Market Overview

BOK Financial Reports Record Annual Earnings of $501 million or $7.03 Per Share

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TULSA, Okla., Jan. 22, 2020 (GLOBE NEWSWIRE) -- BOK Financial (NASDAQ:BOKF) today reported net earnings applicable to common shareholders for the fourth quarter of 2019 of $110 million, or $1.56 per diluted common share.

CEO Commentary

"The fourth quarter concluded our second-consecutive year of record earnings for the organization," said Steven G. Bradshaw, president and chief executive officer. "Achieving our business integration and financial goals for CoBiz early in 2019 set the tone for a monumental year, and helped drive momentum in two of our high-growth markets. The balance between our banking and fee service businesses was evident all year, allowing us to continue our strong earnings growth even with industry headwinds intensifying. This is a testament to how BOK Financial has been carefully constructed over many years with the distinct ability to outperform in challenging conditions."

Bradshaw continued, "While the economic and political environment in 2020 will bring its own set of challenges, our focus remains on the long-term. We fully expect that our approach to creating and sustaining earnings and growing shareholder value will continue to serve us well in 2020."

2019 Financial Highlights
  • Net income for the year ended December 31, 2019 totaled $500.8 million or $7.03 per diluted share compared to $445.6 million or $6.63 per diluted share for the year ended December 31, 2018.
  • Net interest revenue totaled $1.1 billion, an increase of $128.0 million. CoBiz added $158.5 million to net interest revenue, including $37.8 million of net purchase accounting discount accretion for 2019. CoBiz added $43.1 million to net interest revenue for 2018. Net interest margin was 3.11 percent for 2019 compared to 3.20 percent for 2018.
  • Fees and commissions revenue increased $59.0 million to $702.2 million in 2019. Strong growth in brokerage and trading revenue and mortgage banking revenue, which were both positively affected by lower mortgage interest rates in 2019, contributed to the majority of the increase.
  • Operating expense totaled $1.1 billion in 2019, an increase of $104.2 million. We incurred $17.2 million of closing and integration costs in 2019 compared to $16.6 million in 2018. Expenses related to CoBiz operations were $84.0 million in 2019 and $29.7 million in 2018. Excluding these costs, operating expense increased $49.3 million or 5 percent, primarily related to growth in personnel expense.
  • Period-end loans were up $94 million to $21.8 billion at December 31, 2019 and period-end deposits grew $2.4 billion to $27.6 billion.
Fourth Quarter 2019 Financial Highlights
  • Net income was $110.4 million or $1.56 per diluted share for the fourth quarter of 2019 and $142.2 million or $2.00 per diluted share for the third quarter of 2019.
  • Net interest revenue totaled $270.2 million, a decrease of $8.8 million. Net interest margin was 2.88 percent compared to 3.01 percent in the third quarter of 2019. Lower loan discount accretion, changes in funding mix, and the two recent federal funds rate cuts by the Federal Reserve contributed to compression in the net interest margin.
Fourth Quarter 2019 Financial Highlights con't
  • Fees and commissions revenue totaled $179.4 million, a decrease of $6.7 million, primarily due to a seasonal decline in mortgage banking revenue.
  • Operating expense increased $9.5 million to $288.8 million. Personnel expense increased $5.8 million while non-personnel expense increased $3.7 million over the third quarter of 2019.
  • A $19.0 million provision for credit losses was recorded in the fourth quarter of 2019 compared to $12.0 million in the third quarter of 2019. The combined allowance for credit losses totaled $212 million or 0.98 percent of outstanding loans compared to $206 million or 0.92 percent in the previous quarter.
  • Average loans decreased $177 million to $22.2 billion while period-end loans decreased $534 million to $21.8 billion, largely due to decreases in commercial and commercial real estate loans.
  • Average deposits increased $1.4 billion to $27.1 billion and period-end deposits increased $1.5 billion to $27.6 billion.
  • Commercial banking contributed $81.7 million to net income, a decrease of $18.9 million compared to the prior quarter. Net interest revenue decreased by $16.7 million due to a decrease in loan volume combined with decreased yields. Average loans decreased by $126 million to $19.1 billion. Fee revenue decreased $2.8 million, largely due to lower syndication fees. Average deposits increased $587 million to $11.4 billion, including an increase in interest-bearing transaction deposits partially offset by a decrease in demand deposits.
  • Consumer banking contributed $8.3 million to net income, decreasing $8.4 million. Net interest revenue decreased $5.3 million, largely due to a lower yield on deposits sold to our Funds Management unit. Fee revenue decreased $6.6 million. A seasonal decline in mortgage production reduced mortgage banking revenue by $4.8 million. Mortgage production volume decreased $278 million to $635 million and gain on sale margin decreased 7 basis points to 1.44 percent.
  • Wealth Management contributed $22.9 million to net income, consistent with the prior quarter. Fee revenue increased $3.3 million, largely related to brokerage and trading revenue, partially offset by a $1.2 million decrease in net interest revenue. Total operating expenses increased $3.1 million, primarily related to variable compensation that is related to revenue growth. Assets under management or administration were $82.7 billion at December 31, 2019 compared to $80.8 billion at September 30, 2019. Fiduciary assets totaled $52.4 billion at December 31, 2019 and $49.3 billion at September 30, 2019.
Net Interest Revenue

Net interest revenue was $270.2 million for the fourth quarter of 2019, an $8.8 million decrease compared to the third quarter of 2019. Discount accretion on acquired loans totaled $5.8 million for the fourth quarter and $10.9 million for the third quarter.

Average earning assets increased $415 million compared to the third quarter of 2019. Available for sale securities increased $586 million as we continue to position our balance sheet for the current rate environment. Average loan balances decreased $177 million and interest-bearing cash and cash equivalents increased $72 million. Growth in average earning assets was largely funded by a $1.5 billion increase in interest-bearing deposits while other borrowed funds decreased $863 million.

Net interest margin was 2.88 percent compared to 3.01 percent in the previous quarter. A decrease in demand deposits combined with an increase in receivables from trading activities reduced net interest margin by 9 basis points. Lower loan discount accretion reduced net interest margin by 6 basis points. A 3 basis point increase from higher loan fees was partially offset by spread compression.

The yield on average earning assets was 3.93 percent, a 32 basis point decrease from the prior quarter. The loan portfolio yield was 4.75 percent, down 37 basis points. The yield on the available for sale securities portfolio decreased 8 basis points to 2.52 percent while the yield on interest-bearing cash and cash equivalents decreased 80 basis points.

Funding costs were 1.40 percent, down 28 basis points. The cost of interest-bearing deposits decreased 8 basis points to 1.09 percent. The cost of other borrowed funds was down 48 basis points to 1.83 percent.

Fees and Commissions Revenue

Fees and commissions revenue totaled $179.4 million for the fourth quarter of 2019, a decrease of $6.7 million compared to the third quarter of 2019.

Mortgage banking revenue decreased $4.8 million. Mortgage loan production volume decreased 30 percent, primarily due to seasonality. Other revenue decreased $2.3 million primarily due to lower revenue from repossessed oil and gas properties. Brokerage and trading revenue was unchanged from the previous quarter. Growth in trading revenue of $5.6 million was offset by decreases in customer hedging revenue and loan syndication fees. A decrease in overdraft service charges was offset by an increase in trust fees and commissions.

Operating Expense

Total operating expense was $288.8 million for the fourth quarter of 2019, an increase of $9.5 million over the third quarter of 2019.

Personnel expense increased $5.8 million. Incentive compensation increased $4.3 million, primarily due to increased transaction activity in wealth management. The fourth quarter included approximately $2.0 million in severance costs due to realignment of personnel for the current operating environment.

Non-personnel expense increased $3.7 million over the third quarter of 2019. The fourth quarter included a $2.0 million charitable contribution to the BOKF Foundation, which provides support to many nonprofit partners in our communities.

Loans, Deposits and Capital

Loans

Outstanding loans were $21.8 billion at December 31, 2019, a decrease of $534 million compared September 30, 2019. General paydowns in energy and commercial real estate, along with two anticipated large year-end paydowns in commercial, contributed to the decline in balances.

Outstanding commercial loan balances decreased by $393 million or 3 percent compared to September 30, 2019. Services loan balances decreased $144 million. Energy loan balances decreased $141 million. Wholesale/retail sector loans decreased $88 million. Public finance loans decreased by $35 million and manufacturing loans decreased $33 million while other commercial and industrial loans increased $47 million.

Commercial real estate loan balances decreased $192 million or 4 percent compared to September 30, 2019. Loans secured by office buildings decreased $86 million. Loans secured by multifamily residential properties decreased $59 million. Loans secured by retail properties decreased $24 million and loans secured by other commercial real estate properties decreased $22 million.

Deposits

Period-end deposits totaled $27.6 billion at December 31, 2019, a $1.5 billion increase over September 30, 2019. A focus on deposit growth throughout the year led to the execution of several specific initiatives that resulted in large deposit acquisitions during the fourth quarter. Interest-bearing transaction account balances grew by $1.9 billion and demand deposit balances decreased $383 million. Average deposits were $27.1 billion at December 31, 2019, an increase of $1.4 billion compared to September 30, 2019. Total interest-bearing transaction deposits increased $1.6 billion, partially offset by a decrease in demand deposits of $147 million.

Capital

The company's common equity Tier 1 capital ratio was 11.39 percent at December 31, 2019. In addition, the company's Tier 1 capital ratio was 11.39 percent, total capital ratio was 12.94 percent, and leverage ratio was 8.40 percent at December 31, 2019. At September 30, 2019, the company's common equity Tier 1 capital ratio was 11.06 percent, Tier 1 capital ratio was 11.06 percent, total capital ratio was 12.56 percent, and leverage ratio was 8.41 percent.

The company's tangible common equity ratio, a non-GAAP measure, was 8.98 percent at December 31, 2019 and 8.72 percent at September 30, 2019. 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.

The company repurchased 280,000 shares at an average price of $81.59 per share in the fourth quarter of 2019 and 336,713 shares at an average price of $77.03 in the third quarter of 2019.

Credit Quality

Nonperforming assets totaled $294 million or 1.35 percent of outstanding loans and repossessed assets at December 31, 2019, compared to $286 million or 1.28 percent at September 30, 2019. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $195 million or 0.90 percent of outstanding loans and repossessed assets at December 31, 2019, compared to $187 million or 0.85 percent at September 30, 2019.

Nonaccruing loans were $181 million or 0.83 percent of outstanding loans at December 31, 2019. Nonaccruing commercial loans totaled $115 million or 0.82 percent of outstanding commercial loans. Nonaccruing commercial real estate loans totaled $28 million or 0.62 percent of outstanding commercial real estate loans. Nonaccruing residential mortgage loans totaled $38 million or 1.81 percent of outstanding residential mortgage loans.

Nonaccruing loans increased $8.5 million from September 30, 2019, primarily due to a $6.6 million multifamily community development credit. Nonaccruing energy loans also increased $2.8 million. New nonaccruing loans identified in the fourth quarter totaled $49 million, offset by $24 million in payments received and $14 million in charge-offs.

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 $160 million at December 31, compared to $143 million at September 30. The increase largely resulted from energy loans, partially offset by a decrease in loans secured by commercial real estate.

Net charge-offs were $12.5 million or 0.22 percent of average loans on an annualized basis for the fourth quarter of 2019, compared to $10.6 million or 0.19 percent of average loans on an annualized basis for the third quarter of 2019. Net charge-offs were 0.21 percent of average loans over the last four quarters. Gross charge-offs were $14.3 million for the fourth quarter compared to $11.7 million for the previous quarter. Recoveries totaled $1.8 million for the fourth quarter of 2019 and $1.1 million for the third quarter of 2019.

Based on an evaluation of all credit factors, including specific impairment of two shared national credit energy loans where the Company is not the lead agent, changes in nonaccruing and potential problem loans and net charge-offs, the company determined that a $19.0 million provision for credit losses was appropriate for the fourth quarter of 2019. The company recorded a $12.0 million provision for credit losses in the third quarter of 2019.

The combined allowance for credit losses totaled $212 million or 0.98 percent of outstanding loans and 121 percent of nonaccruing loans at December 31, 2019, excluding residential mortgage loans guaranteed by U.S. government agencies. Excluding loans acquired in the CoBiz acquisition, which are measured at acquisition-date fair value, the combined allowance for loan losses was 1.06 percent of outstanding loans and 127 percent of nonaccruing loans at December 31, 2019 compared to 1.02 percent of outstanding loans and 130 percent of nonaccruing loans at September 30, 2019. The allowance for loan losses was $211 million and the accrual for off-balance sheet credit losses was $1.6 million. At September 30, 2019, the combined allowance for credit losses was $206 million or 0.92 percent of outstanding loans and 124 percent of nonaccruing loans, excluding loans guaranteed by U.S. government agencies. The allowance for loan losses was $204 million and the accrual for off-balance sheet credit losses was $1.4 million.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $11.3 billion at December 31, 2019, a $245 million increase compared to September 30, 2019. At December 31, 2019, the available for sale securities portfolio consisted primarily of $8.0 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $3.2 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. At December 31, 2019, the available for sale securities portfolio had a net unrealized gain of $138 million compared to $178 million at September 30, 2019.

The company also maintains a portfolio 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. This portfolio of fair value option securities decreased $718 million to $1.1 billion at December 31, 2019.

The net economic cost of the changes in fair value of mortgage servicing rights and related economic hedges was $2.2 million during the fourth quarter of 2019, including a $13.0 million decrease in the fair value of securities and derivative contracts held as an economic hedge, a $9.3 million increase in the fair value of mortgage servicing rights, and $1.5 million of related net interest revenue.

Conference Call and Webcast

The company will hold a conference call at 9 a.m. Central time on Wednesday, January 22, 2020 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 # 13697774.

About BOK Financial Corporation

BOK Financial Corporation is a $42 billion regional financial services company headquartered in Tulsa, Oklahoma with $83 billion in assets under management and administration. The company's stock is publicly traded on NASDAQ under the Global Select market listings (BOKF). BOK Financial Corporation's holdings include BOKF, NA; BOK Financial Securities, Inc., BOK Financial Private Wealth, Inc. and BOK Financial Insurance, Inc. BOKF, NA operates TransFund, Cavanal Hill Investment Management and BOK Financial Asset Management, Inc. BOKF, NA operates banking divisions across eight states as: Bank of Albuquerque; Bank of Oklahoma; Bank of Texas; and BOK Financial in Arizona, Arkansas, Colorado, Kansas and Missouri; as well as having limited purpose offices in Nebraska, Milwaukee and Connecticut. Through its subsidiaries, BOK Financial Corporation provides commercial and consumer banking, brokerage trading, investment, trust and insurance 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, 2019 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, including its latest acquisition of CoBiz Financial, Inc., 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, inflation, 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, 2019   Sept. 30, 2019
ASSETS      
Cash and due from banks $ 735,836     $ 761,130  
Interest-bearing cash and cash equivalents 522,985     465,458  
Trading securities 1,623,921     1,675,212  
Investment securities 293,418     304,224  
Available for sale securities 11,269,643     11,024,551  
Fair value option securities 1,098,577     1,816,398  
Restricted equity securities 460,552     479,018  
Residential mortgage loans held for sale 182,271     282,487  
Loans:      
Commercial 14,031,650     14,424,625  
Commercial real estate 4,433,783     4,626,057  
Residential mortgage 2,084,172     2,117,303  
Personal 1,201,382     1,117,382  
Total loans 21,750,987     22,285,367  
Allowance for loan losses (210,759 )   (204,432 )
Loans, net of allowance 21,540,228     22,080,935  
Premises and equipment, net 535,519     516,597  
Receivables 231,811     219,420  
Goodwill 1,048,091     1,048,091  
Intangible assets, net 125,271     124,320  
Mortgage servicing rights 201,886     193,661  
Real estate and other repossessed assets, net 20,359     21,026  
Derivative contracts, net 323,375     352,019  
Cash surrender value of bank-owned life insurance 389,879     387,035  
Receivable on unsettled securities sales 1,020,404     904,630  
Other assets 547,995     470,993  
TOTAL ASSETS $ 42,172,021     $ 43,127,205  
       
LIABILITIES AND EQUITY      
Deposits:      
Demand $ 9,461,291     $ 9,844,397  
Interest-bearing transaction 15,391,752     13,521,545  
Savings 550,276     557,593  
Time 2,217,849     2,243,541  
Total deposits 27,621,168     26,167,076  
Funds purchased and repurchase agreements 3,818,350     3,413,051  
Other borrowings 4,527,055     6,822,334  
Subordinated debentures 275,923     275,909  
Accrued interest, taxes and expense 259,701     218,775  
Due on unsettled securities purchases 182,547     703,448  
Derivative contracts, net 251,128     336,791  
Other liabilities 372,230     352,156  
TOTAL LIABILITIES 37,308,102     38,289,540  
Shareholders' equity:      
Capital, surplus and retained earnings 4,750,872     4,695,263  
Accumulated other comprehensive gain 104,923     133,753  
TOTAL SHAREHOLDERS' EQUITY 4,855,795     4,829,016  
Non-controlling interests 8,124     8,649  
TOTAL EQUITY 4,863,919     4,837,665  
TOTAL LIABILITIES AND EQUITY $ 42,172,021     $ 43,127,205  


AVERAGE BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
  Three Months Ended
  Dec. 31, 2019   Sept. 30, 2019   June 30, 2019   Mar. 31, 2019   Dec. 31, 2018
ASSETS                  
Interest-bearing cash and cash equivalents $ 573,203     $ 500,823     $ 535,491     $ 537,903     $ 563,132  
Trading securities 1,672,426     1,696,568     1,757,335     1,968,399     1,929,601  
Investment securities 298,567     308,090     328,482     343,282     364,737  
Available for sale securities 11,333,524     10,747,439     9,435,668     8,883,054     8,704,963  
Fair value option securities 1,521,528     1,553,879     898,772     594,349     277,575  
Restricted equity securities 479,687     476,781     413,812     395,432     362,729  
Residential mortgage loans held for sale 203,535     203,319     192,102     145,040     179,553  
Loans:                  
Commercial 14,344,534     14,507,185     14,175,057     13,966,521     13,587,344  
Commercial real estate 4,532,649     4,652,534     4,656,861     4,602,149     4,747,784  
Residential mortgage 2,130,646     2,129,421     2,146,315     2,193,334     2,222,063  
Personal 1,228,171     1,123,778     1,026,172     1,004,061     1,022,140  
Total loans 22,236,000     22,412,918     22,004,405     21,766,065     21,579,331  
Allowance for loan losses (205,417 )   (201,714 )   (205,532 )   (206,092 )   (209,613 )
Total loans, net 22,030,583     22,211,204     21,798,873     21,559,973     21,369,718  
Total earning assets 38,113,053     37,698,103     35,360,535     34,427,432     33,752,008  
Cash and due from banks 690,806     717,338     703,294     705,411     731,700  
Derivative contracts, net 311,542     331,834     328,802     262,927     299,319  
Cash surrender value of bank-owned life insurance 388,012     385,190     384,974     382,538     379,893  
Receivable on unsettled securities sales 1,973,604     1,742,794     1,437,462     1,224,700     799,548  
Other assets 2,736,337     2,705,089     2,629,710     2,669,673     2,423,275  
TOTAL ASSETS $ 44,213,354     $ 43,580,348     $ 40,844,777     $ 39,672,681     $ 38,385,743  
                   
LIABILITIES AND EQUITY                  
Deposits:                  
Demand $ 9,612,533     $ 9,759,710     $ 9,883,965     $ 9,988,088     $ 10,648,683  
Interest-bearing transaction 14,685,385     13,131,542     12,512,282     11,931,539     11,773,651  
Savings 554,605     557,122     558,738     541,575     526,275  
Time 2,247,717     2,251,800     2,207,391     2,153,277     2,146,786  
Total deposits 27,100,240     25,700,174     25,162,376     24,614,479     25,095,395  
Funds purchased and repurchase agreements 4,120,610     3,106,163     2,066,950     2,033,036     1,205,568  
Other borrowings 6,247,194     8,125,023     7,175,617     7,040,279     6,361,141  
Subordinated debentures 275,916     275,900     275,887     275,882     276,378  
Derivative contracts, net 276,078     300,051     283,484     273,786     268,848  
Due on unsettled securities purchases 784,174     745,893     821,688     453,937     493,887  
Other liabilities 561,654     547,144     460,732     501,788     341,438  
TOTAL LIABILITIES 39,365,866     38,800,348     36,246,734     35,193,187     34,042,655  
Total equity 4,847,488     4,780,000     4,598,043     4,479,494     4,343,088  
TOTAL LIABILITIES AND EQUITY $ 44,213,354     $ 43,580,348     $ 40,844,777     $ 39,672,681     $ 38,385,743  



STATEMENTS OF EARNINGS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except per share data)
  Three Months Ended   Year Ended
  December 31,   December 31,
  2019   2018   2019   2018
               
Interest revenue $ 369,857     $ 365,592     $ 1,531,958     $ 1,228,426  
Interest expense 99,608     79,906     419,079     243,559  
Net interest revenue 270,249     285,686     1,112,879     984,867  
Provision for credit losses 19,000     9,000     44,000     8,000  
Net interest revenue after provision for credit losses 251,249     276,686     1,068,879     976,867  
Other operating revenue:              
Brokerage and trading revenue 43,843     28,101     159,826     108,323  
Transaction card revenue 22,548     20,664     87,216     84,025  
Fiduciary and asset management revenue 45,021     43,665     177,025     184,703  
Deposit service charges and fees 27,331     29,393     112,485     112,153  
Mortgage banking revenue 25,396     21,880     107,541     97,787  
Other revenue 15,283     16,404     58,108     56,185  
Total fees and commissions 179,422     160,107     702,201     643,176  
Other gains (losses), net (1,649 )   (8,305 )   9,351     (2,265 )
Gain (loss) on derivatives, net (4,644 )   11,167     14,951     (422 )
Gain (loss) on fair value option securities, net (8,328 )   (282 )   15,787     (25,572 )
Change in fair value of mortgage servicing rights 9,297     (24,233 )   (53,517 )   4,668  
Gain (loss) on available for sale securities, net 4,487     (1,999 )   5,597     (2,801 )
Total other operating revenue 178,585     136,455     694,370     616,784  
Other operating expense:              
Personnel 168,422     160,706     660,565     583,131  
Business promotion 8,787     9,207     35,662     30,523  
Charitable contributions to BOKF Foundation 2,000     2,846     3,000     2,846  
Professional fees and services 13,408     20,712     54,861     59,099  
Net occupancy and equipment 26,316     27,780     110,275     97,981  
Insurance 5,393     4,248     20,906     23,318  
Data processing and communications 31,884     27,575     124,983     114,796  
Printing, postage and supplies 3,700     5,232     16,517     17,169  
Net losses and operating expenses of repossessed assets 2,403     2,581     6,707     17,052  
Amortization of intangible assets 5,225     5,331     20,618     9,620  
Mortgage banking costs 14,259     11,518     50,685     46,298  
Other expense 6,998     6,907     27,602     26,333  
Total other operating expense 288,795     284,643     1,132,381     1,028,166  
               
Net income before taxes 141,039     128,498     630,868     565,485  
Federal and state income taxes 30,257     20,121     130,183     119,061  
               
Net income 110,782     108,377     500,685     446,424  
Net income (loss) attributable to non-controlling interests 430     (79 )   (73 )   778  
Net income attributable to BOK Financial Corporation shareholders $ 110,352     $ 108,456     $ 500,758     $ 445,646  
               
Average shares outstanding:              
Basic 70,295,899     71,808,029     70,787,700     66,628,640  
Diluted 70,309,644     71,833,334     70,802,612     66,662,273  
               
Net income per share:              
Basic $ 1.56     $ 1.50     $ 7.03     $ 6.63  
Diluted $ 1.56     $ 1.50     $ 7.03     $ 6.63  



FINANCIAL HIGHLIGHTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and share data)
  Three Months Ended
  Dec. 31, 2019   Sept. 30, 2019   June 30, 2019   Mar. 31, 2019   Dec. 31, 2018
Capital:                  
Period-end shareholders' equity $ 4,855,795     $ 4,829,016     $ 4,709,438     $ 4,522,873     $ 4,432,109  
Risk weighted assets $ 31,671,519     $ 32,159,139     $ 32,040,741     $ 31,601,558     $ 30,742,295  
Risk-based capital ratios:                  
Common equity tier 1 11.39%     11.06%     10.84%     10.71%     10.92%  
Tier 1 11.39%     11.06%     10.84%     10.71%     10.92%  
Total capital 12.94%     12.56%     12.34%     12.24%     12.50%  
Leverage ratio 8.40%     8.41%     8.75%     8.76%     8.96%  
Tangible common equity ratio1 8.98%     8.72%     8.69%     8.64%     8.82%  
                   
Common stock:                  
Book value per share $ 68.80     $ 68.15     $ 66.15     $ 63.30     $ 61.45  
Tangible book value per share 52.17     51.60     49.68     46.82     45.03  
Market value per share:                  
High $ 88.28     $ 84.35     $ 88.17     $ 93.72     $ 98.29  
Low $ 71.85     $ 72.96     $ 72.60     $ 72.11     $ 69.96  
Cash dividends paid $ 36,011     $ 35,472     $ 35,631     $ 35,885     $ 35,977  
Dividend payout ratio 32.63%   24.94%   25.90%   32.44%   33.17%
Shares outstanding, net 70,579,598     70,858,010     71,193,770     71,449,982     72,122,932  
Stock buy-back program:                  
Shares repurchased 280,000     336,713     250,000     705,609     525,000  
Amount $ 22,844     $ 25,937     $ 20,125     $ 60,577     $ 45,057  
Average price per share $ 81.59     $ 77.03     $ 80.50     $ 85.85     $ 85.82  
                   
Performance ratios (quarter annualized):
Return on average assets 0.99%     1.29%     1.35%     1.13%     1.12%  
Return on average equity 9.05%     11.83%     12.02%     10.04%     9.93%  
Net interest margin 2.88%     3.01%     3.30%     3.30%     3.40%  
Efficiency ratio 63.65%     59.31%     59.51%     64.80%     63.25%  
                   
Reconciliation of non-GAAP measures:
1  Tangible common equity ratio:                  
Total shareholders' equity $ 4,855,795     $ 4,829,016     $ 4,709,438     $ 4,522,873     $ 4,432,109  
Less: Goodwill and intangible assets, net 1,173,362     1,172,411     1,172,564     1,177,573     1,184,112  
Tangible common equity $ 3,682,433     $ 3,656,605     $ 3,536,874     $ 3,345,300     $ 3,247,997  
                   
Total assets $ 42,172,021     $ 43,127,205     $ 41,893,073     $ 39,882,962     $ 38,020,504  
Less: Goodwill and intangible assets, net 1,173,362     1,172,411     1,172,564     1,177,573     1,184,112  
Tangible assets $ 40,998,659     $ 41,954,794     $ 40,720,509     $ 38,705,389     $ 36,836,392  
                   
Tangible common equity ratio 8.98%     8.72%     8.69%     8.64%     8.82%  
                   
                   
                   
                   
                   
                   
                   
                   
                   
                   
Other data:                  
Tax equivalent interest $ 2,726     $ 2,936     $ 3,481     $ 2,529     $ 3,067  
Net unrealized gain (loss) on available for sale securities $ 138,149     $ 178,060     $ 131,780     $ (2,609 )   $ (95,271 )
                   
Mortgage banking:                  
Mortgage production revenue $ 9,169     $ 13,814     $ 11,869     $ 7,868     $ 5,073  
                   
Mortgage loans funded for sale $ 855,643     $ 877,280     $ 729,841     $ 510,527     $ 497,353  
Add: current period-end outstanding commitments 158,460     379,377     344,087     263,434     160,848  
Less: prior period end outstanding commitments 379,377     344,087     263,434     160,848     197,752  
Total mortgage production volume $ 634,726     $ 912,570     $ 810,494     $ 613,113     $ 460,449  
                   
Mortgage loan refinances to mortgage loans funded for sale 57 %   56 %   31 %   30 %   23 %
Gain on sale margin 1.44 %   1.51 %   1.46 %   1.28 %   1.10 %
                   
Mortgage servicing revenue $ 16,227     $ 16,366     $ 16,262     $ 15,966     $ 16,807  
Average outstanding principal balance of mortgage loans serviced for others 20,856,446     21,172,874     21,418,690     21,581,835     21,706,541  
Average mortgage servicing revenue rates 0.31 %   0.31 %   0.30 %   0.30 %   0.31 %
                   
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net $ (4,714 )   $ 3,742     $ 11,128     $ 4,432     $ 12,162  
Gain (loss) on fair value option securities, net (8,328 )   4,597     9,853     9,665     (282 )
Gain (loss) on economic hedge of mortgage servicing rights (13,042 )   8,339     20,981     14,097     11,880  
Gain (loss) on changes in fair value of mortgage servicing rights 9,297     (12,593 )   (29,555 )   (20,666 )   (24,233 )
Loss on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue (3,745 )   (4,254 )   (8,574 )   (6,569 )   (12,353 )
Net interest revenue on fair value option securities2 1,544     1,245     1,296     1,129     695  
Total economic cost of changes in the fair value of mortgage servicing rights, net of economic hedges $ (2,201 )   $ (3,009 )   $ (7,278 )   $ (5,440 )   $ (11,658 )

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, 2019   Sept. 30, 2019   June 30, 2019   Mar. 31, 2019   Dec. 31, 2018
                   
Interest revenue $ 369,857     $ 395,207     $ 390,820     $ 376,074     $ 365,592  
Interest expense 99,608     116,111     105,388     97,972     79,906  
Net interest revenue 270,249     279,096     285,432     278,102     285,686  
Provision for credit losses 19,000     12,000     5,000     8,000     9,000  
Net interest revenue after provision for credit losses 251,249     267,096     280,432     270,102     276,686  
Other operating revenue:                  
Brokerage and trading revenue 43,843     43,840     40,526     31,617     28,101  
Transaction card revenue 22,548     22,015     21,915     20,738     20,664  
Fiduciary and asset management revenue 45,021     43,621     45,025     43,358     43,665  
Deposit service charges and fees 27,331     28,837     28,074     28,243     29,393  
Mortgage banking revenue 25,396     30,180     28,131     23,834     21,880  
Other revenue 15,283     17,626     12,437     12,762     16,404  
Total fees and commissions 179,422     186,119     176,108     160,552     160,107  
Other gains (losses), net (1,649 )   4,544     3,480     2,976     (8,305 )
Gain (loss) on derivatives, net (4,644 )   3,778     11,150     4,667     11,167  
Gain (loss) on fair value option securities,
net
(8,328 )   4,597     9,853     9,665     (282 )
Change in fair value of mortgage servicing
rights
9,297     (12,593 )   (29,555 )   (20,666 )   (24,233 )
Gain (loss) on available for sale securities,
net
4,487     5     1,029     76     (1,999 )
Total other operating revenue 178,585     186,450     172,065     157,270     136,455  
Other operating expense:                  
Personnel 168,422     162,573     160,342     169,228     160,706  
Business promotion 8,787     8,859     10,142     7,874     9,207  
Charitable contributions to BOKF
Foundation
2,000         1,000         2,846  
Professional fees and services 13,408     12,312     13,002     16,139     20,712  
Net occupancy and equipment 26,316     27,558     26,880     29,521     27,780  
Insurance 5,393     4,220     6,454     4,839     4,248  
Data processing and communications 31,884     31,915     29,735     31,449     27,575  
Printing, postage and supplies 3,700     3,825     4,107     4,885     5,232  
Net losses and operating expenses of repossessed assets 2,403     1,728     580     1,996     2,581  
Amortization of intangible assets 5,225     5,064     5,138     5,191     5,331  
Mortgage banking costs 14,259     14,975     11,545     9,906     11,518  
Other expense 6,998     6,263     8,212     6,129     6,907  
Total other operating expense 288,795     279,292     277,137     287,157     284,643  
Net income before taxes 141,039     174,254     175,360     140,215     128,498  
Federal and state income taxes 30,257     32,396     37,580     29,950     20,121  
Net income 110,782     141,858     137,780     110,265     108,377  
Net income (loss) attributable to non-controlling interests 430     (373 )   217     (347 )   (79 )
Net income attributable to BOK Financial Corporation shareholders $ 110,352     $ 142,231     $ 137,563     $ 110,612     $ 108,456  
                   
Average shares outstanding:                  
Basic 70,295,899     70,596,307     70,887,063     71,387,070     71,808,029  
Diluted 70,309,644     70,609,924     70,902,033     71,404,388     71,833,334  
Net income per share:                  
Basic $ 1.56     $ 2.00     $ 1.93     $ 1.54     $ 1.50  
Diluted $ 1.56     $ 2.00     $ 1.93     $ 1.54     $ 1.50  


LOANS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
    Dec. 31, 2019   Sept. 30, 2019   June 30, 2019   Mar. 31, 2019   Dec. 31, 2018
Commercial:                    
Energy   $ 3,973,377     $ 4,114,269     $ 3,921,353     $ 3,705,099     $ 3,590,333  
Services   3,122,163     3,266,249     3,309,458     3,287,563     3,258,192  
Healthcare   3,033,916     3,032,968     2,926,510     2,915,885     2,799,277  
Wholesale/retail   1,760,866     1,848,617     1,793,118     1,706,900     1,621,158  
Public finance   709,868     744,840     795,659     803,083     804,550  
Manufacturing   665,449     698,408     761,357     742,374     730,521  
Other commercial and industrial   766,011     719,274     829,453     801,071     832,047  
Total commercial   14,031,650     14,424,625     14,336,908     13,961,975     13,636,078  
                     
Commercial real estate:                    
Multifamily   1,265,562     1,324,839     1,300,372     1,210,358     1,288,065  
Office   928,379     1,014,275     1,056,306     1,033,158     1,072,920  
Industrial   856,117     873,536     828,569     767,757     778,106  
Retail   775,521     799,169     825,399     890,685     919,082  
Residential construction and land development   150,879     135,361     141,509     149,686     148,584  
Other commercial real estate   457,325     478,877     557,878     549,007     558,056  
Total commercial real estate   4,433,783     4,626,057     4,710,033     4,600,651     4,764,813  
                     
Residential mortgage:                    
Permanent mortgage   1,057,321     1,066,460     1,088,370     1,098,481     1,122,610  
Permanent mortgages guaranteed by U.S. government agencies   197,794     191,764     195,373     193,308     190,866  
Home equity   829,057     859,079     887,079     900,831     916,557  
Total residential mortgage   2,084,172     2,117,303     2,170,822     2,192,620     2,230,033  
                     
Personal   1,201,382     1,117,382     1,037,889     1,003,734     1,025,806  
                     
Total   $ 21,750,987     $ 22,285,367     $ 22,255,652     $ 21,758,980     $ 21,656,730  


LOANS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
  Dec. 31, 2019   Sept. 30, 2019   June 30, 2019   Mar. 31, 2019   Dec. 31, 2018
                   
Texas:                  
Commercial $ 6,174,894     $ 6,220,227     $ 5,877,265     $ 5,754,018     $ 5,438,133  
Commercial real estate 1,259,117     1,292,116     1,341,609     1,344,810     1,341,783  
Residential mortgage 268,282     273,931     272,878     265,927     266,805  
Personal 458,893     475,430     400,585     396,794     394,743  
Total Texas 8,161,186     8,261,704     7,892,337     7,761,549     7,441,464  
                   
Oklahoma:                  
Commercial 3,454,825     3,690,100     3,762,234     3,551,054     3,491,117  
Commercial real estate 631,026     679,786     717,970     665,190     700,756  
Residential mortgage 1,375,080     1,370,452     1,403,398     1,417,381     1,440,566  
Personal 479,784     383,246     382,764     374,807     375,543  
Total Oklahoma 5,940,715     6,123,584     6,266,366     6,008,432     6,007,982  
                   
Colorado:                  
Commercial 2,169,598     2,247,798     2,325,742     2,231,703     2,275,069  
Commercial real estate 927,826     975,066     1,023,410     957,348     963,575  
Residential mortgage 196,326     224,872     241,780     241,722     251,849  
Personal 80,613     78,733     72,537     65,812     72,916  
Total Colorado 3,374,363     3,526,469     3,663,469     3,496,585     3,563,409  
                   
Arizona:                  
Commercial 1,307,073     1,276,534     1,330,415     1,335,140     1,320,139  
Commercial real estate 728,832     771,425     761,243     791,466     889,903  
Residential mortgage 89,396     92,121     91,684     98,973     97,959  
Personal 97,143     78,694     76,335     61,875     68,546  
Total Arizona 2,222,444     2,218,774     2,259,677     2,287,454     2,376,547  
                   
Kansas/Missouri:                  
Commercial 527,872     566,969     602,836     667,859     659,793  
Commercial real estate 322,541     374,795     331,443     327,870     343,228  
Residential mortgage 66,771     67,035     71,229     75,560     77,971  
Personal 64,298     79,487     84,224     81,831     91,441  
Total Kansas/Missouri 981,482     1,088,286     1,089,732     1,153,120     1,172,433  
                   
New Mexico:                  
Commercial 305,320     335,409     350,520     342,915     340,489  
Commercial real estate 402,148     374,331     385,058     371,416     383,670  
Residential mortgage 80,325     81,383     82,390     85,326     87,346  
Personal 9,932     10,887     10,236     11,065     10,662  
Total New Mexico 797,725     802,010     828,204     810,722     822,167  
                   
Arkansas:                  
Commercial 92,068     87,588     87,896     79,286     111,338  
Commercial real estate 162,293     158,538     149,300     142,551     141,898  
Residential mortgage 7,992     7,509     7,463     7,731     7,537  
Personal 10,719     10,905     11,208     11,550     11,955  
Total Arkansas 273,072     264,540     255,867     241,118     272,728  
                   
TOTAL BOK FINANCIAL $ 21,750,987     $ 22,285,367     $ 22,255,652     $ 21,758,980     $ 21,656,730  

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, 2019   Sept. 30, 2019   June 30, 2019   Mar. 31, 2019   Dec. 31, 2018
Oklahoma:                  
  Demand $ 3,257,337     $ 3,515,312     $ 3,279,359     $ 3,432,239     $ 3,610,593  
  Interest-bearing:                  
  Transaction 8,574,912     7,447,799     7,020,484     6,542,548     6,445,831  
  Savings 306,194     308,103     307,785     309,875     288,210  
  Time 1,125,446     1,198,170     1,253,804     1,217,371     1,118,643  
  Total interest-bearing 10,006,552     8,954,072     8,582,073     8,069,794     7,852,684  
Total Oklahoma 13,263,889     12,469,384     11,861,432     11,502,033     11,463,277  
                   
Texas:                  
  Demand 2,766,379     2,870,429     2,974,005     2,966,743     3,291,433  
  Interest-bearing:                  
  Transaction 2,912,302     2,589,511     2,453,619     2,385,305     2,295,169  
  Savings 102,456     100,597     103,125     101,849     99,624  
  Time 495,343     464,264     425,253     419,269     423,880  
  Total interest-bearing 3,510,101     3,154,372     2,981,997     2,906,423     2,818,673  
Total Texas 6,276,480     6,024,801     5,956,002     5,873,166     6,110,106  
                   
Colorado:                  
  Demand 1,729,674     1,694,044     1,621,820     1,897,547     1,658,473  
  Interest-bearing:                  
  Transaction 1,769,037     1,910,874     1,800,271     1,844,632     1,899,203  
  Savings 53,307     60,107     57,263     58,919     57,289  
  Time 283,517     273,622     246,198     261,235     274,877  
  Total interest-bearing 2,105,861     2,244,603     2,103,732     2,164,786     2,231,369  
Total Colorado 3,835,535     3,938,647     3,725,552     4,062,333     3,889,842  
                   
New Mexico:                  
  Demand 623,722     645,698     630,861     662,362     691,692  
  Interest-bearing:                  
  Transaction 558,493     539,260     557,881     573,203     571,347  
  Savings 63,999     62,863     62,636     61,497     58,194  
  Time 238,140     236,135     232,569     228,212     224,515  
  Total interest-bearing 860,632     838,258     853,086     862,912     854,056  
Total New Mexico 1,484,354     1,483,956     1,483,947     1,525,274     1,545,748  
                   
Arizona:                  
  Demand 672,265     703,381     700,480     695,238     707,402  
  Interest-bearing:                  
  Transaction 684,358     599,655     560,429     621,735     575,567  
  Savings 10,314     12,487     11,966     12,144     10,545  
  Time 49,676     44,347     43,099     44,004     43,051  
  Total interest-bearing 744,348     656,489     615,494     677,883     629,163  
Total Arizona 1,416,613     1,359,870     1,315,974     1,373,121     1,336,565  
                   
                   
                   
Kansas/Missouri:                  
  Demand 384,533     376,020     431,856     410,799     418,199  
  Interest-bearing:                  
  Transaction 784,574     284,940     310,774     361,590     327,866  
  Savings 12,169     11,689     13,125     13,815     13,721  
  Time 17,877     19,126     19,205     19,977     19,688  
  Total interest-bearing 814,620     315,755     343,104     395,382     361,275  
Total Kansas/Missouri 1,199,153     691,775     774,960     806,181     779,474  
                   
Arkansas:                  
  Demand 27,381     39,513     29,176     31,624     36,800  
  Interest-bearing:                  
  Transaction 108,076     149,506     148,485     147,964     91,593  
  Savings 1,837     1,747     1,783     1,785     1,632  
  Time 7,850     7,877     7,810     8,321     8,726  
  Total interest-bearing 117,763     159,130     158,078     158,070     101,951  
Total Arkansas 145,144     198,643     187,254     189,694     138,751  
                   
TOTAL BOK FINANCIAL $ 27,621,168     $ 26,167,076     $ 25,305,121     $ 25,331,802     $ 25,263,763  



NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
  Three Months Ended
  Dec. 31, 2019   Sept. 30, 2019   June 30, 2019   Mar. 31, 2019   Dec. 31, 2018
                   
TAX-EQUIVALENT ASSETS YIELDS                  
Interest-bearing cash and cash equivalents 1.62%     2.42%     2.57%     2.56%     2.23%  
Trading securities 3.19%     3.49%     3.59%     3.88%     4.10%  
Investment securities 4.69%     4.46%     4.41%     4.50%     4.26%  
Available for sale securities 2.52%     2.60%     2.63%     2.57%     2.51%  
Fair value option securities 2.62%     2.79%     3.34%     3.62%     3.56%  
Restricted equity securities 5.37%     6.34%     6.30%     6.42%     6.39%  
Residential mortgage loans held for sale 3.55%     3.73%     3.65%     4.58%     4.00%  
Loans 4.75%     5.12%     5.39%     5.26%     5.09%  
Allowance for loan losses                  
Loans, net of allowance 4.80%     5.17%     5.45%     5.31%     5.14%  
Total tax-equivalent yield on earning assets 3.93%     4.25%     4.51%     4.46%     4.33%  
                   
COST OF INTEREST-BEARING LIABILITIES                
Interest-bearing deposits:                  
  Interest-bearing transaction 1.00%     1.08%     1.04%     0.94%     0.79%  
  Savings 0.11%     0.14%     0.12%     0.12%     0.11%  
  Time 1.94%     1.94%     1.90%     1.80%     1.54%  
Total interest-bearing deposits 1.09%     1.17%     1.13%     1.04%     0.87%  
Funds purchased and repurchase agreements 1.56%     2.01%     2.08%     2.07%     1.36%  
Other borrowings 2.01%     2.42%     2.67%     2.68%     2.51%  
Subordinated debt 5.40%     5.48%     5.53%     5.51%     5.38%  
Total cost of interest-bearing liabilities 1.40%     1.68%     1.70%     1.66%     1.42%  
Tax-equivalent net interest revenue spread 2.53%     2.57%     2.81%     2.80%     2.91%  
Effect of noninterest-bearing funding sources and other 0.35%     0.44%     0.49%     0.50%     0.49%  
Tax-equivalent net interest margin 2.88%     3.01%     3.30%     3.30%     3.40%  

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
  Dec. 31, 2019   Sept. 30, 2019   June 30, 2019   Mar. 31, 2019   Dec. 31, 2018
Nonperforming assets:                  
Nonaccruing loans:                  
Commercial $ 115,416     $ 111,706     $ 123,395     $ 90,358     $ 99,841  
Commercial real estate 27,626     23,185     21,670     21,508     21,621  
Residential mortgage 37,622     37,304     38,477     40,409     41,555  
Personal 287     271     237     302     230  
Total nonaccruing loans 180,951     172,466     183,779     152,577     163,247  
Accruing renegotiated loans guaranteed by U.S. government agencies 92,452     92,718     95,989     91,787     86,428  
Real estate and other repossessed assets 20,359     21,026     16,940     17,139     17,487  
Total nonperforming assets $ 293,762     $ 286,210     $ 296,708     $ 261,503     $ 267,162  
Total nonperforming assets excluding those guaranteed by U.S. government agencies $ 195,210     $ 187,160     $ 193,976     $ 162,770     $ 173,602  
                   
Nonaccruing loans by loan class:                  
Commercial:                  
Energy $ 91,722     $ 88,894     $ 71,632     $ 35,332     $ 47,494  
Services 7,483     6,119     10,087     9,555     8,567  
Healthcare 4,480     5,978     16,148     18,768     16,538  
Manufacturing 10,133     8,741     8,613     9,548     8,919  
Wholesale/retail 1,163     1,504     1,390     1,425     1,316  
Public finance                  
Other commercial and industrial 435     470     15,525     15,730     17,007  
Total commercial 115,416     111,706     123,395     90,358     99,841  
Commercial real estate:                  
Retail 18,868     20,132     20,057     20,159     20,279  
Residential construction and land development 350     350     350     350     350  
Multifamily 6,858     286     275         301  
Office     855     855     855      
Industrial 909     909              
Other commercial real estate 641     653     133     144     691  
Total commercial real estate 27,626     23,185     21,670     21,508     21,621  
Residential mortgage:                  
Permanent mortgage 20,441     20,165     21,803     22,937     23,951  
Permanent mortgage guaranteed by U.S.
government agencies
6,100     6,332     6,743     6,946     7,132  
Home equity 11,081     10,807     9,931     10,526     10,472  
Total residential mortgage 37,622     37,304     38,477     40,409     41,555  
Personal 287     271     237     302     230  
Total nonaccruing loans $ 180,951     $ 172,466     $ 183,779     $ 152,577     $ 163,247  
                   
                   
                                       
                                       
                                       
                                       
                                       
                                       
Performing loans 90 days past due1 $ 7,680     $ 1,541     $ 2,698     $ 610     $ 1,338  
                   
Gross charge-offs $ 14,268     $ 11,707     $ 13,227     $ 11,775     $ 14,515  
Recoveries (1,816 )   (1,066 )   (5,503 )   (1,689 )   (2,168 )
Net charge-offs $ 12,452     $ 10,641     $ 7,724     $ 10,086     $ 12,347  
                   
Provision for credit losses $ 19,000     $ 12,000     $ 5,000     $ 8,000     $ 9,000  
                   
Allowance for loan losses to period end loans 0.97%     0.92%     0.91%     0.94%     0.96%  
Combined allowance for credit losses to period end loans 0.98%     0.92%     0.92%     0.95%     0.97%  
Nonperforming assets to period end loans and repossessed assets 1.35%     1.28%     1.33%     1.20%     1.23%  
Net charge-offs (annualized) to average loans 0.22%     0.19%     0.14%     0.19%     0.23%  
Allowance for loan losses to nonaccruing loans1 120.54%     123.05%     114.40%     141.00%     132.89%  
Combined allowance for credit losses to nonaccruing loans1 121.44%     123.87%     115.48%     142.25%     134.03%  

1   Excludes residential mortgage loans guaranteed by agencies of the U.S. government.


SEGMENTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratios)
    Three Months Ended   Change
Commercial Banking   Dec. 31, 2019   Sept. 30, 2019   Dec. 31, 2018 1 4Q19 vs 3Q19   4Q19 vs 4Q18
Net interest revenue   $ 162,232     $ 178,955     $ 147,314     (9.3)%     10.1%  
Fees and commissions revenue   43,357     46,159     39,667     (6.1)%     9.3%  
Other operating expense   68,900     68,697     51,663     0.3%     33.4%  
Corporate expense allocations   11,942     12,613     9,112     (5.3)%     31.1%  
Net income   81,732     100,675     83,783     (18.8)%     (2.4)%  
                     
Average assets   24,345,447     23,973,067     19,341,921     1.6%     25.9%  
Average loans   19,100,101     19,226,347     15,628,731     (0.7)%     22.2%  
Average deposits   11,419,558     10,833,057     8,393,016     5.4%     36.1%  
                     
Consumer Banking                    
Net interest revenue   $ 43,176     $ 48,462     $ 41,364     (10.9)%     4.4%  
Fees and commissions revenue   44,884     51,460     42,840     (12.8)%     4.8%  
Other operating expense   59,702     59,699     56,346     %   6.0%  
Corporate expense allocations   11,798     11,776     11,114     0.2%     6.2%  
Net income   8,287     16,640     2,531     (50.2)%     227.4%  
                     
Average assets   9,772,710     9,827,130     8,071,978     (0.6)%     21.1%  
Average loans   1,730,467     1,773,831     1,745,642     (2.4)%     (0.9)%  
Average deposits   6,974,453     6,983,018     6,542,188     (0.1)%     6.6%  
                     
Wealth Management                    
Net interest revenue   $ 21,826     $ 23,066     $ 28,949     (5.4)%     (24.6)%  
Fees and commissions revenue   92,729     89,422     72,452     3.7%     28.0%  
Other operating expense   74,688     71,620     66,658     4.3%     12.0%  
Corporate expense allocations   9,296     9,416     11,256     (1.3)%     (17.4)%  
Net income   22,863     23,205     17,447     (1.5)%     31.0%  
                     
Average assets   11,225,213     10,391,225     8,694,289     8.0%     29.1%  
Average loans   1,667,278     1,671,102     1,448,805     (0.2)%     15.1%  
Average deposits   7,301,391     6,590,332     5,483,455     10.8%     33.2%  
Fiduciary assets   52,352,135     49,259,697     44,841,339     6.3%     16.7%  
Assets under management or administration   82,740,961     80,796,949     76,279,777     2.4%     8.5%  

1   Acquired assets and liabilities were allocated to segments in the second quarter of 2019.

Contact:

Cody McAlester
Vice President, Investor Relations
918-595-3030

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