BOK Financial Corporation Reports Quarterly Earnings of $65 million or $0.92 Per Share in the Second Quarter

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TULSA, Okla., July 22, 2020 (GLOBE NEWSWIRE) -- BOK Financial (NASDAQ: BOKF) today reported net earnings applicable to common shareholders for the second quarter of 2020 of $65 million, or $0.92 per diluted common share.

"The second quarter, unlike any in recent memory, demonstrated the effectiveness of our diversified revenue model," said Steven G. Bradshaw, president and chief executive officer. "Record quarters from both our Wealth Management and Mortgage businesses added more than $150 million to fee revenue this quarter, eclipsing our pre-provision net revenue from the same quarter a year ago. In fact, this quarter generated the highest level of pre-provision net revenue in the history of our company, even after normalizing for the impact of the Paycheck Protection Program. Considering the economic environment we find ourselves in today, this is truly a remarkable outcome."

Bradshaw continued, "With more than 40 percent of our company's revenues derived from a host of fee-based businesses, we have the proven ability to generate positive outcomes through all parts of the economic cycle. In this time of margin compression and credit concerns, financial institutions like BOK Financial demonstrate the real power of a diversified business model and sound underwriting methods."

  • Net income was $64.7 million or $0.92 per diluted share for the second quarter of 2020 and $62.1 million or $0.88 per diluted share for the first quarter of 2020. Pre-provision net revenue was $215.8 million for the second quarter of 2020 compared to $173.0 million for the prior quarter. The second quarter of 2020 included a pre-tax provision for expected credit losses of $135.3 million compared to $93.8 million in the prior quarter.

  • Net interest revenue totaled $278.1 million, an increase of $16.7 million, largely due to the addition of loans related to the Small Business Administration's ("SBA") Paycheck Protection Program ("PPP") that began on April 3, 2020. Net interest margin was 2.83 percent compared to 2.80 percent in the first quarter of 2020. Our ability to move deposit costs down, along with LIBOR remaining elevated early in the second quarter relative to recent Federal Reserve rate cuts and the strategic positioning of our balance sheet, has allowed us to combat much of the market pressure on our margin.

  • Fees and commissions revenue totaled $213.7 million, an increase of $21.0 million. Low mortgage interest rates continued to drive increases in mortgage banking revenue of $16.8 million and related bond trading activity of $9.5 million over the first quarter of 2020. These increases were partially offset by a reduction in service charges, largely due to "shelter in place" impacts coupled with proactive waivers of fees that were extended as a courtesy to our customers during the COVID-19 pandemic.

  • Operating expense was $295.4 million, an increase of $26.8 million. Personnel expense increased $20.1 million, including an $11.0 million increase in incentive compensation expense reflecting the growth in our trading activity. Non-personnel expense increased $6.7 million compared to the first quarter of 2020. Increases in mortgage banking costs and occupancy and equipment expense were partially offset by a decrease in business promotion expense.

  • Changes in the fair value of mortgage servicing rights and related economic hedges provided $9.3 million during the second quarter of 2020. A $7.4 million increase in the fair value of securities and derivative contracts held as an economic hedge and $2.7 million of related net interest revenue, were partially offset by a $761 thousand decrease in the fair value of mortgage servicing rights.  

  • We have implemented programs to help our customers through this uncertain time. We are actively participating in programs initiated by the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"), including the SBA's PPP. Average loans for the second quarter increased $2.2 billion to $24.1 billion with $1.7 billion of those being PPP loans. Period-end loans increased $1.7 billion to $24.2 billion. Period-end PPP loans were $2.1 billion. We have also granted $1.2 billion in forbearance requests from customers as of June 30, including $704 million of commercial loans, $398 million in commercial real estate loans and $143 million in loans to individuals.

  • The allowance for loan losses totaled $436 million or 1.80 percent of outstanding loans at June 30, 2020. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $469 million or 1.94 percent of outstanding loans at June 30, 2020. Excluding PPP loans, the allowance for loan losses was 1.97 percent of outstanding loans and the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was 2.12 percent. At March 31, 2020, the allowance for loan losses was $315 million or 1.40 percent of outstanding loans. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $344 million or 1.53 percent of outstanding loans.

  • Average deposits increased $4.5 billion to $32.7 billion and period-end deposits increased $4.6 billion to $33.9 billion. An estimated $2.7 billion of this growth was related to CARES Act funding, with the remainder due to growth from our broader customer base.

  • The company's common equity Tier 1 capital ratio was 11.41 percent at June 30, 2020. In addition, the company's Tier 1 capital ratio was 11.41 percent, total capital ratio was 13.40 percent, and leverage ratio was 7.74 percent at June 30, 2020. At March 31, 2020, the company's common equity Tier 1 capital ratio was 10.98 percent, Tier 1 capital ratio was 10.98 percent, total capital ratio was 12.65 percent, and leverage ratio was 8.15 percent.

Second Quarter 2020 Business Segment Highlights

  • Commercial Banking contributed $81.0 million to net income, an increase of $6.0 million over the first quarter. While net interest revenue decreased $6.3 million, fees and commissions revenue increased $5.1 million. Customer reaction to the volatile price environment drove an increase of $4.4 million in customer hedging revenue this quarter. Other gains (losses), net also increased $4.6 million, primarily related to an impairment of an alternative investment in the first quarter. Operating expense increased $2.2 million, largely due to incentive compensation.

  • Consumer Banking contributed $31.9 million to net income, an increase of $9.0 million over the first quarter. Net interest revenue decreased $4.7 million; however, fees and commissions revenue increased $12.1 million. Mortgage banking revenue increased $16.8 million following another strong quarter for mortgage loan production. Low mortgage interest rates continue to increase volume, particularly around refinances, which is responsible for 71 percent of the volume in the second quarter. The large increase in refinance demand, which reduced industry-wide capacity, has led to the ability to increase margins. Gain on sale margin increased 159 basis points to 3.65 percent. This increase was partially offset by a decrease in service charges as we waived certain fees in the second quarter to help customers throughout this uncertain time. Changes in the fair value of mortgage servicing rights and related economic hedges provided $9.3 million during the second quarter of 2020. Operating expense increased $4.1 million, primarily due to an increase in mortgage banking costs.

  • Wealth Management contributed $33.4 million to net income, an increase of $10.8 million over the first quarter. Net interest revenue increased $8.0 million and fees and commissions increased $8.9 million. Lower interest rates drove record increases in industry-wide mortgage loan production volume during the second quarter. We increased our trading pipeline to provide greater liquidity to the housing market. As a result, trading revenue increased $9.5 million. Trust fees and commissions decreased $3.2 million as we waived certain fees for our customers and market conditions led to reduction in trust revenue. Operating expense increased $2.4 million, primarily due to incentive compensation costs related to increased trading activity partially offset by lower business promotion expense.

Net Interest Revenue

Net interest revenue was $278.1 million for the second quarter of 2020, a $16.7 million increase compared to the first quarter of 2020. PPP loans added $13.6 million to net interest revenue in the second quarter.

Average earning assets increased $1.9 billion compared to the first quarter of 2020. Average loan balances increased $2.2 billion, largely due to the influx of PPP loans. Available for sale securities increased $816 million as we have adjusted our balance sheet for the current rate environment. Fair value option securities, held as an economic hedge of the changes in fair value of our mortgage servicing rights, decreased $1.0 billion. In addition, receivables from unsettled securities sales, primarily related to our U.S. agency residential mortgage-backed trading operations, increased $1.6 billion. Growth in average earning assets and non-interest bearing receivables was largely funded by a $2.2 billion increase in interest-bearing deposits. Other borrowings decreased $3.0 billion, primarily due to a decrease in funds borrowed from the Federal Home Loan Bank, partially offset by an increase in PPP loans funded through the Federal Reserve's PPP Liquidity Facility. Funds purchased and repurchase agreements increased $2.0 billion.

Net interest margin was 2.83 percent compared to 2.80 percent in the previous quarter. The reduction in deposit costs, LIBOR remaining elevated early in the second quarter, and the strategic positioning of our balance sheet, have combined to reduce the pressure on margin. PPP loans added one basis point to net interest margin.

The yield on average earning assets was 3.12 percent, a 61 basis point decrease from the prior quarter as we start to see the effects of the recent Federal Reserve rate cuts. The loan portfolio yield was 3.63 percent, down 87 basis points. The yield on the available for sale securities portfolio decreased 19 basis points to 2.29 percent.

Funding costs were 0.37 percent, down 82 basis points. The cost of interest-bearing deposits decreased 64 basis points to 0.34 percent. The cost of other borrowed funds was down 117 basis points to 0.30 percent. The benefit to net interest margin from assets funded by non-interest liabilities was 8 basis points for the second quarter of 2020 compared to 26 basis points for the first quarter of 2020.

Fees and Commissions Revenue

Fees and commissions revenue totaled $213.7 million for the second quarter of 2020, an increase of $21.0 million over the first quarter of 2020, led by significant growth in mortgage banking and brokerage and trading revenue.

Declining interest rates have propelled mortgage production, particularly refinance activities, and have allowed for margin expansion. Mortgage banking revenue increased $16.8 million to $53.9 million compared to the prior quarter. Mortgage loan production volume was $1.1 billion for the second quarter of 2020, an increase of 2 percent over an already very strong first quarter. Refinances grew to 71 percent of our production volume compared to 57 percent in the prior quarter. Gain on sale margin increased 159 basis points to 3.65 percent as industry-wide capacity constraints have eased pricing competition.

Brokerage and trading revenue increased $11.2 million to $62.0 million. We continue to grow our relationships with mortgage originators by providing liquidity and financial instruments to help them manage their pipeline risk. Trading revenue, primarily related to sales of residential mortgage-backed securities guaranteed by U.S. government agencies and related derivative instruments, increased $9.5 million. Industry-wide mortgage loan production increased in the second quarter driven by the lower rates as the Federal Reserve stepped in to provide market stability. We increased our bond trading pipeline to provide greater liquidity to the housing market during a time of record loan production volumes. Customer hedging revenue also increased $3.0 million as existing customers increased hedging activities in the volatile environment.

Deposit service charges decreased $4.1 million compared to the first quarter. In order to help our customers during uncertain times, we proactively waived certain fees during the second quarter.

Fiduciary and asset management revenue decreased $3.2 million compared to the first quarter of 2020. As a result of the significant decline in interest rates, we provided $1.1 million in fee waivers during the second quarter. In addition, asset volumes and market conditions have affected our trust revenues. These decreases were partially offset by an increase in seasonal tax preparation fees.

Operating Expense

Total operating expense was $295.4 million for the second quarter of 2020, an increase of $26.8 million compared to the first quarter of 2020.

Personnel expense increased $20.1 million. Incentive compensation increased $22.3 million. Cash based incentive compensation increased $11.0 million, primarily due to increased residential mortgage-backed securities trading activity. Deferred compensation, which is largely offset by an increase in the value of related investments included in Other gains (losses), net, increased $11.6 million. Regular compensation increased $1.5 million. Employee benefits decreased $3.8 million, primarily due to a seasonal decrease in payroll taxes.

Non-personnel expense increased $6.7 million compared to the first quarter of 2020. Mortgage banking costs increased $5.1 million. Accruals related to default servicing and loss mitigation costs on loans serviced for others increased $2.8 million due to changes in our portfolio and loan counts, delinquency levels, and additional accruals related to losses on loans in forbearance. Increased amortization of mortgage servicing rights from actual prepayments also added $1.7 million to mortgage banking costs during the second quarter of 2020. Occupancy and equipment expense increased $4.6 million as impairment charges were incurred on two leases where assumptions regarding subleasing changed due to deteriorating economic conditions. We also made a charitable contribution of $3.0 million to the BOKF Foundation in the second quarter. These increases were partially offset by a decrease of $4.3 million in business promotion costs, largely related to reduced travel and entertainment expenses.

Loans, Deposits and Capital

Loans

Outstanding loans were $24.2 billion at June 30, 2020, up $1.7 billion over March 31, 2020, primarily due to a $2.1 billion increase from PPP loans, partially offset by paydowns in the commercial portfolio.

Outstanding core commercial loan balances decreased $637 million or 4 percent compared to March 31, 2020, primarily due to paydowns during the second quarter. 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 customers assets.

General business loans decreased $448 million to $3.1 billion or 13 percent of total loans. General business loans include $1.7 billion of wholesale/retail loans and $780 million of loans from other commercial industries. Broad paydowns across our core commercial and industrial loan book contracted the portfolio.

Services loan balances decreased $176 million to $3.8 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, educational services, consumer services and commercial services.

Although not a significant portion of our commercial portfolio, our services and general business loans also include areas we consider to be more exposed to the economic slowdown as a result of the social distancing measures in place to combat the COVID-19 pandemic such as entertainment and recreation, retail, hotels, churches, airline travel, and higher education that are dependent on large social gatherings to remain profitable. This represents less than 7 percent of our total portfolio. Some of these borrowers have participated in the PPP, which has provided some measure of relief. We will continue to monitor these areas closely in the coming months.

Energy loan balances decreased $138 million to $4.0 billion or 16 percent of total loans as the current commodity price environment dampened demand for new loans and borrowers focused on paying down debt to reduce leverage. Supporting the energy industry has been a hallmark of the Company for over a century. 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 62 percent of committed production loans are secured by properties primarily producing oil. The remaining 38 percent is secured by properties primarily producing natural gas. Unfunded energy loan commitments were $2.5 billion at June 30, 2020, a $222 million decrease compared to March 31, 2020, primarily due to semi-annual borrowing base redeterminations completed during the second quarter.

Healthcare sector loan balances increased $124 million to $3.3 billion or 14 percent of total loans, primarily due to growth in balances from hospital systems. Our healthcare sector loans primarily consist of $2.4 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. The remaining balance is composed of hospitals and other medical service providers impacted by a deferral of elective procedures. The CARES Act does include multiple revenue enhancement measures for both hospitals and skilled nursing facilities as they manage through the risks of the virus.

Commercial real estate loan balances were up $104 million over March 31, 2020 and represent 19 percent of total loans at June 30, 2020. Multifamily residential loans, our largest exposure in commercial real estate, increased $125 million to $1.4 billion at June 30, 2020. Paydowns from refinances into the permanent market slowed during the second quarter. Loans secured by office buildings increased $12 million to $974 million. Loans secured by other commercial real estate properties decreased $32 million to $533 million. Loans secured by retail facilities were $780 million at June 30, 2020, largely unchanged from the prior quarter. Loans secured by retail facilities and office buildings may be impacted by measures being taken to hinder the spread of the virus as well as changes in consumer behavior.

Loans to individuals increased $144 million, primarily due to an increase in residential mortgage loans guaranteed by U.S. government agencies. The Company may repurchase loans previously sold into GNMA mortgage pools when certain defined delinquency criteria are met. Because of this repurchase right, the Company is deemed to have regained effective control over these loans and must include them on the Consolidated Balance Sheet. Loans to individuals represent 14 percent of total loans at June 30, 2020.

Deposits

Period-end deposits totaled $33.9 billion at June 30, 2020, a $4.6 billion increase over March 31, 2020. Inflows resulting from PPP loans and government stimulus payments during the pandemic, along with additional core deposit growth as customers maintain higher balances, have all contributed to the significant increase in deposits. Interest-bearing transaction account balances grew by $2.3 billion and demand deposit balances increased $2.2 billion. Average deposits were $32.7 billion at June 30, 2020, a $4.5 billion increase compared to March 31, 2020. Average demand deposit balances grew by $2.3 billion and interest-bearing transaction deposits increased $1.9 billion.

Capital

The company's common equity Tier 1 capital ratio was 11.41 percent at June 30, 2020. In addition, the company's Tier 1 capital ratio was 11.41 percent, total capital ratio was 13.40 percent, and leverage ratio was 7.74 percent at June 30, 2020. 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 30 basis points to the company's common equity tier 1 capital ratio at June 30. At March 31, 2020, the company's common equity Tier 1 capital ratio was 10.98 percent, Tier 1 capital ratio was 10.98 percent, total capital ratio was 12.65 percent, and leverage ratio was 8.15 percent.

The company's tangible common equity ratio, a non-GAAP measure, was 8.79 percent at June 30, 2020 and 8.39 percent at March 31, 2020. 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 paused share repurchases through the second quarter of 2020. The company repurchased 442,000 shares at an average price of $75.52 in the first quarter of 2020. We view share buybacks opportunistically, but within the context of maintaining our strong capital position.

Credit Quality

The Company adopted FASB Accounting Standard Update No. 2016-13, Financial Instruments Credit Losses (Topic 326): Assets Measured at Amortized Cost ("CECL") on January 1, 2020. CECL requires recognition of expected credit losses on assets carried at amortized cost over their expected lives. The previous incurred loss model incorporated only known information as of the balance sheet date. CECL uses models to measure the probability of default and loss given default over a 12-month reasonable and supportable forecast period. 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.

The provision for credit losses was $135.3 million for the second quarter of 2020, with $138.8 million related to lending activities. Changes in our reasonable and supportable forecasts of macroeconomic variables, primarily due to the anticipated impact of the on-going COVID-19 pandemic, and other assumptions, required a provision of $54.6 million. All other changes totaled $84.2 million, which included $14.4 million primarily due to increased specific impairment of energy loans, portfolio changes of $55.7 million primarily due to changes in risk grades related to energy loans, partially offset by the impact of a decrease in loan balances, and net charge-offs of $14.1 million. The provision related to lending activities was partially offset by a $3.6 million decrease in the accrual for expected credit losses from mortgage banking activities. During the second quarter, the Company sold certain mortgage servicing rights related to residential mortgage loans transferred to mortgage-backed securities. These servicing rights expose the Company to credit risk for amounts that exceed the U.S. government agency guarantees.

Our base case reasonable and supportable forecast includes an 18 percent increase in GDP and an 8.4 percent civilian unemployment rate in the third quarter of 2020, as adjusted for the impact of government stimulus programs. Our forward twelve month forecast through the second quarter of 2021 assumes a 5.0 percent increase in GDP and an 8.5 percent civilian unemployment rate. WTI oil prices are projected to generally follow the NYMEX forward curve that existed at the end of June 2020, $38.99 per barrel for delivery in the third quarter of 2020 and increasing to $40.13 per barrel for delivery in the second quarter of 2021. Our downside reasonable and supportable forecast reflects a more severe and prolonged disruption in economic activity than the base case and includes a 6.0 percent increase in GDP and a 9.7 percent adjusted civilian unemployment rate in the third quarter of 2020. Our forward twelve month forecast through the second quarter of 2021 assumes a 6.0 percent increase in GDP and a 10.0 percent civilian unemployment rate. WTI oil prices are projected to range from $33.99 per barrel for delivery in the third quarter of 2020 to $34.63 per barrel for delivery in the second quarter of 2021.

The allowance for loan losses totaled $436 million or 1.80 percent of outstanding loans and 175 percent of nonaccruing loans at June 30, 2020, 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 $469 million or 1.94 percent of outstanding loans and 188 percent of nonaccruing loans at June 30, 2020. The combined allowance for credit losses attributed to energy was 4.44 percent of outstanding energy loans at June 30. Excluding PPP loans, the allowance for loan losses was 1.97 percent of outstanding loans and the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was 2.12 percent.

At March 31, 2020, the allowance for loan losses was $315 million or 1.40 percent of outstanding loans and 199 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 $344 million or 1.53 percent of outstanding loans and 217 percent of nonaccruing loans.

Nonperforming assets totaled $405 million or 1.68 percent of outstanding loans and repossessed assets at June 30, 2020, compared to $292 million or 1.30 percent at March 31, 2020. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $285 million or 1.19 percent of outstanding loans and repossessed assets at June 30, 2020, compared to $195 million or 0.87 percent at March 31, 2020.

Nonaccruing loans were $255 million or 1.16 percent of outstanding loans at June 30, 2020. Nonaccruing commercial loans totaled $202 million or 1.43 percent of outstanding commercial loans. Nonaccruing commercial real estate loans totaled $14.0 million or 0.31 percent of outstanding commercial real estate loans. Nonaccruing loans to individuals totaled $39 million or 1.17 percent of outstanding loans to individuals. 

Nonaccruing loans increased $92 million from March 31, 2020, primarily due to a $67 million increase in nonaccruing energy loans and a $13 million increase in nonaccruing services loans. New nonaccruing loans identified in the second quarter totaled $124 million, offset by $16 million in payments received, $16 million in charge-offs and $1.1 million of foreclosures.

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 $626 million at June 30, compared to $293 million at March 31. The increase largely resulted from energy and service sector loans. Oil prices remained depressed during April and May during our semi-annual borrowing base redeterminations resulting in credit quality migration in the energy portfolio. While prices have subsequently improved, the pricing environment remains fragile and tied to the continued economic recovery.

Net charge-offs were $14.1 million or 0.25 percent of average loans on an annualized basis for the second quarter of 2020, excluding PPP loans. Net charge-offs were $17.2 million or 0.31 percent of average loans on an annualized basis for the first quarter of 2020. Gross charge-offs were $15.6 million for the second quarter compared to $18.9 million for the previous quarter. Recoveries totaled $1.5 million for the second quarter of 2020 and $1.7 million for the first quarter of 2020.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $12.5 billion at June 30, 2020, a $218 million decrease compared to March 31, 2020. At June 30, 2020, the available for sale securities portfolio consisted primarily of $9.1 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $3.3 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. At June 30, 2020, the available for sale securities portfolio had a net unrealized gain of $487 million compared to $436 million at March 31, 2020.

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 $981 million to $723 million at June 30, 2020.

The net economic benefit of the changes in the fair value of mortgage servicing rights and related economic hedges was $9.3 million during the second quarter of 2020, including a $7.4 million increase in the fair value of securities and derivative contracts held as an economic hedge, $761 thousand decrease in the fair value of mortgage servicing rights, and $2.7 million of related net interest revenue. The completion of a sale of mortgage servicing rights on $1.6 billion of unpaid principal balance, primarily related to loans guaranteed by the Veteran's Administration, was a large contributor to the increase in the fair value of contracts held as an economic hedge. Interest rate movements between the date we established the transaction price and the closing date of the sale produced positive results.

Conference Call and Webcast

The company will hold a conference call at 9 a.m. Central time on July 22, 2020 to discuss the financial results with investors. The live audio webcast and presentation slides will be available on the companys 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 # 13706496.

About BOK Financial Corporation

BOK Financial Corporation is a $46 billion regional financial services company headquartered in Tulsa, Oklahoma with $79 billion in assets under management and administration. The company's stock is publicly traded on NASDAQ under the Global Select market listings (BOKF). BOK Financial Corporation's holdings include BOKF, NA; BOK Financial Securities, Inc., BOK Financial Private Wealth, Inc. and BOK Financial Insurance, Inc. BOKF, NA operates TransFund, Cavanal Hill Investment Management and BOK Financial Asset Management, Inc. BOKF, NA operates banking divisions across eight states as: Bank of Albuquerque; Bank of Oklahoma; Bank of Texas; and BOK Financial in Arizona, Arkansas, Colorado, Kansas and Missouri; as well as having limited purpose offices in Nebraska, Milwaukee and Connecticut. Through its subsidiaries, BOK Financial Corporation provides commercial and consumer banking, brokerage trading, investment, trust and insurance services, mortgage origination and servicing, and an electronic funds transfer network. For more information, visit www.bokf.com.

The company will continue to evaluate critical assumptions and estimates, such as the appropriateness of the allowance for credit losses and asset impairment as of June 30, 2020 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, 2020

 

Mar. 31, 2020

ASSETS

 

 

 

Cash and due from banks

$

762,453 

 

 

 

$

670,500 

 

 

Interest-bearing cash and cash equivalents

485,319 

 

 

 

302,577 

 

 

Trading securities

1,196,105 

 

 

 

2,110,585 

 

 

Investment securities, net of allowance

267,988 

 

 

 

272,576 

 

 

Available for sale securities

12,475,919 

 

 

 

12,694,277 

 

 

Fair value option securities

722,657 

 

 

 

1,703,238 

 

 

Restricted equity securities

125,683 

 

 

 

390,042 

 

 

Residential mortgage loans held for sale

319,357 

 

 

 

204,720 

 

 

Loans:

 

 

 

Commercial

14,158,510 

 

 

 

14,795,975 

 

 

Commercial real estate

4,554,144 

 

 

 

4,450,085 

 

 

Paycheck protection program

2,081,428 

 

 

 

 

 

 

Loans to individuals

3,361,808 

 

 

 

3,217,910 

 

 

Total loans

24,155,890 

 

 

 

22,463,970 

 

 

Allowance for loan losses

(435,597

)

 

 

(315,311

)

 

Loans, net of allowance

23,720,293 

 

 

 

22,148,659 

 

 

Premises and equipment, net

550,230 

 

 

 

546,093 

 

 

Receivables

226,934 

 

 

 

207,341 

 

 

Goodwill

1,048,091 

 

 

 

1,048,091 

 

 

Intangible assets, net

123,595 

 

 

 

121,807 

 

 

Mortgage servicing rights

97,971 

 

 

 

110,828 

 

 

Real estate and other repossessed assets, net

35,330 

 

 

 

36,744 

 

 

Derivative contracts, net

651,553 

 

 

 

922,716 

 

 

Cash surrender value of bank-owned life insurance

393,741 

 

 

 

391,006 

 

 

Receivable on unsettled securities sales

1,863,719 

 

 

 

2,171,881 

 

 

Other assets

752,936 

 

 

 

1,065,481 

 

 

TOTAL ASSETS

$

45,819,874 

 

 

 

$

47,119,162 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

Deposits:

 

 

 

Demand

$

11,992,165 

 

 

 

$

9,821,582 

 

 

Interest-bearing transaction

18,850,418 

 

 

 

16,596,292 

 

 

Savings

696,971 

 

 

 

593,805 

 

 

Time

2,352,760 

 

 

 

2,232,473 

 

 

Total deposits

33,892,314 

 

 

 

29,244,152 

 

 

Funds purchased and repurchase agreements

1,357,602 

 

 

 

4,583,768 

 

 

Other borrowings

3,173,563 

 

 

 

5,529,554 

 

 

Subordinated debentures

275,973 

 

 

 

275,942 

 

 

Accrued interest, taxes and expense

365,634 

 

 

 

309,236 

 

 

Due on unsettled securities purchases

599,510 

 

 

 

537,709 

 

 

Derivative contracts, net

610,020 

 

 

 

1,213,445 

 

 

Other liabilities

440,835 

 

 

 

391,196 

 

 

TOTAL LIABILITIES

40,715,451 

 

 

 

42,085,002 

 

 

Shareholders' equity:

 

 

 

Capital, surplus and retained earnings

4,726,679 

 

 

 

4,694,956 

 

 

Accumulated other comprehensive gain

370,316 

 

 

 

331,292 

 

 

TOTAL SHAREHOLDERS' EQUITY

5,096,995 

 

 

 

5,026,248 

 

 

Non-controlling interests

7,428 

 

 

 

7,912 

 

 

TOTAL EQUITY

5,104,423 

 

 

 

5,034,160 

 

 

TOTAL LIABILITIES AND EQUITY

$

45,819,874 

 

 

 

$

47,119,162 

 

 


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

 

Three Months Ended

 

June 30, 2020

 

Mar. 31, 2020

 

Dec. 31, 2019

 

Sept. 30, 2019

 

June 30, 2019

ASSETS

 

 

 

 

 

 

 

 

 

Interest-bearing cash and cash equivalents

$

619,737 

 

 

 

$

721,659 

 

 

 

$

573,203 

 

 

 

$

500,823 

 

 

 

$

535,491 

 

 

Trading securities

1,871,647 

 

 

 

1,690,104 

 

 

 

1,672,426 

 

 

 

1,696,568 

 

 

 

1,757,335 

 

 

Investment securities, net of allowance

268,947 

 

 

 

282,265 

 

 

 

298,567 

 

 

 

308,090 

 

 

 

328,482 

 

 

Available for sale securities

12,480,065 

 

 

 

11,664,521 

 

 

 

11,333,524 

 

 

 

10,747,439 

 

 

 

9,435,668 

 

 

Fair value option securities

786,757 

 

 

 

1,793,480 

 

 

 

1,521,528 

 

 

 

1,553,879 

 

 

 

898,772 

 

 

Restricted equity securities

273,922 

 

 

 

429,133 

 

 

 

479,687 

 

 

 

476,781 

 

 

 

413,812 

 

 

Residential mortgage loans held for sale

288,588 

 

 

 

129,708 

 

 

 

203,535 

 

 

 

203,319 

 

 

 

192,102 

 

 

Loans:

 

 

 

 

 

 

 

 

 

Commercial

14,502,652 

 

 

 

14,452,851 

 

 

 

14,344,534 

 

 

 

14,507,185 

 

 

 

14,175,057 

 

 

Commercial real estate

4,543,511 

 

 

 

4,346,886 

 

 

 

4,532,649 

 

 

 

4,652,534 

 

 

 

4,656,861 

 

 

Paycheck protection program

1,699,369 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans to individuals

3,353,960 

 

 

 

3,143,286 

 

 

 

3,358,817 

 

 

 

3,253,199 

 

 

 

3,172,487 

 

 

Total loans

24,099,492 

 

 

 

21,943,023 

 

 

 

22,236,000 

 

 

 

22,412,918 

 

 

 

22,004,405 

 

 

Allowance for loan losses

(367,583

)

 

 

(250,338

)

 

 

(205,417

)

 

 

(201,714

)

 

 

(205,532

)

 

Loans, net of allowance

23,731,909 

 

 

 

21,692,685 

 

 

 

22,030,583 

 

 

 

22,211,204 

 

 

 

21,798,873 

 

 

Total earning assets

40,321,572 

 

 

 

38,403,555 

 

 

 

38,113,053 

 

 

 

37,698,103 

 

 

 

35,360,535 

 

 

Cash and due from banks

678,878 

 

 

 

669,369 

 

 

 

690,806 

 

 

 

717,338 

 

 

 

703,294 

 

 

Derivative contracts, net

642,969 

 

 

 

376,621 

 

 

 

311,542 

 

 

 

331,834 

 

 

 

328,802 

 

 

Cash surrender value of bank-owned life insurance

391,951 

 

 

 

390,009 

 

 

 

388,012 

 

 

 

385,190 

 

 

 

384,974 

 

 

Receivable on unsettled securities sales

4,626,307 

 

 

 

3,046,111 

 

 

 

1,973,604 

 

 

 

1,742,794 

 

 

 

1,437,462 

 

 

Other assets

3,095,354 

 

 

 

2,834,953 

 

 

 

2,736,337 

 

 

 

2,705,089 

 

 

 

2,629,710 

 

 

TOTAL ASSETS

$

49,757,031 

 

 

 

$

45,720,618 

 

 

 

$

44,213,354 

 

 

 

$

43,580,348 

 

 

 

$

40,844,777 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

Demand

$

11,489,322 

 

 

 

$

9,232,859 

 

 

 

$

9,612,533 

 

 

 

$

9,759,710 

 

 

 

$

9,883,965 

 

 

Interest-bearing transaction

18,040,170 

 

 

 

16,159,654 

 

 

 

14,685,385 

 

 

 

13,131,542 

 

 

 

12,512,282 

 

 

Savings

656,669 

 

 

 

563,821 

 

 

 

554,605 

 

 

 

557,122 

 

 

 

558,738 

 

 

Time

2,464,793 

 

 

 

2,239,234 

 

 

 

2,247,717 

 

 

 

2,251,800 

 

 

 

2,207,391 

 

 

Total deposits

32,650,954 

 

 

 

28,195,568 

 

 

 

27,100,240 

 

 

 

25,700,174 

 

 

 

25,162,376 

 

 

Funds purchased and repurchase agreements

5,816,484 

 

 

 

3,815,941 

 

 

 

4,120,610 

 

 

 

3,106,163 

 

 

 

2,066,950 

 

 

Other borrowings

3,527,303 

 

 

 

6,542,325 

 

 

 

6,247,194 

 

 

 

8,125,023 

 

 

 

7,175,617 

 

 

Subordinated debentures

275,949 

 

 

 

275,932 

 

 

 

275,916 

 

 

 

275,900 

 

 

 

275,887 

 

 

Derivative contracts, net

836,667 

 

 

 

379,342 

 

 

 

276,078 

 

 

 

300,051 

 

 

 

283,484 

 

 

Due on unsettled securities purchases

887,973 

 

 

 

960,780 

 

 

 

784,174 

 

 

 

745,893 

 

 

 

821,688 

 

 

Other liabilities

690,087 

 

 

 

642,764 

 

 

 

561,654 

 

 

 

547,144 

 

 

 

460,732 

 

 

TOTAL LIABILITIES

44,685,417 

 

 

 

40,812,652 

 

 

 

39,365,866 

 

 

 

38,800,348 

 

 

 

36,246,734 

 

 

Total equity

5,071,614 

 

 

 

4,907,966 

 

 

 

4,847,488 

 

 

 

4,780,000 

 

 

 

4,598,043 

 

 

TOTAL LIABILITIES AND EQUITY

$

49,757,031 

 

 

 

$

45,720,618 

 

 

 

$

44,213,354 

 

 

 

$

43,580,348 

 

 

 

$

40,844,777 

 

 


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

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

2020

 

2019

 

2020

 

2019

 

 

 

 

 

 

 

 

Interest revenue

$

306,384 

 

 

 

$

390,820 

 

 

 

$

655,321 

 

 

 

$

766,894 

 

 

Interest expense

28,280 

 

 

 

105,388 

 

 

 

115,857 

 

 

 

203,360 

 

 

Net interest revenue

278,104 

 

 

 

285,432 

 

 

 

539,464 

 

 

 

563,534 

 

 

Provision for credit losses

135,321 

 

 

 

5,000 

 

 

 

229,092 

 

 

 

13,000 

 

 

Net interest revenue after provision for credit losses

142,783 

 

 

 

280,432 

 

 

 

310,372 

 

 

 

550,534 

 

 

Other operating revenue:

 

 

 

 

 

 

 

Brokerage and trading revenue

62,022 

 

 

 

40,526 

 

 

 

112,801 

 

 

 

72,143 

 

 

Transaction card revenue

22,940 

 

 

 

21,915 

 

 

 

44,821 

 

 

 

42,653 

 

 

Fiduciary and asset management revenue

41,257 

 

 

 

45,025 

 

 

 

85,715 

 

 

 

88,383 

 

 

Deposit service charges and fees

22,046 

 

 

 

28,074 

 

 

 

48,176 

 

 

 

56,317 

 

 

Mortgage banking revenue

53,936 

 

 

 

28,131 

 

 

 

91,103 

 

 

 

51,965 

 

 

Other revenue

11,479 

 

 

 

12,437 

 

 

 

23,788 

 

 

 

25,199 

 

 

Total fees and commissions

213,680 

 

 

 

176,108 

 

 

 

406,404 

 

 

 

336,660 

 

 

Other gains (losses), net

6,768 

 

 

 

3,480 

 

 

 

(3,973

)

 

 

6,456 

 

 

Gain on derivatives, net

21,885 

 

 

 

11,150 

 

 

 

40,305 

 

 

 

15,817 

 

 

Gain (loss) on fair value option securities, net

(14,459

)

 

 

9,853 

 

 

 

53,934 

 

 

 

19,518 

 

 

Change in fair value of mortgage servicing rights

(761

)

 

 

(29,555) (89,241) (50,221) Gain on available for sale securities, net5,580 1,029 5,583 1,105 Total other operating revenue232,693 172,065 413,012 329,335 Other operating expense: Personnel176,235 160,342 332,416 329,570 Business promotion1,935 10,142 8,150 18,016 Professional fees and services12,161 13,002 25,109 29,141 Net occupancy and equipment30,675 26,880 56,736 56,401 Insurance5,156 6,454 10,136 11,293 Data processing and communications32,942 29,735 65,685 61,184 Printing, postage and supplies3,502 4,107 7,774 8,992 Net losses and operating expenses of repossessed assets1,766 580 3,297 2,576 Amortization of intangible assets5,190 5,138 10,284 10,329 Mortgage banking costs15,598 11,545 26,143 21,451 Other expense7,227 8,212 15,281 14,341 Total other operating expense295,387 277,137 564,011 564,294 Net income before taxes80,089 175,360 159,373 315,575 Federal and state income taxes15,803 37,580 33,103 67,530 Net income64,286 137,780 126,270 248,045 Net income (loss) attributable to non-controlling interests(407) 217 (502) (130) Net income attributable to BOK Financial Corporation shareholders$64,693 $137,563 $126,772 $248,175 Average shares outstanding: Basic69,876,043 70,887,063 69,999,865 71,135,414 Diluted69,877,467 70,902,033 70,003,817 71,151,558 Net income per share: Basic$0.92 $1.93 $1.80 $3.47 Diluted$0.92 $1.93 $1.80 $3.46


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

Three Months Ended

June 30, 2020

Mar. 31, 2020

Dec. 31, 2019

Sept. 30, 2019

June 30, 2019

Capital:

Period-end shareholders' equity

$

5,096,995

$

5,026,248

$

4,855,795

$

4,829,016

$

4,709,438

Risk weighted assets

$

32,258,548

$

32,973,242

$

31,673,425

$

32,159,139

$

32,040,741

Risk-based capital ratios:

Common equity tier 1

11.41

%

10.98

%

11.39

%

11.06

%

10.84

%

Tier 1

11.41

%

10.98

%

11.39

%

11.06

%

10.84

%

Total capital

13.40

%

12.65

%

12.94

%

12.56

%

12.34

%

Leverage ratio

7.74

%

8.15

%

8.40

%

8.41

%

8.75

%

Tangible common equity ratio1

8.79

%

8.39

%

8.98

%

8.72

%

8.69

%

Common stock:

Book value per share

$

72.50

$

71.49

$

68.80

$

68.15

$

66.15

Tangible book value per share

55.83

54.85

52.17

51.60

49.68

Market value per share:

High

$

67.62

$

87.40

$

88.28

$

84.35

$

88.17

Low

$

37.80

$

34.57

$

71.85

$

72.96

$

72.60

Cash dividends paid

$

35,769

$

35,949

$

36,011

$

35,472

$

35,631

Dividend payout ratio

55.29

%

57.91

%

32.63

%

24.94

%

25.90

%

Shares outstanding, net

70,306,690

70,308,532

70,579,598

70,858,010

71,193,770

Stock buy-back program:

Shares repurchased

442,000

280,000

336,713

250,000

Amount

$

$

33,380

$

22,844

$

25,937

$

20,125

Average price per share

$

$

75.52

$

81.59

$

77.03

$

80.50

Performance ratios (quarter annualized):

Return on average assets

0.52

%

0.55

%

0.99

%

1.29

%

1.35

%

Return on average equity

5.14

%

5.10

%

9.05

%

11.83

%

12.02

%

Net interest margin

2.83

%

2.80

%

2.88

%

3.01

%

3.30

%

Efficiency ratio

59.57

%

58.62

%

63.65

%

59.31

%

59.51

%

Reconciliation of non-GAAP measures:

1 Tangible common equity ratio:

Total shareholders' equity

$

5,096,995

$

5,026,248

$

4,855,795

$

4,829,016

$

4,709,438

Less: Goodwill and intangible assets, net

1,171,686

1,169,898

1,173,362

1,172,411

1,172,564

Tangible common equity

$

3,925,309

$

3,856,350

$

3,682,433

$

3,656,605

$

3,536,874

Total assets

$

45,819,874

$

47,119,162

$

42,172,021

$

43,127,205

$

41,893,073

Less: Goodwill and intangible assets, net

1,171,686

1,169,898

1,173,362

1,172,411

1,172,564

Tangible assets

$

44,648,188

$

45,949,264

$

40,998,659

$

41,954,794

$

40,720,509

Tangible common equity ratio

8.79

%

8.39

%

8.98

%

8.72

%

8.69

%

Pre-provision net revenue:

Net income before taxes

$

80,089

$

79,284

$

141,039

$

174,254

$

175,360

Provision for expected credit losses

135,321

93,771

19,000

12,000

5,000

Net income (loss) attributable to non-controlling interests

(407

)

(95

)

430

(373

)

217

Pre-provision net revenue

$

215,817

$

173,150

$

159,609

$

186,627

$

180,143

Other data:

Tax equivalent interest

$

2,630

$

2,715

$

2,726

$

2,936

$

3,481

Net unrealized gain (loss) on available for sale securities

$

487,334

$

435,989

$

138,149

$

178,060

$

131,780

Mortgage banking:

Mortgage production revenue

$

39,185

$

21,570

$

9,169

$

13,814

$

11,869

Mortgage loans funded for sale

$

1,184,249

$

548,956

$

855,643

$

877,280

$

729,841

Add: current period-end outstanding commitments

546,304

657,570

158,460

379,377

344,087

Less: prior period end outstanding commitments

657,570

158,460

379,377

344,087

263,434

Total mortgage production volume

$

1,072,983

$

1,048,066

$

634,726

$

912,570

$

810,494

Mortgage loan refinances to mortgage loans funded for sale

71

%

57

%

57

%

56

%

31

%

Gain on sale margin

3.65

%

2.06

%

1.44

%

1.51

%

1.46

%

Mortgage servicing revenue

$

14,751

$

15,597

$

16,227

$

16,366

$

16,262

Average outstanding principal balance of mortgage loans serviced for others

19,319,872

20,416,546

20,856,446

21,172,874

21,418,690

Average mortgage servicing revenue rates

0.31

%

0.31

%

0.31

%

0.31

%

0.30

%

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

Gain (loss) on mortgage hedge derivative contracts, net

$

21,815

$

18,371

$

(4,714

)

$

3,742

$

11,128

Gain (loss) on fair value option securities, net

(14,459

)

68,393

(8,328

)

4,597

9,853

Gain (loss) on economic hedge of mortgage servicing rights

7,356

86,764

(13,042

)

8,339

20,981

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

(761

)

(88,480

)

9,297

(12,593

)

(29,555

)

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

6,595

(1,716

)

(3,745

)

(4,254

)

(8,574

)

Net interest revenue on fair value option securities2

2,702

4,268

1,544

1,245

1,296

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

$

9,297

$

2,552

$

(2,201

)

$

(3,009

)

$

(7,278

)

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, 2020

Mar. 31, 2020

Dec. 31, 2019

Sept. 30, 2019

June 30, 2019

Interest revenue

$

306,384

$

348,937

$

369,857

$

395,207

$

390,820

Interest expense

28,280

87,577

99,608

116,111

105,388

Net interest revenue

278,104

261,360

270,249

279,096

285,432

Provision for credit losses

135,321

93,771

19,000

12,000

5,000

Net interest revenue after provision for credit losses

142,783

167,589

251,249

267,096

280,432

Other operating revenue:

Brokerage and trading revenue

62,022

50,779

43,843

43,840

40,526

Transaction card revenue

22,940

21,881

22,548

22,015

21,915

Fiduciary and asset management revenue

41,257

44,458

45,021

43,621

45,025

Deposit service charges and fees

22,046

26,130

27,331

28,837

28,074

Mortgage banking revenue

53,936

37,167

25,396

30,180

28,131

Other revenue

11,479

12,309

15,283

17,626

12,437

Total fees and commissions

213,680

192,724

179,422

186,119

176,108

Other gains (losses), net

6,768

(10,741

)

(1,649

)

4,544

3,480

Gain (loss) on derivatives, net

21,885

18,420

(4,644

)

3,778

11,150

Gain (loss) on fair value option securities, net

(14,459

)

68,393

(8,328

)

4,597

9,853

Change in fair value of mortgage servicing rights

(761

)

(88,480

)

9,297

(12,593

)

(29,555

)

Gain on available for sale securities, net

5,580

3

4,487

5

1,029

Total other operating revenue

232,693

180,319

178,585

186,450

172,065

Other operating expense:

Personnel

176,235

156,181

168,422

162,573

160,342

Business promotion

1,935

6,215

8,787

8,859

10,142

Charitable contributions to BOKF Foundation

3,000

2,000

1,000

Professional fees and services

12,161

12,948

13,408

12,312

13,002

Net occupancy and equipment

30,675

26,061

26,316

27,558

26,880

Insurance

5,156

4,980

5,393

4,220

6,454

Data processing and communications

32,942

32,743

31,884

31,915

29,735

Printing, postage and supplies

3,502

4,272

3,700

3,825

4,107

Net losses and operating expenses of repossessed assets

1,766

1,531

2,403

1,728

580

Amortization of intangible assets

5,190

5,094

5,225

5,064

5,138

Mortgage banking costs

15,598

10,545

14,259

14,975

11,545

Other expense

7,227

8,054

6,998

6,263

8,212

Total other operating expense

295,387

268,624

288,795

279,292

277,137

Net income before taxes

80,089

79,284

141,039

174,254

175,360

Federal and state income taxes

15,803

17,300

30,257

32,396

37,580

Net income

64,286

61,984

110,782

141,858

137,780

Net income (loss) attributable to non-controlling interests

(407

)

(95

)

430

(373

)

217

Net income attributable to BOK Financial Corporation shareholders

$

64,693

$

62,079

$

110,352

$

142,231

$

137,563

Average shares outstanding:

Basic

69,876,043

70,123,685

70,295,899

70,596,307

70,887,063

Diluted

69,877,467

70,130,166

70,309,644

70,609,924

70,902,033

Net income per share:

Basic

$

0.92

$

0.88

$

1.56

$

2.00

$

1.93

Diluted

$

0.92

$

0.88

$

1.56

$

2.00

$

1.93


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

June 30, 2020

Mar. 31, 2020

Dec. 31, 2019

Sept. 30, 2019

June 30, 2019

Commercial:

Energy

$

3,974,174

$

4,111,676

$

3,973,377

$

4,114,269

$

3,921,353

Services

3,779,881

3,955,748

3,832,031

4,011,089

4,105,117

Healthcare

3,289,343

3,165,096

3,033,916

3,032,968

2,926,510

General business

3,115,112

3,563,455

3,192,326

3,266,299

3,383,928

Total commercial

14,158,510

14,795,975

14,031,650

14,424,625

14,336,908

Commercial real estate:

Multifamily

1,407,107

1,282,457

1,265,562

1,324,839

1,300,372

Office

973,995

962,004

928,379

1,014,275

1,056,306

Retail

780,467

774,198

775,521

799,169

825,399

Industrial

723,005

728,026

856,117

873,536

828,569

Residential construction and land development

136,911

138,958

150,879

135,361

141,509

Other commercial real estate

532,659

564,442

457,325

478,877

557,878

Total commercial real estate

4,554,144

4,450,085

4,433,783

4,626,057

4,710,033

Paycheck protection program

2,081,428

Loans to individuals:

Permanent mortgage

1,813,442

1,844,555

1,886,378

1,925,539

1,975,449

Permanent mortgages guaranteed by U.S. government agencies

322,269

197,889

197,794

191,764

195,373

Personal

1,226,097

1,175,466

1,201,382

1,117,382

1,037,889

Total loans to individuals

3,361,808

3,217,910

3,285,554

3,234,685

3,208,711

Total

$

24,155,890

$

22,463,970

$

21,750,987

$

22,285,367

$

22,255,652


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

June 30, 2020

Mar. 31, 2020

Dec. 31, 2019

Sept. 30, 2019

June 30, 2019

Texas:

Commercial

$

5,771,691

$

6,350,690

$

6,174,894

$

6,220,227

$

5,877,265

Commercial real estate

1,389,547

1,296,266

1,259,117

1,292,116

1,341,609

Paycheck protection program

612,133

Loans to individuals

748,474

756,634

727,175

749,361

673,463

Total Texas

8,521,845

8,403,590

8,161,186

8,261,704

7,892,337

Oklahoma:

Commercial

5,086,934

3,886,086

3,454,825

3,690,100

3,762,234

Commercial real estate

636,021

593,473

631,026

679,786

717,970

Paycheck protection program

442,518

Loans to individuals

1,967,665

1,788,518

1,854,864

1,753,698

1,786,162

Total Oklahoma

8,133,138

6,268,077

5,940,715

6,123,584

6,266,366

Colorado:

Commercial

1,600,382

2,181,309

2,169,598

2,247,798

2,325,742

Commercial real estate

937,742

955,608

927,826

975,066

1,023,410

Paycheck protection program

488,279

Loans to individuals

264,872

268,674

276,939

303,605

314,317

Total Colorado

3,291,275

3,405,591

3,374,363

3,526,469

3,663,469

Arizona:

Commercial

1,036,862

1,396,582

1,307,073

1,276,534

1,330,415

Commercial real estate

689,121

714,161

728,832

771,425

761,243

Paycheck protection program

318,961

Loans to individuals

177,066

181,821

186,539

170,815

168,019

Total Arizona

2,222,010

2,292,564

2,222,444

2,218,774

2,259,677

Kansas/Missouri:

Commercial

404,860

556,255

527,872

566,969

602,836

Commercial real estate

314,504

310,799

322,541

374,795

331,443

Paycheck protection program

76,724

Loans to individuals

102,577

116,734

131,069

146,522

155,453

Total Kansas/Missouri

898,665

983,788

981,482

1,088,286

1,089,732

New Mexico:

Commercial

182,688

327,164

305,320

335,409

350,520

Commercial real estate

455,574

434,150

402,148

374,331

385,058

Paycheck protection program

128,058

Loans to individuals

83,470

87,110

90,257

92,270

92,626

Total New Mexico

849,790

848,424

797,725

802,010

828,204

Arkansas:

Commercial

75,093

97,889

92,068

87,588

87,896

Commercial real estate

131,635

145,628

162,293

158,538

149,300

Paycheck protection program

14,755

Loans to individuals

17,684

18,419

18,711

18,414

18,671

Total Arkansas

239,167

261,936

273,072

264,540

255,867

TOTAL BOK FINANCIAL

$

24,155,890

$

22,463,970

$

21,750,987

$

22,285,367

$

22,255,652

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, 2020

Mar. 31, 2020

Dec. 31, 2019

Sept. 30, 2019

June 30, 2019

Oklahoma:

Demand

$

4,378,559

$

3,669,558

$

3,257,337

$

3,515,312

$

3,279,360

Interest-bearing:

Transaction

11,438,489

9,955,697

8,574,912

7,447,799

7,020,484

Savings

387,557

329,631

306,194

308,103

307,785

Time

1,330,619

1,137,802

1,125,446

1,198,170

1,253,804

Total interest-bearing

13,156,665

11,423,130

10,006,552

8,954,072

8,582,073

Total Oklahoma

17,535,224

15,092,688

13,263,889

12,469,384

11,861,433

Texas:

Demand

3,070,955

2,767,399

2,757,376

2,867,915

2,970,340

Interest-bearing:

Transaction

3,358,090

2,874,362

2,911,731

2,589,063

2,453,187

Savings

128,892

115,039

102,456

100,597

103,125

Time

476,867

505,565

495,343

464,264

425,253

Total interest-bearing

3,963,849

3,494,966

3,509,530

3,153,924

2,981,565

Total Texas

7,034,804

6,262,365

6,266,906