BOK Financial Reports Earnings Of $286 Million For 2011

BOK Financial Corporation reported net income for 2011 of $285.9 million or $4.17 per diluted share, up $39.1 million or 16% over 2010. Net income for the fourth quarter of 2011 totaled $67.0 million or $0.98 per diluted share, up $8.2 million or 14% over the fourth quarter of 2010. Net income for the third quarter of 2011 totaled $85.1 million or $1.24 per diluted share.

“BOK Financial is pleased to announce outstanding performance for 2011,” said President and CEO Stan Lybarger. “Continued credit quality improvement and non-interest revenue growth increased 2011 earnings. The Company reduced its provision for credit losses by $111 million compared with 2010. Net loans charged-off were down $66 million and nonaccruing loans decreased $30 million. Non-interest revenue grew $12 million, despite the impact of regulatory changes on overdraft and interchange fees. We also achieved net loan growth for the first time since 2008. Commercial loans increased $637 million, which partially offset the pressure of lower rates on net interest revenue. Growth in operating expenses was limited to 3.2%, excluding changes in the fair value of mortgage servicing rights.”

“The Company’s solid performance continued in the fourth quarter of 2011,” said Lybarger. “Outstanding loan balances increased $145 million during the quarter. We reduced our allowance for loan losses by $15 million in response to lower net charge-offs and improved other credit quality indicators.”

Highlights of fourth quarter of 2011 included:
  • Net interest revenue decreased to $171.5 million for the fourth quarter of 2011 from $175.4 million in the third quarter of 2011. Net interest margin was 3.20% for the fourth quarter of 2011 compared to 3.34% in the third quarter. Increased premium amortization and cash flows reinvested at lower current interest rates combined to reduce the securities portfolio yield.
  • Fees and commissions revenue totaled $131.8 million for the fourth quarter of 2011, compared to $146.0 million for the third quarter of 2011. Transaction card revenue decreased $5.4 million primarily due to new federal regulations which reduced debit card interchange revenue. Mortgage banking revenue decreased $4.1 million and brokerage and trading revenue decreased $3.8 million.
  • Operating expenses, excluding changes in the fair value of mortgage servicing rights, totaled $213.9 million, up $17.9 million over the prior quarter. Personnel expense increased $17.9 million primarily due to increased incentive compensation expense.
  • A $15.0 million negative provision for credit losses was recorded in the fourth quarter of 2011. No provision for credit losses was recorded in the third quarter of 2011. Net charge-offs continued to decrease and other credit quality indicators continue to improve.
  • The combined allowance for credit losses totaled $263 million or 2.33% of outstanding loans at December 31, 2011 compared to $287 million or 2.58% of outstanding loans at September 30, 2011. Nonperforming assets totaled $357 million or 3.13% of outstanding loans and repossessed assets at December 31, 2011 and $388 million or 3.45% of outstanding loans and repossessed assets at September 30, 2011.
  • Outstanding loan balances were $11.3 billion at December 31, 2011 compared to $11.1 billion at September 30, 2011. Commercial loan balances increased $96 million over September 30, 2011. Commercial real estate loans increased $20 million and residential mortgage loans increased $59 million. Consumer loans decreased $29 million.
  • Period end deposits totaled $18.8 billion at December 31, 2011 compared to $18.4 billion at September 30, 2011. Demand deposit accounts increased $386 million and interest-bearing transaction accounts increased $102 million. Time deposits decreased $172 million.
  • Tangible common equity ratio was 9.56% at December 31, 2011 and 9.65% at September 30, 2011. The tangible common equity ratio is a non-GAAP measure of capital strength used by the Company and investors based on shareholders’ equity minus intangible assets and equity that does not benefit common shareholders. The Company and its subsidiary bank continue to exceed the regulatory definition of well capitalized. The Company’s Tier 1 capital ratios, as defined by banking regulations, were 13.27% at December 31, 2011 and 13.14% at September 30, 2011.
  • The Company increased the cash dividend to $22 million or $0.33 per common share during the fourth quarter of 2011. This was the second quarterly cash dividend increase in 2011. On January 31, 2012, the board of directors approved a quarterly cash dividend of $0.33 per common share payable on or about February 29, 2012 to shareholders of record as of February 15, 2012.

Net Interest Revenue

Net interest revenue decreased $3.9 million compared to the third quarter of 2011. Net interest margin decreased 14 basis points from the prior quarter to 3.20%.

The yield on average earning assets decreased 22 basis points compared to the preceding quarter. The available for sale securities portfolio yield decreased 44 basis points to 2.39%. Historically low residential mortgage rates in the fourth quarter of 2011 increased both actual and projected prepayment speeds. Increased prepayment speeds reduced available for sale portfolio yields through accelerated premium amortization. In addition, cash flows from the securities portfolio were reinvested at the current lower interest rates. The loan portfolio yield decreased by 6 basis points to 4.65%. The cost of interest-bearing liabilities decreased 10 basis points from the previous quarter to 0.66%.

The effect of lower interest rates on net interest revenue was partially offset by earning asset growth. Average earning assets increased $789 million during the fourth quarter of 2011. Average outstanding loans increased $280 million due primarily to a $174 million increase in commercial loan balances and an $81 million increase in residential mortgage loans. The average balances of investment and available for sale securities increased $372 million.

Average interest-bearing deposits decreased $161 million compared to the previous quarter. Average time deposit account balances decreased $133 million and average interest-bearing transaction account balances decreased $33 million. Average demand deposits increased $502 million. Average balances of borrowed funds increased $225 million over the third quarter.

Fees and Commissions Revenue

Fees and commissions revenue decreased $14.2 million to $131.8 million for the fourth quarter of 2011. Transaction card revenue decreased $5.4 million, mortgage banking revenue decreased $4.1 million and brokerage and trading revenue decreased $3.8 million.

The $5.4 million decrease in transaction card revenue compared to the third quarter of 2011 was primarily due to interchange fee regulations which became effective October 1, 2011. This is consistent with our previously disclosed expectation that these regulations would reduce annual interchange revenue by $20 million to $25 million.

Mortgage loan production revenue decreased $4.4 million compared to the previous quarter. Market interest rates for mortgage loans were more stable during the fourth quarter which reduced gains on loans sold. Residential mortgage loans funded for sale totaled $753 million for the fourth quarter of 2011 compared to $637 million for the third quarter of 2011. Refinanced mortgage loans were 66% of the loans originated for sale in the fourth quarter of 2011 compared to 54% of loans originated in the third quarter. The decrease in brokerage and trading revenue was primarily due to a $3.6 million decrease in customer hedging revenue. Revenue from both interest-rate and energy derivative contracts was down from the previous quarter.

Operating Expenses

Total operating expenses were $219.2 million for the fourth quarter of 2011 compared to $220.9 million for the third quarter of 2011. Excluding changes in the fair value of mortgage servicing rights, operating expenses totaled $213.9 million, up $17.9 million over the third quarter of 2011. Personnel costs increased $17.9 million compared to the prior quarter due primarily to increased incentive compensation expense. Non-personnel expense was flat compared to the third quarter of 2011.

Deferred compensation expense increased $15.2 million, including $9.5 million related to the BOK Financial Corporation 2011 True-Up Plan. Approved by shareholders on April 26, 2011, the True-Up Plan is designed to adjust annual and long-term performance-based incentive compensation for certain senior executives either upward or downward based on the earnings per share performance and compensation of comparable senior executives at peer banks. The remaining increase in deferred compensation expense was due to the market performance of BOK Financial stock and other investments. Regular compensation expense increased $1.8 million and cash-based incentive compensation increased $1.6 million.

BOK Financial agreed to pay a $19 million settlement to fully and finally resolve litigation and avoid any further expense and distraction of three class action lawsuits respecting the manner in which certain charges post to consumer demand deposit accounts. A $5.0 million charge was recorded in the fourth quarter of 2011 to fully accrue for the settlement. The settlement is subject to negotiation of a definitive agreement and final court approval.

Credit Quality

Nonperforming assets decreased $31 million during the fourth quarter to $357 million or 3.13% of outstanding and repossessed assets at December 31, 2011. Nonaccruing loans decreased $28 million and real estate and other repossessed assets decreased $5.2 million. Renegotiated residential mortgage loans guaranteed by U.S. government agencies increased $2.4 million.

Nonaccruing loans totaled $201 million or 1.79% of outstanding loans at December 31, 2011 and $229 million or 2.06% of outstanding loans at September 30, 2011. During the fourth quarter of 2011, $23 million of new nonaccruing loans were identified offset by $23 million in payments received, $15 million in charge-offs and $15 million in foreclosures and repossessions .

Nonaccruing commercial loans totaled $69 million or 1.05% of total commercial loans at December 31, 2011, down $15 million since September 30, 2011. Nonaccruing manufacturing sector loans totaled $23 million or 6.57% of total manufacturing sector loans, nonaccruing wholesale/retail sector loans totaled $21 million or 2.20% of total wholesale/retail sector loans and nonaccruing services sector loans totaled $17 million or 0.97% of total services sector loans. Nonaccruing manufacturing sector loans are primarily composed of a single customer relationship in the Oklahoma market totaling $21 million. Nonaccruing wholesale/retail sector loans are primarily composed of a single customer relationship in the Arkansas market totaling $16 million.

Nonaccruing commercial real estate loans totaled $99 million or 4.35% of outstanding commercial real estate loans at December 31, 2011, down $11 million from September 30, 2011. Nonaccruing commercial real estate loans continued to be largely concentrated in land development and residential construction loans with $62 million or 19% of all land development and construction loans nonaccruing at December 31, 2011. Approximately $30 million or 19% of total commercial real estate loans in Colorado are nonaccruing, $26 million or 14% of total commercial real estate loans in Arizona are nonaccruing and $11 million or 3.34% of total commercial real estate loans in New Mexico are nonaccruing. Newly identified nonaccruing commercial real estate loans totaled $6.3 million, offset by $7.8 million of foreclosures, $6.1 million of cash payments received and $3.4 million of charge-offs.

Nonaccruing residential mortgage loans decreased $2.0 million during the fourth quarter of 2011 to $30 million or 1.51% of outstanding residential mortgage loans. Principally all non-guaranteed residential mortgage loans past due 90 days or more are nonaccruing. Residential mortgage loans past due 30 to 89 days and still accruing interest, excluding loans guaranteed by U.S. government agencies, totaled $20 million at December 31, 2011 and $24 million at September 30, 2011.

The combined allowance for credit losses totaled $263 million or 2.33% of outstanding loans and 131% of nonaccruing loans at December 31, 2011. The allowance for loan losses was $253 million and the allowance for off-balance sheet credit losses was $9.3 million. The general trend of net charge-offs has improved from their elevated levels. Total net charge-offs fell from $104 million in 2010 to $38 million in 2011. Quarterly net charge-offs have stabilized. Net loans charged-off against the allowance for loan loss totaled $9.5 million or 0.34% on an annualized basis for the fourth quarter of 2011 compared to $10.2 million or 0.37% on an annualized basis for the third quarter of 2011. Other credit factors also continued to improve. The portion of specifically-analyzed impaired loans for which no allowance is required has grown to 88% of impaired loans. Most economic indicators are stable or improving in our primary markets. After evaluating all credit factors, the Company determined that a $15.0 million negative provision for credit losses was necessary during the fourth quarter of 2011.

Real estate and other repossessed assets totaled $123 million at December 31, 2011 primarily consisting of $41 million of 1-4 family residential properties (including $17 million guaranteed by U.S. government agencies), $39 million of developed commercial real estate properties, $20 million of undeveloped land and $19 million of residential land and land development properties. The distribution of real estate owned and other repossessed assets among various markets included $35 million attributed to Arizona, $30 million attributed to Texas, $15 million attributed to New Mexico, $12 million attributed to Oklahoma, and $11 million attributed to Colorado. Real estate and other repossessed assets decreased by $5.2 million during the fourth quarter. Sales of $30 million and write-downs and net losses of $3.6 million were partially offset by $30 million of additions. Additions included $15 million and sales included $15 million of 1-4 family residential properties guaranteed by U.S. government agencies.

The Company also has off-balance sheet credit risk related to residential mortgage loans sold to U.S. government agencies with full recourse prior to 2008 under various community development programs. These mortgage loans were underwritten to standards approved by the agencies, including full documentation and originated under programs available only for owner-occupied properties. The Company no longer sells residential mortgage loans with recourse other than obligations under standard representations and warranties. The recourse obligation relates to the loan performance for the life of the loan. The Company is obligated to repurchase these loans at the time of foreclosure for the unpaid principal balance plus unpaid interest. The outstanding principal balance of these loans decreased to $259 million at December 31, 2011 from $262 million at September 30, 2011. The loans are primarily to borrowers in our market areas, including $182 million in Oklahoma, $25 million in Arkansas, $16 million in New Mexico, $15 million in Kansas/Missouri and $12 million in Texas. At December 31, 2011, approximately 6% of these loans are nonperforming and 7% were past due 30 to 89 days. A separate accrual for credit risk of $19 million is available to absorb losses on these loans.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $10.2 billion at December 31, 2011, up $560 million over September 30, 2011. The available for sale portfolio consisted primarily of residential mortgage-backed securities, including $9.6 billion fully backed by U.S. government agencies and $419 million privately issued by publicly owned financial institutions. Privately issued mortgage-backed securities included $287 million backed by Jumbo-A residential mortgage loans and $132 million backed by Alt-A residential mortgage loans.

Net unrealized gains on available for sale securities totaled $222 million at December 31, 2011 and $279 million at September 30, 2011. Net unrealized gains on residential mortgage-backed securities issued by U.S. government agencies decreased $43 million to $291 million at December 31, 2011. Net unrealized losses on privately-issued residential mortgage-backed securities totaled $84 million at December 31, 2011 and $67 million at September 30, 2011.

The amortized cost of privately issued residential mortgage-backed securities totaled $503 million at December 31, 2011, down $22 million since September 30, 2011. Approximately $460 million of the privately issued residential mortgage-backed securities were rated below investment grade by at least one nationally-recognized rating agency. Cash received during the fourth quarter reduced the amortized cost of privately issued residential mortgage-backed securities rated below investment grade by $19 million. Amortized cost of these securities was also reduced by $1.7 million for credit-related impairment charges due to additional expected home price depreciation. Net unrealized losses on privately-issued residential mortgage-backed securities rated below investment grade totaled $79 million at December 31, 2011. Net unrealized losses on these same below investment grade securities were $64 million at September 30, 2011.

The Company recognized $7.1 million of net gains on sales of $667 million of available for sale securities in the fourth quarter of 2011 and $16.7 million of net gains on sales of $612 million of available for sale securities in the third quarter of 2011. Securities were sold either because they had reached their expected maximum potential total return or to mitigate exposure to prepayment risk.

The Company also maintains a portfolio of residential mortgage-backed securities issued by U.S. government agencies and interest rate derivative contracts designated as an economic hedge of the changes in the fair value of our mortgage servicing rights. Mortgage interest rates remained low in the fourth quarter 2011, causing prepayment speeds to increase and the value of our mortgage servicing rights to decrease by $5.3 million. This decrease was partially offset by an increase of $343 thousand in the value of securities and interest rate derivative contracts held as an economic hedge.

Loans, Deposits and Capital

Loans

Outstanding loans at December 31, 2011 were $11.3 billion, up $145 million over September 30, 2011. Growth in commercial, commercial real estate and residential mortgage loans was partially offset by a decrease in consumer loans.

Outstanding commercial loan balances increased $96 million over September 30, 2011. Commercial loans increased $145 million in Texas and $51 million in Colorado, partially offset by a $110 million decrease in Oklahoma. Energy sector loans increased $218 million growing in the Texas, Colorado and Oklahoma markets. Healthcare sector loans increased $69 million primarily in the Texas and Oklahoma markets. Service sector loans decreased $112 million and wholesale/retail sector loans decreased $63 million, both primarily due to decreases in loan balances attributed to the Oklahoma and Texas markets. Manufacturing sector loans decreased $20 million, due primarily to a decrease in loan balances attributed to the Oklahoma market, partially offset by growth in loan balances attributed to the Texas market. Unfunded energy loan commitments decreased $185 million during the fourth quarter to $2.0 billion. All other unfunded commercial loan commitments totaled $3.3 billion at December 31, 2011.

Commercial real estate loans increased $20 million over the third quarter of 2011. Loans secured by retail properties increased $64 million and loans secured by industrial facilities increased $52 million, both primarily due to loans attributed to the Texas market. Construction and land development loan balances continued to decline, down $28 million, primarily in the Texas and Arizona markets. Other real estate loans decreased $30 million, loans secured by office buildings decreased $19 million and loans secured by multifamily residential properties decreased by $19 million. Unfunded commercial real estate loan commitments totaled $355 million at December 31, 2011, largely unchanged from September 30, 2011.

Residential mortgage loans increased $59 million over September 30, 2011. Home equity loans increased $43 million. Permanent mortgage loans guaranteed by U.S. government agencies increased $16 million. This increase consists of loans previously sold into Government National Mortgage Association mortgage pools that we have either repurchased or that are eligible to be repurchased by the Company.

Consumer loans decreased $29 million from September 30, 2011 primarily due to continued runoff of indirect automobile loans related to the previously announced decision to curtail that business in favor of a customer-focused direct approach to consumer lending. Approximately $105 million of indirect automobile loans remain outstanding at December 31, 2011.

Deposits

Total deposits increased $324 million over September 30, 2011 to $18.8 billion at December 31, 2011. Demand deposit balances increased $386 million and interest-bearing transaction account balances increased $102 million. Time deposits decreased $172 million. Among the lines of business, commercial deposits increased $293 million and wealth management deposits increased $131 million, partially offset by a $97 million seasonal decrease in consumer deposits. The increase in commercial deposit balances was largely driven by small business, commercial and industrial and energy customers.

Capital

The Company and its subsidiary bank exceeded the regulatory definition of well capitalized at December 31, 2011. The Company’s Tier 1 capital ratio was 13.27% at December 31, 2011 and 13.14% at September 30, 2011. Total capital ratio was 16.49% at December 31, 2011 and 16.54% at September 30, 2011. In addition, the Company’s tangible common equity ratio, a non-GAAP measure, was 9.56% at December 31, 2011 and 9.65% at September 30, 2011. Unrealized securities gains added 46 basis points to the tangible common equity ratio at December 31, 2011. The Company repurchased 69,581 common shares at an average price of $51.44 per share during the fourth quarter through a previously-announced share repurchase program.

About BOK Financial Corporation

BOK Financial is a $25 billion regional financial services company based in Tulsa, Oklahoma. The Company’s stock is publicly traded on NASDAQ under the Global Select market listings (symbol: BOKF). BOK Financial’s holdings include BOKF, NA, BOSC, Inc. and Cavanal Hill Investment Management, Inc. BOKF, NA operates the TransFund electronic funds network and seven banking divisions: Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas and Colorado State Bank and Trust. Through its subsidiaries, the Company provides commercial and consumer banking, investment and trust services, mortgage origination and servicing, and an electronic funds transfer network. For more information, visit www.bokf.com.

The Company will continue to evaluate critical assumptions and estimates, such as the adequacy of the allowance for credit losses and asset impairment as of December 31, 2011 through the date its financial statements are filed with the Securities and Exchange Commission and will adjust amounts reported if necessary.

This news release contains forward-looking statements that are based on management’s beliefs, assumptions, current expectations, estimates and projections about BOK Financial, the financial services industry and the economy generally. Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “plans,” “projects,” variations of such words and similar expressions are intended to identify such forward-looking statements. Management judgments relating to and discussion of the provision and allowance for credit losses involve judgments as to future events and are inherently forward-looking statements. Assessments that BOK Financial’s acquisitions and other growth endeavors will be profitable are necessary statements of belief as to the outcome of future events based in part on information provided by others which BOK Financial has not independently verified. These statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions which are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what is expected, implied or forecasted in such forward-looking statements. Internal and external factors that might cause such a difference include, but are not limited to (1) the ability to fully realize expected cost savings from mergers within the expected time frames, (2) the ability of other companies on which BOK Financial relies to provide goods and services in a timely and accurate manner, (3) changes in interest rates and interest rate relationships, (4) demand for products and services, (5) the degree of competition by traditional and nontraditional competitors, (6) changes in banking regulations, tax laws, prices, levies and assessments, (7) the impact of technological advances and (8) trends in consumer behavior as well as their ability to repay loans. BOK Financial and its affiliates undertake no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events, or otherwise.

BALANCE SHEETS
BOK FINANCIAL CORPORATION
(In thousands)
   
December 31, September 30, December 31,
2011 2011   2010  
(Unaudited) (Unaudited) (Unaudited)
ASSETS
Cash and due from banks $ 976,191 $ 953,688 $ 1,247,946
Funds sold and resell agreements 10,174 19,193 21,458
Trading securities 76,800 109,659 55,467
Investment securities 439,236 452,652 339,553
Available for sale securities 10,179,365 9,619,631 9,235,622
Fair value option securities 651,226 672,191 428,021
Residential mortgage loans held for sale 188,125 256,397 263,413
Loans:
Commercial 6,571,454 6,475,689 5,933,996
Commercial real estate 2,279,909 2,259,902 2,277,350
Residential mortgage 1,970,461 1,911,896 1,828,248
Consumer   447,919       477,082       603,442  
Total loans 11,269,743 11,124,569 10,643,036
Less allowance for loan losses   (253,481 )     (271,456 )     (292,971 )
Loans, net of allowance 11,016,262 10,853,113 10,350,065
Premises and equipment, net 262,735 264,325 265,465
Receivables 123,257 111,427 148,940
Goodwill 335,601 335,601 335,601
Intangible assets, net 10,219 11,115 13,803
Mortgage servicing rights, net 86,783 87,948 115,723
Real estate and other repossessed assets 122,753 127,943 141,394
Bankers' acceptances 1,881 211 1,222
Derivative contracts 293,859 370,616 270,445
Cash surrender value of bank-owned life insurance 263,318 260,506 255,442
Receivable on unsettled securities sales 75,151 172,641 135,059
Other assets   381,010       387,408       316,964  
TOTAL ASSETS $ 25,493,946     $ 25,066,265     $ 23,941,603  
 
 
LIABILITIES AND EQUITY
Deposits:
Demand $ 5,799,785 $ 5,414,284 $ 4,220,764
Interest-bearing transaction 9,354,456 9,252,837 9,255,362
Savings 226,357 217,431 193,767
Time   3,381,982       3,554,470       3,509,168  
Total deposits 18,762,580 18,439,022 17,179,061
Funds purchased 1,063,318 1,318,668 1,025,018
Repurchase agreements 1,233,064 1,206,793 1,258,762
Other borrowings 74,485 80,276 833,578
Subordinated debentures 398,881 398,834 398,701
Accrued interest, taxes, and expense 149,508 155,188 134,107
Bankers' acceptances 1,881 211 1,222
Due on unsettled securities purchases 653,371 218,097 160,425
Derivative contracts 236,522 341,822 215,420
Other liabilities   133,684       139,804       191,431  
TOTAL LIABILITIES 22,707,294 22,298,715 21,397,725
Shareholders' equity:
Capital, surplus and retained earnings 2,621,489 2,569,021 2,413,887
Accumulated other comprehensive income   128,979       163,571       107,839  
TOTAL SHAREHOLDERS' EQUITY 2,750,468 2,732,592 2,521,726
Non-controlling interest   36,184       34,958       22,152  
TOTAL EQUITY   2,786,652       2,767,550       2,543,878  
TOTAL LIABILITIES AND EQUITY $ 25,493,946     $ 25,066,265     $ 23,941,603  
AVERAGE BALANCE SHEETS - UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
  Quarter Ended
December 31,   September 30,   June 30,   March 31,   December 31,
  2011     2011     2011     2011     2010  
 
ASSETS
Funds sold and resell agreements $ 12,035 $ 12,344 $ 8,814 $ 20,680 $ 21,128
Trading securities 97,972 88,576 80,113 60,768 74,084
Investment securities 443,326 329,627 357,698 339,246 341,941
Available for sale securities 9,914,523 9,656,592 9,543,482 9,376,674 9,581,708
Fair value option securities 660,025 594,629 518,073 397,093 474,731
Residential mortgage loans held for sale 201,242 156,621 134,876 125,494 282,734
Loans:
Commercial 6,502,981 6,329,135 6,145,918 6,084,765 5,946,960
Commercial real estate 2,256,153 2,208,757 2,172,166 2,236,400 2,282,779
Residential mortgage 1,949,929 1,868,627 1,858,117 1,788,049 1,832,624
Consumer   443,252       466,285       504,553     544,542       604,830  
Total loans 11,152,315 10,872,805 10,680,755 10,653,756 10,667,193
Less allowance for loan losses   (266,473 )     (285,570 )     (291,308 )     (295,014 )     (307,223 )
Total loans, net   10,885,842       10,587,235       10,389,447       10,358,742       10,359,970  
Total earning assets 22,214,965 21,425,624 21,032,503 20,678,697 21,136,296
Cash and due from banks 1,234,312 1,045,450 764,806 1,095,910 1,092,979
Cash surrender value of bank-owned life insurance 261,496 260,505 259,337 256,456 255,530
Derivative contracts 247,411 228,466 253,163 211,895 249,861
Other assets   1,679,256       1,661,693       1,669,426       1,496,816       1,548,285  
TOTAL ASSETS $ 25,637,440     $ 24,621,738     $ 23,979,235     $ 23,739,774     $ 24,282,951  
 
LIABILITIES AND EQUITY
Deposits:
Demand $ 5,588,596 $ 5,086,538 $ 4,554,000 $ 4,265,657 $ 4,171,595
Interest-bearing transaction 9,276,608 9,310,046 9,184,141 9,632,595 9,325,573
Savings 220,236 214,979 210,707 203,638 191,235
Time   3,485,059       3,617,731       3,632,130       3,616,991       3,602,150  
Total deposits 18,570,499 18,229,294 17,580,978 17,718,881 17,290,553
Funds purchased 1,197,154 994,099 1,168,670 820,969 775,620
Repurchase agreements 1,189,861 1,128,275 1,004,217 1,062,359 1,201,760
Other borrowings 88,489 128,288 187,441 144,987 829,756
Subordinated debentures 398,858 398,812 398,767 398,723 398,680
Derivative contracts 180,623 187,515 175,199 144,492 197,330
Other liabilities   1,241,469       817,049       813,074       884,566       1,053,695  
TOTAL LIABILITIES 22,866,953 21,883,332 21,328,346 21,174,977 21,747,394
Total equity   2,770,487       2,738,406       2,650,889       2,564,797       2,535,557  
TOTAL LIABILITIES AND EQUITY $ 25,637,440     $ 24,621,738     $ 23,979,235     $ 23,739,774     $ 24,282,951  
STATEMENTS OF EARNINGS - UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands, except per share data)
Quarter Ended   Year Ended
December 31, December 31,
2011   2010 2011   2010
 
 
Interest revenue $ 198,040 $ 197,148 $ 811,595 $ 851,082
Interest expense   26,570       33,498       120,101       142,030  
Net interest revenue 171,470 163,650 691,494 709,052
Provision for (reduction of) allowances for credit losses   (15,000 )     6,999       (6,050 )     105,139  
Net interest revenue after
provision for credit losses 186,470 156,651 697,544 603,913
 
Other operating revenue
Brokerage and trading revenue 25,629 28,610 104,181 101,471
Transaction card revenue 25,960 29,500 116,757 112,302
Trust fees and commissions 17,865 18,145 73,290 68,976
Deposit service charges and fees 24,921 23,732 95,872 103,611
Mortgage banking revenue 25,438 25,158 91,643 87,600
Bank-owned life insurance 2,784 3,182 11,280 12,066
Other revenue   9,189       7,648       35,620       30,368  
Total fees and commissions 131,786 135,975 528,643 516,394
Gain (loss) on other assets, net 1,897 15 5,885 (1,161 )
Gain (loss) on derivatives, net (174 ) (7,286 ) 2,686 4,271
Gain (loss) on fair value option securities, net 222 (11,117 ) 24,413 7,331
Gain on available for sale securities, net 7,080 953 34,144 21,882
Total other-than-temporary impairment losses (1,037 ) (4,768 ) (10,578 ) (29,960 )
Portion of loss recognized in (reclassified from)
other comprehensive income   (1,747 )     (1,859 )     (12,929 )     2,151  
Net impairment losses recognized in earnings   (2,784 )     (6,627 )     (23,507 )     (27,809 )
Total other operating revenue 138,027 111,913 572,264 520,908
 
Other operating expense
Personnel 121,129 106,770 429,986 401,864
Business promotion 5,868 4,377 20,549 17,726
Contribution to BOKF Charitable Foundation - - 4,000 -
Professional fees and services 7,664 9,527 28,798 30,217
Net occupancy and equipment 16,826 16,331 64,611 63,969
Insurance 3,636 6,139 16,799 24,320
Data processing and communications 26,599 23,902 97,976 87,752
Printing, postage and supplies 3,637 3,170 14,085 13,665
Net losses and operating expenses
of repossessed assets 6,180 6,966 23,715 34,483
Amortization of intangible assets 895 1,365 3,583 5,336
Mortgage banking costs 10,154 11,999 34,942 40,739
Change in fair value of mortgage servicing rights 5,261 (25,111 ) 40,447 (3,661 )
Visa retrospective responsibility obligation - (1,103 ) - -
Other expense   11,348       14,029       41,982       36,760  
Total other operating expense 219,197 178,361 821,473 753,170
 
Net income before taxes 105,300 90,203 448,335 371,651
Federal and state income taxes   37,396       31,097       158,511       123,357  
 
Net income 67,904 59,106 289,824 248,294
Net income attributable to non-controlling interest   911       274       3,949       1,540  
 
Net income attributable to BOK Financial Corporation $ 66,993     $ 58,832     $ 285,875     $ 246,754  
 
Average shares outstanding:
Basic 67,526,009 67,685,434 67,787,676 67,627,735
Diluted 67,774,721 67,888,950 68,038,763 67,831,734
 
Net income per share:
Basic $ 0.98 $ 0.86 $ 4.18 $ 3.63
Diluted $ 0.98 $ 0.86 $ 4.17 $ 3.61
FINANCIAL HIGHLIGHTS - UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands, except ratio and share data)
  Quarter Ended
December 31,   September 30, June 30,   March 31,   December 31,
2011 2011 2011 2011 2010
Capital:
Period-end shareholders' equity $ 2,750,468 $ 2,732,592 $ 2,667,717 $ 2,576,135 $ 2,521,726
Risk weighted assets $ 17,291,105 $ 17,106,533 $ 16,452,305 $ 16,416,387 $ 16,368,976
Risk-based capital ratios:
Tier 1 13.27% 13.14% 13.30% 12.97% 12.69%
Total capital 16.49% 16.54% 16.80% 16.48% 16.20%
Leverage ratio 9.15% 9.37% 9.29% 9.13% 8.74%
Tangible common equity ratio (A) 9.56% 9.65% 9.71% 9.54% 9.21%
Tier 1 common equity ratio (B) 13.06% 12.94% 13.15% 12.84% 12.55%
 
Common stock:
Book value per share $ 40.36 $ 40.18 $ 38.97 $ 37.64 $ 36.97
Market value per share:
High $ 55.90 $ 55.81 $ 54.72 $ 56.32 $ 54.86
Low $ 45.68 $ 44.00 $ 50.13 $ 50.37 $ 44.83
Cash dividends paid $ 22,451 $ 18,836 $ 18,823 $ 17,102 $ 17,025
Dividend payout ratio 33.51% 22.13% 27.28% 26.40% 28.94%
Shares outstanding, net 68,153,044 68,006,390 68,462,869 68,438,422 68,207,689
Stock buy-back program:
Shares repurchased 69,581 492,444 - - -
Amount $ 3,579   $ 22,866   $ -   $ -   $ -
Average price per share $ 51.44   $ 46.43   $ -   $ -   $ -
 
Performance ratios (quarter annualized):
Return on average assets 1.04% 1.37% 1.15% 1.11% 0.96%
Return on average equity 9.59% 12.33% 10.44% 10.24% 9.21%
Net interest margin 3.20% 3.34% 3.40% 3.47% 3.21%
Efficiency ratio 69.73% 60.13% 62.23% 61.15% 65.60%
 
Other data:
Trust assets $ 34,177,331 $ 31,750,636 $ 33,075,456 $ 32,013,487 $ 32,751,501
Mortgage servicing portfolio $ 11,300,986 $ 11,249,503 $ 11,283,442 $ 11,202,626 $ 11,263,130
Mortgage loans funded for sale $ 753,215 $ 637,127 $ 483,808 $ 419,684 $ 821,481
Mortgage loan refinances to total fundings 66% 54% 36% 49% 72%
Tax equivalent adjustment $ 2,274 $ 2,233 $ 2,261 $ 2,321 $ 2,263
Net unrealized gain on available for sale securities $ 222,160 $ 278,616 $ 263,199 $ 201,340 $ 200,203
 
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts $ 121 $ 4,048 $ 1,224 $ (2,419) $ (7,392)
Gain (loss) on mortgage trading securities 222   17,788   9,921   (3,518)   (11,117)
Gain (loss) on economic hedge of mortgage servicing rights 343 21,836 11,145 (5,937) (18,509)
Gain (loss) on changes in fair value of mortgage servicing rights (5,261)   (24,822)   (13,493)   3,129   25,111
Gain (loss) on changes in fair value of mortgage servicing

rights, net of economic hedges
$ (4,918)   $ (2,986)   $ (2,348)   $ (2,808)   $ 6,602
Net interest revenue on mortgage trading securities $ 4,436   $ 5,036   $ 5,121   $ 3,058   $ 4,232
 
Reconciliation of non-GAAP measures:
(A) Tangible common equity ratio:
Total shareholders' equity $ 2,750,468 $ 2,732,592 $ 2,667,717 $ 2,576,135 $ 2,521,726
Less: Goodwill and intangible assets, net (345,820)   (346,716)   (347,611)   (348,507)   (349,404)
Tangible common equity $ 2,404,648   $ 2,385,876   $ 2,320,106   $ 2,227,628   $ 2,172,322
 
Total assets $ 25,493,946 $ 25,066,265 $ 24,238,182 $ 23,701,023 $ 23,941,603
Less: Goodwill and intangible assets, net (345,820)   (346,716)   (347,611)   (348,507)   (349,404)
  $ 25,148,126   $ 24,719,549   $ 23,890,571   $ 23,352,516   $ 23,592,199
Tangible common equity ratio 9.56% 9.65% 9.71% 9.54% 9.21%
 
(B) Tier 1 common equity ratio:
Tier 1 capital $ 2,295,061 $ 2,248,743 $ 2,188,199 $ 2,129,998 $ 2,076,525
Less: Non-controlling interest (36,184)   (34,958)   (24,457)   (21,555)   (22,152)
Tier 1 common equity $ 2,258,877   $ 2,213,785   $ 2,163,742   $ 2,108,443   $ 2,054,373
 
Risk weighted assets $ 17,291,105 $ 17,106,533 $ 16,452,305 $ 16,416,387 $ 16,368,976
 
Tier 1 common equity ratio 13.06% 12.94% 13.15% 12.84% 12.55%
QUARTERLY EARNINGS TRENDS - UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands, except ratio and per share data)
Quarter Ended
December 31,   September 30,   June 30,   March 31,   December 31,
2011 2011 2011 2011 2010
 
Interest revenue $ 198,040 $ 205,749 $ 205,717 $ 202,089 $ 197,148
Interest expense   26,570       30,365       31,716       31,450       33,498  
Net interest revenue 171,470 175,384 174,001 170,639 163,650
Provision for (reduction of) allowances for credit losses   (15,000 )     -       2,700       6,250       6,999  
Net interest revenue after
provision for credit losses 186,470 175,384 171,301 164,389 156,651
 
Other operating revenue
Brokerage and trading revenue 25,629 29,451 23,725 25,376 28,610
Transaction card revenue 25,960 31,328 31,024 28,445 29,500
Trust fees and commissions 17,865 17,853 19,150 18,422 18,145
Deposit service charges and fees 24,921 24,614 23,857 22,480 23,732
Mortgage banking revenue 25,438 29,493 19,356 17,356 25,158
Bank-owned life insurance 2,784 2,761 2,872 2,863 3,182
Other revenue   9,189       10,535       7,842       8,332       7,648  
Total fees and commissions 131,786 146,035 127,826 123,274 135,975
Gain (loss) on other assets, net 1,897 712 3,344 (68 ) 15
Gain (loss) on derivatives, net (174 ) 4,048 1,225 (2,413 ) (7,286 )
Gain (loss) on fair value option securities, net 222 17,788 9,921 (3,518 ) (11,117 )
Gain on available for sale securities, net 7,080 16,694 5,468 4,902 953
Total other-than-temporary impairment losses (1,037 ) (9,467 ) (74 ) - (4,768 )
Portion of loss recognized in (reclassified from)
other comprehensive income   (1,747 )     (1,833 )     (4,750 )     (4,599 )     (1,859 )
Net impairment losses recognized in earnings   (2,784 )     (11,300 )     (4,824 )     (4,599 )     (6,627 )
Total other operating revenue 138,027 173,977 142,960 117,578 111,913
 
Other operating expense
Personnel 121,129 103,260 105,603 99,994 106,770
Business promotion 5,868 5,280 4,777 4,624 4,377
Contribution to BOKF Charitable Foundation - 4,000 - - -
Professional fees and services 7,664 7,418 6,258 7,458 9,527
Net occupancy and equipment 16,826 16,627 15,554 15,604 16,331
Insurance 3,636 2,206 4,771 6,186 6,139
Data processing and communications 26,599 24,446 24,428 22,503 23,902
Printing, postage and supplies 3,637 3,780 3,586 3,082 3,170
Net losses and operating expenses
of repossessed assets 6,180 5,939 5,859 6,015 6,966
Amortization of intangible assets 895 896 896 896 1,365
Mortgage banking costs 10,154 9,349 8,968 6,471 11,999
Change in fair value of mortgage servicing rights 5,261 24,822 13,493 (3,129 ) (25,111 )
Visa retrospective responsibility obligation - - - - (1,103 )
Other expense   11,348       12,873       9,016       8,745       14,029  
Total other operating expense 219,197 220,896 203,209 178,449 178,361
 
Net income before taxes 105,300 128,465 111,052 103,518 90,203
Federal and state income taxes   37,396       43,006       39,357       38,752       31,097  
 
Net income 67,904 85,459 71,695 64,766 59,106
Net income (loss) attributable to non-controlling interest   911       358       2,688       (8 )     274  
 
Net income attributable to BOK Financial Corporation $ 66,993     $ 85,101     $ 69,007     $ 64,774     $ 58,832  
 
Average shares outstanding:
Basic 67,526,009 67,827,591 67,898,483 67,901,722 67,685,434
Diluted 67,774,721 68,037,419 68,169,485 68,176,527 67,888,950
 
Net income per share:
Basic $ 0.98 $ 1.24 $ 1.01 $ 0.95 $ 0.86
Diluted $ 0.98 $ 1.24 $ 1.00 $ 0.94 $ 0.86
LOANS BY PRINCIPAL MARKET AREA - UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
  Quarter Ended
December 31, September 30, June 30,   March 31,   December 31,
2011 2011 2011 2011   2010
 
Oklahoma:
Commercial $ 2,697,623 $ 2,807,979 $ 2,594,502 $ 2,618,045 $ 2,581,082
Commercial real estate 600,703 624,990 619,201 661,254 726,409
Residential mortgage 1,429,069 1,366,953 1,309,110 1,219,237 1,253,466
Consumer   236,056     248,851     267,550     291,412     336,492
Total Oklahoma   4,963,451     5,048,773     4,790,363     4,789,948     4,897,449
 
Texas:
Commercial 2,214,462 2,069,117 2,003,847 1,916,270 1,888,635
Commercial real estate 830,831 741,984 711,906 687,817 686,956
Residential mortgage 266,050 273,025 282,934 283,925 297,027
Consumer   126,280     133,286     140,044     141,199     146,986
Total Texas   3,437,623     3,217,412     3,138,731     3,029,211     3,019,604
 
New Mexico:
Commercial 252,367 269,690 280,306 262,597 279,432
Commercial real estate 316,853 314,701 311,565 326,104 314,781
Residential mortgage 100,581 93,444 95,021 90,466 88,392
Consumer   18,519     18,142     18,536     19,242     19,583
Total New Mexico   688,320     695,977     705,428     698,409     702,188
 
Arkansas:
Commercial 86,111 89,262 74,677 75,889 84,775
Commercial real estate 127,687 124,393 121,286 124,875 116,989
Residential mortgage 14,511 14,428 13,939 14,114 13,155
Consumer   36,061     44,163     52,439     61,746     72,787
Total Arkansas   264,370     272,246     262,341     276,624     287,706
 
Colorado:
Commercial 559,127 508,222 515,829 514,100 470,500
Commercial real estate 153,855 188,659 167,414 172,416 197,180
Residential mortgage 64,437 65,327 66,985 67,975 72,310
Consumer   21,651     22,024     19,507     20,145     21,409
Total Colorado   799,070     784,232     769,735     774,636     761,399
 
Arizona:
Commercial 288,536 283,867 291,515 251,390 231,117
Commercial real estate 192,731 222,249 205,269 213,442 201,018
Residential mortgage 82,202 85,243 86,415 89,384 89,245
Consumer   5,505     6,625     6,772     5,266     3,445
Total Arizona   568,974     597,984     589,971     559,482     524,825
 
Kansas / Missouri:
Commercial 473,228 447,552 417,920 409,966 398,455
Commercial real estate 57,249 42,926 47,074 37,074 34,017
Residential mortgage 13,611 13,476 13,593 12,220 14,653
Consumer   3,847     3,991     2,388     2,265     2,740
Total Kansas / Missouri   547,935     507,945     480,975     461,525     449,865
 
TOTAL BOK FINANCIAL $ 11,269,743   $ 11,124,569   $ 10,737,544   $ 10,589,835   $ 10,643,036
DEPOSITS BY PRINCIPAL MARKET AREA - UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
  Quarter Ended
December 31,   September 30, June 30,   March 31,   December 31,
  2011   2011   2011   2011   2010
 
Oklahoma:
Demand $ 3,223,201 $ 2,953,410 $ 2,486,671 $ 2,420,210 $ 2,271,375
Interest-bearing:
Transaction 6,050,986 6,038,770 5,916,784 6,068,304 6,061,626
Savings 126,763 122,829 120,278 120,020 106,411
Time   1,450,571     1,489,486     1,462,137     1,465,506     1,373,307
Total interest-bearing   7,628,320     7,651,085     7,499,199     7,653,830     7,541,344
Total Oklahoma   10,851,521     10,604,495     9,985,870     10,074,040     9,812,719
 
Texas:
Demand 1,808,491 1,710,315 1,528,772 1,405,892 1,389,876
Interest-bearing:
Transaction 1,940,819 1,820,116 1,741,176 1,977,850 1,791,810
Savings 45,872 42,272 42,185 40,313 36,429
Time   867,664     938,200     992,366     1,015,754     966,116
Total interest-bearing   2,854,355     2,800,588     2,775,727     3,033,917     2,794,355
Total Texas   4,662,846     4,510,903     4,304,499     4,439,809     4,184,231
 
New Mexico:
Demand 319,269 325,612 299,305 282,708 270,916
Interest-bearing:
Transaction 491,068 480,816 483,026 498,355 530,244
Savings 27,487 26,127 24,613 24,455 28,342
Time   410,722     431,436     449,618     453,580     450,177
Total interest-bearing   929,277     938,379     957,257     976,390     1,008,763
Total New Mexico   1,248,546     1,263,991     1,256,562     1,259,098     1,279,679
 
Arkansas:
Demand 18,513 21,809 17,452 15,144 15,310
Interest-bearing:
Transaction 131,181 181,486 138,954 130,613 129,580
Savings 1,727 1,735 1,673 1,514 1,266
Time   61,329     74,163     82,112     94,889     100,998
Total interest-bearing   194,237     257,384     222,739     227,016     231,844
Total Arkansas   212,750     279,193     240,191     242,160     247,154
 
Colorado:
Demand 272,565 217,394 196,915 197,579 157,742
Interest-bearing:
Transaction 511,993 520,743 509,738 528,948 522,207
Savings 22,771 22,599 21,406 21,655 20,310
Time   523,969     547,481     563,642     546,586     502,889
Total interest-bearing   1,058,733     1,090,823     1,094,786     1,097,189     1,045,406
Total Colorado   1,331,298     1,308,217     1,291,701     1,294,768     1,203,148
 
Arizona:
Demand 106,741 138,971 150,194 106,880 74,887
Interest-bearing:
Transaction 104,961 101,933 107,961 102,089 95,890
Savings 1,192 1,366 1,364 984 809
Time   37,641     40,007     44,619     50,060     52,227
Total interest-bearing   143,794     143,306     153,944     153,133     148,926
Total Arizona   250,535     282,277     304,138     260,013     223,813
 
Kansas / Missouri:
Demand 51,004 46,773 46,668 28,774 40,658
Interest-bearing:
Transaction 123,449 108,973 115,684 222,705 124,005
Savings 545 503 358 323 200
Time   30,086     33,697     40,206     51,236     63,454
Total interest-bearing   154,080     143,173     156,248     274,264     187,659
Total Kansas / Missouri   205,084     189,946     202,916     303,038     228,317
 
TOTAL BOK FINANCIAL $ 18,762,580   $ 18,439,022   $ 17,585,877   $ 17,872,926   $ 17,179,061
NET INTEREST MARGIN TREND - UNAUDITED
BOK FINANCIAL CORPORATION
  Quarter Ended
December 31,   September 30,   June 30,   March 31,   December 31,
2011 2011 2011 2011 2010
TAX-EQUIVALENT ASSETS YIELDS
Funds sold and resell agreements 0.10 % 0.16 % 0.14 % 0.08 % 0.13 %
Trading securities 2.79 % 2.85 % 2.92 % 3.84 % 4.06 %
Investment securities:
Taxable (A) 5.91 % 5.63 % 6.13 % 6.15 % 5.88 %
Tax-exempt (A) 4.81 % 4.94 % 4.82 %   4.88 %   4.77 %
Total investment securities (A) 5.59 % 5.35 % 5.49 %   5.46 %   5.28 %
Available for sale securities:
Taxable (A) 2.37 % 2.82 % 3.02 % 3.15 % 2.61 %
Tax-exempt (A) 5.14 % 4.92 %   5.12 %   5.68 %   5.41 %
Total available for sale securities (A) 2.39 % 2.83 %   3.04 %   3.17 %   2.63 %
Fair value option securities 2.98 % 3.66 % 4.42 % 3.74 % 3.43 %
Residential mortgage loans held for sale 4.01 % 4.09 % 4.48 % 4.33 % 3.85 %
Loans 4.65 % 4.71 % 4.69 % 4.75 % 4.76 %
Less allowance for loan losses -   -     -     -     -  
Loans, net of allowance 4.76 % 4.84 % 4.82 % 4.89 % 4.90 %
Total tax-equivalent yield on earning assets (A) 3.69 % 3.91 % 4.01 % 4.10 % 3.86 %
COST OF INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest-bearing transaction 0.18 % 0.23 % 0.27 % 0.32 % 0.37 %
Savings 0.26 % 0.34 % 0.39 % 0.37 % 0.35 %
Time 1.70 % 1.84 %   1.86 %   1.82 %   1.78 %
Total interest-bearing deposits 0.59 % 0.68 % 0.71 % 0.72 % 0.76 %
Funds purchased 0.06 % 0.05 % 0.09 % 0.16 % 0.25 %
Repurchase agreements 0.13 % 0.17 % 0.20 % 0.40 % 0.49 %
Other borrowings 4.75 % 5.26 % 4.76 % 1.31 % 0.37 %
Subordinated debt 5.61 % 5.60 %   5.57 %   5.67 %   5.64 %
Total cost of interest-bearing liabilities 0.66 % 0.76 %   0.81 %   0.80 %   0.81 %
Tax-equivalent net interest revenue spread 3.03 % 3.15 % 3.20 % 3.30 % 3.05 %
Effect of noninterest-bearing funding sources and other 0.17 % 0.19 %   0.20 %   0.17 %   0.16 %
Tax-equivalent net interest margin 3.20 % 3.34 %   3.40 %   3.47 %   3.21 %
 
(A) Yield calculations exclude security trades that have been recorded on trade date with no corresponding interest income.
CREDIT QUALITY INDICATORS
BOK FINANCIAL CORPORATION
(In thousands, except ratios)   Quarter Ended

December 31,
  September 30,   June 30,   March 31,   December 31,
2011 2011 2011 2011 2010
 
Nonperforming assets:
Nonaccruing loans:
Commercial $ 68,811 $ 83,736 $ 53,365 $ 57,449 $ 38,455
Commercial real estate 99,193 110,048 110,363 125,504 150,366
Residential mortgage 29,767 31,731 31,693 37,824 37,426
Consumer   3,515       3,960       4,749       5,185       4,567  
Total nonaccruing loans 201,286 229,475 200,170 225,962 230,814
Renegotiated loans (A) 32,893 30,477 22,261 21,705 22,261
Real estate and other repossessed assets   122,753       127,943       129,026       131,420       141,394  
Total nonperforming assets $ 356,932     $ 387,895     $ 351,457     $ 379,087     $ 394,469  
 
Nonaccruing loans by principal market:
Oklahoma $ 65,261 $ 73,794 $ 41,411 $ 49,585 $ 60,805
Texas 28,083 29,783 32,385 34,404 33,157
New Mexico 15,297 17,242 17,244 17,510 19,283
Arkansas 23,450 26,831 24,842 29,769 7,914
Colorado 33,522 36,854 37,472 40,629 49,416
Arizona 35,673 44,929 43,307 54,065 60,239
Kansas / Missouri   -       42       3,509       -       -  
Total nonaccruing loans $ 201,286     $ 229,475     $ 200,170     $ 225,962     $ 230,814  
 
Nonaccruing loans by loan portfolio sector:
Commercial:
Energy $ 336 $ 3,900 $ 345 $ 415 $ 465
Manufacturing 23,051 27,691 4,366 4,545 2,116
Wholesale / retail 21,180 27,088 25,138 30,411 8,486
Integrated food services - - - 6 13
Services 16,968 18,181 16,254 15,720 19,262
Healthcare 5,486 5,715 5,962 2,574 3,534
Other commercial and industrial   1,790       1,161       1,300       3,778       4,579  
Total commercial   68,811       83,736       53,365       57,449       38,455  
Commercial real estate:
Construction and land development 61,874 72,207 76,265 90,707 99,579
Retail 6,863 6,492 4,642 5,276 4,978
Office 11,457 11,967 11,473 14,628 19,654
Multifamily 3,513 4,036 4,717 1,900 6,725
Industrial - - - - 4,087
Other commercial real estate   15,486       15,346       13,266       12,993       15,343  
Total commercial real estate   99,193       110,048       110,363       125,504       150,366  
Residential mortgage:
Permanent mortgage 25,366 27,486 27,991 33,466 32,111
Home equity   4,401       4,245       3,702       4,358       5,315  
Total residential mortgage   29,767       31,731       31,693       37,824       37,426  
Consumer   3,515       3,960       4,749       5,185       4,567  
Total nonaccruing loans $ 201,286     $ 229,475     $ 200,170     $ 225,962     $ 230,814  
 
Performing loans 90 days past due (B) $ 2,498 $ 1,401 $ 2,341 $ 8,043 $ 7,966
 
Gross charge-offs $ 14,771 $ 14,023 $ 12,774 $ 15,232 $ 20,152
Recoveries   5,311       3,869       4,256       4,914       5,939  

Net charge-offs
$ 9,460     $ 10,154     $ 8,518     $ 10,318     $ 14,213  
 
Provision for (reduction of) allowances for credit losses $ (15,000 ) $ - $ 2,700 $ 6,250 $ 6,999
 
Allowance for loan losses to period end loans 2.25 % 2.44 % 2.67 % 2.73 % 2.75 %
Combined allowance for credit losses to period end loans 2.33 % 2.58 % 2.77 % 2.86 % 2.89 %

Nonperforming assets to period end loans and repossessed assets

 
3.13 % 3.45 % 3.23 % 3.54 % 3.66 %
Net charge-offs (annualized) to average loans 0.34 % 0.37 % 0.32 % 0.39 % 0.53 %
Allowance for loan losses to nonaccruing loans 125.93 % 118.29 % 143.18 % 128.14 % 126.93 %
Combined allowance for credit losses to nonaccruing loans 130.53 % 125.16 % 148.55 % 134.17 % 133.11 %
 

(A) includes residential mortgage loans guaranteed by agencies of the U.S. government. These loans have been modified to extend payment terms and/or reduce interest rates to current market.
$ 28,974 $ 26,670 $ 18,716 $ 18,304 $ 18,551
 

(B) Excludes residential mortgage loans guaranteed agencies of the U.S. government.

Copyright Business Wire 2010

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