BOK Financial Corporation Reports Quarterly Earnings of $146 million or $2.10 Per Share in the First Quarter

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TULSA, Okla., April 21, 2021 (GLOBE NEWSWIRE) -- BOK Financial (NASDAQ: BOKF) today reported net earnings applicable to common shareholders for the first quarter of 2021 of $146.1 million, or $2.10 per diluted common share.

CEO Commentary

Steven G. Bradshaw, president and chief executive officer stated, "Not since the energy downturn in 2016 have we had an opportunity to demonstrate how valuable our organization's differentiated credit culture is to shareholder outcomes. Exceptional credit outcomes coupled with improving economic metrics led us to release $25 million in reserves in the quarter. This is a testament not only to how well we've managed the ongoing crisis, but more importantly, our ability to remain disciplined with credit decisions in more favorable parts of the cycle."

Bradshaw continued, "While loan growth remains challenged industry-wide during a time of unprecedented liquidity and heightened uncertainty, BOK Financial Corporation remains focused on the long-term. We have a longstanding track record of loan growth outpacing U.S. GDP growth, and with the economic recovery underway, we see a clear path to growing loans this year. With substantial capital levels, a strong competitive position and a favorable footprint, we remain confident in our ability to serve both our clients and our shareholders well in 2021.

As always, we are closely monitoring our expense levels, striving for balance between expense reductions and containment while keeping our level of long term investments in people and technology a top priority. We believe the company is extremely well positioned to attract and expand new relationships as the economy expands and further opens in 2021."

First Quarter 2021 Financial Highlights

  • Net income was $146.1 million or $2.10 per diluted share for the first quarter of 2021 and $154.2 million or $2.21 per diluted share for the fourth quarter of 2020.

  • Net interest revenue totaled $280.4 million, a decrease of $16.8 million. Net interest margin was 2.62 percent compared to 2.72 percent in the fourth quarter of 2020. A reduction in average outstanding loan balances and the timing of certain loan fees, combined with reinvestment of cash flows from our available for sale securities portfolio at current rates, led to lower net interest revenue and compressed net interest margin in the first quarter.

  • Fees and commissions revenue totaled $162.2 million, a decrease of $18.9 million. Brokerage and trading revenue decreased $18.7 million, largely due to a decrease in trading volume and margin compression. While still strong, mortgage banking revenue decreased $2.2 million, primarily the result of increasing mortgage interest rates coupled with margin compression.

  • Operating expense decreased $18.0 million to $282.6 million. Personnel expense decreased $3.2 million, primarily due to lower incentive compensation, partially offset by a seasonal increase in employee benefits expense. Non-personnel expense decreased $14.8 million primarily due to a gain on sale of repossessed oil and gas assets. Decreases in professional fees, business promotion, occupancy and equipment expense and other expenses were partially offset by an increase in data processing and communications expense.

  • Period-end loans decreased $474 million to $22.5 billion at March 31, 2021, primarily due to paydowns of commercial loans and commercial real estate loans. Period-end Paycheck Protection Program ("PPP") loans increased $166 million to $1.8 billion. Average loans were $22.8 billion, a $691 million decrease compared to the fourth quarter of 2020.

  • Forecasts for improving macroeconomic factors as the pace of COVID-19 vaccinations accelerates and energy prices stabilize resulted in a $25.0 million negative provision for expected credit losses in the first quarter of 2021. A $6.5 million negative provision for expected credit losses was recorded in the prior quarter. The allowance for loan losses totaled $352 million or 1.70 percent of outstanding loans, excluding PPP loans, at March 31, 2021. The allowance for loan losses was $389 million or 1.82 percent of outstanding loans, excluding PPP loans, at December 31, 2020.

  • Average deposits increased $1.0 billion to $36.5 billion and period-end deposits increased $1.7 billion to $37.9 billion, largely due to growth in commercial balances. Clients across all of our business segments continued to maintain higher deposit balances during this period of economic uncertainty, supplemented by inflows from government stimulus payments.

  • The company's common equity Tier 1 capital ratio was 12.14 percent at March 31, 2021. In addition, the company's Tier 1 capital ratio was 12.21 percent, total capital ratio was 13.98 percent, and leverage ratio was 8.51 percent at March 31, 2021. At December 31, 2020, the company's common equity Tier 1 capital ratio was 11.95 percent, Tier 1 capital ratio was 11.95 percent, total capital ratio was 13.82 percent, and leverage ratio was 8.28 percent.

  • The company repurchased 260,000 shares of common stock at an average price of $77.20 a share in the first quarter of 2021.

  • Commercial Banking contributed $69.7 million to net income, a decrease of $5.3 million compared to the fourth quarter of 2020. Combined net interest revenue and fee revenue decreased $11.2 million. Net interest revenue decreased $12.0 million, primarily due to a reduction in outstanding loan balances, timing of certain loan fees, and lower yields on deposits sold to our Funds Management unit. Average Commercial Banking loans decreased $578 million due to purposeful deleveraging by our customers. Average Commercial deposits grew 5 percent to $16.1 billion in the first quarter.

  • Consumer Banking contributed $6.8 million to net income in the first quarter of 2021, a decrease of $7.9 million compared to the fourth quarter of 2020. Combined net interest revenue and fee revenue decreased $12.7 million. Net interest revenue decreased $9.7 million, mainly due to lower yields on deposits sold to our Funds Management unit. Fees and commissions revenue decreased $3.0 million, largely due to reduced mortgage gain on sale margins. While mortgage production revenue decreased, mortgage production volumes remained strong in the first quarter.

  • Wealth Management contributed $19.4 million to net income in the first quarter of 2021, a decrease of $9.1 million compared to the fourth quarter of 2020. Combined net interest revenue and fee revenue decreased $17.4 million. Net interest revenue was relatively consistent with the previous quarter. However, brokerage and trading revenue decreased $15.0 million due to narrowing margins and a reduction in trading volumes. While our agency residential mortgage trading activity has slowed from the record levels in 2020, combined net interest revenue and fee revenue has grown compared to the first quarter of 2020. Operating expense decreased $5.4 million, primarily due to incentive compensation costs related to decreased trading activity. Average Wealth Management loans grew by $78.3 million compared to the prior quarter while average deposits increased $116 million. Assets under management or administration totaled $92.0 billion compared to $91.6 billion in the prior quarter.

Net Interest Revenue

Net interest revenue was $280.4 million for the first quarter of 2021, a $16.8 million decrease compared to the fourth quarter of 2020. The decrease in net interest revenue was primarily driven by lower average outstanding loan balances. Net interest margin was 2.62 percent compared to 2.72 percent in the fourth quarter of 2020. Reinvestment of cash flows from our available for sale securities portfolio to current interest rates and timing of PPP and other loan fees also contributed to a decrease in net interest revenue and net interest margin in the first quarter.

Average earning assets decreased $178 million compared to the fourth quarter of 2020. Average loan balances decreased $691 million, primarily from commercial and commercial real estate loan paydowns. Available for sale securities increased $484 million. Average interest-bearing deposits grew by $823 million, primarily due to higher interest-bearing transaction deposits in the wake of the most recent government stimulus program. Other borrowings decreased $1.8 billion while funds purchased and repurchase agreements increased $677 million.

The yield on average earning assets was 2.78 percent, a 14 basis point decrease from the prior quarter. The yield on the available for sale securities portfolio decreased 14 basis points to 1.84 percent. Cash flows received from these securities are currently being reinvested at 95 - 105 basis points. The loan portfolio yield decreased 13 basis points to 3.55 percent, largely due to the timing of certain loan fees, including Paycheck Protection Program loans.

Funding costs were 0.24 percent, down 4 basis points. The cost of other borrowed funds was down 8 basis points to 0.30 percent. The cost of interest-bearing deposits decreased 2 basis points to 0.17 percent. The benefit to net interest margin from assets funded by non-interest liabilities was 8 basis points for the first quarter of 2021, consistent with the prior quarter.

Fees and Commissions Revenue

Fees and commissions revenue totaled $162.2 million for the first quarter of 2021, a decrease of $18.9 million compared to the fourth quarter of 2020. Brokerage and trading revenue decreased $18.7 million to $20.8 million, including a $15.4 million reduction in trading revenue. Agency residential mortgage trading volumes have slowed from record levels in 2020 and margins compressed due to market conditions during the first quarter of 2021. In addition, customer hedging revenue decreased $2.1 million, primarily due to decreased energy customer hedging activities. Investment banking revenue decreased $2.1 million, mainly due to timing of loan syndication activity.

Mortgage banking revenue decreased $2.2 million compared to the prior quarter, down to a level comparable to the first quarter of 2020. While mortgage production volumes remained consistent with the prior quarter, mortgage interest rates began to increase and margins compressed. The gain on sale margin decreased 28 basis points to 2.98 percent.

Other revenue increased $2.1 million, primarily due to production revenue from repossessed oil and gas properties.

Operating Expense

Total operating expense was $282.6 million for the first quarter of 2021, a decrease of $18.0 million compared to the fourth quarter of 2020.

Personnel expense decreased $3.2 million, led by a $10.3 million decrease in incentive compensation expense, partially offset by a $6.4 million seasonal increase in payroll taxes and retirement plan costs. Cash based incentive compensation expense decreased $8.2 million, primarily in relation to decreased trading revenue. Deferred compensation expense, which is largely offset by a decrease in the value of related investments included in Other gains (losses), net, decreased $3.4 million.

Non-personnel expense decreased $14.8 million compared to the fourth quarter of 2020. Net losses and expenses on repossessed assets decreased $7.8 million, largely due to $14.1 million gain on the sale of an equity interest received as part of the workout of a defaulted energy loan. Smaller reductions in expenses in professional fees and services, business promotion, and occupancy and equipment also supplemented the overall decrease in non-personnel expense. These were partially offset by a $2.4 million increase in data processing and communications expense as we continue to invest in technology.

We made a charitable contribution of $4.0 million in the first quarter and a contribution of $6.0 million in the prior quarter to the BOKF Foundation as we continue to focus on the communities we serve and the extreme needs created by the pandemic.

Loans, Deposits and Capital

Loans

Outstanding loans were $22.5 billion at March 31, 2021, a $474 million decrease compared to December 31, 2020, primarily due to payoffs of commercial and commercial real estate loans.

Outstanding commercial loan balances decreased $420 million or 3 percent compared to December 31, 2020. Borrowers continue to reduce leverage in this challenging economic environment. 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 $267 million to $3.2 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 $2.4 billion at March 31, 2021, consistent with December 31, 2020.

Healthcare sector loan balances were largely unchanged compared to the prior quarter, totaling $3.3 billion or 15 percent of total loans. Our healthcare sector loans primarily consist of $2.6 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 most recent stimulus bill, like the CARES Act, has multiple revenue enhancement measures for both hospitals and skilled nursing facilities as they manage through the risks of the virus.

General business loans decreased $51 million to $2.7 billion or 12 percent of total loans. General business loans include $1.5 billion of wholesale/retail loans and $1.2 billion of loans from other commercial industries.

Services loan balances decreased $87 million to $3.4 billion or 15 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 $195 million compared to December 31, 2020 and represent 20 percent of total loans at March 31, 2021. Multifamily residential loans, our largest exposure in commercial real estate, decreased $100 million to $1.2 billion at March 31, 2021. Loans secured by other commercial real estate properties decreased $74 million to $485 million. Loans secured by industrial facilities decreased $21 million to $789 million. Loans secured by retail facilities and office buildings were largely unchanged compared to December 31, 2020.

PPP loan balances increased $166 million to $1.8 billion or 8 percent of total loans. We originated $544 million of new PPP loans during the first quarter of 2021, maintaining our strategy of focusing on our existing client base to timely support our existing client needs. Growth from new originations was partially offset by paydowns from the first round of loans.

Loans to individuals decreased $25 million and represent 16 percent of total loans at March 31, 2021. Residential mortgage loans decreased $66 million. Personal loans were up $29 million and residential mortgage loans guaranteed by U.S. government agencies increased $11 million. The Company may repurchase loans previously sold into GNMA mortgage pools when certain defined delinquency criteria are met. Because of this repurchase right, we have regained effective control over these loans and must include them on the Consolidated Balance Sheet.

Deposits

Period-end deposits totaled $37.9 billion at March 31, 2021, a $1.7 billion increase over December 31, 2020. Continued deposit growth was due primarily to customers retaining higher balances in the current economic environment supplemented by the most recent government stimulus program. Demand deposit account balances grew by $837 million and interest-bearing transaction account balances grew by $732 million. Period-end commercial deposits grew by $1.0 billion, consumer deposits increased $474 million and wealth management deposits were up $566 million. Average deposits were $36.5 billion at March 31, 2021, a $1.0 billion increase compared to December 31, 2020. Interest-bearing transaction deposits increased $715 million.

Capital

The company's common equity Tier 1 capital ratio was 12.14 percent at March 31, 2021. In addition, the company's Tier 1 capital ratio was 12.21 percent, total capital ratio was 13.98 percent, and leverage ratio was 8.51 percent at March 31, 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 23 basis points to the company's common equity tier 1 capital ratio at March 31. At December 31, 2020, the company's common equity Tier 1 capital ratio was 11.95 percent, Tier 1 capital ratio was 11.95 percent, total capital ratio was 13.82 percent, and leverage ratio was 8.28 percent.

The company's tangible common equity ratio, a non-GAAP measure, was 8.82 percent at March 31, 2021 and 9.02 percent at December 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 repurchased 260,000 shares of common stock at an average price of $77.20 a share in the first 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 $25.0 million negative provision for credit losses in the first quarter of 2021. Changes in our reasonable and supportable forecasts of macroeconomic variables, primarily due to an improved economic outlook related to the anticipated impact of the on-going COVID-19 pandemic, resulted in a $31.1 million decrease in the allowance for credit losses from lending activities. Changes in the loan portfolio characteristics, including specific impairment and losses, risk grading and loan balances resulted in a $5.2 million increase in the allowance for credit losses from lending activities.

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. This scenario assumes vaccine distribution continues to accelerate through the first half of 2021, with a large share of the U.S. population vaccinated by the end of the third quarter of 2021. Continued easing of restrictions and the release of pent-up consumer demand results in GDP growth above historical averages, with GDP recovering to pre-COVID levels in the second quarter of 2021. We expect a 5.6 percent increase in GDP over the next twelve months. Our forecasted civilian unemployment rate is 6.0 percent for the second quarter of 2021, improving to 5.0 percent by the first quarter of 2022. WTI oil prices are projected to generally follow the NYMEX forward curve that existed at the end of March 2021, averaging $57.87 per barrel over the next twelve months.

The probability weighting of our base case reasonable and supportable forecast was unchanged compared to the fourth quarter of 2020 as there continues to be a high level of uncertainty in the current economic outlook. Our downside case assumes additional waves and hotspots emerge stemming from new virus strains throughout the second and third quarter of 2021 and more constrained distribution of vaccines not reaching widespread distribution until the end of 2021. This results in no GDP growth over the next twelve months and unemployment rates remaining elevated through the first quarter of 2022.

The allowance for loan losses totaled $352 million or 1.56 percent of outstanding loans and 170 percent of nonaccruing loans at March 31, 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 $385 million or 1.71 percent of outstanding loans and 186 percent of nonaccruing loans at March 31, 2021. The combined allowance for credit losses attributed to energy was 3.29 percent of outstanding energy loans at March 31 compared to 3.61 at December 31. Excluding PPP loans, the allowance for loan losses was 1.70 percent of outstanding loans and the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was 1.86 percent.

At December 31, 2020, the allowance for loan losses was $389 million or 1.69 percent of outstanding loans and 171 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 $426 million or 1.85 percent of outstanding loans and 188 percent of nonaccruing loans.

Nonperforming assets totaled $442 million or 1.95 percent of outstanding loans and repossessed assets at March 31, 2021, down from $477 million or 2.07 percent at December 31, 2020. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $278 million or 1.37 percent of outstanding loans and repossessed assets at March 31, 2021, compared to $317 million or 1.51 percent at December 31, 2020. The decrease in nonperforming assets was primarily related to a decrease in nonaccruing energy loans and sales of energy-related repossessed assets during the first quarter of 2021.

Nonaccruing loans were $216 million or 1.04 percent of outstanding loans, excluding PPP loans, at March 31, 2021. Nonaccruing commercial loans totaled $147 million or 1.16 percent of outstanding commercial loans. Nonaccruing commercial real estate loans totaled $27 million or 0.60 percent of outstanding commercial real estate loans. Nonaccruing loans to individuals totaled $42 million or 1.18 percent of outstanding loans to individuals.

Nonaccruing loans decreased $19 million compared to December 31, 2020, primarily due to a decrease in nonaccruing energy loans. New nonaccruing loans identified in the first quarter totaled $25 million, offset by $26 million in payments received and $17 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 $422 million at March 31, down from $478 million at December 31. Lower energy and services potential problem loans, were partially offset by an increase in potential problem healthcare loans.

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. Net charge-offs were 0.31 percent of average loans over the last four quarters. Net charge-offs were $16.7 million or 0.31 percent of average loans on an annualized basis for the fourth quarter of 2020, excluding PPP loans. Gross charge-offs were $16.9 million for the first quarter compared to $18.3 million for the previous quarter. Recoveries totaled $2.4 million for the first quarter of 2021 and $1.6 million for the fourth quarter of 2020.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $13.4 billion at March 31, 2021, a $359 million increase compared to December 31, 2020. At March 31, 2021, the available for sale securities portfolio consisted primarily of $9.7 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $3.4 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. At March 31, 2021, the available for sale securities portfolio had a net unrealized gain of $290 million compared to $441 million at December 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 $42 million to $72 million at March 31, 2021.

The net economic benefit of the changes in the fair value of mortgage servicing rights and related economic hedges was $4.7 million during the first quarter of 2021, including a $33.9 million increase in the fair value of mortgage servicing rights, $29.6 million decrease in the fair value of securities and derivative contracts held as an economic hedge, and $393 thousand of related net interest revenue.

Conference Call and Webcast

The company will hold a conference call at 9 a.m. Central time on April 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 # 13718312.

About BOK Financial Corporation

BOK Financial Corporation is a $47 billion regional financial services company headquartered in Tulsa, Oklahoma with $92 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 March 31, 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)

Mar. 31, 2021

Dec. 31, 2020

ASSETS

Cash and due from banks

$

723,983

$

798,757

Interest-bearing cash and cash equivalents

695,213

381,816

Trading securities

5,085,949

4,707,975

Investment securities, net of allowance

226,121

244,843

Available for sale securities

13,410,057

13,050,665

Fair value option securities

72,498

114,982

Restricted equity securities

139,614

171,391

Residential mortgage loans held for sale

284,447

252,316

Loans:

Commercial

12,657,784

13,077,535

Commercial real estate

4,503,347

4,698,538

Paycheck protection program

1,848,550

1,682,310

Loans to individuals

3,524,166

3,549,137

Total loans

22,533,847

23,007,520

Allowance for loan losses

(352,402

)

(388,640

)

Loans, net of allowance

22,181,445

22,618,880

Premises and equipment, net

555,455

551,308

Receivables

250,852

245,880

Goodwill

1,048,091

1,048,091

Intangible assets, net

110,585

113,436

Mortgage servicing rights

132,915

101,172

Real estate and other repossessed assets, net

70,911

90,526

Derivative contracts, net

1,289,156

810,688

Cash surrender value of bank-owned life insurance

401,320

398,758

Receivable on unsettled securities sales

67,759

62,386

Other assets

696,142

907,218

TOTAL ASSETS

$

47,442,513

$

46,671,088

LIABILITIES AND EQUITY

Deposits:

Demand

$

13,103,170

$

12,266,338

Interest-bearing transaction

21,890,874

21,158,422

Savings

854,226

751,992

Time

2,004,356

1,967,128

Total deposits

37,852,626

36,143,880

Funds purchased and repurchase agreements

795,161

1,662,386

Other borrowings

1,708,517

1,882,970

Subordinated debentures

276,024

276,005

Accrued interest, taxes and expense

290,328

323,667

Due on unsettled securities purchases

106,835

257,627

Derivative contracts, net

719,556

405,779

Other liabilities

431,122

427,213

TOTAL LIABILITIES

42,180,169

41,379,527

Shareholders' equity:

Capital, surplus and retained earnings

5,018,053

4,930,398

Accumulated other comprehensive gain

221,409

335,868

TOTAL SHAREHOLDERS' EQUITY

5,239,462

5,266,266

Non-controlling interests

22,882

25,295

TOTAL EQUITY

5,262,344

5,291,561

TOTAL LIABILITIES AND EQUITY

$

47,442,513

$

46,671,088

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

Three Months Ended

Mar. 31, 2021

Dec. 31, 2020

Sept. 30, 2020

June 30, 2020

Mar. 31, 2020

ASSETS

Interest-bearing cash and cash equivalents

$

711,047

$

643,926

$

553,070

$

619,737

$

721,659

Trading securities

6,963,617

6,888,189

1,834,160

1,871,647

1,690,104

Investment securities, net of allowance

237,313

251,863

258,965

268,947

282,265

Available for sale securities

13,433,767

12,949,702

12,580,850

12,480,065

11,664,521

Fair value option securities

104,662

122,329

387,784

786,757

1,793,480

Restricted equity securities

189,921

280,428

144,415

273,922

429,133

Residential mortgage loans held for sale

207,013

229,631

213,125

288,588

129,708

Loans:

Commercial

12,908,461

13,113,449

13,772,217

14,502,652

14,452,851

Commercial real estate

4,547,945

4,788,393

4,754,269

4,543,511

4,346,886

Paycheck protection program

1,741,534

1,928,665

2,092,933

1,699,369

Loans to individuals

3,559,067

3,617,011

3,491,044

3,353,960

3,143,286

Total loans

22,757,007

23,447,518

24,110,463

24,099,492

21,943,023

Allowance for loan losses

(382,734

)

(414,225

)

(441,831

)

(367,583

)

(250,338

)

Loans, net of allowance

22,374,273

23,033,293

23,668,632

23,731,909

21,692,685

Total earning assets

44,221,613

44,399,361

39,641,001

40,321,572

38,403,555

Cash and due from banks

760,691

742,432

723,826

678,878

669,369

Derivative contracts, net

873,712

553,779

581,839

642,969

376,621

Cash surrender value of bank-owned life insurance

399,830

397,354

394,680

391,951

390,009

Receivable on unsettled securities sales

735,482

1,094,198

4,563,301

4,626,307

3,046,111

Other assets

3,319,305

3,200,040

3,027,108

3,095,354

2,834,953

TOTAL ASSETS

$

50,310,633

$

50,387,164

$

48,931,755

$

49,757,031

$

45,720,618

LIABILITIES AND EQUITY

Deposits:

Demand

$

12,312,629

$

12,136,071

$

11,929,694

$

11,489,322

$

9,232,859

Interest-bearing transaction

21,433,406

20,718,390

19,752,106

18,040,170

16,159,654

Savings

789,656

737,360

707,121

656,669

563,821

Time

1,986,425

1,930,808

2,251,012

2,464,793

2,239,234

Total deposits

36,522,116

35,522,629

34,639,933

32,650,954

28,195,568

Funds purchased and repurchase agreements

2,830,378

2,153,254

2,782,150

5,816,484

3,815,941

Other borrowings

3,392,346

5,193,656

3,382,688

3,527,303

6,542,325

Subordinated debentures

276,015

275,998

275,980

275,949

275,932

Derivative contracts, net

428,488

399,476

458,390

836,667

379,342

Due on unsettled securities purchases

915,410

957,642

1,516,880

887,973

960,780

Other liabilities

671,715

656,147

712,674

690,087

642,764

TOTAL LIABILITIES

45,036,468

45,158,802

43,768,695

44,685,417

40,812,652

Total equity

5,274,165

5,228,362

5,163,060

5,071,614

4,907,966

TOTAL LIABILITIES AND EQUITY

$

50,310,633

$

50,387,164

$

48,931,755

$

49,757,031

$

45,720,618

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

Three Months Ended

March 31,

2021

2020

Interest revenue

$

298,239

$

348,937

Interest expense

17,819

87,577

Net interest revenue

280,420

261,360

Provision for credit losses

(25,000

)

93,771

Net interest revenue after provision for credit losses

305,420

167,589

Other operating revenue:

Brokerage and trading revenue

20,782

50,779

Transaction card revenue

22,430

21,881

Fiduciary and asset management revenue

41,322

44,458

Deposit service charges and fees

24,209

26,130

Mortgage banking revenue

37,113

37,167

Other revenue

16,296

12,309

Total fees and commissions

162,152

192,724

Other gains (losses), net

(3,036

)

(10,741

)

Gain (loss) on derivatives, net

(27,650

)

18,420

Gain (loss) on fair value option securities, net

(1,910

)

68,393

Change in fair value of mortgage servicing rights

33,874

(88,480

)

Gain on available for sale securities, net

467

3

Total other operating revenue

163,897

180,319

Other operating expense:

Personnel

173,010

156,181

Business promotion

2,154

6,215

Charitable contributions to BOKF Foundation

4,000

Professional fees and services

11,980

12,948

Net occupancy and equipment

26,662

26,061

Insurance

4,620

4,980

Data processing and communications

37,467

32,743

Printing, postage and supplies

3,440

4,272

Net losses (gains) and operating expenses of repossessed assets

(6,588

)

1,531

Amortization of intangible assets

4,807

5,094

Mortgage banking costs

13,943

10,545

Other expense

7,132

8,054

Total other operating expense

282,627

268,624

Net income before taxes

186,690

79,284

Federal and state income taxes

42,382

17,300

Net income

144,308

61,984

Net loss attributable to non-controlling interests

(1,752

)

(95

)

Net income attributable to BOK Financial Corporation shareholders

$

146,060

$

62,079

Average shares outstanding:

Basic

69,137,375

70,123,685

Diluted

69,141,710

70,130,166

Net income per share:

Basic

$

2.10

$

0.88

Diluted

$

2.10

$

0.88

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

Three Months Ended

Mar. 31, 2021

Dec. 31, 2020

Sept. 30, 2020

June 30, 2020

Mar. 31, 2020

Capital:

Period-end shareholders' equity

$

5,239,462

$

5,266,266

$

5,218,787

$

5,096,995

$

5,026,248

Risk weighted assets

$

32,623,108

$

32,492,277

$

31,529,826

$

32,180,602

$

32,973,242

Risk-based capital ratios:

Common equity tier 1

12.14%

11.95%

12.07%

11.44%

10.98%

Tier 1

12.21%

11.95%

12.07%

11.44%

10.98%

Total capital

13.98%

13.82%

14.05%

13.43%

12.65%

Leverage ratio

8.51%

8.28%

8.39%

7.74%

8.15%

Tangible common equity ratio1

8.82%

9.02%

9.02%

8.79%

8.39%

Common stock:

Book value per share

$

75.33

$

75.62

$

74.23

$

72.50

$

71.49

Tangible book value per share

$

58.67

$

58.94

$

57.64

$

55.83

$

54.85

Market value per share:

High

$

98.95

$

73.07

$

62.86

$

67.62

$

87.40

Low

$

67.57

$

50.09

$

48.41

$

37.80

$

34.57

Cash dividends paid

$

36,038

$

36,219

$

35,799

$

35,769

$

35,949

Dividend payout ratio

24.67 %

23.48 %

23.24 %

55.29 %

57.91 %

Shares outstanding, net

69,557,873

69,637,600

70,305,833

70,306,690

70,308,532

Stock buy-back program:

Shares repurchased

260,000

665,100

442,000

Amount

$

20,071

$

42,450

$

$

$

33,380

Average price per share

$

77.20

$

63.82

$

$

$

75.52

Performance ratios (quarter annualized):

Return on average assets

1.18%

1.22%

1.25%

0.52%

0.55%

Return on average equity

11.28%

11.75%

11.89%

5.14%

5.10%

Net interest margin

2.62%

2.72%

2.81%

2.83%

2.80%

Efficiency ratio

63.32%

62.36%

60.41%

59.57%

58.62%

Reconciliation of non-GAAP measures:

1 Tangible common equity ratio:

Total shareholders' equity

$

5,239,462

$

5,266,266

$

5,218,787

$

5,096,995

$

5,026,248

Less: Goodwill and intangible assets, net

1,158,676

1,161,527

1,166,615

1,171,686

1,169,898

Tangible common equity

$

4,080,786

$

4,104,739

$

4,052,172

$

3,925,309

$

3,856,350

Total assets

$

47,442,513

$

46,671,088

$

46,067,224

$

45,819,874

$

47,119,162

Less: Goodwill and intangible assets, net

1,158,676

1,161,527

1,166,615

1,171,686

1,169,898

Tangible assets

$

46,283,837

$

45,509,561

$

44,900,609

$

44,648,188

$

45,949,264

Tangible common equity ratio

8.82%

9.02%

9.02%

8.79%

8.39%

Pre-provision net revenue:

Net income before taxes

$

186,690

$

199,847

$

204,644

$

80,089

$

79,284

Provision for expected credit losses

(25,000

)

(6,500

)

135,321

93,771

Net income (loss) attributable to non-controlling interests

(1,752

)

485

58

(407

)

(95

)

Pre-provision net revenue

$

163,442

$

192,862

$

204,586

$

215,817

$

173,150

Other data:

Tax equivalent interest

$

2,301

$

2,414

$

2,457

$

2,630

$

2,715

Net unrealized gain on available for sale securities

$

290,217

$

440,814

$

480,563

$

487,334

$

435,989

Mortgage banking:

Mortgage production revenue

$

25,287

$

26,662

$

38,431

$

39,185

$

21,570

Mortgage loans funded for sale

$

843,053

$

998,435

$

1,032,472

$

1,184,249

$

548,956

Add: current period-end outstanding commitments

387,465

380,637

560,493

546,304

657,570

Less: prior period end outstanding commitments

380,637

560,493

546,304

657,570

158,460

Total mortgage production volume

$

849,881

$

818,579

$

1,046,661

$

1,072,983

$

1,048,066

Mortgage loan refinances to mortgage loans funded for sale

65%

58%

54%

71%

57%

Gain on sale margin

2.98%

3.26%

3.67%

3.65%

2.06%

Mortgage servicing revenue

$

11,826

$

12,636

$

13,528

$

14,751

$

15,597

Average outstanding principal balance of mortgage loans serviced for others

15,723,231

16,518,208

17,434,215

19,319,872

20,416,546

Average mortgage servicing revenue rates

0.31%

0.30%

0.31%

0.31%

0.31%

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

Gain (loss) on mortgage hedge derivative contracts, net

$

(27,705

)

$

(385

)

$

2,295

$

21,815

$

18,371

Gain (loss) on fair value option securities, net

(1,910

)

68

(754

)

(14,459

)

68,393

Gain (loss) on economic hedge of mortgage servicing rights

(29,615

)

(317

)

1,541

7,356

86,764

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

33,874

6,276

3,441

(761

)

(88,480

)

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

4,259

5,959

4,982

6,595

(1,716

)

Net interest revenue on fair value option securities2

393

550

1,565

2,702

4,268

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

$

4,652

$

6,509

$

6,547

$

9,297

$

2,552

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

Mar. 31, 2021

Dec. 31, 2020

Sept. 30, 2020

June 30, 2020

Mar. 31, 2020

Interest revenue

$

298,239

$

319,020

$

294,659

$

306,384

$

348,937

Interest expense

17,819

21,790

22,909

28,280

87,577

Net interest revenue

280,420

297,230

271,750

278,104

261,360

Provision for credit losses

(25,000

)

(6,500

)

135,321

93,771

Net interest revenue after provision for credit losses

305,420

303,730

271,750

142,783

167,589

Other operating revenue:

Brokerage and trading revenue

20,782

39,506

69,526

62,022

50,779

Transaction card revenue

22,430

21,896

23,465

22,940

21,881

Fiduciary and asset management revenue

41,322

41,799

39,931

41,257

44,458

Deposit service charges and fees

24,209

24,343

24,286

22,046

26,130

Mortgage banking revenue

37,113

39,298

51,959

53,936

37,167

Other revenue

16,296

14,209

13,698

11,479

12,309

Total fees and commissions

162,152

181,051

222,865

213,680

192,724

Other gains (losses), net

(3,036

)

5,383

6,265

6,768

(10,741

)

Gain (loss) on derivatives, net

(27,650

)

(339

)

2,354

21,885

18,420

Gain (loss) on fair value option securities, net

(1,910

)

68

(754

)

(14,459

)

68,393

Change in fair value of mortgage servicing rights

33,874

6,276

3,441

(761

)

(88,480

)

Gain (loss) on available for sale securities, net

467

4,339

(12

)

5,580

3

Total other operating revenue

163,897

196,778

234,159

232,693

180,319

Other operating expense:

Personnel

173,010

176,198

179,860

176,235

156,181

Business promotion

2,154

3,728

2,633

1,935

6,215

Charitable contributions to BOKF Foundation

4,000

6,000

3,000

Professional fees and services

11,980

14,254

14,074

12,161

12,948

Net occupancy and equipment

26,662

27,875

28,111

30,675

26,061

Insurance

4,620

4,006

5,848

5,156

4,980

Data processing and communications

37,467

35,061

34,751

32,942

32,743

Printing, postage and supplies

3,440

3,805

3,482

3,502

4,272

Net losses (gains) and operating expenses of repossessed assets

(6,588

)

1,168

6,244

1,766

1,531

Amortization of intangible assets

4,807

5,088

5,071

5,190

5,094

Mortgage banking costs

13,943

14,765

15,803

15,598

10,545

Other expense

7,132

8,713

5,388

7,227

8,054

Total other operating expense

282,627

300,661

301,265

295,387

268,624

Net income before taxes

186,690

199,847

204,644

80,089

79,284

Federal and state income taxes

42,382

45,138

50,552

15,803

17,300

Net income

144,308

154,709

154,092

64,286

61,984

Net income (loss) attributable to non-controlling interests

(1,752

)

485

58

(407

)

(95

)

Net income attributable to BOK Financial Corporation shareholders

$

146,060

$

154,224

$

154,034

$

64,693

$

62,079

Average shares outstanding:

Basic

69,137,375

69,489,597

69,877,866

69,876,043

70,123,685

Diluted

69,141,710

69,493,050

69,879,290

69,877,467

70,130,166

Net income per share:

Basic

$

2.10

$

2.21

$

2.19

$

0.92

$

0.88

Diluted

$

2.10

$

2.21

$

2.19

$

0.92

$

0.88

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

Mar. 31, 2021

Dec. 31, 2020

Sept. 30, 2020

June 30, 2020

Mar. 31, 2020

Commercial:

Services

$

3,421,948

$

3,508,583

$

3,545,825

$

3,779,881

$

3,955,748

Energy

3,202,488

3,469,194

3,717,101

3,974,174

4,111,676

Healthcare

3,290,758

3,305,990

3,325,790

3,289,343

3,165,096

General business

2,742,590

2,793,768

2,976,990

3,115,112

3,563,455

Total commercial

12,657,784

13,077,535

13,565,706

14,158,510

14,795,975

Commercial real estate:

Multifamily

1,227,915

1,328,045

1,387,461

1,407,107

1,282,457

Office

1,094,060

1,085,257

1,099,563

973,995

962,004

Industrial

789,437

810,510

792,389

723,005

728,026

Retail

787,648

796,223

786,211

780,467

774,198

Residential construction and land development

119,079

119,394

121,258

136,911

138,958

Other commercial real estate

485,208

559,109

506,818

532,659

564,442

Total commercial real estate

4,503,347

4,698,538

4,693,700

4,554,144

4,450,085

Paycheck protection program

1,848,550

1,682,310

2,097,325

2,081,428

Loans to individuals:

Residential mortgage

1,797,478

1,863,003

1,849,144

1,813,442

1,844,555

Residential mortgages guaranteed by U.S. government agencies

420,051

408,687

384,247

322,269

197,889

Personal

1,306,637

1,277,447

1,213,178

1,226,097

1,175,466

Total loans to individuals

3,524,166

3,549,137

3,446,569

3,361,808

3,217,910

Total

$

22,533,847

$

23,007,520

$

23,803,300

$

24,155,890

$

22,463,970

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

Mar. 31, 2021

Dec. 31, 2020

Sept. 30, 2020

June 30, 2020

Mar. 31, 2020

Texas:

Commercial

$

5,748,345

$

5,926,534

$

6,135,471

$

6,359,206

$

6,350,690

Commercial real estate

1,511,714

1,519,217

1,523,226

1,413,108

1,296,266

Paycheck protection program

537,899

501,079

614,970

612,133

Loans to individuals

848,194

855,410

794,055

749,531

756,634

Total Texas

8,646,152

8,802,240

9,067,722

9,133,978

8,403,590

Oklahoma:

Commercial

2,975,477

3,144,782

3,332,244

3,489,259

3,886,086

Commercial real estate

597,840

597,733

608,448

596,419

593,473

Paycheck protection program

468,002

413,108

487,247

442,518

Loans to individuals

2,043,705

2,052,784

2,034,576

1,966,032

1,788,518

Total Oklahoma

6,085,024

6,208,407

6,462,515

6,494,228

6,268,077

Colorado:

Commercial

1,910,826

1,929,320

1,993,364

2,085,294

2,181,309

Commercial real estate

777,786

879,648

893,626

940,622

955,608

Paycheck protection program

436,540

377,111

494,910

488,279

Loans to individuals

264,759

264,295

257,832

265,359

268,674

Total Colorado

3,389,911

3,450,374

3,639,732

3,779,554

3,405,591

Arizona:

Commercial

1,207,089

1,219,072

1,218,769

1,346,037

1,396,582

Commercial real estate

667,766

726,111

702,291

698,818

714,161

Paycheck protection program

208,481

211,725

272,114

318,961

Loans to individuals

179,031

177,948

166,203

177,155

181,821

Total Arizona

2,262,367

2,334,856

2,359,377

2,540,971

2,292,564

Kansas/Missouri:

Commercial

421,974

455,914

493,606

481,162

556,255

Commercial real estate

395,590

366,821

352,663

314,926

310,799

Paycheck protection program

60,741

56,011

80,230

76,724

Loans to individuals

104,954

105,995

96,598

102,577

116,734

Total Kansas/Missouri

983,259

984,741

1,023,097

975,389

983,788

New Mexico:

Commercial

307,395

303,833

288,374

308,090

327,164

Commercial real estate

448,298

473,204

473,697

458,230

434,150

Paycheck protection program

124,059

109,881

133,244

128,058

Loans to individuals

70,491

75,665

79,890

83,470

87,110

Total New Mexico

950,243

962,583

975,205

977,848

848,424

Arkansas:

Commercial

86,678

98,080

103,878

89,462

97,889

Commercial real estate

104,353

135,804

139,749

132,021

145,628

Paycheck protection program

12,828

13,395

14,610

14,755

Loans to individuals

13,032

17,040

17,415

17,684

18,419

Total Arkansas

216,891

264,319

275,652

253,922

261,936

TOTAL BOK FINANCIAL

$

22,533,847

$

23,007,520

$

23,803,300

$

24,155,890

$

22,463,970

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)

Mar. 31, 2021

Dec. 31, 2020

Sept. 30, 2020

June 30, 2020

Mar. 31, 2020

Oklahoma:

Demand

$

4,822,895

$

4,328,619

$

4,493,691

$

4,378,559

$

3,669,558

Interest-bearing:

Transaction

12,827,914

12,603,603

12,586,401

11,438,489

9,955,697

Savings

487,862

420,996

401,062

387,557

329,631

Time

1,197,517

1,134,453

1,081,176

1,330,619

1,137,802

Total interest-bearing

14,513,293

14,159,052

14,068,639

13,156,665

11,423,130

Total Oklahoma

19,336,188

18,487,671

18,562,330

17,535,224

15,092,688

Texas:

Demand

3,593,510

3,450,468

3,152,393

3,070,955

2,767,399

Interest-bearing:

Transaction

4,257,390

3,800,482

3,482,603

3,358,090

2,874,362

Savings

154,406

139,173

136,787

128,892

115,039

Time

368,086

383,062

438,337

476,867

505,565

Total interest-bearing

4,779,882

4,322,717

4,057,727

3,963,849

3,494,966

Total Texas

8,373,392

7,773,185

7,210,120

7,034,804

6,262,365

Colorado:

Demand

2,115,354

2,168,404

2,057,603

2,096,075

1,579,764

Interest-bearing:

Transaction

2,100,135

2,170,485

1,861,763

1,816,604

1,759,384

Savings

73,446

69,384

68,230

67,477

58,000

Time

204,973

208,778

226,780

254,845

279,105

Total interest-bearing

2,378,554

2,448,647

2,156,773

2,138,926

2,096,489

Total Colorado

4,493,908

4,617,051

4,214,376

4,235,001

3,676,253

New Mexico:

Demand

1,131,713

941,074

964,908

965,877

750,052

Interest-bearing:

Transaction

736,923

733,007

713,418

752,565

563,891

Savings

103,591

91,646

85,463

80,242

67,553

Time

181,863

186,307

200,525

222,370

235,778

Total interest-bearing

1,022,377

1,010,960

999,406

1,055,177

867,222

Total New Mexico

2,154,090

1,952,034

1,964,314

2,021,054

1,617,274

Arizona:

Demand

915,439

905,201

928,671

985,757

665,396

Interest-bearing:

Transaction

835,795

768,220

771,319

780,500

729,603

Savings

13,235

12,174

11,498

15,669

8,832

Time

30,997

32,721

36,929

42,318

47,081

Total interest-bearing

880,027

813,115

819,746

838,487

785,516

Total Arizona

1,795,466

1,718,316

1,748,417

1,824,244

1,450,912

Kansas/Missouri:

Demand

478,370

426,738

405,360

427,795

318,985

Interest-bearing:

Transaction

991,510

960,237

616,797

526,635

537,552

Savings

18,686

16,286

15,520

15,033

12,888

Time

13,898

14,610

16,430

17,746

19,137

Total interest-bearing

1,024,094

991,133

648,747

559,414

569,577

Total Kansas/Missouri

1,502,464

1,417,871

1,054,107

987,209

888,562

Arkansas:

Demand

45,889

45,834

44,712

67,147

70,428

Interest-bearing:

Transaction

141,207

122,388

164,439

177,535

175,803

Savings

3,000

2,333

2,389

2,101

1,862

Time

7,022

7,197

7,796

7,995

8,005

Total interest-bearing

151,229

131,918

174,624

187,631

185,670

Total Arkansas

197,118

177,752

219,336

254,778

256,098

TOTAL BOK FINANCIAL

$

37,852,626

$

36,143,880

$

34,973,000

$

33,892,314

$

29,244,152

NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION

Three Months Ended

Mar. 31, 2021

Dec. 31, 2020

Sept. 30, 2020

June 30, 2020

Mar. 31, 2020

TAX-EQUIVALENT ASSETS YIELDS

Interest-bearing cash and cash equivalents

0.10

%

0.10

%

0.12

%

0.07

%

1.33

%

Trading securities

2.06

%

2.02

%

1.92

%

2.46

%

2.89

%

Investment securities, net of allowance

4.88

%

4.88

%

4.85

%

4.77

%

4.73

%

Available for sale securities

1.84

%

1.98

%

2.11

%

2.29

%

2.48

%

Fair value option securities

1.95

%

2.27

%

1.92

%

2.00

%

2.67

%

Restricted equity securities

2.86

%

3.25

%

2.53

%

2.75

%

5.49

%

Residential mortgage loans held for sale

2.71

%

2.75

%

3.01

%

3.10

%

3.50

%

Loans

3.55

%

3.68

%

3.60

%

3.63

%

4.50

%

Allowance for loan losses

Loans, net of allowance

3.62

%

3.75

%

3.67

%

3.69

%

4.55

%

Total tax-equivalent yield on earning assets

2.78

%

2.92

%

3.04

%

3.12

%

3.73

%

COST OF INTEREST-BEARING LIABILITIES

Interest-bearing deposits:

Interest-bearing transaction

0.12

%

0.14

%

0.17

%

0.21

%

0.89

%

Savings

0.04

%

0.05

%

0.05

%

0.05

%

0.09

%

Time

0.70

%

0.89

%

1.13

%

1.36

%

1.83

%

Total interest-bearing deposits

0.17

%

0.19

%

0.26

%

0.34

%

0.98

%

Funds purchased and repurchase agreements

0.19

%

0.28

%

0.17

%

0.14

%

1.14

%

Other borrowings

0.39

%

0.42

%

0.43

%

0.56

%

1.66

%

Subordinated debt

4.92

%

4.87

%

4.89

%

5.16

%

5.30

%

Total cost of interest-bearing liabilities

0.24

%

0.28

%

0.31

%

0.37

%

1.19

%

Tax-equivalent net interest revenue spread

2.54

%

2.64

%

2.73

%

2.75

%

2.54

%

Effect of noninterest-bearing funding sources and other

0.08

%

0.08

%

0.08

%

0.08

%

0.26

%

Tax-equivalent net interest margin

2.62

%

2.72

%

2.81

%

2.83

%

2.80

%

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

Mar. 31, 2021

Dec. 31, 2020

Sept. 30, 2020

June 30, 2020

Mar. 31, 2020

Nonperforming assets:

Nonaccruing loans:

Commercial:

Energy

$

101,800

$

125,059

$

126,816

$

162,989

$

96,448

Services

28,033

25,598

25,817

21,032

8,425

Healthcare

3,187

3,645

3,645

3,645

4,070

General business

14,053

12,857

13,675

14,333

9,681

Total commercial

147,073

167,159

169,953

201,999

118,624

Commercial real estate

27,243

27,246

12,952

13,956

8,545

Loans to individuals:

Permanent mortgage

32,884

32,228

31,599