BOK Financial Reports Annual Earnings of $317 Million for 2013

Fourth Quarter Earnings Total $73 Million

Business Wire

TULSA, Okla.--(BUSINESS WIRE)--

BOK Financial Corporation reported net income of $316.6 million or $4.59 per diluted share for the year ended December 31, 2013. Net income for the year ended December 31, 2012 was $351.2 million or $5.13 per diluted share.

Net income for fourth quarter of 2013 totaled $73.0 million or $1.06 per diluted share compared to net income of $75.7 million or $1.10 per diluted share for the third quarter of 2013.

Steven Bradshaw, President and Chief Executive Officer, stated, “Many of the factors that impacted earnings throughout 2013 persisted into the fourth quarter, including slower mortgage volumes and increased expenses to meet regulatory initiatives. However, loan growth accelerated nicely in the fourth quarter, led by commercial real estate and healthcare lending, and our capital strength and the credit quality of our loan portfolio remain at industry-leading levels.”

Bradshaw continued, “All told, 2013 was a challenging year. While we remained solidly profitable, it was the first year since 2008 that we were unable to grow earnings. Consistent earnings growth is the key to building long term shareholder value, and we don’t make excuses. Accordingly, our newly-constituted executive leadership team is executing on a plan to accelerate revenue growth, enhance our customer experience, and control internal expense growth while meeting heightened regulatory expectations and providing a great place to work for employees. These five key objectives will set the foundation for long-term growth in earnings and shareholder value.”

Highlights of fourth quarter of 2013 included:

  • Net interest revenue totaled $166.2 million for the fourth quarter of 2013 compared to $167.9 million for the third quarter of 2013. Net interest margin was 2.74% for the fourth quarter of 2013, and 2.75% for the third quarter of 2013.
  • Fees and commissions revenue totaled $142.4 million for the fourth quarter of 2013 compared to $145.2 million for the third quarter of 2013.
  • Operating expenses were $215.4 million for the fourth quarter, up $5.1 million over the previous quarter. Personnel expense was largely unchanged compared to the previous quarter. Non-personnel expense increased $5.3 million.
  • An $11.4 million negative provision for credit losses was recorded in the fourth quarter of 2013 compared to an $8.5 million negative provision for credit losses in the third quarter. BOK Financial had a net recovery of $3.0 million for the fourth quarter of 2013 compared to net charge-offs of $299 thousand in the third quarter.
  • The combined allowance for credit losses totaled $187 million or 1.47% of outstanding loans at December 31, 2013 compared to $196 million or 1.59% of outstanding loans at September 30, 2013. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $155 million or 1.23% of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at December 31, 2013 and $183 million or 1.49% of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at September 30, 2013.
  • Average loans increased $59 million over the previous quarter due primarily to growth in commercial loans. Average commercial loans were up $135 million. Average commercial real estate loans were unchanged. Residential mortgage and consumer loans decreased by a total of $69 million. Period-end outstanding loan balances were $12.8 billion at December 31, 2013, an increase of $442 million over September 30, 2013. Commercial loan balances increased $372 million and commercial real estate loans were up $66 million over the prior quarter. Growth in residential mortgage loans was largely offset by a decrease in consumer loans.
  • Average deposits increased $428 million over the previous quarter. Growth in demand deposits and interest-bearing transaction accounts was partially offset by a decrease in time deposit balances. Period end deposits grew by $778 million over September 30, 2013 to $20.3 billion at December 31, 2013. Interest-bearing transaction accounts increased $814 million. Demand deposit account balances were largely unchanged and time deposits decreased $24 million.
  • Tangible common equity ratio was 9.90% at December 31, 2013 and 9.73% at September 30, 2013. The tangible common equity ratio is a non-GAAP measure of capital strength used by the Company and investors based on shareholders' equity minus intangible assets and equity that does not benefit common shareholders. The Company and its subsidiary bank continue to exceed the regulatory definition of well capitalized. The Company's Tier 1 capital ratios, as defined by banking regulations, were 13.73% at December 31, 2013 and 13.51% at September 30, 2013.
  • The Company paid a regular quarterly cash dividend of $28 million or $0.40 per common share during the fourth quarter of 2013. On January 28, 2014, the board of directors approved a quarterly cash dividend of $0.40 per common share payable on or about February 28, 2014 to shareholders of record as of February 14, 2014.

Net Interest Revenue

Net interest revenue decreased $1.6 million compared to the third quarter of 2013. Net interest margin was 2.74% for the fourth quarter of 2013, compared to 2.75% for the third quarter of 2013.

The yield on average earning assets was 3.02%, a decrease of 1 basis point compared to the prior quarter. The yield on the available for sale securities portfolio decreased 4 basis points to 1.89% primarily due to cash flows being reinvested at lower current market rates. Cash flows received from payments on residential mortgage-backed securities are currently being reinvested in short-duration securities that yield nearly 1.75%. The loan portfolio yield decreased 5 basis points from the previous quarter to 4.01% primarily due to continued market pricing pressure. Funding costs were unchanged compared to the prior quarter at 0.42%.

Average earning assets decreased $140 million during the fourth quarter of 2013 primarily due to a $124 million decrease in the available for sale securities portfolio and a $95 million decrease in interest-bearing cash and cash equivalents. Average loan balances were up $59 million over the previous quarter. Average deposits increased $428 million and the average balance of borrowed funds decreased $699 million compared to the third quarter of 2013.

Steven Nell, Chief Financial Officer, commented, "In the fourth quarter, we began to proactively shrink the size of our bond portfolio to better position the balance sheet for a longer-term rising rate environment. Our outlook for earning assets is for continued declines in the securities portfolio to be partially offset by loan growth. The resulting shift in earnings asset mix will be supportive of the net interest margin."

Fees and Commissions Revenue

Fees and commissions revenue totaled $142.4 million for the fourth quarter of 2013, a decrease of $2.9 million compared to the third quarter of 2013.

Brokerage and trading revenue decreased $3.8 million compared to the prior quarter primarily due to a decrease in securities trading revenue and investment banking revenue, partially offset by an increase in customer hedging revenue.

Mortgage banking revenue totaled $21.9 million for the fourth quarter of 2013 compared to $23.5 million for the third quarter of 2013. Residential mortgage loans funded for sale totaled $849 million, a decrease of $231 million compared to the previous quarter. Outstanding commitments to originate mortgage loans also decreased to $259 million at December 31 from $351 million at September 30. Approximately 39% of loans originated in the fourth quarter were through correspondent channels, unchanged from the previous quarter. Refinanced mortgage loans represented 29% of loans originated for sale in the fourth quarter of 2013 compared to 30% in the third quarter of 2013.

Trust fees and commissions grew by $1.2 million over the third quarter of 2013 primarily due to the increase in the fair value of assets managed and seasonal increase in tax fees. Other revenue was up $3.7 million over the prior quarter primarily due to the favorable resolution of a lawsuit. Deposit service charges and fees decreased $1.3 million and transaction card revenue decreased $921 thousand.

On December 10, 2013, federal banking agencies issued final rules implementing Section 619 of the Dodd-Frank Wall Street Reform and Consumer Act, commonly referred to as the Volcker Rule. Section 619 is effective April 1, 2014. During the fourth quarter, BOK Financial recognized a $1.4 million impairment charge as the Company may be required to divest a portion of its ownership interests in private equity funds by July 21, 2015.

Operating Expenses

Total operating expenses were $215.4 million for the fourth quarter of 2013, up $5.1 million over the third quarter of 2013. Personnel costs were largely unchanged compared to the third quarter of 2013. Non-personnel expense increased $5.3 million over the third quarter of 2013. Professional fees and services expense increased $2.8 million, data processing and communications expense increased $2.5 million and net occupancy expense increased $1.8 million over the third quarter. Operating expenses for the third quarter included a $2.1 million discretionary contribution of appreciated stock to the BOKF Foundation. This contribution also resulted in a $1.1 million reduction in income tax expense.

Loans, Deposits and Capital

Loans

Outstanding loans were $12.8 billion at December 31, 2013, an increase of $442 million over the previous quarter. Commercial, commercial real estate and residential mortgage loan balances all grew over the prior quarter, partially offset by a decrease in consumer loan balances.

Outstanding commercial loan balances increased $372 million over September 30, 2013. All sectors of our commercial loan portfolio grew over the prior quarter. Service sector loans balances grew by $134 million and healthcare sector loans were up $114 million. Other commercial and industrial loans increased $47 million, energy loan balances increased $40 million and wholesale/retail sector loans grew $20 million over September 30, 2013. Unfunded energy loan commitments decreased by $105 million in the fourth quarter to $3 billion. All other unfunded commercial loan commitments totaled $3.6 billion at December 31, 2013, up $49 million over September 30, 2013.

Commercial real estate loans grew by $66 million over September 30, 2013. Loans secured by multifamily residential properties were up $56 million and retail sector loans by $29 million over the prior quarter. Loans secured by office buildings decreased $11 million and construction and land development loan balances decreased $10 million. Unfunded commercial real estate loan commitments totaled $534 million at December 31, 2013, a decrease of $13 million from September 30, 2013.

Residential mortgage loans increased $17 million over September 30, 2013, due primarily to growth in permanent mortgage balances guaranteed by U.S. government agencies. Growth in first lien, fully amortizing home equity loans, was partially offset by a decrease in non-guaranteed permanent mortgage loan balances. Consumer loans decreased $13 million compared to the prior quarter primarily due to a decrease in other consumer loans and continued runoff of the indirect automobile loan portfolio.

"As we moved through the fourth quarter, we saw significant acceleration in key lending segments including commercial real estate and our healthcare lending business," added Dan Ellinor, Chief Operating Officer. "As a result, we posted double-digit annualized loan growth during the quarter and now enter 2014 with strong pipelines and a solid plan for building on our commercial lending success."

"The energy lending business was essentially flat in the fourth quarter, as paydowns due to long term refinancing and asset sales continue to offset new deals," Ellinor continued. "Commercial and industrial lending, while stronger in the fourth quarter than in the third, was flat overall in 2013 as business owners waited for more consistent economic growth before making long-term investments that require additional financing. Net/net, we believe we can deliver loan growth in 2014 in the mid to high single digits."

Deposits

Deposits totaled $20.3 billion at December 31, 2013, an increase of $778 million over September 30, 2013 primarily due to normal seasonality and temporary customer activity. During the first half of January 2014, deposits decreased approximately $300 million. Demand deposit balances were largely unchanged compared to the prior quarter. Interest-bearing transaction account balances grew by $814 million and time deposits decreased $24 million. Among the lines of business, commercial deposits increased $270 million, consumer deposits decreased $23 million and wealth management deposits increased $537 million. Growth in commercial deposit balances was primarily due to growth in balances attributed to treasury service customers. Growth in commercial and industrial, small business and healthcare customer balances were partially offset by a decrease in balances attributed to energy and commercial real estate customers during the fourth quarter.

Capital

The Company and its subsidiary bank exceeded the regulatory definition of well capitalized at December 31, 2013. The Company's Tier 1 capital ratio was 13.73% at December 31, 2013 and 13.51% at September 30, 2013. The total capital ratio was 15.52% at December 31, 2013 and 15.35% at September 30, 2013. In addition, the Company's tangible common equity ratio, a non-GAAP measure, was 9.90% at December 31, 2013 and 9.73% at September 30, 2013.

In July 2013, banking regulators issued the final rule revising regulatory capital rules for substantially all U.S. banking organizations. The new capital rule will be effective for BOK Financial on January 1, 2015. The new capital rule establishes a 7% threshold for the Tier 1 common equity ratio consisting of a minimum level plus a capital conservation buffer. The Company expects to exclude unrealized gains and losses from available for sale securities from its calculation of Tier 1 capital, consistent with the treatment under current capital rules. BOK Financial's Tier 1 common equity ratio based on the existing Basel I standards was 13.55% as of December 31, 2013. Based on our interpretation of the new capital rule, our estimated Tier 1 common equity ratio would be approximately 12.60%, nearly 560 basis points above the 7% regulatory threshold.

Credit Quality

Nonperforming assets totaled $248 million or 1.92% of outstanding loans and repossessed assets at December 31, 2013 compared to $271 million or 2.18% of outstanding loans and repossessed assets at September 30, 2013. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $155 million or 1.23% of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at December 31, 2013 and $183 million or 1.49% at September 30, 2013, a decrease of $27 million or 15%.

Nonaccruing loans totaled $101 million or 0.79% of outstanding loans at December 31, 2013 compared to $113 million or 0.91% of outstanding loans at September 30, 2013. New nonaccruing loans identified in the fourth quarter totaled $21 million, offset by $16 million in payments received, $14 million in foreclosures and repossessions and $3.1 million in charge-offs.

Nonaccruing commercial loans were $17 million or 0.21% of outstanding commercial loans at December 31, 2013 compared to $20 million or 0.26% of outstanding commercial loans at September 30, 2013.

Nonaccruing commercial real estate loans decreased to $41 million or 1.69% of outstanding commercial real estate loans at December 31, 2013 from $53 million or 2.23% of outstanding commercial real estate loans at September 30, 2013. Nonaccruing commercial real estate loans consist primarily of land development and residential construction loans. Nonaccruing land development and residential construction loans totaled $17 million at December 31, 2013, a decrease of $3.4 million during the fourth quarter.

Nonaccruing residential mortgage loans totaled $42 million or 2.06% of outstanding residential mortgage loans, an increase of $3.1 million over September 30, 2013. Principally all non-guaranteed residential mortgage loans past due 90 days or more are nonaccruing. Residential mortgage loans past due 30 to 89 days and still accruing interest, excluding loans guaranteed by U.S. government agencies, totaled $13 million at December 31, 2013 and $8.6 million at September 30, 2013.

After evaluating all credit factors, the Company determined that an $11.4 million negative provision for credit losses was necessary during the fourth quarter of 2013. A major employer in the Tulsa, Ft. Worth and Kansas City markets exited bankruptcy during the fourth quarter. The Company had previously established a non-specific allowance related to the secondary exposure to the employer's bankruptcy by employees, retirees, vendors, suppliers and other business partners. In addition, all credit metrics improved during the quarter and gross loss rates continued to decline. The combined allowance for credit losses totaled $187 million or 1.47% of outstanding loans and 185.35% of nonaccruing loans at December 31, 2013. The allowance for loan losses was $185 million and the accrual for off-balance sheet credit losses was $2.1 million. Gross charge-offs totaled $3.1 million for the fourth quarter, compared to $4.7 million for the previous quarter. Recoveries totaled $6.1 million for the fourth quarter of 2013. BOK Financial had a net recovery of $3.0 million for the fourth quarter of 2013 compared with net charge-offs of $299 thousand or 0.01% of average loans on an annualized basis for the third quarter of 2013.

Real estate and other repossessed assets totaled $92 million at December 31, 2013, primarily consisting of $53 million of 1-4 family residential properties (including $37 million guaranteed by U.S. government agencies), $18 million of developed commercial real estate properties, $14 million of undeveloped land and $7.0 million of residential land and land development properties. The distribution of real estate owned and other repossessed assets among various markets included $19 million attributed to Oklahoma, $17 million attributed to Arizona and $27.8 million attributed to New Mexico. Real estate and other repossessed assets decreased $16 million during the fourth quarter of 2013. Additions of $14 million were offset by $29 million of sales. Additions included $12 million and sales included $12 million of 1-4 family residential properties guaranteed by U.S. government agencies. Net gains on sales and write-downs of real estate and other repossessed assets totaled $211 thousand in the fourth quarter of 2013 compared to $438 thousand in the third quarter.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $10.1 billion at December 31, 2013 and $10.4 billion at September 30, 2013. At December 31, 2013, the available for sale portfolio consisted primarily of $7.7 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $2.1 billion of commercial mortgage-backed securities fully backed by U.S. government agencies.

At December 31, 2013 the available for sale securities portfolio had a net unrealized loss of $38 million compared to a net unrealized gain of $7.4 million at September 30, 2013. Substantially all of the change in net unrealized losses and gains resulted from rising interest rates. Net unrealized gains on residential mortgage-backed securities issued by U.S. government agencies at September 30, 2013 decreased $42 million during the fourth quarter to a net unrealized loss of $4.2 million at December 31, 2013. Commercial mortgage-backed securities had a net unrealized loss of $44 million at December 31, 2013, compared to a net unrealized loss of $40 million at September 30, 2013.

In the fourth quarter of 2013, the Company recognized net gains of $1.6 million from sales of $270 million of available for sale securities. Securities were sold either because they had reached their expected maximum potential return or sold to reinvest those proceeds into shorter average life securities. Net gains from sales of $356 million of available for sale securities in the third quarter of 2013 totaled $478 thousand.

The Company also maintains a portfolio of residential mortgage-backed securities issued by U.S. government agencies and interest rate derivative contracts designated as an economic hedge of the changes in the fair value of our mortgage servicing rights. Due to fluctuations in residential mortgage interest rates during the fourth quarter of 2013, the value of our mortgage servicing rights increased by $6.1 million. The value of securities and interest rate derivative contracts held as an economic hedge decreased by $3.9 million.

About BOK Financial Corporation

BOK Financial is a $27 billion regional financial services company based in Tulsa, Oklahoma. The Company's stock is publicly traded on NASDAQ under the Global Select market listings (BOKF). BOK Financial's holdings include BOKF, NA, BOSC, Inc., The Milestone Group, Inc. and Cavanal Hill Investment Management, Inc. BOKF, NA operates the TransFund electronic funds network and seven banking divisions: Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas and Colorado State Bank and Trust. Through its subsidiaries, the Company provides commercial and consumer banking, investment and trust services, mortgage origination and servicing, and an electronic funds transfer network. For more information, visit www.bokf.com.

The Company will continue to evaluate critical assumptions and estimates, such as the appropriateness of the allowance for credit losses and asset impairment as of December 31, 2013 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,” 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 involve judgments as to future 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 (1) the ability to fully realize expected cost savings from mergers within the expected time frames, (2) the ability of other companies on which BOK Financial relies to provide goods and services in a timely and accurate manner, (3) changes in interest rates and interest rate relationships, (4) demand for products and services, (5) the degree of competition by traditional and nontraditional competitors, (6) changes in banking regulations, tax laws, prices, levies and assessments, (7) the impact of technological advances and (8) trends in consumer 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)

    December 31,
2013
    September 30,
2013
    December 31,
2012
ASSETS
Cash and due from banks $ 512,931 $ 625,671 $ 710,739
Interest-bearing cash and cash equivalents 574,282 535,313 575,500
Trading securities 91,616 150,887 214,102
Investment securities 677,878 644,225 499,534
Available for sale securities 10,147,162 10,372,903 11,287,221
Fair value option securities 167,125 167,860 284,296
Restricted equity shares 85,240 125,540 64,807
Residential mortgage loans held for sale 200,546 230,511 293,762
Loans:
Commercial 7,943,221 7,571,075 7,641,912
Commercial real estate 2,415,353 2,349,229 2,228,999
Residential mortgage 2,052,026 2,034,765 2,045,040
Consumer       381,664         395,031         395,505  
Total loans 12,792,264 12,350,100 12,311,456
Allowance for loan losses       (185,396 )       (194,325 )       (215,507 )
Loans, net of allowance 12,606,868 12,155,775 12,095,949
Premises and equipment, net 277,849 275,347 265,920
Receivables 117,126 108,435 114,185
Goodwill 359,759 359,759 361,979
Intangible assets, net 24,564 25,407 28,192
Mortgage servicing rights, net 153,333 140,863 100,812
Real estate and other repossessed assets, net 92,272 108,122 103,791
Derivative contracts, net 265,012 377,325 338,106
Cash surrender value of bank-owned life insurance 284,801 282,490 274,531
Receivable on unsettled securities sales 17,174 93,020 211,052
Other assets       359,894         386,914         324,153  
TOTAL ASSETS     $ 27,015,432       $ 27,166,367       $ 28,148,631  
 
LIABILITIES AND EQUITY
Deposits:
Demand $ 7,316,277 $ 7,331,976 $ 8,038,286
Interest-bearing transaction 9,934,051 9,119,810 9,888,038
Savings 323,006 319,849 284,744
Time       2,695,993         2,720,020         2,967,992  
Total deposits 20,269,327 19,491,655 21,179,060
Funds purchased 868,081 992,345 1,167,416
Repurchase agreements 813,454 782,418 887,030
Other borrowings 1,040,353 1,837,181 651,775
Subordinated debentures 347,802 347,758 347,633
Accrued interest, taxes, and expense 194,870 182,076 176,678
Due on unsettled securities purchases 45,740 114,259 297,453
Derivative contracts, net 247,185 232,544 283,589
Other liabilities       133,647         159,157         164,316  
TOTAL LIABILITIES 23,960,459 24,139,393 25,154,950
Shareholders' equity:
Capital, surplus and retained earnings 3,045,672 2,993,870 2,807,940
Accumulated other comprehensive income (loss)       (25,623 )       (2,626 )       149,920  
TOTAL SHAREHOLDERS' EQUITY 3,020,049 2,991,244 2,957,860
Non-controlling interest       34,924         35,730         35,821  
TOTAL EQUITY       3,054,973         3,026,974         2,993,681  
TOTAL LIABILITIES AND EQUITY     $ 27,015,432       $ 27,166,367       $ 28,148,631  
 
 
AVERAGE BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION

(in thousands)

    Three Months Ended
December 31,
2013
    September 30,
2013
    June 30,
2013
    March 31,
2013
    December 31,
2012
ASSETS
Interest-bearing cash and cash equivalents $ 559,918 $ 654,591 $ 408,224 $ 388,132 $ 413,920
Trading securities 127,011 124,689 181,866 162,353 165,109
Investment securities 672,722 621,104 610,940 534,772 474,085
Available for sale securities 10,434,810 10,558,677 11,060,700 11,292,181 11,482,212
Fair value option securities 167,490 169,299 216,312 251,725 292,490
Restricted equity securities 123,009 155,938 144,332 80,433 65,275
Residential mortgage loans held for sale 217,811 225,789 261,977 216,816 272,581
Loans:
Commercial 7,737,884 7,602,951 7,606,918 7,498,905 7,441,957
Commercial real estate 2,352,915 2,359,120 2,286,674 2,309,988 2,170,676
Residential mortgage 1,998,980 2,043,332 2,013,004 2,034,315 1,991,530
Consumer       371,798         396,694         370,847         381,752         385,156  
Total loans 12,461,576 12,402,096 12,277,444 12,224,960 11,989,319
Allowance for loan losses       (193,309 )       (201,616 )       (206,807 )       (214,017 )       (229,095 )
Total loans, net       12,268,267         12,200,480         12,070,637         12,010,943         11,760,224  
Total earning assets 24,571,038 24,710,567 24,954,988 24,937,355 24,925,896
Cash and due from banks 324,349 386,331 546,558 465,412 455,247
Derivative contracts, net 314,530 377,664 401,485 286,772 316,579
Cash surrender value of bank-owned life insurance 283,289 280,909 278,501 275,705 272,778
Receivable on unsettled securities sales 83,016 90,014 135,964 178,561 144,077
Other assets       1,526,566         1,409,247         1,341,828         1,369,626         1,382,199  
TOTAL ASSETS     $ 27,102,788       $ 27,254,732       $ 27,659,324       $ 27,513,431       $ 27,496,776  
 
LIABILITIES AND EQUITY
Deposits:
Demand $ 7,356,063 $ 7,110,079 $ 6,888,983 $ 7,002,046 $ 7,505,074
Interest-bearing transaction 9,486,136 9,276,136 9,504,128 9,836,204 9,343,421
Savings 323,123 317,912 315,421 296,319 278,714
Time       2,710,019         2,742,970         2,818,533         2,913,999         3,010,367  
Total deposits 19,875,341 19,447,097 19,527,065 20,048,568 20,137,576
Funds purchased 748,074 776,356 789,302 1,155,983 1,295,442
Repurchase agreements 752,286 799,175 819,373 878,679 900,131
Other borrowings 1,551,591 2,175,747 2,172,417 863,360 364,425
Subordinated debentures 347,781 347,737 347,695 347,654 347,613
Derivative contracts, net 294,315 330,819 334,877 220,037 246,296
Due on unsettled securities purchases 152,078 111,998 330,926 665,175 854,474
Other liabilities       327,519         300,880         310,015         336,136         379,332  
TOTAL LIABILITIES 24,048,985 24,289,809 24,631,670 24,515,592 24,525,289
Total equity       3,053,803         2,964,923         3,027,654         2,997,839         2,971,487  
TOTAL LIABILITIES AND EQUITY     $ 27,102,788       $ 27,254,732       $ 27,659,324       $ 27,513,431       $ 27,496,776  
 
 
STATEMENTS OF EARNINGS -- UNAUDITED
BOK FINANCIAL CORPORATION

(in thousands, except per share data)

    Three Months Ended       Year Ended
December 31, December 31,
2013     2012 2013     2012
 
Interest revenue $ 183,120 $ 195,206 $ 745,371 $ 794,871
Interest expense       16,876         20,945           70,894         87,322  
Net interest revenue 166,244 174,261 674,477 707,549
Provision for credit losses       (11,400 )       (14,000 )         (27,900 )       (22,000 )
Net interest revenue after provision for credit losses       177,644         188,261           702,377         729,549  
Other operating revenue:
Brokerage and trading revenue 28,515 31,958 125,478 126,930
Transaction card revenue 29,134 28,009 116,823 107,985
Trust fees and commissions 25,074 22,030 96,082 80,053
Deposit service charges and fees 23,440 24,174 95,110 98,917
Mortgage banking revenue 21,876 46,410 121,934 169,302
Bank-owned life insurance 2,285 2,673 10,155 11,089
Other revenue       12,048         9,661           38,262         34,604  
Total fees and commissions 142,372 164,915 603,844 628,880
Gain (loss) on other assets, net 651 137 (925 ) (1,415 )
Loss on derivatives, net (930 ) (637 ) (4,367 ) (301 )
Gain (loss) on fair value option securities, net (2,805 ) (2,081 ) (15,212 ) 9,230
Change in fair value of mortgage servicing rights 6,093 4,689 22,720 (9,210 )
Gain on available for sale securities, net 1,634 1,066 10,720 33,845
Total other-than-temporary impairment losses (504 ) (2,574 ) (1,144 )
Portion of loss recognized in (reclassified from) other comprehensive income               (1,163 )         266         (6,207 )
Net impairment losses recognized in earnings               (1,667 )         (2,308 )       (7,351 )
Total other operating revenue 147,015 166,422 614,472 653,678
Other operating expense:
Personnel 125,662 131,192 505,225 491,033
Business promotion 6,020 6,150 22,598 23,338
Contribution to BOKF Foundation 2,062 2,062 2,062
Professional fees and services 10,003 10,082 32,552 34,015
Net occupancy and equipment 19,103 16,883 69,773 66,726
Insurance 4,394 3,789 16,122 15,356
Data processing and communications 28,196 25,010 106,075 98,904
Printing, postage and supplies 3,126 3,403 13,885 14,228
Net losses and operating expenses of repossessed assets 1,618 6,665 5,160 20,528
Amortization of intangible assets 842 1,065 3,428 2,927
Mortgage banking costs 7,071 10,542 31,088 44,334
Other expense       9,384         9,931           32,652         26,912  
Total other operating expense 215,419 226,774 840,620 840,363
 
Net income before taxes 109,240 127,909 476,229 542,864
Federal and state income taxes       35,318         44,293           157,298         188,740  
Net income 73,922 83,616 318,931 354,124
Net income attributable to non-controlling interest       946         1,051           2,322         2,933  
Net income attributable to BOK Financial Corporation shareholders     $ 72,976       $ 82,565         $ 316,609       $ 351,191  
Average shares outstanding:
Basic 68,095,254 67,622,777 67,988,897 67,684,043
Diluted 68,293,758 67,914,717 68,205,519 67,964,940
 
Net income per share:
Basic $ 1.06 $ 1.21 $ 4.61 $ 5.15
Diluted $ 1.06 $ 1.21 $ 4.59 $ 5.13
 
 
FINANCIAL HIGHLIGHTS -- UNAUDITED
BOK FINANCIAL CORPORATION

(in thousands, except ratio and share data)

    Three Months Ended
December 31,
2013
    September 30,
2013
    June 30,
2013
    March 31,
2013
    December 31,
2012
Capital:
Period-end shareholders' equity $ 3,020,049 $ 2,991,244 $ 2,957,637 $ 3,011,958 $ 2,957,860
Risk weighted assets $ 19,437,711 $ 19,366,620 $ 19,157,978 $ 18,756,648 $ 19,016,673
Risk-based capital ratios:
Tier 1 13.73 % 13.51 % 13.37 % 13.35 % 12.78 %
Total capital 15.52 % 15.35 % 15.28 % 15.68 % 15.13 %
Leverage ratio 10.05 % 9.80 % 9.43 % 9.28 % 9.01 %
Tangible common equity ratio1 9.90 % 9.73 % 9.38 % 9.70 % 9.25 %
Tier 1 common equity ratio2 13.55 % 13.33 % 13.19 % 13.16 % 12.59 %
 
Common stock:
Book value per share $ 43.88 $ 43.49 $ 43.03 $ 43.85 $ 43.29
Market value per share:
High $ 66.32 $ 69.36 $ 65.95 $ 62.77 $ 59.77
Low $ 60.81 $ 62.93 $ 60.52 $ 55.05 $ 54.19
Cash dividends paid $ 27,523 $ 26,135 $ 26,118 $ 26,067 $ 94,231
Dividend payout ratio 37.72 % 34.51 % 32.68 % 29.63 % 114.13 %
Shares outstanding, net 68,829,450 68,787,584 68,739,208 68,687,718 68,327,351
Stock buy-back program:
Shares repurchased
Amount     $       $       $       $       $  
Average price per share     $       $       $       $       $  
 
Performance ratios (quarter annualized):
Return on average assets 1.07 % 1.10 % 1.16 % 1.30 % 1.19 %
Return on average equity 9.48 % 10.13 % 10.59 % 11.90 % 11.05 %
Net interest margin 2.74 % 2.75 % 2.80 % 2.90 % 2.95 %
Efficiency ratio 66.57 % 66.14 % 58.82 % 60.25 % 64.63 %
 
Reconciliation of non-GAAP measures:

1    Tangible common equity ratio:

Total shareholders' equity $ 3,020,049 $ 2,991,244 $ 2,957,637 $ 3,011,958 $ 2,957,860
Less: Goodwill and intangible assets, net       (384,323 )       (385,166 )       (386,001 )       (386,876 )       (390,171 )
Tangible common equity     $ 2,635,726       $ 2,606,078       $ 2,571,636       $ 2,625,082       $ 2,567,689  
Total assets $ 27,015,432 $ 27,166,367 $ 27,808,200 $ 27,447,158 $ 28,148,631
Less: Goodwill and intangible assets, net       (384,323 )       (385,166 )       (386,001 )       (386,876 )       (390,171 )
Tangible assets     $ 26,631,109       $ 26,781,201       $ 27,422,199       $ 27,060,282       $ 27,758,460  
Tangible common equity ratio       9.90 %       9.73 %       9.38 %       9.70 %       9.25 %

2    Tier 1 common equity ratio:

Tier 1 capital $ 2,668,981 $ 2,616,610 $ 2,561,399 $ 2,503,892 $ 2,430,671
Less: Non-controlling interest       (34,924 )       (35,730 )       (35,245 )       (35,934 )       (35,821 )
Tier 1 common equity     $ 2,634,057       $ 2,580,880       $ 2,526,154       $ 2,467,958       $ 2,394,850  
Risk weighted assets     $ 19,437,711       $ 19,366,620       $ 19,157,978       $ 18,756,648       $ 19,016,673  
Tier 1 common equity ratio       13.55 %       13.33 %       13.19 %       13.16 %       12.59 %
 
 
FINANCIAL HIGHLIGHTS -- UNAUDITED
BOK FINANCIAL CORPORATION

(in thousands, except ratio and share data)

    Three Months Ended
December 31,
2013
    September 30,
2013
    June 30,
2013
    March 31,
2013
    December 31,
2012
Other data:
Fiduciary assets $ 30,137,092 $ 29,593,140 $ 28,280,214 $ 27,606,180 $ 25,829,038
Mortgage servicing portfolio $ 13,718,942 $ 13,298,479 $ 12,741,651 $ 12,272,691 $ 11,981,624
Mortgage commitments $ 258,873 $ 351,196 $ 547,508 $ 466,571 $ 356,634
Mortgage loans funded for sale $ 848,870 $ 1,080,167 $ 1,196,038 $ 956,315 $ 1,073,541
Mortgage loan refinances to total fundings 29 % 30 % 48 % 62 % 62 %
Tax equivalent adjustment $ 2,467 $ 2,565 $ 2,647 $ 2,619 $ 2,472
Net unrealized gain (loss) on available for sale securities $ (37,929 ) $ 7,425 $ 42,233 $ 228,620 $ 254,587
 
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net $ (931 ) $ 31 $ (2,526 ) $ (1,654 ) $ (707 )
Loss on fair value option securities, net       (3,013 )       (89 )       (9,102 )       (3,232 )       (2,177 )
Loss on economic hedge of mortgage servicing rights (3,944 ) (58 ) (11,628 ) (4,886 ) (2,884 )
Gain (loss) on changes in fair value of mortgage servicing rights       6,093         (346 )       14,315         2,658         4,689  
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges     $ 2,149       $ (404 )     $ 2,687       $ (2,228 )     $ 1,805  
 
Net interest revenue on fair value option securities     $ 811       $ 741       $ 910       $ 828       $ 748  
 
 
QUARTERLY EARNINGS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION

(in thousands, except ratio and per share data)

    Three Months Ended
December 31,
2013
    September 30,
2013
    June 30,
2013
    March 31,
2013
    December 31,
2012
 
Interest revenue $ 183,120 $ 185,428 $ 186,777 $ 190,046 $ 195,206
Interest expense       16,876         17,539         17,885         18,594         20,945  
Net interest revenue 166,244 167,889 168,892 171,452 174,261
Provision for credit losses       (11,400 )       (8,500 )               (8,000 )       (14,000 )
Net interest revenue after provision for credit losses 177,644 176,389 168,892 179,452 188,261
Other operating revenue:
Brokerage and trading revenue 28,515 32,338 32,874 31,751 31,958
Transaction card revenue 29,134 30,055 29,942 27,692 28,009
Trust fees and commissions 25,074 23,892 24,803 22,313 22,030
Deposit service charges and fees 23,440 24,742 23,962 22,966 24,174
Mortgage banking revenue 21,876 23,486 36,596 39,976 46,410
Bank-owned life insurance 2,285 2,408 2,236 3,226 2,673
Other revenue       12,048         8,314         8,760         9,140         9,661  
Total fees and commissions 142,372 145,235 159,173 157,064 164,915
Gain (loss) on other assets, net 651 (377 ) (1,666 ) 467 137
Gain (loss) on derivatives, net (930 ) 31 (2,527 ) (941 ) (637 )
Loss on fair value option securities, net (2,805 ) (80 ) (9,156 ) (3,171 ) (2,081 )
Change in fair value of mortgage servicing rights 6,093 (346 ) 14,315 2,658 4,689
Gain on available for sale securities, net 1,634 478 3,753 4,855 1,066
Total other-than-temporary impairment losses (1,436 ) (1,138 ) (504 )
Portion of loss recognized in (reclassified from) other comprehensive income               (73 )       586         (247 )       (1,163 )
Net impairment losses recognized in earnings               (1,509 )       (552 )       (247 )       (1,667 )
Total other operating revenue 147,015 143,432 163,340 160,685 166,422
Other operating expense:
Personnel 125,662 125,799 128,110 125,654 131,192
Business promotion 6,020 5,355 5,770 5,453 6,150
Contribution to BOKF Foundation 2,062 — ... 2,062
Professional fees and services 10,003 7,183 8,381 6,985 10,082
Net occupancy and equipment 19,103 17,280 16,909 16,481 16,883
Insurance 4,394 3,939 4,044 3,745 3,789
Data processing and communications 28,196 25,695 26,734 25,450 25,010
Printing, postage and supplies 3,126 3,505 3,580 3,674 3,403
Net losses and operating expenses of repossessed assets 1,618 2,014 282 1,246 6,665
Amortization of intangible assets 842 835 875 876 1,065
Mortgage banking costs 7,071 8,753 7,910 7,354 10,542
Other expense       9,384         7,878         8,326         7,064         9,931  
Total other operating expense 215,419 210,298 210,921 203,982 226,774
Net income before taxes 109,240 109,523 121,311 136,155 127,909
Federal and state income taxes       35,318         33,461         41,423         47,096         44,293  
Net income 73,922 76,062 79,888 89,059 83,616
Net income (loss) attributable to non-controlling interest       946         324         (43 )       1,095         1,051  
Net income attributable to BOK Financial Corporation shareholders     $ 72,976       $ 75,738       $ 79,931       $ 87,964       $ 82,565  
Average shares outstanding:
Basic 68,095,254 68,049,179 67,993,822 67,814,550 67,622,777
Diluted 68,293,758 68,272,861 68,212,497 68,040,180 67,914,717
Net income per share:
Basic $ 1.06 $ 1.10 $ 1.16 $ 1.28 $ 1.21
Diluted $ 1.06 $ 1.10 $ 1.16 $ 1.28 $ 1.21
 
 
LOANS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION

(In thousands)

    December 31,
2013
    September 30,
2013
    June 30,
2013
    March 31,
2013
    December 31,
2012
Commercial:
Energy $ 2,351,760 $ 2,311,991 $ 2,384,746 $ 2,349,432 $ 2,460,659
Services 2,282,210 2,148,551 2,204,253 2,114,799 2,164,186
Wholesale/retail 1,201,364 1,181,806 1,175,543 1,085,000 1,106,439
Manufacturing 391,751 382,460 386,133 399,818 348,484
Healthcare 1,274,246 1,160,212 1,118,810 1,081,636 1,081,406
Integrated food services 150,494 141,440 163,551 173,800 191,106
Other commercial and industrial       291,396       244,615       275,084       213,820       289,632
Total commercial       7,943,221       7,571,075       7,708,120       7,418,305       7,641,912
 
Commercial real estate:
Construction and land development 206,258 216,456 225,654 237,829 253,093
Retail 586,047 556,918 553,412 584,279 522,786
Office 411,499 422,043 459,558 420,644 427,872
Multifamily 576,502 520,454 500,452 460,474 402,896
Industrial 243,877 245,022 253,990 237,049 245,994
Other real estate       391,170       388,336       324,030       344,885       376,358
Total commercial real estate       2,415,353       2,349,229       2,317,096       2,285,160       2,228,999
 
Residential mortgage:
Permanent mortgage 1,062,744 1,078,661 1,095,871 1,091,575 1,123,965
Permanent mortgages guaranteed by U.S. government agencies 181,598 163,919 156,887 162,419 160,444
Home equity       807,684       792,185       787,027       758,456       760,631
Total residential mortgage       2,052,026       2,034,765       2,039,785       2,012,450       2,045,040
 
Consumer:
Indirect automobile 6,513 10,757 16,555 24,368 34,735
Other consumer       375,151       384,274       359,226       353,281       360,770
Total consumer       381,664       395,031       375,781       377,649       395,505
 
Total     $ 12,792,264     $ 12,350,100     $ 12,440,782     $ 12,093,564     $ 12,311,456
 
 
LOANS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION

(in thousands)

    December 31,
2013
    September 30,
2013
    June 30,
2013
    March 31,
2013
    December 31,
2012
 
Bank of Oklahoma:
Commercial $ 2,902,140 $ 2,801,979 $ 2,993,247 $ 2,853,608 $ 3,089,686
Commercial real estate 602,010 564,141 569,780 568,500 580,694
Residential mortgage 1,524,212 1,497,027 1,503,457 1,468,434 1,488,486
Consumer       192,283       207,360       211,744       207,662       220,096
Total Bank of Oklahoma       5,220,645       5,070,507       5,278,228       5,098,204       5,378,962
 
Bank of Texas:
Commercial 3,052,274 2,858,970 2,849,888 2,718,050 2,726,925
Commercial real estate 816,574 853,857 813,659 800,577 771,796
Residential mortgage 260,544 263,945 263,916 272,406 275,408
Consumer       131,297       129,144       105,390       110,060       116,252
Total Bank of Texas       4,260,689       4,105,916       4,032,853       3,901,093       3,890,381
 
Bank of Albuquerque:
Commercial 342,336 325,542 296,036 271,075 265,830
Commercial real estate 308,829 306,914 314,871 332,928 326,135
Residential mortgage 133,900 131,756 133,058 129,727 130,337
Consumer       13,842       14,583       14,364       14,403       15,456
Total Bank of Albuquerque       798,907       778,795       758,329       748,133       737,758
 
Bank of Arkansas:
Commercial 81,556 73,063 61,414 54,191 62,049
Commercial real estate 78,264 84,364 85,546 88,264 90,821
Residential mortgage 7,922 10,466 10,691 11,285 13,046
Consumer       8,023       9,426       11,819       13,943       15,421
Total Bank of Arkansas       175,765       177,319       169,470       167,683       181,337
 
Colorado State Bank & Trust:
Commercial 735,626 748,331 786,262 822,942 776,610
Commercial real estate 190,355 158,320 146,137 171,251 173,327
Residential mortgage 62,821 66,475 62,490 56,052 59,363
Consumer       22,686       22,592       23,148       20,990       19,333
Total Colorado State Bank & Trust       1,011,488       995,718       1,018,037       1,071,235       1,028,633
 
Bank of Arizona:
Commercial 417,702 379,817 355,698 326,266 313,296
Commercial real estate 257,477 250,129 258,938 229,020 201,760
Residential mortgage 47,111 49,109 51,774 54,285 57,803
Consumer       7,887       7,059       4,947       5,664       4,686
Total Bank of Arizona       730,177       686,114       671,357       615,235       577,545
 
Bank of Kansas City:
Commercial 411,587 383,373 365,575 372,173 407,516
Commercial real estate 161,844 131,504 128,165 94,620 84,466
Residential mortgage 15,516 15,987 14,399 20,261 20,597
Consumer       5,646       4,867       4,369       4,927       4,261
Total Bank of Kansas City       594,593       535,731       512,508       491,981       516,840
 
TOTAL BOK FINANCIAL     $ 12,792,264     $ 12,350,100     $ 12,440,782     $ 12,093,564     $ 12,311,456
 

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)

    December 31,
2013
    September 30,
2013
    June 30,
2013
    March 31,
2013
    December 31,
2012
Bank of Oklahoma:
Demand $ 3,432,940 $ 3,442,831 $ 3,552,328 $ 3,591,661 $ 4,207,263
Interest-bearing:
Transaction 6,318,045 5,565,462 5,644,959 6,132,736 6,023,384
Savings 191,880 189,186 185,345 185,363 163,512
Time       1,214,507       1,197,617       1,179,869       1,264,365       1,267,854
Total interest-bearing       7,724,432       6,952,265       7,010,173       7,582,464       7,454,750
Total Bank of Oklahoma       11,157,372       10,395,096       10,562,501       11,174,125       11,662,013
 
Bank of Texas:
Demand 2,481,603 2,498,668 2,299,632 2,098,891 2,606,176
Interest-bearing:
Transaction 1,966,580 1,853,586 1,931,758 1,979,318 2,129,084
Savings 64,632 63,368 63,745 63,218 58,429
Time       638,465       667,873       692,888       717,974       762,233
Total interest-bearing       2,669,677       2,584,827       2,688,391       2,760,510       2,949,746
Total Bank of Texas       5,151,280       5,083,495       4,988,023       4,859,401       5,555,922
 
Bank of Albuquerque:
Demand 502,395 491,894 455,580 446,841 427,510
Interest-bearing:
Transaction 529,140 541,565 525,481 513,774 511,758
Savings 33,944 34,003 34,096 35,560 31,926
Time       327,281       334,946       346,506       354,303       364,928
Total interest-bearing       890,365       910,514       906,083       903,637       908,612
Total Bank of Albuquerque       1,392,760       1,402,408       1,361,663       1,350,478       1,336,122
 
Bank of Arkansas:
Demand 38,566 33,378 31,778 32,761 39,897
Interest-bearing:
Transaction 144,018 205,891 187,223 156,079 101,868
Savings 1,986 1,919 1,974 2,642 2,239
Time       32,949       35,184       37,272       41,613       42,573
Total interest-bearing       178,953       242,994       226,469       200,334       146,680
Total Bank of Arkansas       217,519       276,372       258,247       233,095       186,577
 
Colorado State Bank & Trust:
Demand 409,942 375,060 367,407 298,470 336,252
Interest-bearing:
Transaction 541,675 536,734 519,584 528,060 676,144
Savings 26,880 27,782 27,948 27,187 25,889
Time       407,088       424,225       451,168       461,496       472,305
Total interest-bearing       975,643       988,741       998,700       1,016,743       1,174,338
Total Colorado State Bank & Trust       1,385,585       1,363,801       1,366,107       1,315,213       1,510,590
 
 
DEPOSITS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION

(in thousands)

December 31,
2013
September 30,
2013
June 30,
2013
March 31,
2013
December 31,
2012
Bank of Arizona:
Demand 204,092 188,365 186,382 157,754 161,093
Interest-bearing:
Transaction 364,736 339,158 376,305 378,420 360,276
Savings 2,432 2,511 2,238 2,122 1,978
Time       34,391       36,285       35,490       34,690       31,371
Total interest-bearing       401,559       377,954       414,033       415,232       393,625
Total Bank of Arizona       605,651       566,319       600,415       572,986       554,718
 
Bank of Kansas City:
Demand 246,739 301,780 252,216 274,482 260,095
Interest-bearing:
Transaction 69,857 77,414 81,250 53,915 85,524
Savings 1,252 1,080 1,029 983 771
Time       41,312       23,890       24,779       25,613       26,728
Total interest-bearing       112,421       102,384       107,058       80,511       113,023
Total Bank of Kansas City       359,160       404,164       359,274       354,993       373,118
 
TOTAL BOK FINANCIAL     $ 20,269,327     $ 19,491,655     $ 19,496,230     $ 19,860,291     $ 21,179,060
 
 
NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
    Three Months Ended
December 31,
2013
    September 30,
2013
    June 30,
2013
    March 31,
2013
    December 31,
2012
 
TAX-EQUIVALENT ASSETS YIELDS
Interest-bearing cash and cash equivalents 0.18 % 0.22 % 0.27 % 0.19 % 0.21 %
Trading securities 1.73 % 2.25 % 2.40 % 2.13 % 1.54 %
Investment securities:
Taxable 5.75 % 5.78 % 5.88 % 5.88 % 5.90 %
Tax-exempt     1.66 %     1.60 %     1.88 %     2.38 %     2.95 %
Total investment securities     3.12 %     3.22 %     3.58 %     4.17 %     4.69 %
Available for sale securities:
Taxable 1.89 % 1.92 % 1.94 % 2.09 % 2.15 %
Tax-exempt     2.74 %     2.81 %     3.59 %     3.39 %     3.10 %
Total available for sale securities     1.89 %     1.93 %     1.96 %     2.11 %     2.16 %
Fair value option securities 2.06 % 1.80 % 1.92 % 2.06 % 1.64 %
Restricted equity securities 5.06 % 3.05 % 4.05 % 4.30 % 4.15 %
Residential mortgage loans held for sale 4.16 % 3.87 % 3.54 % 3.36 % 3.44 %
Loans 4.01 % 4.06 % 4.12 % 4.20 % 4.33 %
Allowance for loan losses                              
Loans, net of allowance 4.07 % 4.13 % 4.19 % 4.27 % 4.42 %
Total tax-equivalent yield on earning assets 3.02 % 3.03 % 3.10 % 3.21 % 3.30 %
 
COST OF INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest-bearing transaction 0.11 % 0.11 % 0.12 % 0.13 % 0.15 %
Savings 0.12 % 0.13 % 0.15 % 0.16 % 0.18 %
Time     1.55 %     1.55 %     1.57 %     1.62 %     1.80 %
Total interest-bearing deposits 0.42 % 0.43 % 0.44 % 0.46 % 0.54 %
Funds purchased 0.08 % 0.07 % 0.10 % 0.13 % 0.15 %
Repurchase agreements 0.06 % 0.06 % 0.06 % 0.07 % 0.09 %
Other borrowings 0.31 % 0.28 % 0.27 % 0.49 % 0.90 %
Subordinated debt     2.48 %     2.52 %     2.54 %     2.52 %     2.56 %
Total cost of interest-bearing liabilities     0.42 %     0.42 %     0.43 %     0.46 %     0.54 %
Tax-equivalent net interest revenue spread 2.60 % 2.61 % 2.67 % 2.75 % 2.76 %
Effect of noninterest-bearing funding sources and other     0.14 %     0.14 %     0.13 %     0.15 %     0.19 %
Tax-equivalent net interest margin     2.74 %     2.75 %     2.80 %     2.90 %     2.95 %
 

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.

 
CREDIT QUALITY INDICATORS
BOK FINANCIAL CORPORATION

(in thousands, except ratios)

    Three Months Ended
December 31,
2013
    September 30,
2013
    June 30,
2013
    March 31,
2013
    December 31,
2012
Nonperforming assets:
Nonaccruing loans:
Commercial $ 16,760 $ 19,522 $ 20,869 $ 19,861 $ 24,467
Commercial real estate 40,850 52,502 58,693 65,175 60,626
Residential mortgage 42,320 39,256 40,534 45,426 46,608
Consumer       1,219       1,624       2,037       2,171       2,709
Total nonaccruing loans 101,149 112,904 122,133 132,633 134,410
Accruing renegotiated loans guaranteed by U.S. government agencies 54,322 50,099 48,733 47,942 38,515
Real estate and other repossessed assets:
Guaranteed by U.S. government agencies 37,431 37,906 32,155 27,864 22,365
Other       54,841       70,216       77,957       74,837       81,426
Total real estate and other repossessed assets       92,272       108,122       110,112       102,701       103,791
Total nonperforming assets     $ 247,743     $ 271,125     $ 280,978     $ 283,276     $ 276,716
Total nonperforming assets excluding those guaranteed by U.S. government agencies     $ 155,213     $ 182,543     $ 200,007     $ 207,256     $ 215,347
 
Nonaccruing loans by loan portfolio sector:
Commercial:
Energy $ 1,860 $ 1,953 $ 2,277 $ 2,377 $ 2,460
Manufacturing 592 843 876 1,848 2,007
Wholesale / retail 6,969 7,223 6,700 2,239 3,077
Integrated food services 684
Services 4,922 6,927 7,448 9,474 12,090
Healthcare 1,586 1,733 2,670 2,962 3,166
Other commercial and industrial       831       843       898       961       983
Total commercial       16,760       19,522       20,869       19,861       24,467
Commercial real estate:
Construction and land development 17,377 20,784 21,135 23,462 26,131
Retail 4,857 7,914 8,406 8,921 8,117
Office 6,391 6,838 7,828 12,851 6,829
Multifamily 7 4,350 6,447 4,501 2,706
Industrial 252 2,198 3,968
Other commercial real estate       11,966       12,616       14,877       13,242       12,875
Total commercial real estate       40,850       52,502       58,693       65,175       60,626
Residential mortgage:
Permanent mortgage 34,279 31,797 32,747 38,153 39,863
Permanent mortgage guaranteed by U.S. government agencies 777 577 83 214 489
Home equity       7,264       6,882       7,704       7,059       6,256
Total residential mortgage       42,320       39,256       40,534       45,426       46,608
Consumer 1,219 1,624 2,037 2,171 2,709
Total nonaccruing loans     $ 101,149     $ 112,904     $ 122,133     $ 132,633     $ 134,410
 
 
Performing loans 90 days past due1 $ 1,415 $ 188 $ 2,460 $ 4,229 $ 3,925
 
 
CREDIT QUALITY INDICATORS
BOK FINANCIAL CORPORATION

(in thousands, except ratios)

    Three Months Ended
December 31,
2013
    September 30,
2013
    June 30,
2013
    March 31,
2013
    December 31,
2012
Gross charge-offs $ (3,113 ) $ (4,708 ) $ (8,552 ) $ (8,909 ) $ (8,000 )
Recoveries       6,068         4,409         6,210         6,557         3,723  
Net recoveries (charge-offs)     $ 2,955       $ (299 )     $ (2,342 )     $ (2,352 )     $ (4,277 )
 
Provision for credit losses $ (11,400 ) $ (8,500 ) $ $ (8,000 ) $ (14,000 )
 
Allowance for loan losses to period end loans 1.45 % 1.57 % 1.63 % 1.70 % 1.75 %
Combined allowance for credit losses to period end loans 1.47 % 1.59 % 1.65 % 1.71 % 1.77 %
Nonperforming assets to period end loans and repossessed assets 1.92 % 2.18 % 2.24 % 2.32 % 2.23 %
Net charge-offs (annualized) to average loans (0.09 )% 0.01 % 0.08 % 0.08 % 0.14 %
Allowance for loan losses to nonaccruing loans 183.29 % 172.12 % 166.31 % 155.29 % 160.34 %
Combined allowance for credit losses to nonaccruing loans 185.35 % 173.54 % 167.63 % 156.12 % 161.76 %
 
1 Excludes residential mortgage loans guaranteed by agencies of the U.S. government.

Contact:
Investor Relations
Joseph Crivelli, 918-595-3027
or
Corporate Communications
Andrea Myers, 918-594-7794

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