BOK Financial Reports Quarterly Earnings of $77 Million

Loans Grow 9% on Annualized Basis

Business Wire

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

BOK Financial Corporation reported net income of $76.6 million or $1.11 per diluted share for the first quarter of 2014. Net income was $73.0 million or $1.06 per diluted share for the fourth quarter of 2013 and $88.0 million or $1.28 per diluted share for the first quarter of 2013.

Steven G. Bradshaw, Chief Executive Officer, stated, “We are executing well on our strategic objectives, and as a result the first quarter was solid for BOK Financial Corporation. Sustained loan growth, sequential revenue growth from key fee-generating lines of business, and careful expense controls led to a strong bottom line. Credit quality remains pristine with net recoveries in the quarter, and our capital base remains at industry-leading levels.”

Bradshaw added, “We also closed on our acquisition of GTRUST Financial Corporation, and announced the acquisition of MBM Advisors during the quarter. Each of these acquisitions strengthens our presence in an important growth market while bringing a new wealth management product line that can be delivered across the footprint.”

Highlights of first quarter of 2014 included:

  • Net interest revenue totaled $162.6 million for the first quarter of 2014 compared to $166.2 million for the fourth quarter of 2013. Net interest margin was 2.71% for the first quarter of 2014 and 2.74% for the fourth quarter of 2013.
  • Fees and commissions revenue totaled $140.9 million for the first quarter of 2014 compared to $142.4 million for the fourth quarter of 2013.
  • Operating expenses were $185.1 million for the first quarter, a decrease of $30.3 million compared to the previous quarter. Personnel expense decreased $21.2 million. The Company reversed $15.5 million accrued in 2011 through 2013 for amounts payable to certain executive officers under the 2011 True-Up Plan. Non-personnel expense decreased $9.1 million.
  • No provision for credit losses was recorded in the first quarter of 2014 compared to an $11.4 million negative provision for credit losses in the fourth quarter of 2013. BOK Financial had a net recovery of $2.5 million for the first quarter of 2014 compared to a net recovery of $3.0 million in the previous quarter.
  • The combined allowance for credit losses totaled $190 million or 1.45% of outstanding loans at March 31, 2014 compared to $187 million or 1.47% of outstanding loans at December 31, 2013. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $153 million or 1.18% of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at March 31, 2014 and $155 million or 1.23% of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at December 31, 2013.
  • Average loans increased by $486 million over the previous quarter due primarily to growth in commercial loans. Average commercial loans were up $234 million and average commercial real estate loans increased $252 million. Period-end outstanding loan balances were $13.1 billion at March 31, 2014, a $286 million increase over December 31, 2013. Commercial loan balances increased $108 million and commercial real estate loans increased $216 million.
  • Average deposits increased $360 million over the previous quarter. Growth in interest-bearing transaction accounts was partially offset by a decrease in demand and time deposit balances. Period-end deposits were $20.4 billion at March 31, 2014, a $120 million increase over December 31, 2013, primarily due to growth in demand deposit balances.
  • The Company's Tier 1 common equity ratio, as defined by banking regulations, was 13.59% at both March 31, 2014 and December 31, 2013. The Company and its subsidiary bank continue to exceed the regulatory definition of well capitalized. The Company's Tier 1 capital ratio was 13.77% at both March 31, 2014 and December 31, 2013. Total capital ratio was 15.55% at March 31, 2014 and 15.56% at December 31, 2013. The Company's leverage ratio was 10.17% at March 31, 2014 and 10.05% at December 31, 2013.
  • The Company paid a regular quarterly cash dividend of $28 million or $0.40 per common share during the first quarter of 2014. On April 29, 2014, the board of directors approved a quarterly cash dividend of $0.40 per common share payable on or about May 30, 2014 to shareholders of record as of May 16, 2014.

Net Interest Revenue

Net interest revenue decreased $3.6 million compared to the fourth quarter of 2013. Net interest margin was 2.71% for the first quarter of 2014 compared to 2.74% for the fourth quarter of 2013.

The yield on average earning assets was 2.99%, a decrease of 3 basis points compared to the prior quarter. The loan portfolio yield decreased 12 basis points from the previous quarter to 3.89% primarily due to continued market pricing pressure and improved credit quality of new loans. The yield on the available for sale securities portfolio increased 2 basis points to 1.91%. Cash flows received from payments on the securities portfolio funded loan growth or reduced short-term borrowings. Excess cash flows were reinvested in short-duration securities that yield nearly 2%. Funding costs decreased 1 basis point compared to the prior quarter to 0.41%.

Average earning assets increased $16 million during the first quarter of 2014. Growth in average loan balances of $486 million over the previous quarter was offset by a $358 million decrease in the available for sale securities portfolio. The average balance of interest-bearing cash and cash equivalents, trading securities, restricted equity securities and residential mortgage loans held for sale all decreased compared to the prior quarter. Average deposits increased $360 million and the average balance of borrowed funds decreased $218 million compared to the fourth quarter of 2013.

Steven Nell, Chief Financial Officer, stated, "We are executing our plan to reduce the size of our bond portfolio to position the balance sheet for a rising rate environment. During the first quarter, the bond portfolio decreased by $213 million, and by the end of 2014 our goal is to reduce it by $1 billion total. The strong loan growth we are experiencing is enabling us to accomplish this goal while minimizing the impact on net interest income."

Fees and Commissions Revenue

Fees and commissions revenue totaled $140.9 million for the first quarter of 2014, a decrease of $1.5 million compared to the fourth quarter of 2013. The fourth quarter of 2013 included $2.0 million from the favorable resolution of a lawsuit.

Brokerage and trading revenue increased $1.0 million over the prior quarter. Retail brokerage and investment banking revenue both increased, partially offset by a decrease in customer hedging revenue. Securities trading revenue was largely unchanged compared to the prior quarter.

Mortgage banking revenue totaled $22.8 million for the first quarter of 2014, an increase of $968 thousand over the fourth quarter of 2013. Revenue from mortgage loan production was up $721 thousand. Loan production revenue is largely recognized at the time the commitment to originate the mortgage loan is made. Outstanding commitments to originate mortgage loans grew by $129 million over December 31 to $388 million at March 31. Residential mortgage loans funded for sale totaled $728 million, a decrease of $121 million compared to the previous quarter. Approximately 38% of loans originated in the first quarter were through correspondent channels, compared to 39% in the previous quarter. Origination from the Home Direct mortgage origination channel grew to 7% of loans originated in the first quarter. Refinanced mortgage loans represented 32% of loans originated for sale in the first quarter of 2014 compared to 29% in the fourth quarter of 2013. Revenue from mortgage loan servicing grew by $247 thousand due to an increase in the volume of loans serviced.

Fiduciary and asset management revenue grew by $648 thousand over the fourth quarter of 2013 primarily due to the increase in the fair value of assets managed. Deposit service charges and fees decreased $751 thousand. Overdraft fees decreased, partially offset by increased service fees on commercial accounts. Transaction card revenue was unchanged compared to the prior quarter. Growth in merchant services fees was offset by a decrease in interchange fees paid on debit cards issued by the Company.

Operating Expenses

Total operating expenses were $185.1 million for the first quarter of 2014, a decrease of $30.3 million compared to the fourth quarter of 2013.

Personnel costs decreased $21.2 million compared to the fourth quarter of 2013. The accrual for amounts payable to certain executive officers of the Company under the 2011 True-Up Plan was reduced by $15.5 million based on information published by peer banks during the first quarter of 2014 in their annual proxy filings. The accrual amount is determined based on the compensation levels of comparable senior executives at a defined group of peer banks. The composition of this peer group and related compensation levels of senior executives both changed based on annual proxy filings. The expense recognized for the 2011 True-Up Plan in the fourth quarter of 2013 was $4.5 million. Amounts due under the 2011 True-Up Plan, which is currently accrued at $54 million, will be paid in May 2014.

Personnel costs during the first quarter of 2014 were also adjusted downward by $1.7 million to reflect changes in deferred compensation owed to certain executive officers. This adjustment was offset by a decrease in the value of specific assets held as an economic hedge against the deferred compensation liability. The decreased value of these assets is reported in Gain (loss) on other assets, net.

Non-personnel expense decreased $9.1 million compared to the fourth quarter of 2013. Mortgage banking costs decreased $3.4 million compared to the prior quarter primarily due to lower provisions for losses related to mortgage loans sold with standard representations and warranties and losses related to repurchases of loans sold to U.S. government agencies that no longer qualify for sale accounting. The Company also finalized hold-back claims related to purchased mortgage loan servicing rights which reduced expenses by $1.3 million in the first quarter. Other expenses decreased $2.5 million, professional fees and services expense decreased $2.4 million and net occupancy expense decreased $2.2 million compared to the fourth quarter. BOK Financial made a $2.4 million discretionary contribution of appreciated stock to the BOKF Foundation during the first quarter. This contribution also resulted in a $1.2 million reduction in income tax expense.

Loans, Deposits and Capital

Loans

Outstanding loans were $13.1 billion at March 31, 2014, an increase of $286 million over the previous quarter. Commercial and commercial real estate balances grew over the prior quarter, partially offset by a decrease in residential mortgage and consumer loan balances.

Outstanding commercial loan balances increased $108 million or 5% on an annualized basis over December 31, 2013 primarily due to a $122 million increase in healthcare sector loans. Manufacturing sector loan balances grew by $52 million and wholesale/retail sector loans were up $25 million over the prior quarter. Service sector loans decreased $50 million and integrated food services loans decreased $24 million. Energy and other commercial and industrial loans were also down compared to December 31, 2013. Unfunded energy loan commitments increased by $117 million in the first quarter to $2.6 billion. All other unfunded commercial loan commitments totaled $3.5 billion at March 31, 2014, a decrease of $53 million compared to December 31, 2013.

Commercial real estate loans grew by $216 million or 9% over December 31, 2013. Loans secured by multifamily residential properties were up $86 million. Loans secured by industrial facilities increased $61 million. Retail sector loans grew by $54 million and loans secured by office buildings increased $25 million over the prior quarter. Construction and land development loan balances decreased $21 million. Unfunded commercial real estate loan commitments totaled $524 million at March 31, 2014, an $11 million decrease from December 31, 2013.

Residential mortgage loans decreased $33 million compared to December 31, 2013, due primarily to a decrease in non-government guaranteed permanent mortgage loan balances. Home equity loans also decreased compared to the prior quarter. Consumer loans decreased $5.6 million compared to the prior quarter.

Daniel H. Ellinor, Chief Operating Officer, noted, “Loan growth has been strong all across the commercial banking line of business. Our healthcare group continues to execute well and generated continued double-digit annualized loan growth in the first quarter. Commercial real estate is also accelerating, with nine percent loan growth in the first quarter driven by highly-rated borrowers in the multifamily, retail, and industrial markets. While our core energy specialty lending group remained flat during the quarter, the lending pipeline is the strongest it has been in over a year. Our exploration and production portfolio was up $50 million during the quarter. In total, we continue to expect mid to high single-digit annualized loan growth for the balance of 2014.”

Ellinor added, “The market remains intensely competitive with continued price competition across all lending lines. Accordingly, spreads continue to narrow. However, we have the ability to compete on price while remaining disciplined on credit structure. Our diversified fee-generating businesses give us the opportunity to drive additional revenue from new borrowers. In addition, average spreads during the quarter were impacted by $100 million in net new loans to investment-grade municipal and commercial borrowers.”

Deposits

Deposits totaled $20.4 billion at March 31, 2014, an increase of $120 million over December 31, 2013. Demand deposit balances grew by $156 million and savings account balances were up $33 million over the prior quarter. Interest-bearing transaction account balances decreased $34 million and time deposits decreased $34 million. Among the lines of business, commercial deposits increased $99 million, consumer deposits increased $125 million and wealth management deposits decreased $165 million. Growth in commercial deposit balances was primarily due to growth in balances attributed to treasury service customers. Growth in commercial and industrial and small business customer balances were partially offset by a decrease in balances attributed to energy and healthcare customers during the first quarter.

Capital

The Company and its subsidiary bank exceeded the regulatory definition of well capitalized at March 31, 2014. The Company's Tier 1 capital ratio was 13.77% at both March 31, 2014 and December 31, 2013. The total capital ratio was 15.55% at March 31, 2014 and 15.56% at December 31, 2013. In addition, the Company's tangible common equity ratio, a non-GAAP measure, was 10.06% at March 31, 2014 and 9.90% at December 31, 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 13.59% as of March 31, 2014. Based on our interpretation of the new capital rule, our estimated Tier 1 common equity ratio on a fully phased-in basis would be 12.60%, 560 basis points above the 7% regulatory threshold.

Credit Quality

Nonperforming assets totaled $256 million or 1.94% of outstanding loans and repossessed assets at March 31, 2014 compared to $248 million or 1.92% of outstanding loans and repossessed assets at December 31, 2013. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $153 million or 1.18% of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at March 31, 2014 and $155 million or 1.23% at December 31, 2013, a decrease of $2.2 million.

Nonaccruing loans totaled $105 million or 0.80% of outstanding loans at March 31, 2014 compared to $101 million or 0.79% of outstanding loans at December 31, 2013. New nonaccruing loans identified in the first quarter totaled $16.2 million, offset by $7.5 million in payments received, $2.8 million in charge-offs and $2.3 million in foreclosures and repossessions. At March 31, 2014, nonaccruing commercial loans totaled $19 million or 0.24% of outstanding commercial loans, nonaccruing commercial real estate loans totaled $39 million or 1.49% of outstanding commercial real estate loans, and nonaccruing residential mortgage loans totaled $45 million or 2.25% of outstanding residential mortgage loans.

BOK Financial had a net recovery of $2.5 million for the first quarter of 2014 compared with a net recovery of $3.0 million for the fourth quarter of 2013. Gross charge-offs totaled $2.8 million for the first quarter, compared to $3.1 million for the previous quarter. Recoveries totaled $5.4 million for the first quarter of 2014 and $6.1 million for the fourth quarter of 2013.

After evaluating all credit factors, the Company determined that no provision for credit losses was necessary during the first quarter of 2014. The combined allowance for credit losses totaled $190 million or 1.45% of outstanding loans and 181.46% of nonaccruing loans at March 31, 2014. The allowance for loan losses was $188 million and the accrual for off-balance sheet credit losses was $1.7 million.

Real estate and other repossessed assets totaled $96 million at March 31, 2014, primarily consisting of $60 million of 1-4 family residential properties (including $46 million guaranteed by U.S. government agencies), $15 million of developed commercial real estate properties, $13 million of undeveloped land and $6.5 million of residential land and land development properties.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $9.9 billion at March 31, 2014 and $10.1 billion at December 31, 2013. At March 31, 2014, the available for sale portfolio consisted primarily of $7.5 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 March 31, 2014 the available for sale securities portfolio had a net unrealized gain of $15 million compared to a net unrealized loss of $38 million at December 31, 2013. Net unrealized gains on residential mortgage-backed securities issued by U.S. government agencies at March 31, 2014 increased $42 million during the first quarter to a net unrealized gain of $38 million at March 31, 2014. Commercial mortgage-backed securities had a net unrealized loss of $36 million at March 31, 2014, compared to a net unrealized loss of $44 million at December 31, 2013.

In the first quarter of 2014, the Company recognized net gains of $1.2 million from sales of $531 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 $270 million of available for sale securities in the fourth quarter of 2013 totaled $1.6 million.

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 first quarter of 2014, the value of our mortgage servicing rights decreased by $4.5 million. The value of securities and interest rate derivative contracts held as an economic hedge increased by $3.6 million.

Conference Call and Webcast

The Company will hold a conference call at 9:00 a.m. central time on Wednesday, April 30, 2014 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 1-412-317-6016. A conference call and webcast replay will also be available shortly after conclusion of the live call at www.bokf.com or by dialing 1-412-317-0088 and referencing conference ID # 10043696.

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 March 31, 2014 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)

 
    March 31,
2014
    December 31,
2013
    March 31,
2013
ASSETS
Cash and due from banks $ 645,435 $ 512,931 $ 458,471
Interest-bearing cash and cash equivalents 708,571 574,282 487,146
Trading securities 86,571 91,616 206,598
Investment securities 668,976 677,878 589,271
Available for sale securities 9,933,723 10,147,162 11,059,145
Fair value option securities 160,884 167,125 210,192
Restricted equity securities 85,643 85,240 119,988
Residential mortgage loans held for sale 226,512 200,546 286,211
Loans:
Commercial 8,051,706 7,943,221 7,418,305
Commercial real estate 2,631,407 2,415,353 2,285,160
Residential mortgage 2,018,675 2,052,026 2,012,450
Consumer       376,066         381,664         377,649  
Total loans 13,077,854 12,792,264 12,093,564
Allowance for loan losses       (188,318 )       (185,396 )       (205,965 )
Loans, net of allowance 12,889,536 12,606,868 11,887,599
Premises and equipment, net 279,257 277,849 270,130
Receivables 114,437 117,126 116,028
Goodwill 364,570 359,759 359,759
Intangible assets, net 31,561 24,564 27,117
Mortgage servicing rights, net 153,774 153,333 109,840
Real estate and other repossessed assets, net 95,515 92,272 102,701
Derivative contracts, net 218,507 265,012 320,473
Cash surrender value of bank-owned life insurance 286,932 284,801 277,776
Receivable on unsettled securities sales 18,199 17,174 190,688
Other assets       396,111         359,894         368,025  
TOTAL ASSETS     $ 27,364,714       $ 27,015,432       $ 27,447,158  
 
LIABILITIES AND EQUITY
Deposits:
Demand $ 7,472,287 $ 7,316,277 $ 6,900,860
Interest-bearing transaction 9,899,656 9,934,051 9,742,302
Savings 355,596 323,006 317,075
Time       2,662,174         2,695,993         2,900,054  
Total deposits 20,389,713 20,269,327 19,860,291
Funds purchased 1,166,178 868,081 853,843
Repurchase agreements 777,108 813,454 806,526
Other borrowings 1,031,693 1,040,353 1,733,047
Subordinated debentures 347,846 347,802 347,674
Accrued interest, taxes, and expense 160,351 194,870 192,358
Due on unsettled securities purchases 39,641 45,740 158,984
Derivative contracts, net 185,499 247,185 251,836
Other liabilities       122,086         133,647         194,707  
TOTAL LIABILITIES 24,220,115 23,960,459 24,399,266
Shareholders' equity:
Capital, surplus and retained earnings 3,103,130 3,045,672 2,878,575
Accumulated other comprehensive income (loss)       6,795         (25,623 )       133,383  
TOTAL SHAREHOLDERS' EQUITY 3,109,925 3,020,049 3,011,958
Non-controlling interests       34,674         34,924         35,934  
TOTAL EQUITY       3,144,599         3,054,973         3,047,892  
TOTAL LIABILITIES AND EQUITY     $ 27,364,714       $ 27,015,432       $ 27,447,158  
 
 
AVERAGE BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION

(in thousands)

 
    Three Months Ended
March 31,
2014
    December 31,
2013
    September 30,
2013
    June 30,
2013
    March 31,
2013
ASSETS
Interest-bearing cash and cash equivalents $ 549,473 $ 559,918 $ 654,591 $ 408,224 $ 388,132
Trading securities 92,409 127,011 124,689 181,866 162,353
Investment securities 671,756 672,722 621,104 610,940 534,772
Available for sale securities 10,076,942 10,434,810 10,558,677 11,060,700 11,292,181
Fair value option securities 165,515 167,490 169,299 216,312 251,725
Restricted equity securities 85,234 123,009 155,938 144,332 80,433
Residential mortgage loans held for sale 185,196 217,811 225,789 261,977 216,816
Loans:
Commercial 7,971,712 7,737,883 7,602,950 7,606,919 7,498,905
Commercial real estate 2,605,264 2,352,915 2,359,120 2,286,674 2,309,988
Residential mortgage 1,998,620 1,998,980 2,043,332 2,013,004 2,034,315
Consumer       372,330         371,798         396,694         370,847         381,752  
Total loans 12,947,926 12,461,576 12,402,096 12,277,444 12,224,960
Allowance for loan losses       (186,979 )       (193,309 )       (201,616 )       (206,807 )       (214,017 )
Total loans, net       12,760,947         12,268,267         12,200,480         12,070,637         12,010,943  
Total earning assets 24,587,472 24,571,038 24,710,567 24,954,988 24,937,355
Cash and due from banks 473,758 324,349 386,331 546,558 465,412
Derivative contracts, net 287,363 314,530 377,664 401,485 286,772
Cash surrender value of bank-owned life insurance 285,592 283,289 280,909 278,501 275,705
Receivable on unsettled securities sales 114,708 83,016 90,014 135,964 178,561
Other assets       1,489,875         1,526,566         1,409,247         1,341,828         1,369,626  
TOTAL ASSETS     $ 27,238,768       $ 27,102,788       $ 27,254,732       $ 27,659,324       $ 27,513,431  
 
LIABILITIES AND EQUITY
Deposits:
Demand $ 7,312,076 $ 7,356,063 $ 7,110,079 $ 6,888,983 $ 7,002,046
Interest-bearing transaction 9,900,823 9,486,136 9,276,136 9,504,128 9,836,204
Savings 336,576 323,123 317,912 315,421 296,319
Time       2,686,041         2,710,019         2,742,970         2,818,533         2,913,999  
Total deposits 20,235,516 19,875,341 19,447,097 19,527,065 20,048,568
Funds purchased 1,021,755 748,074 776,356 789,302 1,155,983
Repurchase agreements 773,127 752,286 799,175 819,373 878,679
Other borrowings 1,038,747 1,551,591 2,175,747 2,172,417 863,360
Subordinated debentures 347,824 347,781 347,737 347,695 347,654
Derivative contracts, net 258,729 294,315 330,819 334,877 220,037
Due on unsettled securities purchases 116,295 152,078 111,998 330,926 665,175
Other liabilities       341,701         327,519         300,880         310,015         336,136  
TOTAL LIABILITIES 24,133,694 24,048,985 24,289,809 24,631,670 24,515,592
Total equity       3,105,074         3,053,803         2,964,923         3,027,654         2,997,839  
TOTAL LIABILITIES AND EQUITY     $ 27,238,768       $ 27,102,788       $ 27,254,732       $ 27,659,324       $ 27,513,431  
 
 
STATEMENTS OF EARNINGS -- UNAUDITED
BOK FINANCIAL CORPORATION

(in thousands, except per share data)

 
    Three Months Ended
March 31,
2014     2013
Interest revenue $ 179,120 $ 190,046
Interest expense       16,478         18,594  
Net interest revenue 162,642 171,452
Provision for credit losses               (8,000 )
Net interest revenue after provision for credit losses       162,642         179,452  
Other operating revenue:
Brokerage and trading revenue 29,516 31,751
Transaction card revenue 29,134 27,692
Fiduciary and asset management revenue 25,722 22,313
Deposit service charges and fees 22,689 22,966
Mortgage banking revenue 22,844 39,976
Bank-owned life insurance 2,106 3,226
Other revenue       8,852         9,140  
Total fees and commissions 140,863 157,064
Gain (loss) on other assets, net (4,264 ) 467
Gain (loss) on derivatives, net 968 (941 )
Gain (loss) on fair value option securities, net 2,660 (3,171 )
Change in fair value of mortgage servicing rights (4,461 ) 2,658
Gain on available for sale securities, net 1,240 4,855
Total other-than-temporary impairment losses
Portion of loss recognized in (reclassified from) other comprehensive income               (247 )
Net impairment losses recognized in earnings               (247 )
Total other operating revenue 137,006 160,685
Other operating expense:
Personnel 104,433 125,654
Business promotion 5,841 5,453
Charitable contributions to BOKF Foundation 2,420
Professional fees and services 7,565 6,985
Net occupancy and equipment 16,896 16,481
Insurance 4,541 3,745
Data processing and communications 27,135 25,450
Printing, postage and supplies 3,541 3,674
Net losses and operating expenses of repossessed assets 1,432 1,246
Amortization of intangible assets 816 876
Mortgage banking costs 3,634 7,354
Other expense       6,850         7,064  
Total other operating expense 185,104 203,982
 
Net income before taxes 114,544 136,155
Federal and state income taxes       37,501         47,096  
 
Net income 77,043 89,059
Net income attributable to non-controlling interests       453         1,095  
Net income attributable to BOK Financial Corporation shareholders     $ 76,590       $ 87,964  
 
Average shares outstanding:
Basic 68,273,685 67,814,550
Diluted 68,436,478 68,040,180
 
Net income per share:
Basic $ 1.11 $ 1.28
Diluted $ 1.11 $ 1.28
 
 
FINANCIAL HIGHLIGHTS -- UNAUDITED
BOK FINANCIAL CORPORATION

(in thousands, except ratio and share data)

 
   

Three Months Ended

March 31,
2014

   

December 31,
2013

   

September 30,
2013

   

June 30,
2013

   

March 31,
2013

Capital:
Period-end shareholders' equity $ 3,109,925 $ 3,020,049 $ 2,991,244 $ 2,957,637 $ 3,011,958
Risk weighted assets $ 19,720,418 $ 19,389,381 $ 19,366,620 $ 19,157,978 $ 18,756,648
Risk-based capital ratios:
Tier 1 13.77 % 13.77 % 13.51 % 13.37 % 13.35 %
Total capital 15.55 % 15.56 % 15.35 % 15.28 % 15.68 %
Leverage ratio 10.17 % 10.05 % 9.80 % 9.43 % 9.28 %
Tangible common equity ratio1 10.06 % 9.90 % 9.73 % 9.38 % 9.70 %
Tier 1 common equity ratio 13.59 % 13.59 % 13.33 % 13.19 % 13.16 %
 
Common stock:
Book value per share $ 45.00 $ 43.88 $ 43.49 $ 43.03 $ 43.85
Market value per share:
High $ 69.69 $ 66.32 $ 69.36 $ 65.95 $ 62.77
Low $ 62.34 $ 60.81 $ 62.93 $ 60.52 $ 55.05
Cash dividends paid $ 27,637 $ 27,523 $ 26,135 $ 26,118 $ 26,067
Dividend payout ratio 36.08 % 37.72 % 34.51 % 32.68 % 29.63 %
Shares outstanding, net 69,111,167 68,829,450 68,787,584 68,739,208 68,687,718
 
Performance ratios (quarter annualized):
Return on average assets 1.14 % 1.07 % 1.10 % 1.16 % 1.30 %
Return on average equity 10.00 % 9.48 % 10.13 % 10.59 % 11.90 %
Net interest margin 2.71 % 2.74 % 2.75 % 2.80 % 2.90 %
Efficiency ratio 59.69 % 68.50 % 66.03 % 63.11 % 61.04 %
 
Reconciliation of non-GAAP measures:

1    Tangible common equity ratio:

Total shareholders' equity $ 3,109,925 $ 3,020,049 $ 2,991,244 $ 2,957,637 $ 3,011,958

Less: Goodwill and intangible assets, net

      (396,131 )       (384,323 )       (385,166 )       (386,001 )       (386,876 )
Tangible common equity     $ 2,713,794       $ 2,635,726       $ 2,606,078       $ 2,571,636       $ 2,625,082  
 
Total assets $ 27,364,714 $ 27,015,432 $ 27,166,367 $ 27,808,200 $ 27,447,158
Less: Goodwill and intangible assets, net       (396,131 )       (384,323 )       (385,166 )       (386,001 )       (386,876 )
Tangible assets     $ 26,968,583       $ 26,631,109       $ 26,781,201       $ 27,422,199       $ 27,060,282  
 
Tangible common equity ratio       10.06 %       9.90 %       9.73 %       9.38 %       9.70 %
 
 
 

FINANCIAL HIGHLIGHTS -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands, except ratio and share data)

 

Three Months Ended

March 31,
2014

December 31,
2013

September 30,
2013

June 30,
2013

March 31,
2013

Other data:
Fiduciary assets $ 31,296,565 $ 30,137,092 $ 29,593,140 $ 28,280,214 $ 27,606,180
Mortgage servicing portfolio $ 14,045,642 $ 13,718,942 $ 13,298,479 $ 12,741,651 $ 12,272,691
Mortgage commitments $ 387,755 $ 258,873 $ 351,196 $ 547,508 $ 466,571
Mortgage loans funded for sale $ 727,516 $ 848,870 $ 1,080,167 $ 1,196,038 $ 956,315
Mortgage loan refinances to total fundings 32 % 29 % 30 % 48 % 62 %
Tax equivalent adjustment $ 2,551 $ 2,467 $ 2,565 $ 2,647 $ 2,619
Net unrealized gain (loss) on available for sale securities $ 15,446 $ (37,929 ) $ 7,425 $ 42,233 $ 228,620
 
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net $ 968 $ (931 ) $ 31 $ (2,526 ) $ (1,654 )
Gain (loss) on fair value option securities, net       2,585         (3,013 )       (89 )       (9,102 )       (3,232 )
Gain (loss) on economic hedge of mortgage servicing rights 3,553 (3,944 ) (58 ) (11,628 ) (4,886 )
Gain (loss) on changes in fair value of mortgage servicing rights       (4,461 )       6,093         (346 )       14,315         2,658  
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges     $ (908 )     $ 2,149       $ (404 )     $ 2,687       $ (2,228 )
 
Net interest revenue on fair value option securities     $ 790       $ 811       $ 741       $ 910       $ 828  
 
...
 
QUARTERLY EARNINGS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION

(in thousands, except ratio and per share data)

 
    Three Months Ended
March 31,
2014
    December 31,
2013
    September 30,
2013
    June 30,
2013
    March 31,
2013
 
Interest revenue $ 179,120 $ 183,120 $ 185,428 $ 186,777 $ 190,046
Interest expense       16,478         16,876         17,539         17,885         18,594  
Net interest revenue 162,642 166,244 167,889 168,892 171,452
Provision for credit losses               (11,400 )       (8,500 )               (8,000 )
Net interest revenue after provision for credit losses 162,642 177,644 176,389 168,892 179,452
Other operating revenue:
Brokerage and trading revenue 29,516 28,515 32,338 32,874 31,751
Transaction card revenue 29,134 29,134 30,055 29,942 27,692
Fiduciary and asset management revenue 25,722 25,074 23,892 24,803 22,313
Deposit service charges and fees 22,689 23,440 24,742 23,962 22,966
Mortgage banking revenue 22,844 21,876 23,486 36,596 39,976
Bank-owned life insurance 2,106 2,285 2,408 2,236 3,226
Other revenue       8,852         12,048         8,314         8,760         9,140  
Total fees and commissions 140,863 142,372 145,235 159,173 157,064
Gain (loss) on other assets, net (4,264 ) 651 (377 ) (1,666 ) 467
Gain (loss) on derivatives, net 968 (930 ) 31 (2,527 ) (941 )
Gain (loss) on fair value option securities, net 2,660 (2,805 ) (80 ) (9,156 ) (3,171 )
Change in fair value of mortgage servicing rights (4,461 ) 6,093 (346 ) 14,315 2,658
Gain on available for sale securities, net 1,240 1,634 478 3,753 4,855
Total other-than-temporary impairment losses (1,436 ) (1,138 )
Portion of loss recognized in (reclassified from) other comprehensive income                       (73 )       586         (247 )
Net impairment losses recognized in earnings                       (1,509 )       (552 )       (247 )
Total other operating revenue 137,006 147,015 143,432 163,340 160,685
Other operating expense:
Personnel 104,433 125,662 125,799 128,110 125,654
Business promotion 5,841 6,020 5,355 5,770 5,453
Charitable contributions to BOKF Foundation 2,420 2,062
Professional fees and services 7,565 10,003 7,183 8,381 6,985
Net occupancy and equipment 16,896 19,103 17,280 16,909 16,481
Insurance 4,541 4,394 3,939 4,044 3,745
Data processing and communications 27,135 28,196 25,695 26,734 25,450
Printing, postage and supplies 3,541 3,126 3,505 3,580 3,674
Net losses and operating expenses of repossessed assets 1,432 1,618 2,014 282 1,246
Amortization of intangible assets 816 842 835 875 876
Mortgage banking costs 3,634 7,071 8,753 7,910 7,354
Other expense       6,850         9,384         7,878         8,326         7,064  
Total other operating expense 185,104 215,419 210,298 210,921 203,982
Net income before taxes 114,544 109,240 109,523 121,311 136,155
Federal and state income taxes       37,501         35,318         33,461         41,423         47,096  
Net income 77,043 73,922 76,062 79,888 89,059
Net income (loss) attributable to non-controlling interests       453         946         324         (43 )       1,095  
Net income attributable to BOK Financial Corporation shareholders     $ 76,590       $ 72,976       $ 75,738       $ 79,931       $ 87,964  
 
Average shares outstanding:
Basic 68,273,685 68,095,254 68,049,179 67,993,822 67,814,550
Diluted 68,436,478 68,293,758 68,272,861 68,212,497 68,040,180
Net income per share:
Basic $ 1.11 $ 1.06 $ 1.10 $ 1.16 $ 1.28
Diluted $ 1.11 $ 1.06 $ 1.10 $ 1.16 $ 1.28
 
 
LOANS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION

(In thousands)

                   
March 31,
2014
December 31,
2013
September 30,
2013
June 30,
2013
March 31,
2013
Commercial:
Energy $ 2,344,072 $ 2,351,760 $ 2,311,991 $ 2,384,746 $ 2,349,432
Services 2,232,471 2,282,210 2,148,551 2,204,253 2,114,799
Wholesale/retail 1,225,990 1,201,364 1,181,806 1,175,543 1,085,000
Manufacturing 444,215 391,751 382,460 386,133 399,818
Healthcare 1,396,562 1,274,246 1,160,212 1,118,810 1,081,636
Integrated food services 126,514 150,494 141,440 163,551 173,800
Other commercial and industrial       281,882       291,396       244,615       275,084       213,820
Total commercial       8,051,706       7,943,221       7,571,075       7,708,120       7,418,305
 
Commercial real estate:
Residential construction and land development 184,820 206,258 216,456 225,654 237,829
Retail 640,506 586,047 556,918 553,412 584,279
Office 436,264 411,499 422,043 459,558 420,644
Multifamily 662,674 576,502 520,454 500,452 460,474
Industrial 305,207 243,877 245,022 253,990 237,049
Other commercial real estate       401,936       391,170       388,336       324,030       344,885
Total commercial real estate       2,631,407       2,415,353       2,349,229       2,317,096       2,285,160
 
Residential mortgage:
Permanent mortgage 1,033,572 1,062,744 1,078,661 1,095,871 1,091,575
Permanent mortgages guaranteed by U.S. government agencies 184,822 181,598 163,919 156,887 162,419
Home equity       800,281       807,684       792,185       787,027       758,456
Total residential mortgage       2,018,675       2,052,026       2,034,765       2,039,785       2,012,450
 
Consumer       376,066       381,664       395,031       375,781       377,649
 
Total     $ 13,077,854     $ 12,792,264     $ 12,350,100     $ 12,440,782     $ 12,093,564
 
 
LOANS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION

(in thousands)

 
    March 31,
2014
    December 31,
2013
    September 30,
2013
    June 30,
2013
    March 31,
2013
Bank of Oklahoma:
Commercial $ 2,782,997 $ 2,902,140 $ 2,801,979 $ 2,993,247 $ 2,853,608
Commercial real estate 593,282 602,010 564,141 569,780 568,500
Residential mortgage 1,505,702 1,524,212 1,497,027 1,503,457 1,468,434
Consumer       179,733       192,283       207,360       211,744       207,662
Total Bank of Oklahoma       5,061,714       5,220,645       5,070,507       5,278,228       5,098,204
 
Bank of Texas:
Commercial 3,161,203 3,052,274 2,858,970 2,849,888 2,718,050
Commercial real estate 969,804 816,574 853,857 813,659 800,577
Residential mortgage 256,332 260,544 263,945 263,916 272,406
Consumer       136,782       131,297       129,144       105,390       110,060
Total Bank of Texas       4,524,121       4,260,689       4,105,916       4,032,853       3,901,093
 
Bank of Albuquerque:
Commercial 351,454 342,336 325,542 296,036 271,075
Commercial real estate 305,080 308,829 306,914 314,871 332,928
Residential mortgage 131,932 133,900 131,756 133,058 129,727
Consumer       12,972       13,842       14,583       14,364       14,403
Total Bank of Albuquerque       801,438       798,907       778,795       758,329       748,133
 
Bank of Arkansas:
Commercial 73,804 81,556 73,063 61,414 54,191
Commercial real estate 81,181 78,264 84,364 85,546 88,264
Residential mortgage 7,898 7,922 10,466 10,691 11,285
Consumer       6,881       8,023       9,426       11,819       13,943
Total Bank of Arkansas       169,764       175,765       177,319       169,470       167,683
 
Colorado State Bank & Trust:
Commercial 825,315 735,626 748,331 786,262 822,942
Commercial real estate 213,850 190,355 158,320 146,137 171,251
Residential mortgage 57,345 62,821 66,475 62,490 56,052
Consumer       22,095       22,686       22,592       23,148       20,990
Total Colorado State Bank & Trust       1,118,605       1,011,488       995,718       1,018,037       1,071,235
 
Bank of Arizona:
Commercial 453,799 417,702 379,817 355,698 326,266
Commercial real estate 301,266 257,477 250,129 258,938 229,020
Residential mortgage 42,899 47,111 49,109 51,774 54,285
Consumer       7,145       7,887       7,059       4,947       5,664
Total Bank of Arizona       805,109       730,177       686,114       671,357       615,235
 
Bank of Kansas City:
Commercial 403,134 411,587 383,373 365,575 372,173
Commercial real estate 166,944 161,844 131,504 128,165 94,620
Residential mortgage 16,567 15,516 15,987 14,399 20,261
Consumer       10,458       5,646       4,867       4,369       4,927
Total Bank of Kansas City       597,103       594,593       535,731       512,508       491,981
 
TOTAL BOK FINANCIAL     $ 13,077,854     $ 12,792,264     $ 12,350,100     $ 12,440,782     $ 12,093,564
 

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)

 
    March 31,
2014
    December 31,
2013
    September 30,
2013
    June 30,
2013
    March 31,
2013
Bank of Oklahoma:
Demand $ 3,476,876 $ 3,432,940 $ 3,442,831 $ 3,552,328 $ 3,591,661
Interest-bearing:
Transaction 6,148,712 6,318,045 5,565,462 5,644,959 6,132,736
Savings 211,770 191,880 189,186 185,345 185,363
Time       1,209,002       1,214,507       1,197,617       1,179,869       1,264,365
Total interest-bearing       7,569,484       7,724,432       6,952,265       7,010,173       7,582,464
Total Bank of Oklahoma       11,046,360       11,157,372       10,395,096       10,562,501       11,174,125
 
Bank of Texas:
Demand 2,513,729 2,481,603 2,498,668 2,299,632 2,098,891
Interest-bearing:
Transaction 1,967,107 1,966,580 1,853,586 1,931,758 1,979,318
Savings 70,890 64,632 63,368 63,745 63,218
Time       621,925       638,465       667,873       692,888       717,974
Total interest-bearing       2,659,922       2,669,677       2,584,827       2,688,391       2,760,510
Total Bank of Texas       5,173,651       5,151,280       5,083,495       4,988,023       4,859,401
 
Bank of Albuquerque:
Demand 524,191 502,395 491,894 455,580 446,841
Interest-bearing:
Transaction 516,734 529,140 541,565 525,481 513,774
Savings 37,481 33,944 34,003 34,096 35,560
Time       320,352       327,281       334,946       346,506       354,303
Total interest-bearing       874,567       890,365       910,514       906,083       903,637
Total Bank of Albuquerque       1,398,758       1,392,760       1,402,408       1,361,663       1,350,478
 
Bank of Arkansas:
Demand 40,026 38,566 33,378 31,778 32,761
Interest-bearing:
Transaction 212,144 144,018 205,891 187,223 156,079
Savings 2,264 1,986 1,919 1,974 2,642
Time       32,312       32,949       35,184       37,272       41,613
Total interest-bearing       246,720       178,953       242,994       226,469       200,334
Total Bank of Arkansas       286,746       217,519       276,372       258,247       233,095
 
Colorado State Bank & Trust:
Demand 399,820 409,942 375,060 367,407 298,470
Interest-bearing:
Transaction 536,438 541,675 536,734 519,584 528,060
Savings 28,973 26,880 27,782 27,948 27,187
Time       399,948       407,088       424,225       451,168       461,496
Total interest-bearing       965,359       975,643       988,741       998,700       1,016,743
Total Colorado State Bank & Trust       1,365,179       1,385,585       1,363,801       1,366,107       1,315,213
 
Bank of Arizona:
Demand 265,149 204,092 188,365 186,382 157,754
Interest-bearing:
Transaction 409,200 364,736 339,158 376,305 378,420
Savings 2,711 2,432 2,511 2,238 2,122
Time       37,989       34,391       36,285       35,490       34,690
Total interest-bearing       449,900       401,559       377,954       414,033       415,232
Total Bank of Arizona       715,049       605,651       566,319       600,415       572,986
 
Bank of Kansas City:
Demand 252,496 246,739 301,780 252,216 274,482
Interest-bearing:
Transaction 109,321 69,857 77,414 81,250 53,915
Savings 1,507 1,252 1,080 1,029 983
Time       40,646       41,312       23,890       24,779       25,613
Total interest-bearing       151,474       112,421       102,384       107,058       80,511
Total Bank of Kansas City       403,970       359,160       404,164       359,274       354,993
 
TOTAL BOK FINANCIAL     $ 20,389,713     $ 20,269,327     $ 19,491,655     $ 19,496,230     $ 19,860,291
 
 
NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
 
    Three Months Ended
March 31,
2014
    December 31,
2013
    September 30,
2013
    June 30,
2013
    March 31,
2013
TAX-EQUIVALENT ASSETS YIELDS
Interest-bearing cash and cash equivalents 0.20 % 0.18 % 0.22 % 0.27 % 0.19 %
Trading securities 2.85 % 1.73 % 2.25 % 2.40 % 2.13 %
Investment securities:
Taxable 5.64 % 5.75 % 5.78 % 5.88 % 5.88 %
Tax-exempt     1.67 %     1.66 %     1.60 %     1.88 %     2.38 %
Total investment securities     3.04 %     3.12 %     3.22 %     3.58 %     4.17 %
Available for sale securities:
Taxable 1.90 % 1.89 % 1.92 % 1.94 % 2.09 %
Tax-exempt     3.11 %     2.74 %     2.81 %     3.59 %     3.39 %
Total available for sale securities     1.91 %     1.89 %     1.93 %     1.96 %     2.11 %
Fair value option securities 1.99 % 2.06 % 1.80 % 1.92 % 2.06 %
Restricted equity securities 4.68 % 5.06 % 3.05 % 4.05 % 4.30 %
Residential mortgage loans held for sale 3.46 % 4.16 % 3.87 % 3.54 % 3.36 %
Loans 3.89 % 4.01 % 4.06 % 4.12 % 4.20 %
Allowance for loan losses                              
Loans, net of allowance 3.95 % 4.07 % 4.13 % 4.19 % 4.27 %
Total tax-equivalent yield on earning assets 2.99 % 3.02 % 3.03 % 3.10 % 3.21 %
 
COST OF INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest-bearing transaction 0.10 % 0.11 % 0.11 % 0.12 % 0.13 %
Savings 0.12 % 0.12 % 0.13 % 0.15 % 0.16 %
Time     1.56 %     1.55 %     1.55 %     1.57 %     1.62 %
Total interest-bearing deposits 0.41 % 0.42 % 0.43 % 0.44 % 0.46 %
Funds purchased 0.06 % 0.08 % 0.07 % 0.10 % 0.13 %
Repurchase agreements 0.08 % 0.06 % 0.06 % 0.06 % 0.07 %
Other borrowings 0.40 % 0.31 % 0.28 % 0.27 % 0.49 %
Subordinated debt     2.52 %     2.48 %     2.52 %     2.54 %     2.52 %
Total cost of interest-bearing liabilities     0.41 %     0.42 %     0.42 %     0.43 %     0.46 %
Tax-equivalent net interest revenue spread 2.58 % 2.60 % 2.61 % 2.67 % 2.75 %
Effect of noninterest-bearing funding sources and other     0.13 %     0.14 %     0.14 %     0.13 %     0.15 %
Tax-equivalent net interest margin     2.71 %     2.74 %     2.75 %     2.80 %     2.90 %
 

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
March 31,
2014
    December 31,
2013
    September 30,
2013
    June 30,
2013
    March 31,
2013
Nonperforming assets:
Nonaccruing loans:
Commercial $ 19,047 $ 16,760 $ 19,522 $ 20,869 $ 19,861
Commercial real estate 39,305 40,850 52,502 58,693 65,175
Residential mortgage 45,380 42,320 39,256 40,534 45,426
Consumer       974         1,219         1,624         2,037         2,171  
Total nonaccruing loans 104,706 101,149 112,904 122,133 132,633
Accruing renegotiated loans guaranteed by U.S. government agencies 55,507 54,322 50,099 48,733 47,942
Real estate and other repossessed assets:
Guaranteed by U.S. government agencies 45,638 37,431 37,906 32,155 27,864
Other       49,877         54,841         70,216         77,957         74,837  
Total real estate and other repossessed assets       95,515         92,272         108,122         110,112         102,701  
Total nonperforming assets     $ 255,728       $ 247,743       $ 271,125       $ 280,978       $ 283,276  
Total nonperforming assets excluding those guaranteed by U.S. government agencies     $ 153,011       $ 155,213       $ 182,543       $ 200,007       $ 207,256  
 
Nonaccruing loans by loan portfolio sector:
Commercial:
Energy $ 1,759 $ 1,860 $ 1,953 $ 2,277 $ 2,377
Services 4,581 4,922 6,927 7,448 9,474
Wholesale / retail 6,854 6,969 7,223 6,700 2,239
Manufacturing 3,565 592 843 876 1,848
Healthcare 1,443 1,586 1,733 2,670 2,962
Integrated food services
Other commercial and industrial       845         831         843         898         961  
Total commercial       19,047         16,760         19,522         20,869         19,861  
Commercial real estate:
Residential construction and land development 16,547 17,377 20,784 21,135 23,462
Retail 4,626 4,857 7,914 8,406 8,921
Office 6,301 6,391 6,838 7,828 12,851
Multifamily 7 4,350 6,447 4,501
Industrial 886 252 2,198
Other commercial real estate       10,945         11,966         12,616         14,877         13,242  
Total commercial real estate       39,305         40,850         52,502         58,693         65,175  
Residential mortgage:
Permanent mortgage 36,342 34,279 31,797 32,747 38,153
Permanent mortgage guaranteed by U.S. government agencies 1,572 777 577 83 214
Home equity       7,466         7,264         6,882         7,704         7,059  
Total residential mortgage       45,380         42,320         39,256         40,534         45,426  
Consumer       974         1,219         1,624         2,037         2,171  
Total nonaccruing loans     $ 104,706       $ 101,149       $ 112,904       $ 122,133       $ 132,633  
 
Performing loans 90 days past due1 $ 1,991 $ 1,415 $ 188 $ 2,460 $ 4,229
 
Gross charge-offs $ (2,848 ) $ (3,113 ) $ (4,708 ) $ (8,552 ) $ (8,909 )
Recoveries       5,360         6,068         4,409         6,210         6,557  
Net recoveries (charge-offs)     $ 2,512       $ 2,955       $ (299 )     $ (2,342 )     $ (2,352 )
 
Provision for credit losses $ $ (11,400 ) $ (8,500 ) $ $ (8,000 )
 
Allowance for loan losses to period end loans 1.44 % 1.45 % 1.57 % 1.63 % 1.70 %
Combined allowance for credit losses to period end loans 1.45 % 1.47 % 1.59 % 1.65 % 1.71 %
Nonperforming assets to period end loans and repossessed assets 1.94 % 1.92 % 2.18 % 2.24 % 2.32 %
Net charge-offs (annualized) to average loans (0.08 )% (0.09 )% 0.01 % 0.08 % 0.08 %
Allowance for loan losses to nonaccruing loans 179.86 % 183.29 % 172.12 % 166.31 % 155.29 %
Combined allowance for credit losses to nonaccruing loans 181.46 % 185.35 % 173.54 % 167.63 % 156.12 %
 
1 Excludes residential mortgage loans guaranteed by agencies of the U.S. government.

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

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