BOK Financial Corporation Reports Quarterly Earnings of $166 million or $2.40 Per Share in the Second Quarter

·37 min read

TULSA, Okla., July 21, 2021 (GLOBE NEWSWIRE) -- BOK Financial Corporation (NASDAQ: BOKF) today reported net earnings applicable to common shareholders for the second quarter of 2021 of $166.4 million, or $2.40 per diluted common share.

CEO Commentary

Steven G. Bradshaw, president and chief executive officer, stated, "The organization eclipsed $160 million in net income for the first time on another stellar, broad-based contribution from our Wealth Management team and stable net interest revenues. Additionally, growth in our Healthcare portfolio and steady core C&I this quarter provides a solid foundation as we head into the back half of 2021. While growth in other areas of the loan portfolio remains somewhat constrained by near-term labor and supply chain disruptions, our customers' confidence about future growth is very high, which reaffirms our outlook for the remainder of this year."

Bradshaw continued, "While our top-line strength this quarter was impressive, equally strong was our discipline around operating costs and our excellent credit outcomes. We continue to hold the line on many expense saves gained through the pandemic, driving meaningful earnings leverage. Credit also continues to be a clear differentiator, as oil and natural gas prices rebounded to multi-year highs. Non-performing assets and potential problem loans were both down significantly, and credit costs continue to be at the low end of our historical range. Altogether, this quarter demonstrates just how effectively we can execute on both the top and bottom line and build shareholder value."

Second Quarter 2021 Financial Highlights

  • Net income was $166.4 million or $2.40 per diluted share for the second quarter of 2021 and $146.1 million or $2.10 per diluted share for the first quarter of 2021.

  • Net interest revenue totaled $280.3 million, consistent with the prior quarter. Net interest margin was 2.60 percent compared to 2.62 percent in the first quarter of 2021.

  • Fees and commissions revenue totaled $169.4 million, an increase of $7.3 million. Growth in much of our fee-based business, led by brokerage and trading and fiduciary and asset management revenues, was partially offset by lower mortgage banking revenue.

  • Operating expense decreased $4.6 million to $291.2 million. The first quarter of 2021 included a $4.0 million charitable donation to the BOKF Foundation that did not recur in the second quarter.

  • Period-end loans decreased $1.1 billion to $21.4 billion at June 30, 2021. Period-end Paycheck Protection Program ("PPP") loans decreased $727 million to $1.1 billion. Paydowns of energy and commercial real estate loans were partially offset by an increase in healthcare and personal loans. Average loans were $22.2 billion, a $590 million decrease compared to the first quarter of 2021.

  • Forecasts for improving macroeconomic factors and credit quality metrics resulted in a $35.0 million negative provision for expected credit losses in the second quarter of 2021 and a $25.0 million negative provision in the prior quarter. The combined allowance for credit losses totaled $336 million or 1.66 percent of outstanding loans, excluding PPP loans, at June 30, 2021. The combined allowance for credit losses was $385 million or 1.86 percent of outstanding loans, excluding PPP loans, at March 31, 2021.

  • Average deposits increased $968 million to $37.5 billion while period-end deposits decreased $413 million to $37.4 billion. Average demand deposits grew by $877 million and average interest bearing deposits grew by $91 million.

  • The company's common equity Tier 1 capital ratio was 11.95 percent at June 30, 2021. In addition, the company's Tier 1 capital ratio was 12.01 percent, total capital ratio was 13.61 percent, and leverage ratio was 8.58 percent at June 30, 2021. At March 31, 2021, the company's common equity Tier 1 capital ratio was 12.14 percent, Tier 1 capital ratio was 12.21 percent, total capital ratio was 13.98 percent, and leverage ratio was 8.42 percent.

  • The company repurchased 492,994 shares of common stock at an average price of $88.84 a share in the second quarter of 2021.

  • The company intends to redeem the subordinated debt issued in June of 2016 at the interest rate of 5.375 percent using existing capital, saving approximately $8.0 million per year in interest payments.

  • Commercial Banking contributed $72.6 million to net income in the second quarter of 2021, an increase of $3.0 million compared to the first quarter of 2021. Combined net interest revenue and fee revenue increased $14.4 million, largely due to an increase of $7.5 million in production revenue from repossessed oil and gas properties. This increase was supplemented by growth in customer hedging revenue, syndication fees and transaction card revenue. These increases were partially offset by a decrease in net gains on sales of repossessed assets. Operating expense increased $4.4 million, primarily due to an increase in operating expenses on repossessed assets. Average Commercial Banking loans decreased $541 million due to purposeful deleveraging by our customers. Average Commercial Banking deposits grew 6 percent to $17.0 billion in the first quarter.

  • Consumer Banking contributed $1.7 million to net income in the second quarter of 2021, a decrease of $5.3 million compared to the prior quarter. Combined net interest revenue and fee revenue decreased $10.6 million. Net interest revenue increased $4.0 million, mainly due to favorable yields on deposits sold to our Funds Management unit. Fees and commissions revenue decreased $14.6 million, largely due to reduced mortgage production volume and margin compression. Operating expense decreased $3.2 million, primarily due to lower mortgage banking costs. Average Consumer Banking deposits grew by 5 percent to $8.5 billion.

  • Wealth Management contributed $31.1 million to net income in the second quarter of 2021, an increase of $11.7 million compared to the first quarter. Combined net interest revenue and fee revenue increased $17.1 million. Brokerage and trading revenue and related net interest revenue increased $10.5 million to $62.2 million due to growth in agency residential mortgage trading volumes and higher margin market opportunities. Fiduciary and asset management revenue increased $3.7 million to $45 million, largely due to seasonal tax preparation fees combined with higher oil and gas asset management fees. Trust business line fees also grew as a result of higher client asset balances. Assets under management were $96.6 billion, an increase of $4.7 billion compared to the prior quarter.

Net Interest Revenue

Net interest revenue was $280.3 million for the second quarter of 2021, largely unchanged compared to the first quarter of 2021. Net interest margin was 2.60 percent compared to 2.62 percent in the prior quarter.

Average earning assets decreased $354 million compared to the first quarter of 2021. Average loan balances decreased $590 million, largely due to energy and commercial real estate paydowns. Available for sale securities decreased $190 million. Average trading securities grew by $467 million. Other borrowings increased $216 million while funds purchased and repurchase agreements decreased $1.0 billion.

The yield on average earning assets was 2.75 percent, a 3 basis point decrease from the prior quarter. The yield on the available for sale securities portfolio increased 1 basis point to 1.85 percent. The loan portfolio yield decreased 1 basis point to 3.54 percent.

Funding costs were 0.21 percent, down 3 basis points. The cost of interest-bearing deposits decreased 3 basis points to 0.14 percent. The cost of other borrowed funds decreased 2 basis points to 0.28 percent. The benefit to net interest margin from assets funded by non-interest liabilities was 6 basis points for the second quarter of 2021, compared to 8 basis points for the prior quarter.

Operating Revenue

Fees and commissions revenue totaled $169.4 million for the second quarter of 2021, an increase of $7.3 million compared to the prior quarter. Brokerage and trading revenue increased $8.6 million to $29.4 million, including a $9.3 million increase in trading revenue. An increase in agency residential mortgage-backed securities trading volumes and higher margin market opportunities combined to grow trading revenue. Fiduciary and asset management revenue grew $3.5 million, primarily due to seasonal tax preparation fees. Trust business line fees also grew as a result of higher client asset balances. Transaction card revenue increased $2.5 million due to higher transaction volumes with the broader reopening of the U.S. economy. Deposit service charges increased $1.7 million, primarily related to commercial accounts where lower earnings credit rates caused by the low interest rate environment have resulted in higher service charges. Other revenue increased $6.9 million as a result of higher operating revenue from repossessed oil and gas properties.

Mortgage banking revenue decreased $15.9 million compared to the prior quarter due to lower mortgage loan production volume and gain on sale margin compression. Mortgage production volume decreased $206 million to $644 million as a result of industry-wide housing inventory constraints, changes to government-sponsored entity delivery limits on loans secured by second homes and investment properties, and overall market conditions. The realized margin on funded mortgage loans decreased 35 basis points to 2.75 percent while the gain on sale margin, which includes unrealized gains and losses on our mortgage commitment pipeline and related hedges, decreased 143 basis points to 1.55 percent. Margins were compressed largely due to competitive pricing pressure and timing of settlements.

Other gains and losses, net increased $6.3 million over the prior quarter. Increases in gains on alternative investments were partially offset by a decrease in net gains on sales of repossessed assets.

Operating Expense

Total operating expense was $291.2 million for the second quarter of 2021, a decrease of $4.6 million compared to the prior quarter.

The first quarter of 2021 included a $4.0 million charitable donation to the BOKF Foundation that did not recur in the second quarter. Excluding this effect, non-personnel expense was largely unchanged. A decrease in mortgage banking costs related to lower prepayments and data processing and communications expense was offset by increased operating expenses on repossessed assets. Personnel expense decreased $1.0 million.

Loans, Deposits and Capital

Loans

Outstanding loans were $21.4 billion at June 30, 2021, a $1.1 billion decrease compared to March 31, 2021, led by lower PPP loan balances. Additional paydowns of energy loans and commercial real estate loans were partially offset by an increase in healthcare loans.

Outstanding commercial loan balances decreased $185 million compared to March 31, 2021, primarily due to lower energy loan balances. Although the primary source of repayment of our commercial loan portfolio is the on-going cash flow from operations of the customer's business, loans are generally governed by a borrowing base and secured by the customer’s assets.

Energy loan balances decreased $191 million to $3.0 billion or 14 percent of total loans. While commodity prices have continued to improve and stabilize, sourcing new loans sufficient to offset paydowns remains a challenge. The majority of this portfolio is first lien, senior secured, reserve-based lending to oil and gas producers, which we believe is the lowest risk form of energy lending. Approximately 66 percent of committed production loans are secured by properties primarily producing oil. The remaining 34 percent is secured by properties primarily producing natural gas. Unfunded energy loan commitments were $2.6 billion at June 30, 2021, consistent with March 31, 2021.

Healthcare sector loan balances increased $91 million compared to the prior quarter, totaling $3.4 billion or 16 percent of total loans. Our healthcare sector loans primarily consist of $2.7 billion of senior housing and care facilities, including independent living, assisted living and skilled nursing. Generally we loan to borrowers with a portfolio of multiple facilities that serves to help diversify risks specific to a single facility.

General business loans decreased $52 million to $2.7 billion or 13 percent of total loans. General business loans include $1.4 billion of wholesale/retail loans and $1.3 billion of loans from other commercial industries.

Services loan balances decreased $32 million to $3.4 billion or 16 percent of total loans. Services loans consist of a large number of loans to a variety of businesses, including Native American tribal and state and local municipal government entities, Native American tribal casino operations, foundations and not-for-profit organizations, educational services and specialty trade contractors.

Commercial real estate loan balances decreased $256 million compared to March 31, 2021 and represent 20 percent of total loans at June 30, 2021, largely due to refinancing in the long term, non-recourse markets. Multifamily residential loans, decreased $263 million to $965 million at June 30, 2021. Loans secured by office facilities decreased $21 million to $1.1 billion. Loans secured by other commercial real estate properties decreased $14 million to $471 million. Loans secured by industrial facilities increased $35 million to $825 million. Loans secured by retail facilities were largely unchanged compared to March 31, 2021.

PPP loan balances decreased $727 million to $1.1 billion or 5 percent of total loans. The rate of paydowns of the first round of PPP loans has increased in the second quarter.

Loans to individuals increased $51 million and represent 17 percent of total loans at June 30, 2021. Personal loans were up $82 million while residential mortgage loans decreased $25 million.

Deposits

Period-end deposits totaled $37.4 billion at June 30, 2021, a $413 million decrease compared to March 31, 2021. Demand deposit account balances grew by $277 million and interest-bearing transaction account balances decreased by $612 million. Average deposits were $37.5 billion at June 30, 2021, a $968 million increase compared to March 31, 2021. Demand deposit account balances increased $877 million primarily from deposits attributed to the Commercial Banking segment.

Capital

The company's common equity Tier 1 capital ratio was 11.95 percent at June 30, 2021. In addition, the company's Tier 1 capital ratio was 12.01 percent, total capital ratio was 13.61 percent, and leverage ratio was 8.58 percent at June 30, 2021. We have elected to delay the regulatory capital impact of the transition of the allowance for credit losses from the incurred loss methodology to CECL for two years, followed by a three-year transition period, which added 19 basis points to the company's common equity tier 1 capital ratio at June 30. At March 31, 2021, the company's common equity Tier 1 capital ratio was 12.14 percent, Tier 1 capital ratio was 12.21 percent, total capital ratio was 13.98 percent, and leverage ratio was 8.42 percent.

The company's tangible common equity ratio, a non-GAAP measure, was 9.09 percent at June 30, 2021 and 8.82 percent at March 31, 2021. The tangible common equity ratio is primarily based on total shareholders' equity, which includes unrealized gains and losses on available for sale securities. The company has elected to exclude unrealized gains and losses from available for sale securities from its calculation of Tier 1 capital for regulatory capital purposes, consistent with the treatment under the previous capital rules.

The company repurchased 492,994 shares of common stock at an average price of $88.84 a share in the second quarter of 2021. We view share buybacks opportunistically, but within the context of maintaining our strong capital position.

Credit Quality

Expected credit losses on assets carried at amortized cost are recognized over their expected lives based on models that measure the probability of default and loss given default over a 12-month reasonable and supportable forecast period. Our models incorporate base case, downside and upside macroeconomic variables such as real gross domestic product ("GDP") growth, civilian unemployment rate and West Texas Intermediate ("WTI") oil prices on a probability weighted basis.

We recorded a $35.0 million negative provision for credit losses in the second quarter of 2021, primarily due to changes in our reasonable and supportable forecasts of macroeconomic variables as a result of continued improvement in the economic outlook related to the anticipated impact of the on-going COVID-19 pandemic and improving credit quality metrics. Decreased allowance due to lower loan balances was offset by losses during the quarter.

Our base case reasonable and supportable forecast assumes that the COVID-19 pandemic continues to improve as virus immunity becomes increasingly more widespread and vaccines prove to be effective against new virus strains. Continued easing of restrictions and the release of pent-up consumer demand results in GDP growth above historical averages throughout 2021, but begins to moderate in 2022. We expect a 4.8 percent increase in GDP over the next twelve months. This scenario also assumes the expiration of expanded unemployment insurance benefits is a catalyst for hiring activity during the second half of 2021. Our forecasted civilian unemployment rate is 5.5 percent for the third quarter of 2021, improving to 4.7 percent by the second quarter of 2022. WTI oil prices are projected to generally follow the NYMEX forward curve that existed at the end of June 2021, averaging $67.04 per barrel over the next twelve months.

The probability weighting of our base case reasonable and supportable forecast increased to 70 percent in the second quarter of 2021 compared to 60 percent in the first quarter of 2021 as the level of uncertainty in the current economic outlook continues to improve. Our downside case, probability weighted at 20 percent, assumes additional waves and hotspots emerge in areas of the country with lower vaccination rates stemming from the impact of new virus strains, such as the current Delta variant, as the U.S. enters the fall and winter months. This results in a relatively mild recession with conditions beginning to improve in the spring of 2022.

The allowance for loan losses totaled $312 million or 1.46 percent of outstanding loans and 183 percent of nonaccruing loans at June 30, 2021, excluding residential mortgage loans guaranteed by U.S. government agencies. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $336 million or 1.57 percent of outstanding loans and 197 percent of nonaccruing loans at June 30, 2021. Excluding PPP loans, the allowance for loan losses was 1.54 percent of outstanding loans and the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was 1.66 percent.

At March 31, 2021, the allowance for loan losses was $352 million or 1.56 percent of outstanding loans and 170 percent of nonaccruing loans, excluding loans guaranteed by U.S. government agencies. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $385 million or 1.71 percent of outstanding loans and 186 percent of nonaccruing loans.

Nonperforming assets totaled $408 million or 1.90 percent of outstanding loans and repossessed assets at June 30, 2021, down from $442 million or 1.95 percent at March 31, 2021. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $228 million or 1.14 percent of outstanding loans and repossessed assets at June 30, 2021, compared to $278 million or 1.37 percent at March 31, 2021. The decrease in nonperforming assets was primarily related to a decrease in nonaccruing energy loans and sales of energy-related repossessed assets during the second quarter of 2021.

Nonaccruing loans were $180 million or 0.89 percent of outstanding loans, excluding PPP loans, at June 30, 2021. Nonaccruing commercial loans totaled $113 million or 0.90 percent of outstanding commercial loans. Nonaccruing commercial real estate loans totaled $26 million or 0.62 percent of outstanding commercial real estate loans. Nonaccruing loans to individuals totaled $41 million or 1.14 percent of outstanding loans to individuals.

Nonaccruing loans decreased $36 million compared to March 31, 2021, primarily due to a decrease in nonaccruing energy loans. New nonaccruing loans identified in the second quarter totaled $13 million, offset by $31 million in payments received and $18 million in charge-offs.

Potential problem loans, which are defined as performing loans that, based on known information, cause management concern as to the borrowers' ability to continue to perform, totaled $384 million at June 30, 2021, down from $422 million at March 31. Potential problem energy, services and general business loans all decreased compared to the prior quarter.

Net charge-offs were $15.4 million or 0.30 percent of average loans on an annualized basis for the second quarter of 2021, excluding PPP loans. Net charge-offs were 0.32 percent of average loans over the last four quarters. Net charge-offs were $14.5 million or 0.28 percent of average loans on an annualized basis for the first quarter of 2021, excluding PPP loans. Gross charge-offs were $18.3 million for the second quarter compared to $16.9 million for the previous quarter. Recoveries totaled $2.9 million for the second quarter of 2021 and $2.4 million for the first quarter of 2021.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $13.3 billion at June 30, 2021, a $92 million decrease compared to March 31, 2021. At June 30, 2021, the available for sale securities portfolio consisted primarily of $8.6 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $4.3 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. At June 30, 2021, the available for sale securities portfolio had a net unrealized gain of $297 million compared to $290 million at March 31, 2021.

The company also maintains a portfolio of residential mortgage-backed securities issued by U.S. government agencies and interest rate derivative contracts as an economic hedge of the changes in the fair value of our mortgage servicing rights. This portfolio of fair value option securities decreased $12 million to $60 million at June 30, 2021.

The net economic benefit of the changes in the fair value of mortgage servicing rights and related economic hedges was $4.4 million during the second quarter of 2021, including a $17.1 million increase in the fair value of securities and derivative contracts held as an economic hedge, $13.0 million decrease in the fair value of mortgage servicing rights, and $341 thousand of related net interest revenue.

Conference Call and Webcast

The company will hold a conference call at 9 a.m. Central time on Wednesday, July 21, 2021 to discuss the financial results with investors. The live audio webcast and presentation slides will be available on the company’s website at www.bokf.com. The conference call can also be accessed by dialing 1-201-689-8471. A conference call and webcast replay will also be available shortly after conclusion of the live call at www.bokf.com or by dialing 1-412-317-6671 and referencing conference ID # 13721197.

About BOK Financial Corporation

BOK Financial Corporation is a $47 billion regional financial services company headquartered in Tulsa, Oklahoma with $97 billion in assets under management and administration. The company's stock is publicly traded on NASDAQ under the Global Select market listings (BOKF). BOK Financial Corporation's holdings include BOKF, NA; BOK Financial Securities, Inc., BOK Financial Private Wealth, Inc. and BOK Financial Insurance, Inc. BOKF, NA operates TransFund, Cavanal Hill Investment Management and BOK Financial Asset Management, Inc. BOKF, NA operates banking divisions across eight states as: Bank of Albuquerque; Bank of Oklahoma; Bank of Texas; and BOK Financial in Arizona, Arkansas, Colorado, Kansas and Missouri; as well as having limited purpose offices in Nebraska, Wisconsin and Connecticut. Through its subsidiaries, BOK Financial Corporation provides commercial and consumer banking, brokerage trading, investment, trust and insurance services, mortgage origination and servicing, and an electronic funds transfer network. For more information, visit www.bokf.com.

The company will continue to evaluate critical assumptions and estimates, such as the appropriateness of the allowance for credit losses and asset impairment as of June 30, 2021 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 Corporation, the financial services industry, the economy generally and the expected or potential impact of the novel coronavirus (COVID-19) pandemic, and the related responses of the government, consumers, and others, on our business, financial condition and results of operations. Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “plans,” “projects,” “will,” “intends,” variations of such words and similar expressions are intended to identify such forward-looking statements. Management judgments relating to and discussion of the provision and allowance for credit losses, allowance for uncertain tax positions, accruals for loss contingencies and valuation of mortgage servicing rights involve judgments as to expected events and are inherently forward-looking statements. Assessments that acquisitions and 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 various forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions which are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what is expected, implied or forecasted in such forward-looking statements. Internal and external factors that might cause such a difference include, but are not limited to changes in government, consumer or business responses to, and ability to treat or prevent further outbreak of the COVID-19 pandemic, changes in commodity prices, interest rates and interest rate relationships, inflation, demand for products and services, the degree of competition by traditional and nontraditional competitors, changes in banking regulations, tax laws, prices, levies and assessments, the impact of technological advances, and trends in customer behavior as well as their ability to repay loans. BOK Financial Corporation 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)

June 30, 2021

Mar. 31, 2021

ASSETS

Cash and due from banks

$

678,998

$

723,983

Interest-bearing cash and cash equivalents

580,457

695,213

Trading securities

5,699,070

5,085,949

Investment securities, net of allowance

220,832

226,121

Available for sale securities

13,317,922

13,410,057

Fair value option securities

60,432

72,498

Restricted equity securities

134,885

139,614

Residential mortgage loans held for sale

200,842

284,447

Loans:

Commercial

12,472,907

12,657,784

Commercial real estate

4,246,992

4,503,347

Paycheck protection program

1,121,583

1,848,550

Loans to individuals

3,574,967

3,524,166

Total loans

21,416,449

22,533,847

Allowance for loan losses

(311,890

)

(352,402

)

Loans, net of allowance

21,104,559

22,181,445

Premises and equipment, net

556,400

555,455

Receivables

195,763

250,852

Goodwill

1,048,091

1,048,091

Intangible assets, net

105,694

110,585

Mortgage servicing rights

117,629

132,915

Real estate and other repossessed assets, net

57,337

70,911

Derivative contracts, net

1,701,443

1,289,156

Cash surrender value of bank-owned life insurance

401,163

401,320

Receivable on unsettled securities sales

70,954

67,759

Other assets

901,904

696,142

TOTAL ASSETS

$

47,154,375

$

47,442,513

LIABILITIES AND EQUITY

Deposits:

Demand

$

13,380,409

$

13,103,170

Interest-bearing transaction

21,278,719

21,890,874

Savings

875,456

854,226

Time

1,905,349

2,004,356

Total deposits

37,439,933

37,852,626

Funds purchased and repurchase agreements

730,183

795,161

Other borrowings

1,546,231

1,708,517

Subordinated debentures

276,043

276,024

Accrued interest, taxes and expense

199,014

290,328

Due on unsettled securities purchases

576,536

106,835

Derivative contracts, net

612,261

719,556

Other liabilities

419,623

431,122

TOTAL LIABILITIES

41,799,824

42,180,169

Shareholders' equity:

Capital, surplus and retained earnings

5,106,209

5,018,053

Accumulated other comprehensive gain

226,768

221,409

TOTAL SHAREHOLDERS' EQUITY

5,332,977

5,239,462

Non-controlling interests

21,574

22,882

TOTAL EQUITY

5,354,551

5,262,344

TOTAL LIABILITIES AND EQUITY

$

47,154,375

$

47,442,513

AVERAGE BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)

Three Months Ended

June 30, 2021

Mar. 31, 2021

Dec. 31, 2020

Sept. 30, 2020

June 30, 2020

ASSETS

Interest-bearing cash and cash equivalents

$

659,312

$

711,047

$

643,926

$

553,070

$

619,737

Trading securities

7,430,217

6,963,617

6,888,189

1,834,160

1,871,647

Investment securities, net of allowance

221,401

237,313

251,863

258,965

268,947

Available for sale securities

13,243,542

13,433,767

12,949,702

12,580,850

12,480,065

Fair value option securities

64,864

104,662

122,329

387,784

786,757

Restricted equity securities

208,692

189,921

280,428

144,415

273,922

Residential mortgage loans held for sale

218,200

207,013

229,631

213,125

288,588

Loans:

Commercial

12,402,925

12,908,461

13,113,449

13,772,217

14,502,652

Commercial real estate

4,395,848

4,547,945

4,788,393

4,754,269

4,543,511

Paycheck protection program

1,668,047

1,741,534

1,928,665

2,092,933

1,699,369

Loans to individuals

3,700,269

3,559,067

3,617,011

3,491,044

3,353,960

Total loans

22,167,089

22,757,007

23,447,518

24,110,463

24,099,492

Allowance for loan losses

(345,269

)

(382,734

)

(414,225

)

(441,831

)

(367,583

)

Loans, net of allowance

21,821,820

22,374,273

23,033,293

23,668,632

23,731,909

Total earning assets

43,868,048

44,221,613

44,399,361

39,641,001

40,321,572

Cash and due from banks

763,393

760,691

742,432

723,826

678,878

Derivative contracts, net

1,022,137

873,712

553,779

581,839

642,969

Cash surrender value of bank-owned life insurance

401,760

399,830

397,354

394,680

391,951

Receivable on unsettled securities sales

716,700

735,482

1,094,198

4,563,301

4,626,307

Other assets

3,424,884

3,319,305

3,200,040

3,027,108

3,095,354

TOTAL ASSETS

$

50,196,922

$

50,310,633

$

50,387,164

$

48,931,755

$

49,757,031

LIABILITIES AND EQUITY

Deposits:

Demand

$

13,189,954

$

12,312,629

$

12,136,071

$

11,929,694

$

11,489,322

Interest-bearing transaction

21,491,145

21,433,406

20,718,390

19,752,106

18,040,170

Savings

872,618

789,656

737,360

707,121

656,669

Time

1,936,510

1,986,425

1,930,808

2,251,012

2,464,793

Total deposits

37,490,227

36,522,116

35,522,629

34,639,933

32,650,954

Funds purchased and repurchase agreements

1,790,490

2,830,378

2,153,254

2,782,150

5,816,484

Other borrowings

3,608,369

3,392,346

5,193,656

3,382,688

3,527,303

Subordinated debentures

276,034

276,015

275,998

275,980

275,949

Derivative contracts, net

366,202

428,488

399,476

458,390

836,667

Due on unsettled securities purchases

701,495

915,410

957,642

1,516,880

887,973

Other liabilities

634,460

671,715

656,147

712,674

690,087

TOTAL LIABILITIES

44,867,277

45,036,468

45,158,802

43,768,695

44,685,417

Total equity

5,329,645

5,274,165

5,228,362

5,163,060

5,071,614

TOTAL LIABILITIES AND EQUITY

$

50,196,922

$

50,310,633

$

50,387,164

$

48,931,755

$

49,757,031

STATEMENTS OF EARNINGS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except per share data)

Three Months Ended

Six Months Ended

June 30,

June 30,

2021

2020

2021

2020

Interest revenue

$

295,893

$

306,384

$

594,132

$

655,321

Interest expense

15,584

28,280

33,403

115,857

Net interest revenue

280,309

278,104

560,729

539,464

Provision for credit losses

(35,000

)

135,321

(60,000

)

229,092

Net interest revenue after provision for credit losses

315,309

142,783

620,729

310,372

Other operating revenue:

Brokerage and trading revenue

29,408

62,022

50,190

112,801

Transaction card revenue

24,923

22,940

47,353

44,821

Fiduciary and asset management revenue

44,832

41,257

86,154

85,715

Deposit service charges and fees

25,861

22,046

50,070

48,176

Mortgage banking revenue

21,219

53,936

58,332

91,103

Other revenue

23,172

11,479

39,468

23,788

Total fees and commissions

169,415

213,680

331,567

406,404

Other gains (losses), net

16,449

7,347

26,570

(3,391

)

Gain (loss) on derivatives, net

18,820

21,885

(8,830

)

40,305

Gain (loss) on fair value option securities, net

(1,627

)

(14,459

)

(3,537

)

53,934

Change in fair value of mortgage servicing rights

(13,041

)

(761

)

20,833

(89,241

)

Gain on available for sale securities, net

1,430

5,580

1,897

5,583

Total other operating revenue

191,446

233,272

368,500

413,594

Other operating expense:

Personnel

172,035

176,235

345,045

332,416

Business promotion

2,744

1,935

4,898

8,150

Charitable contributions to BOKF Foundation

3,000

4,000

3,000

Professional fees and services

12,361

12,161

24,341

25,109

Net occupancy and equipment

26,633

30,675

53,295

56,736

Insurance

3,660

5,156

8,280

10,136

Data processing and communications

36,418

32,942

73,885

65,685

Printing, postage and supplies

4,285

3,502

7,725

7,774

Amortization of intangible assets

4,578

5,190

9,385

10,284

Mortgage banking costs

11,126

15,598

25,069

26,143

Other expense

17,312

9,572

31,013

19,160

Total other operating expense

291,152

295,966

586,936

564,593

Net income before taxes

215,603

80,089

402,293

159,373

Federal and state income taxes

48,496

15,803

90,878

33,103

Net income

167,107

64,286

311,415

126,270

Net income (loss) attributable to non-controlling interests

686

(407

)

(1,066

)

(502

)

Net income attributable to BOK Financial Corporation shareholders

$

166,421

$

64,693

$

312,481

$

126,772

Average shares outstanding:

Basic

68,815,666

69,876,043

68,975,743

69,999,865

Diluted

68,817,442

69,877,467

68,978,798

70,003,817

Net income per share:

Basic

$

2.40

$

0.92

$

4.50

$

1.80

Diluted

$

2.40

$

0.92

$

4.50

$

1.80

FINANCIAL HIGHLIGHTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and share data)

Three Months Ended

June 30, 2021

Mar. 31, 2021

Dec. 31, 2020

Sept. 30, 2020

June 30, 2020

Capital:

Period-end shareholders' equity

$

5,332,977

$

5,239,462

$

5,266,266

$

5,218,787

$

5,096,995

Risk weighted assets

$

33,824,860

$

32,623,108

$

32,492,277

$

31,529,826

$

32,180,602

Risk-based capital ratios:

Common equity tier 1

11.95

%

12.14

%

11.95

%

12.07

%

11.44

%

Tier 1

12.01

%

12.21

%

11.95

%

12.07

%

11.44

%

Total capital

13.61

%

13.98

%

13.82

%

14.05

%

13.43

%

Leverage ratio

8.58

%

8.42

%

8.28

%

8.39

%

7.74

%

Tangible common equity ratio1

9.09

%

8.82

%

9.02

%

9.02

%

8.79

%

Common stock:

Book value per share

$

77.20

$

75.33

$

75.62

$

74.23

$

72.50

Tangible book value per share

$

60.50

$

58.67

$

58.94

$

57.64

$

55.83

Market value per share:

High

$

93.00

$

98.95

$

73.07

$

62.86

$

67.62

Low

$

83.59

$

67.57

$

50.09

$

48.41

$

37.80

Cash dividends paid

$

35,925

$

36,038

$

36,219

$

35,799

$

35,769

Dividend payout ratio

21.59

%

24.67

%

23.48

%

23.24

%

55.29

%

Shares outstanding, net

69,078,458

69,557,873

69,637,600

70,305,833

70,306,690

Stock buy-back program:

Shares repurchased

492,994

260,000

665,100

Amount

$

43,797

$

20,071

$

42,450

$

$

Average price per share

$

88.84

$

77.20

$

63.82

$

$

Performance ratios (quarter annualized):

Return on average assets

1.33

%

1.18

%

1.22

%

1.25

%

0.52

%

Return on average equity

12.58

%

11.28

%

11.75

%

11.89

%

5.14

%

Net interest margin

2.60

%

2.62

%

2.72

%

2.81

%

2.83

%

Efficiency ratio

64.20

%

66.26

%

62.77

%

59.57

%

59.68

%

Reconciliation of non-GAAP measures:

1 Tangible common equity ratio:

Total shareholders' equity

$

5,332,977

$

5,239,462

$

5,266,266

$

5,218,787

$

5,096,995

Less: Goodwill and intangible assets, net

1,153,785

1,158,676

1,161,527

1,166,615

1,171,686

Tangible common equity

$

4,179,192

$

4,080,786

$

4,104,739

$

4,052,172

$

3,925,309

Total assets

$

47,154,375

$

47,442,513

$

46,671,088

$

46,067,224

$

45,819,874

Less: Goodwill and intangible assets, net

1,153,785

1,158,676

1,161,527

1,166,615

1,171,686

Tangible assets

$

46,000,590

$

46,283,837

$

45,509,561

$

44,900,609

$

44,648,188

Tangible common equity ratio

9.09

%

8.82

%

9.02

%

9.02

%

8.79

%

Three Months Ended

June 30, 2021

Mar. 31, 2021

Dec. 31, 2020

Sept. 30, 2020

June 30, 2020

Pre-provision net revenue:

Net income before taxes

$

215,603

$

186,690

$

199,847

$

204,644

$

80,089

Provision for expected credit losses

(35,000

)

(25,000

)

(6,500

)

135,321

Net income (loss) attributable to non-controlling interests

686

(1,752

)

485

58

(407

)

Pre-provision net revenue

$

179,917

$

163,442

$

192,862

$

204,586

$

215,817

Other data:

Tax equivalent interest

$

2,320

$

2,301

$

2,414

$

2,457

$

2,630

Net unrealized gain on available for sale securities

$

297,267

$

290,217

$

440,814

$

480,563

$

487,334

Mortgage banking:

Mortgage production revenue

$

10,004

$

25,287

$

26,662

$

38,431

$

39,185

Mortgage loans funded for sale

$

754,893

$

843,053

$

998,435

$

1,032,472

$

1,184,249

Add: current period-end outstanding commitments

276,154

387,465

380,637

560,493

546,304

Less: prior period end outstanding commitments

387,465

380,637

560,493

546,304

657,570

Total mortgage production volume

$

643,582

$

849,881

$

818,579

$

1,046,661

$

1,072,983

Mortgage loan refinances to mortgage loans funded for sale

48

%

65

%

58

%

54

%

71

%

Realized margin on funded mortgage loans

2.75

%

3.10

%

3.78

%

3.52

%

2.04

%

Gain on sale margin

1.55

%

2.98

%

3.26

%

3.67

%

3.65

%

Mortgage servicing revenue

$

11,215

$

11,826

$

12,636

$

13,528

$

14,751

Average outstanding principal balance of mortgage loans serviced for others

15,065,173

15,723,231

16,518,208

17,434,215

19,319,872

Average mortgage servicing revenue rates

0.30

%

0.31

%

0.30

%

0.31

%

0.31

%

Gain (loss) on mortgage servicing rights, net of economic hedge:

Gain (loss) on mortgage hedge derivative contracts, net

$

18,764

$

(27,705

)

$

(385

)

$

2,295

$

21,815

Gain (loss) on fair value option securities, net

(1,627

)

(1,910

)

68

(754

)

(14,459

)

Gain (loss) on economic hedge of mortgage servicing rights

17,137

(29,615

)

(317

)

1,541

7,356

Gain (loss) on changes in fair value of mortgage servicing rights

(13,041

)

33,874

6,276

3,441

(761

)

Gain on changes in fair value of mortgage servicing rights,
net of economic hedges, included in other operating revenue

4,096

4,259

5,959

4,982

6,595

Net interest revenue on fair value option securities2

341

393

550

1,565

2,702

Total economic benefit of changes in the fair value of mortgage
servicing rights, net of economic hedges

$

4,437

$

4,652

$

6,509

$

6,547

$

9,297

2 Actual interest earned on fair value option securities less internal transfer-priced cost of funds.

QUARTERLY EARNINGS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and per share data)

Three Months Ended

June 30, 2021

Mar. 31, 2021

Dec. 31, 2020

Sept. 30, 2020

June 30, 2020

Interest revenue

$

295,893

$

298,239

$

319,020

$

294,659

$

306,384

Interest expense

15,584

17,819

21,790

22,909

28,280

Net interest revenue

280,309

280,420

297,230

271,750

278,104

Provision for credit losses

(35,000

)

(25,000

)

(6,500

)

135,321

Net interest revenue after provision for
credit losses

315,309

305,420

303,730

271,750

142,783

Other operating revenue:

Brokerage and trading revenue

29,408

20,782

39,506

69,526

62,022

Transaction card revenue

24,923

22,430

21,896

23,465

22,940

Fiduciary and asset management revenue

44,832

41,322

41,799

39,931

41,257

Deposit service charges and fees

25,861

24,209

24,343

24,286

22,046

Mortgage banking revenue

21,219

37,113

39,298

51,959

53,936

Other revenue

23,172

16,296

14,209

13,698

11,479

Total fees and commissions

169,415

162,152

181,051

222,865

213,680

Other gains, net

16,449

10,121

7,394

2,044

7,347

Gain (loss) on derivatives, net

18,820

(27,650

)

(339

)

2,354

21,885

Gain (loss) on fair value option securities, net

(1,627

)

(1,910

)

68

(754

)

(14,459

)

Change in fair value of mortgage servicing rights

(13,041

)

33,874

6,276

3,441

(761

)

Gain (loss) on available for sale securities, net

1,430

467

4,339

(12

)

5,580

Total other operating revenue

191,446

177,054

198,789

229,938

233,272

Other operating expense:

Personnel

172,035

173,010

176,198

179,860

176,235

Business promotion

2,744

2,154

3,728

2,633

1,935

Charitable contributions to BOKF Foundation

4,000

6,000

3,000

Professional fees and services

12,361

11,980

14,254

14,074

12,161

Net occupancy and equipment

26,633

26,662

27,875

28,111

30,675

Insurance

3,660

4,620

4,006

5,848

5,156

Data processing and communications

36,418

37,467

35,061

34,751

32,942

Printing, postage and supplies

4,285

3,440

3,805

3,482

3,502

Amortization of intangible assets

4,578

4,807

5,088

5,071

5,190

Mortgage banking costs

11,126

13,943

14,765

15,803

15,598

Other expense

17,312

13,701

11,892

7,411

9,572

Total other operating expense

291,152

295,784

302,672

297,044

295,966

Net income before taxes

215,603

186,690

199,847

204,644

80,089

Federal and state income taxes

48,496

42,382

45,138

50,552

15,803

Net income

167,107

144,308

154,709

154,092

64,286

Net income (loss) attributable to non-controlling interests

686

(1,752

)

485

58

(407

)

Net income attributable to BOK Financial
Corporation shareholders

$

166,421

$

146,060

$

154,224

$

$

64,693

Average shares outstanding:

Basic

68,815,666

69,137,375

69,489,597

69,877,866

69,876,043

Diluted

68,817,442

69,141,710

69,493,050

69,879,290

69,877,467

Net income per share:

Basic

$

2.40

$

2.10

$

2.21

$

2.19

$

0.92

Diluted

$

2.40

$

2.10

$

2.21

$

2.19

$

0.92

LOANS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)

June 30, 2021

Mar. 31, 2021

Dec. 31, 2020

Sept. 30, 2020

June 30, 2020

Commercial:

Services

$

3,389,756

$

3,421,948

$

3,508,583

$

3,545,825

$

3,779,881

Healthcare

3,381,261

3,290,758

3,305,990

3,325,790

3,289,343

Energy

3,011,331

3,202,488

3,469,194

3,717,101

3,974,174

General business

2,690,559

2,742,590

2,793,768

2,976,990

3,115,112

Total commercial

12,472,907

12,657,784

13,077,535

13,565,706

14,158,510

Commercial real estate:

Office

1,073,346

1,094,060

1,085,257

1,099,563

973,995

Multifamily

964,824

1,227,915

1,328,045

1,387,461

1,407,107

Industrial

824,577

789,437

810,510

792,389

723,005

Retail

784,445

787,648

796,223

786,211

780,467

Residential construction and land
development

128,939

119,079

119,394

121,258

136,911

Other commercial real estate

470,861

485,208

559,109

506,818

532,659

Total commercial real estate

4,246,992

4,503,347

4,698,538

4,693,700

4,554,144

Paycheck protection program

1,121,583

1,848,550

1,682,310

2,097,325

2,081,428

Loans to individuals:

Residential mortgage

1,772,627

1,797,478

1,863,003

1,849,144

1,813,442

Residential mortgages guaranteed by U.S.
government agencies

413,806

420,051

408,687

384,247

322,269

Personal

1,388,534

1,306,637

1,277,447

1,213,178

1,226,097

Total loans to individuals

3,574,967

3,524,166

3,549,137

3,446,569

3,361,808

Total

$

21,416,449

$

22,533,847

$

23,007,520

$

23,803,300

$

24,155,890

LOANS MANAGED BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)

June 30, 2021

Mar. 31, 2021

Dec. 31, 2020

Sept. 30, 2020

June 30, 2020

Texas:

Commercial

$

5,690,901

$

5,748,345

$

5,926,534

$

6,135,471

$

6,359,206

Commercial real estate

1,403,751

1,511,714

1,519,217

1,523,226

1,413,108

Paycheck protection program

342,933

537,899

501,079

614,970

612,133

Loans to individuals

885,619

848,194

855,410

794,055

749,531

Total Texas

8,323,204

8,646,152

8,802,240

9,067,722

9,133,978

Oklahoma:

Commercial

2,840,560

2,975,477

3,144,782

3,332,244

3,489,259

Commercial real estate

552,673

597,840

597,733

608,448

596,419

Paycheck protection program

242,880

468,002

413,108

487,247

442,518

Loans to individuals

2,063,419

2,043,705

2,052,784

2,034,576

1,966,032

Total Oklahoma

5,699,532

6,085,024

6,208,407

6,462,515

6,494,228

Colorado:

Commercial

1,904,182

1,910,826

1,929,320

1,993,364

2,085,294

Commercial real estate

656,521

777,786

879,648

893,626

940,622

Paycheck protection program

299,712

436,540

377,111

494,910

488,279

Loans to individuals

262,796

264,759

264,295

257,832

265,359

Total Colorado

3,123,211

3,389,911

3,450,374

3,639,732

3,779,554

Arizona:

Commercial

1,239,270

1,207,089

1,219,072

1,218,769

1,346,037

Commercial real estate

705,497

667,766

726,111

702,291

698,818

Paycheck protection program

104,946

208,481

211,725

272,114

318,961

Loans to individuals

178,481

179,031

177,948

166,203

177,155

Total Arizona

2,228,194

2,262,367

2,334,856

2,359,377

2,540,971

Kansas/Missouri:

Commercial

388,291

421,974

455,914

493,606

481,162

Commercial real estate

406,055

395,590

366,821

352,663

314,926

Paycheck protection program

41,954

60,741

56,011

80,230

76,724

Loans to individuals

103,092

104,954

105,995

96,598

102,577

Total Kansas/Missouri

939,392

983,259

984,741

1,023,097

975,389

New Mexico:

Commercial

304,804

307,395

303,833

288,374

308,090

Commercial real estate

437,996

448,298

473,204

473,697

458,230

Paycheck protection program

86,716

124,059

109,881

133,244

128,058

Loans to individuals

68,177

70,491

75,665

79,890

83,470

Total New Mexico

897,693

950,243

962,583

975,205

977,848

Arkansas:

Commercial

104,899

86,678

98,080

103,878

89,462

Commercial real estate

84,499

104,353

135,804

139,749

132,021

Paycheck protection program

2,442

12,828

13,395

14,610

14,755

Loans to individuals

13,383

13,032

17,040

17,415

17,684

Total Arkansas

205,223

216,891

264,319

275,652

253,922

TOTAL BOK FINANCIAL

$

21,416,449

$

22,533,847

$

23,007,520

$

23,803,300

$

24,155,890

Loans attributed to a principal market may not always represent the location of the borrower or the collateral.

DEPOSITS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)

June 30, 2021

Mar. 31, 2021

Dec. 31, 2020

Sept. 30, 2020

June 30, 2020

Oklahoma:

Demand

$

4,985,542

$

4,823,436

$

4,329,205

$

4,493,978

$

4,378,786

Interest-bearing:

Transaction

12,065,844

12,828,070

12,603,658

12,586,449

11,438,549

Savings

500,344

487,862

420,996

401,062

387,557

Time

1,139,980

1,197,517

1,134,453

1,081,176

1,330,619

Total interest-bearing

13,706,168

14,513,449

14,159,107

14,068,687

13,156,725

Total Oklahoma

18,691,710

19,336,885

18,488,312

18,562,665

17,535,511

Texas:

Demand

3,752,790

3,592,969

3,449,882

3,152,106

3,070,728

Interest-bearing:

Transaction

4,335,113

4,257,234

3,800,427

3,482,555

3,358,030

Savings

160,805

154,406

139,173

136,787

128,892

Time

346,577

368,086

383,062

438,337

476,867

Total interest-bearing

4,842,495

4,779,726

4,322,662

4,057,679

3,963,789

Total Texas

8,595,285

8,372,695

7,772,544

7,209,785

7,034,517

Colorado:

Demand

1,991,343

2,115,354

2,168,404

2,057,603

2,096,075

Interest-bearing:

Transaction

2,159,819

2,100,135

2,170,485

1,861,763

1,816,604

Savings

73,990

73,446

69,384

68,230

67,477

Time

193,787

204,973

208,778

226,780

254,845

Total interest-bearing

2,427,596

2,378,554

2,448,647

2,156,773

2,138,926

Total Colorado

4,418,939

4,493,908

4,617,051

4,214,376

4,235,001

New Mexico:

Demand

1,197,412

1,131,713

941,074

964,908

965,877

Interest-bearing:

Transaction

723,757

736,923

733,007

713,418

752,565

Savings

105,837

103,591

91,646

85,463

80,242

Time

174,665

181,863

186,307

200,525

222,370

Total interest-bearing

1,004,259

1,022,377

1,010,960

999,406

1,055,177

Total New Mexico

2,201,671

2,154,090

1,952,034

1,964,314

2,021,054

Arizona:

Demand

943,511

915,439

905,201

928,671

985,757

Interest-bearing:

Transaction

820,901

835,795

768,220

771,319

780,500

Savings

13,496

13,235

12,174

11,498

15,669

Time

30,012

30,997

32,721

36,929

42,318

Total interest-bearing

864,409

880,027

813,115

819,746

838,487

Total Arizona

1,807,920

1,795,466

1,718,316

1,748,417

1,824,244

Kansas/Missouri:

Demand

463,339

478,370

426,738

405,360

427,795

Interest-bearing:

Transaction

978,160

991,510

960,237

616,797

526,635

Savings

17,539

18,686

16,286

15,520

15,033

Time

13,509

13,898

14,610

16,430

17,746

Total interest-bearing

1,009,208

1,024,094

991,133

648,747

559,414

Total Kansas/Missouri

1,472,547

1,502,464

1,417,871

1,054,107

987,209

Arkansas:

Demand

46,472

45,889

45,834

44,712

67,147

Interest-bearing:

Transaction

195,125

141,207

122,388

164,439

177,535

Savings

3,445

3,000

2,333

2,389

2,101

Time

6,819

7,022

7,197

7,796

7,995

Total interest-bearing

205,389

151,229

131,918

174,624

187,631

Total Arkansas

251,861

197,118

177,752

219,336

254,778

TOTAL BOK FINANCIAL

$

37,439,933

$

37,852,626

$

36,143,880

$

34,973,000

$

33,892,314

NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION

Three Months Ended

June 30, 2021

Mar. 31, 2021

Dec. 31, 2020

Sept. 30, 2020

June 30, 2020

TAX-EQUIVALENT ASSETS YIELDS

Interest-bearing cash and cash equivalents

0.10

%

0.10

%

0.10

%

0.12

%

0.07

%

Trading securities

1.95

%

2.06

%

2.02

%

1.92

%

2.46

%

Investment securities, net of allowance

5.01

%

4.88

%

4.88

%

4.85

%

4.77

%

Available for sale securities

1.85

%

1.84

%

1.98

%

2.11

%

2.29

%

Fair value option securities

2.60

%

1.95

%

2.27

%

1.92

%

2.00

%

Restricted equity securities

3.36

%

2.86

%

3.25

%

2.53

%

2.75

%

Residential mortgage loans held for sale

2.91

%

2.71

%

2.75

%

3.01

%

3.10

%

Loans

3.54

%

3.55

%

3.68

%

3.60

%

3.63

%

Allowance for loan losses

Loans, net of allowance

3.60

%

3.62

%

3.75

%

3.67

%

3.69

%

Total tax-equivalent yield on earning assets

2.75

%

2.78

%

2.92

%

3.04

%

3.12

%

COST OF INTEREST-BEARING LIABILITIES

Interest-bearing deposits:

Interest-bearing transaction

0.10

%

0.12

%

0.14

%

0.17

%

0.21

%

Savings

0.04

%

0.04

%

0.05

%

0.05

%

0.05

%

Time

0.58

%

0.70

%

0.89

%

1.13

%

1.36

%

Total interest-bearing deposits

0.14

%

0.17

%

0.19

%

0.26

%

0.34

%

Funds purchased and repurchase agreements

0.16

%

0.19

%

0.28

%

0.17

%

0.14

%

Other borrowings

0.34

%

0.39

%

0.42

%

0.43

%

0.56

%

Subordinated debt

4.87

%

4.92

%

4.87

%

4.89

%

5.16

%

Total cost of interest-bearing liabilities

0.21

%

0.24

%

0.28

%

0.31

%

0.37

%

Tax-equivalent net interest revenue spread

2.54

%

2.54

%

2.64

%

2.73

%

2.75

%

Effect of noninterest-bearing funding sources and other

0.06

%

0.08

%

0.08

%

0.08

%

0.08

%

Tax-equivalent net interest margin

2.60

%

2.62

%

2.72

%

2.81

%

2.83

%

Yield calculations are shown on a tax equivalent basis at the statutory federal and state rates for the periods presented. The yield calculations exclude security trades that have been recorded on trade date with no corresponding interest income and the unrealized gains and losses. The yield calculation also includes average loan balances for which the accrual of interest has been discontinued and are net of unearned income. Yield/rate calculations are generally based on the conventions that determine how interest income and expense is accrued.

CREDIT QUALITY INDICATORS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratios)

Three Months Ended

June 30, 2021

Mar. 31, 2021

Dec. 31, 2020

Sept. 30, 2020

June 30, 2020

Nonperforming assets:

Nonaccruing loans:

Commercial:

Energy

$

70,341

$

101,800

$

125,059

$

126,816

$

162,989

Services

29,913

28,033

25,598

25,817

21,032

Healthcare

527

3,187

3,645

3,645

3,645

General business

11,823

14,053

12,857

13,675

14,333

Total commercial

112,604

147,073

167,159

169,953

201,999

Commercial real estate

26,123

27,243

27,246

12,952

13,956

Loans to individuals:

Permanent mortgage

31,473

32,884

32,228

31,599

33,098

Permanent mortgage guaranteed by U.S
government agencies

9,207

8,564

7,741

6,397

6,110

Personal

229

255

319

252

233

Total loans to individuals

40,909

41,703

40,288

38,248

39,441

Total nonaccruing loans

$

179,636

$

216,019

$

234,693

$

221,153

$

255,396

Accruing renegotiated loans guaranteed by U.S.
government agencies

171,324

154,591

151,775

142,770

114,571

Real estate and other repossessed assets

57,337

70,911

90,526

52,847

35,330

Total nonperforming assets

$

408,297

$

441,521

$

476,994

$

416,770

$

405,297

Total nonperforming assets excluding
those guaranteed by U.S. government agencies

$

227,766

$

278,366

$

317,478

$

267,603

$

284,616

Accruing loans 90 days past due1

$

252

$

395

$

10,369

$

7,684

$

10,992

Gross charge-offs

$

18,304

$

16,905

$

18,251

$

26,661

$

15,570

Recoveries

(2,856

)

(2,437

)

(1,592

)

(4,232

)

(1,491

)

Net charge-offs

$

15,448

$

14,468

$

16,659

$

22,429

$

14,079

Provision for loan losses

$

(25,064

)

$

(21,770

)

$

(14,478

)

$

6,609

$

134,365

Provision for credit losses from off-balance
sheet unfunded loan commitments

(8,590

)

(4,044

)

8,952

(4,950

)

4,405

Provision for expected credit losses from
mortgage banking activities

(1,222

)

885

(923

)

(770

)

(3,575

)

Provision for credit losses related to held-to
maturity (investment) securities portfolio

(124

)

(71

)

(51

)

(889

)

126

Total provision for credit losses

$

(35,000

)

$

(25,000

)

$

(6,500

)

$

$

135,321

Three Months Ended

June 30, 2021

Mar. 31, 2021

Dec. 31, 2020

Sept. 30, 2020

June 30, 2020

Allowance for loan losses to period end loans

1.46

%

1.56

%

1.69

%

1.76

%

1.80

%

Allowance for loan losses to period end
loans excluding PPP loans2

1.54

%

1.70

%

1.82

%

1.93

%

1.97

%

Combined allowance for loan losses and
accrual for off-balance sheet credit risk
from unfunded loan commitments to
period end loans

1.57

%

1.71

%

1.85

%

1.88

%

1.94

%

Combined allowance for loan losses and
accrual for off-balance sheet credit risk
from unfunded loan commitments to
period end loans excluding PPP loans2

1.66

%

1.86

%

2.00

%

2.06

%

2.12

%

Nonperforming assets to period end loans
and repossessed assets

1.90

%

1.95

%

2.07

%

1.75

%

1.68

%

Net charge-offs (annualized) to average loans

0.28

%

0.25

%

0.28

%

0.37

%

0.23

%

Net charge-offs (annualized) to average loans
excluding PPP loans2

0.30

%

0.28

%

0.31

%

0.41

%

0.25

%

Allowance for loan losses to nonaccruing loans1

183.00

%

169.87

%

171.24

%

195.47

%

174.74

%

Combined allowance for loan losses and
accrual for off-balance sheet credit risk
from unfunded loan commitments to
nonaccruing loans1

197.25

%

185.72

%

187.51

%

208.49

%

187.94

%

1 Excludes residential mortgage loans guaranteed by agencies of the U.S. government.
2 Metric meaningful due to the unique characteristics and short-term nature of the PPP loans.

SEGMENTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratios)

Three Months Ended

2Q21 vs 1Q21

2Q21 vs 2Q20

June 30, 2021

Mar. 31, 2021

June 30, 2020

$ change

% change

$ change

% change

Commercial Banking

Net interest revenue

$

130,901

$

130,005

$

145,109

$

896

0.7

%

$

(14,208

)

(9.8

)%

Fees and commissions revenue

63,368

49,847

46,515

13,521

27.1

%

16,853

36.2

%

Combined net interest and fee revenue

194,269

179,852

191,624

14,417

8.0

%

2,645

1.4

%

Other operating expense

71,351

66,979

62,933

4,372

6.5

%

8,418

13.4

%

Corporate expense allocations

12,512

12,734

5,437

(222

)

(1.7

)%

7,075

130.1

%

Net income

72,632

69,673

80,992

2,959

4.2

%

(8,360

)

(10.3

)%

Average assets

28,160,594

28,047,052

27,575,652

113,542

0.4

%

584,942

2.1

%

Average loans

16,981,888

17,522,520

19,262,827

(540,632

)

(3.1

)%

(2,280,939

)

(11.8

)%

Average deposits

17,049,772

16,130,168

14,599,225

919,604

5.7

%

2,450,547

16.8

%

Consumer Banking

Net interest revenue

$

24,945

$

20,974

$

39,270

$

3,971

18.9

%

$

(14,325

)

(36.5

)%

Fees and commissions revenue

37,714

52,300

67,192

(14,586

)

(27.9

)%

(29,478

)

(43.9

)%

Combined net interest and fee revenue

62,659

73,274

106,462

(10,615

)

(14.5

)%

(43,803

)

(41.1

)%

Other operating expense

52,453

55,622

58,249

(3,169

)

(5.7

)%

(5,796

)

(10.0

)%

Corporate expense allocations

11,599

11,475

10,692

124

1.1

%

907

8.5

%

Net income

1,698

6,948

32,501

(5,250

)

(75.6

)%

(30,803

)

(94.8

)%

Average assets

10,087,488

9,755,539

9,920,005

331,949

3.4

%

167,483

1.7

%

Average loans

1,786,242

1,823,732

1,679,164

(37,490

)

(2.1

)%

107,078

6.4

%

Average deposits

8,469,043

8,082,443

7,587,246

386,600

4.8

%

881,797

11.6

%