,492     $ 85,649     $ 88,147     $ 88,356     $ 50,026  
                   
Average shares outstanding:                  
Basic 64,793,005     64,742,822     64,729,752     64,715,964     64,719,018  
Diluted 64,843,179     64,805,172     64,793,134     64,783,737     64,787,728  
Net income per share:                  
Basic $ 1.11 2   $ 1.31     $ 1.35     $ 1.35     $ 0.76  
Diluted $ 1.11 2   $ 1.31     $ 1.35     $ 1.35     $ 0.76  
                                       
Checkcard revenue was reclassified from transaction card revenue to deposit service charges and fees.
EPS decreased $0.18 due to tax reform.
                                       


 
LOANS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
    Dec. 31, 2017   Sept. 30, 2017   June 30, 2017   March 31, 2017   Dec. 31, 2016
Commercial:                    
Services   $ 2,986,949     $ 2,967,513     $ 2,958,827     $ 3,013,375     $ 3,108,990  
Energy   2,930,156     2,867,981     2,847,240     $ 2,537,112     2,497,868  
Healthcare   2,314,753     2,239,451     2,221,518     2,265,604     2,201,916  
Wholesale/retail   1,471,256     1,658,098     1,543,695     1,506,243     1,576,818  
Manufacturing   496,774     519,446     546,137     543,430     514,975  
Other commercial and industrial   534,087     543,445     520,538     461,346     490,257  
Total commercial   10,733,975     10,795,934     10,637,955     10,327,110     10,390,824  
                     
Commercial real estate:                    
Multifamily   980,017     999,009     952,380     922,991     903,272  
Office   831,770     797,089     862,973     860,889     798,888  
Retail   691,532     725,865     722,805     745,046     761,888  
Industrial   573,014     591,080     693,635     871,463     871,749  
Residential construction and land development   117,245     112,102     141,592     135,994     135,533  
Other real estate   286,409     292,997     315,207     334,680     337,716  
Total commercial real estate   3,479,987     3,518,142     3,688,592     3,871,063     3,809,046  
                     
Residential mortgage:                    
Permanent mortgage   1,043,435     1,013,965     989,040     977,743     1,006,820  
Permanent mortgages guaranteed by U.S. government agencies   197,506     187,370     191,729     204,181     199,387  
Home equity   732,745     744,415     758,429     764,350     743,625  
Total residential mortgage   1,973,686     1,945,750     1,939,198     1,946,274     1,949,832  
                     
Personal   965,776     947,008     917,900     847,459     839,958  
                     
Total   $ 17,153,424     $ 17,206,834     $ 17,183,645     $ 16,991,906     $ 16,989,660  
                                         


 
LOANS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
  Dec. 31, 2017   Sept. 30, 2017   June 30, 2017   March 31, 2017   Dec. 31, 2016
                   
Bank of Oklahoma:                  
  Commercial $ 3,238,720     $ 3,408,973     $ 3,369,967     $ 3,189,183     $ 3,370,259  
  Commercial real estate 682,037     712,915     667,932     691,332     684,381  
  Residential mortgage 1,435,432     1,405,900     1,398,021     1,404,054     1,407,197  
  Personal 342,212     322,320     318,016     310,708     303,823  
Total Bank of Oklahoma 5,698,401     5,850,108     5,753,936     5,595,277     5,765,660  
                   
Bank of Texas:                  
  Commercial 4,520,401     4,434,595     4,339,634     4,148,316     4,022,455  
  Commercial real estate 1,261,864     1,236,702     1,360,164     1,452,988     1,415,011  
  Residential mortgage 233,675     229,993     232,074     231,647     233,981  
  Personal 375,084     375,173     354,222     312,092     306,748  
Total Bank of Texas 6,391,024     6,276,463     6,286,094     6,145,043     5,978,195  
                   
Bank of Albuquerque:                  
  Commercial 343,296     367,747     369,370     407,403     399,256  
  Commercial real estate 341,282     319,208     324,405     307,927     284,603  
  Residential mortgage 98,018     101,983     103,849     106,432     108,058  
  Personal 11,721     12,953     12,439     11,305     11,483  
Total Bank of Albuquerque 794,317     801,891     810,063     833,067     803,400  
                   
Bank of Arkansas:                  
  Commercial 95,644     91,051     85,020     88,010     86,577  
  Commercial real estate 87,393     80,917     73,943     74,469     73,616  
  Residential mortgage 6,596     6,318     6,395     6,829     7,015  
  Personal 9,992     10,388     11,993     6,279     6,524  
Total Bank of Arkansas 199,625     188,674     177,351     175,587     173,732  
                   
Colorado State Bank & Trust:                  
  Commercial 1,130,714     1,124,200     1,065,780     998,216     1,018,208  
  Commercial real estate 174,201     186,427     255,379     266,218     265,264  
  Residential mortgage 63,350     63,734     63,346     62,313     59,631  
  Personal 63,115     60,513     56,187     49,523     50,372  
Total Colorado State Bank & Trust 1,431,380     1,434,874     1,440,692     1,376,270     1,393,475  
                   
Bank of Arizona:                  
  Commercial 687,792     634,809     617,759     643,222     686,253  
  Commercial real estate 660,094     706,188     705,858     737,088     747,409  
  Residential mortgage 41,771     40,730     37,034     36,737     36,265  
  Personal 57,140     55,050     55,528     51,386     52,553  
Total Bank of Arizona 1,446,797     1,436,777     1,416,179     1,468,433     1,522,480  
                   
Mobank (Kansas City):                  
  Commercial 717,408     734,559     790,425     852,760     807,816  
  Commercial real estate 273,116     275,785     300,911     341,041     338,762  
  Residential mortgage 94,844     97,092     98,479     98,262     97,685  
  Personal 106,512     110,611     109,515     106,166     108,455  
Total Mobank (Kansas City) 1,191,880     1,218,047     1,299,330     1,398,229     1,352,718  
                   
TOTAL BOK FINANCIAL $ 17,153,424     $ 17,206,834     $ 17,183,645     $ 16,991,906     $ 16,989,660  
                                       
Loans attributed to a geographical region may not always represent the location of the borrower or the collateral.
                                       


 
DEPOSITS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
  Dec. 31, 2017   Sept. 30, 2017   June 30, 2017   March 31, 2017   Dec. 31, 2016
Bank of Oklahoma:                  
  Demand $ 3,885,008     $ 4,061,612     $ 4,353,421     $ 4,320,666     $ 3,993,170  
  Interest-bearing:                  
Transaction 5,901,293     5,909,259     5,998,787     6,114,288     6,345,536  
Savings 265,870     265,023     263,664     265,014     241,696  
Time 1,092,133     1,131,547     1,170,014     1,189,144     1,118,355  
  Total interest-bearing 7,259,296     7,305,829     7,432,465     7,568,446     7,705,587  
Total Bank of Oklahoma 11,144,304     11,367,441     11,785,886     11,889,112     11,698,757  
                   
Bank of Texas:                  
  Demand 3,239,098     3,094,184     3,121,890     3,091,258     3,137,009  
  Interest-bearing:                  
Transaction 2,397,071     2,272,987     2,272,185     2,317,576     2,388,812  
Savings 93,620     93,400     91,491     89,640     83,101  
Time 502,879     521,072     502,128     511,037     535,642  
  Total interest-bearing 2,993,570     2,887,459     2,865,804     2,918,253     3,007,555  
Total Bank of Texas 6,232,668     5,981,643     5,987,694     6,009,511     6,144,564  
                   
Bank of Albuquerque:                  
  Demand 663,353     659,793     612,117     593,117     627,979  
  Interest-bearing:                  
Transaction 552,393     551,884     558,523     623,677     590,571  
Savings 55,647     53,532     54,136     53,683     49,963  
Time 216,743     224,773     229,616     233,506     238,408  
  Total interest-bearing 824,783     830,189     842,275     910,866     878,942  
Total Bank of Albuquerque 1,488,136     1,489,982     1,454,392     1,503,983     1,506,921  
                   
Bank of Arkansas:                  
  Demand 30,384     31,442     40,511     42,622     26,389  
  Interest-bearing:                  
Transaction 85,095     126,746     129,848     106,804     105,232  
Savings 1,881     1,876     2,135     2,304     2,192  
Time 14,045     14,434     14,876     15,067     16,696  
  Total interest-bearing 101,021     143,056     146,859     124,175     124,120  
Total Bank of Arkansas 131,405     174,498     187,370     166,797     150,509  
                   
Colorado State Bank & Trust:                  
  Demand 633,714     540,300     577,617     601,778     576,000  
  Interest-bearing:                  
Transaction 657,629     628,807     626,343     610,510     616,679  
Savings 35,223     34,776     35,651     37,801     32,866  
Time 224,962     231,927     228,458     234,740     242,782  
  Total interest-bearing 917,814     895,510     890,452     883,051     892,327  
Total Colorado State Bank & Trust 1,551,528     1,435,810     1,468,069     1,484,829     1,468,327  
                   
                   
Bank of Arizona:                  
  Demand 334,701     335,740     366,866     342,854     366,755  
  Interest-bearing:                  
Transaction 274,846     174,010     154,457     180,254     305,099  
Savings 3,343     4,105     3,638     3,858     2,973  
Time 20,394     20,831     19,911     26,112     27,765  
  Total interest-bearing 298,583     198,946     178,006     210,224     335,837  
Total Bank of Arizona 633,284     534,686     544,872     553,078     702,592  
                   
Mobank (Kansas City):                  
  Demand 457,080     462,410     496,473     514,278     508,418  
  Interest-bearing:                  
Transaction 382,066     361,391     346,996     406,105     513,176  
Savings 13,574     12,513     13,603     13,424     12,679  
Time 27,260     27,705     31,119     34,242     42,152  
  Total interest-bearing 422,900     401,609     391,718     453,771     568,007  
Total Mobank (Kansas City) 879,980     864,019     888,191     968,049     1,076,425  
                   
TOTAL BOK FINANCIAL $ 22,061,305     $ 21,848,079     $ 22,316,474     $ 22,575,359     $ 22,748,095  
                                       


 
NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
  Three Months Ended
  Dec. 31, 2017   Sept. 30, 2017   June 30, 2017   March 31, 2017   Dec. 31, 2016
                   
TAX-EQUIVALENT ASSETS YIELDS                  
Interest-bearing cash and cash equivalents 1.27 %   1.29 %   1.04 %   0.82 %   0.55 %
Trading securities 3.38 %   3.47 %   3.23 %   3.87 %   3.91 %
Investment securities:                  
  Taxable 5.31 %   5.31 %   5.34 %   5.44 %   5.39 %
  Tax-exempt 2.69 %   2.60 %   2.51 %   2.45 %   2.33 %
Total investment securities 3.98 %   3.86 %   3.76 %   3.70 %   3.60 %
Available for sale securities:                  
  Taxable 2.19 %   2.16 %   2.09 %   2.02 %   1.98 %
  Tax-exempt 5.41 %   5.27 %   6.09 %   5.37 %   5.27 %
Total available for sale securities 2.21 %   2.17 %   2.11 %   2.05 %   2.00 %
Fair value option securities 2.90 %   2.97 %   2.92 %   2.27 %   0.99 %
Restricted equity securities 5.87 %   5.87 %   5.95 %   5.52 %   5.45 %
Residential mortgage loans held for sale 3.72 %   3.36 %   3.92 %   3.35 %   3.31 %
Loans 4.29 %   4.31 %   4.03 %   3.88 %   3.67 %
Allowance for loan losses                  
Loans, net of allowance 4.35 %   4.38 %   4.09 %   3.94 %   3.72 %
Total tax-equivalent yield on earning assets 3.49 %   3.50 %   3.30 %   3.15 %   2.98 %
                   
COST OF INTEREST-BEARING LIABILITIES                  
Interest-bearing deposits:                  
  Interest-bearing transaction 0.35 %   0.32 %   0.26 %   0.20 %   0.16 %
  Savings 0.07 %   0.08 %   0.08 %   0.08 %   0.09 %
  Time 1.17 %   1.16 %   1.11 %   1.09 %   1.12 %
Total interest-bearing deposits 0.48 %   0.45 %   0.40 %   0.35 %   0.32 %
Funds purchased 0.90 %   0.92 %   0.61 %   0.47 %   0.28 %
Repurchase agreements 0.18 %   0.15 %   0.06 %   0.02 %   0.02 %
Other borrowings 1.36 %   1.29 %   1.09 %   0.83 %   0.61 %
Subordinated debt 5.55 %   5.68 %   5.55 %   5.68 %   5.51 %
Total cost of interest-bearing liabilities 0.79 %   0.75 %   0.63 %   0.52 %   0.44 %
Tax-equivalent net interest revenue spread 2.70 %   2.75 %   2.67 %   2.63 %   2.54 %
Effect of noninterest-bearing funding sources and other 0.27 %   0.26 %   0.22 %   0.18 %   0.15 %
Tax-equivalent net interest margin 2.97 %   3.01 %   2.89 %   2.81 %   2.69 %
                             
Yield calculations are shown on a tax equivalent basis at the statutory federal and state rates for the periods presented. The yield calculations exclude security trades that have been recorded on trade date with no corresponding interest income and the unrealized gains and losses. The yield calculation also includes average loan balances for which the accrual of interest has been discontinued and are net of unearned income. Yield/rate calculations are generally based on the conventions that determine how interest income and expense is accrued.
                             


 
CREDIT QUALITY INDICATORS
BOK FINANCIAL CORPORATION
(in thousands, except ratios)
  Three Months Ended
  Dec. 31, 2017   Sept. 30, 2017   June 30, 2017   March 31, 2017   Dec. 31, 2016
Nonperforming assets:                  
Nonaccruing loans:                  
Commercial $ 137,303     $ 176,900     $ 197,157     $ 156,825     $ 178,953  
Commercial real estate 2,855     2,975     3,775     4,475     5,521  
Residential mortgage 47,447     45,506     44,235     46,081     46,220  
Personal 269     255     272     235     290  
Total nonaccruing loans 187,874     225,636     245,439     207,616     230,984  
Accruing renegotiated loans guaranteed by U.S. government agencies 73,994     69,440     80,624     83,577     81,370  
Real estate and other repossessed assets: 28,437     32,535     39,436     42,726     44,287  
Total nonperforming assets $ 290,305     $ 327,611     $ 365,499     $ 333,919     $ 356,641  
Total nonperforming assets excluding those guaranteed by U.S. government agencies $ 207,132     $ 249,280     $ 275,823     $ 240,234     $ 263,425  
                   
Nonaccruing loans by loan portfolio sector:                  
Commercial:                  
Energy $ 92,284     $ 110,683     $ 123,992     $ 110,425     $ 132,499  
Services 2,620     1,174     7,754     7,713     8,173  
Healthcare 14,765     24,446     24,505     909     825  
Wholesale/retail 2,574     1,893     10,620     11,090     11,407  
Manufacturing 5,962     9,059     9,656     5,907     4,931  
Other commercial and industrial 19,098     29,645     20,630     20,781     21,118  
Total commercial 137,303     176,900     197,157     156,825     178,953  
Commercial real estate:                  
Construction and land development 1,832     1,924     2,051     2,616     3,433  
Retail 276     289     301     314     326  
Office 275     275     396     413     426  
Multifamily         10     24     38  
Industrial             76     76  
Other commercial real estate 472     487     1,017     1,032     1,222  
Total commercial real estate 2,855     2,975     3,775     4,475     5,521  
Residential mortgage:                  
Permanent mortgage 25,193     24,623     23,415     24,188     22,855  
Permanent mortgage guaranteed by U.S. government agencies 9,179     8,891     9,052     10,108     11,846  
Home equity 13,075     11,992     11,768     11,785     11,519  
Total residential mortgage 47,447     45,506     44,235     46,081     46,220  
Personal 269     255     272     235     290  
Total nonaccruing loans $ 187,874     $ 225,636     $ 245,439     $ 207,616     $ 230,984  
                   
Performing loans 90 days past due1 $ 633     $ 253     $ 1,414     $ 95     $ 5  
                   
Gross charge-offs $ (14,749 )   $ (5,825 )   $ (2,872 )   $ (2,153 )   $ (1,651 )
Recoveries 3,061     2,437     1,214     2,900     2,813  
Net recoveries (charge-offs) $ (11,688 )   $ (3,388 )   $ (1,658 )   $ 747     $ 1,162  
                   
Provision for credit losses $ (7,000 )   $     $     $     $  
                   
Allowance for loan losses to period end loans 1.34 %   1.44 %   1.46 %   1.46 %   1.45 %
Combined allowance for credit losses to period end loans 1.37 %   1.47 %   1.49 %   1.52 %   1.52 %
Nonperforming assets to period end loans and repossessed assets 1.69 %   1.90 %   2.12 %   1.96 %   2.09 %
Net charge-offs (annualized) to average loans 0.27 %   0.08 %   0.04 %   (0.02 )%   (0.03 )%
Allowance for loan losses to nonaccruing loans1 129.09 %   114.28 %   105.78 %   125.92 %   112.33 %
Combined allowance for credit losses to nonaccruing loans1 131.18 %   116.78 %   108.51 %   130.70 %   117.46 %
                   
1   Excludes residential mortgage loans guaranteed by agencies of the U.S. government.
 

 

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

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