BOK Financial Reports Quarterly Earnings Of $80 Million

BOK Financial Corporation reported net income of $79.9 million or $1.16 per diluted share for the second quarter of 2013. Net income was $88.0 million or $1.28 per diluted share for the first quarter of 2013 and $97.6 million or $1.43 per diluted share for the second quarter of 2012. Net income for the second quarter of 2012 included $14.5 million or $0.21 per diluted share from a gain on the sale of common stock received in settlement of a defaulted loan and a negative provision for credit losses.

Net income for the six months ended June 30, 2013 totaled $167.9 million or $2.44 per diluted share compared to $181.2 million or $2.65 per diluted share for the six months ended June 30, 2012.

"Commercial loan growth and mortgage loan production volume both continued to be strong during the quarter. Outstanding commercial loan balances were up $290 million and mortgage loan production grew $240 million," said President and CEO Stan Lybarger. "Fee-based revenues grew $2.8 million over the first quarter, despite the impact of higher interest rates in the second quarter. We estimate that fair value adjustments to mortgage loan commitments and trading securities were reduced by $6 million from the market's reaction to statements that the Federal Reserve may curtail its bond buying program as economic indicators strengthen."

Highlights of second quarter of 2013 included:
  • Net interest revenue totaled $167.2 million for the second quarter of 2013 compared to $170.4 million for the first quarter of 2013. Net interest margin was 2.81% for the second quarter of 2013 and 2.92% for the first quarter of 2013. The yield on the available for sale securities portfolio decreased 16 basis points.
  • Fees and commissions revenue totaled $160.9 million, up $2.8 million over the first quarter of 2013. Trust fees and commissions, transaction card revenues, brokerage and trading revenues and deposit service charges and fees all increased over the previous quarter due largely to transaction volume. Mortgage banking revenue decreased due to lower gain on sale margins.
  • Operating expenses, excluding changes in the fair value of mortgage servicing rights, totaled $210.9 million, up $6.9 million or 3% over the previous quarter. Personnel expense increased $2.5 million. Non-personnel expense increased $4.5 million.
  • No provision for credit losses was recorded in the second quarter of 2013 compared to an $8.0 million negative provision in the previous quarter. Net charge-offs in the second quarter of 2013 totaled $2.3 million or 0.08% of average loans on an annualized basis compared to $2.4 million or 0.08% of average loans on an annualized basis in the first quarter.
  • The combined allowance for credit losses totaled $205 million or 1.65% of outstanding loans at June 30, 2013 compared to $207 million or 1.71% of outstanding loans at March 31, 2013. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $200 million or 1.62% of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at June 30, 2013 and $207 million or 1.73% of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at March 31, 2013.
  • Outstanding loan balances were $12.4 billion at June 30, 2013, up $347 million over March 31, 2013. Commercial loan balances grew by $290 million during the second quarter. Commercial real estate loans increased by $32 million and residential mortgage loans increased by $27 million. Consumer loans were largely unchanged compared to March 31, 2013.
  • Period end deposits totaled $19.5 billion at June 30, 2013 compared to $19.9 billion at March 31, 2013. Demand deposit account balances increased $244 million during the second quarter. Interest-bearing transaction accounts decreased $476 million and time deposits decreased $132 million.
  • Tangible common equity ratio was 9.38% at June 30, 2013 and 9.70% at March 31, 2013. 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 13.37% at June 30, 2013 and 13.35% at March 31, 2013.
  • The Company paid a regular quarterly cash dividend of $26 million or $0.38 per common share during the second quarter of 2013. On July 30, 2013, the board of directors approved a quarterly cash dividend of $0.38 per common share payable on or about August 30, 2013 to shareholders of record as of August 16, 2013.

Net Interest Revenue

Net interest revenue decreased $3.2 million compared to the first quarter of 2013. Net interest margin was 2.81% for the second quarter of 2013 compared to 2.92% for the first quarter of 2013.

The yield on average earning assets decreased 13 basis points compared to the prior quarter to 3.11%. The yield on the available for sale securities portfolio decreased 16 basis points to 1.93% due to cash flows being reinvested at lower current market rates partially offset by slower prepayment speeds compared to the prior quarter. Cash flows received from payments on residential mortgage-backed securities are currently being reinvested in short-duration securities that yield nearly 1.75%. The loan portfolio yield decreased to 4.12% from 4.20% in the previous quarter. Loan yields decreased primarily due to increased market pricing pressure and improved credit quality in our loan portfolio.

Funding costs decreased 3 basis points to 0.43%. Rates paid on time deposits decreased 5 basis points. Rates paid on interest-bearing transaction accounts and savings accounts each decreased a basis point. The cost of other borrowed funds decreased 3 basis points. The benefit to net interest margin from earning assets funded by non-interest bearing liabilities decreased 1 basis point in the second quarter.

Average earning assets decreased $49 million during the second quarter of 2013. The available for sale securities portfolio decreased $231 million compared to the first quarter of 2013. Average outstanding loans increased $52 million. Commercial loan balances increased $108 million. Commercial real estate loan balances decreased $23 million and residential mortgage loan balances decreased $21 million. The average balance of investment securities was up $76 million and the average balance of residential mortgage loans held for sale grew by $45 million.

Average deposits decreased $522 million compared to the previous quarter. Interest-bearing transaction account balances decreased $332 million. Demand deposit balances decreased $113 million and time deposit account balances decreased $95 million. The average balance of borrowed funds increased $883 million over the first quarter of 2013.

Fees and Commissions Revenue

Fees and commissions revenue totaled $160.9 million for the second quarter of 2013, up $2.8 million over the first quarter of 2013. Revenue growth from increased transaction volumes was partially offset by quarter-end mark-to-market valuation adjustments of residential mortgage loans held for sale and trading securities.

Mortgage banking revenue totaled $36.6 million for the second quarter of 2013 compared to $40.0 million for the first quarter of 2013. Residential mortgage loans funded for sale totaled $1.2 billion, an increase of $240 million over the previous quarter. Outstanding commitments to originate mortgage loans increased to $548 million at June 30 from $467 million at March 31. Revenue growth from increased loan production was offset by an overall narrowing of gain on sale margins and a shift in product mix toward loans with narrower margins. Approximately 26% of loans originated in the second quarter were through correspondent channels, up from 21% in the previous quarter. Refinanced mortgage loans decreased to 48% of loans originated for sale in the second quarter of 2013 compared to 62% in the first quarter of 2013. Additionally, the increase in interest rates near the end of June decreased the fair value of both our mortgage loans held for sale and outstanding mortgage loan commitments.

"We mitigate the risk of changes in the fair value of mortgage loans held for sale and mortgage loan commitments with forward sales contracts," said Executive Vice President and CFO Steven Nell. "We generally hedge all loans held for sale and an estimate of commitments that will ultimately become closed loans. The rapid increase in interest rates in response to comments by the Federal Reserve Bank increased the percent of loan commitments we expect to close which resulted in lower hedge coverage at quarter end. The net impact decreased the fair value of loan commitments by approximately $3.5 million."

"Recent comments by the Federal Reserve Bank have increased mortgage interest rates," said Nell. "While we welcome the long-term benefit this will have on our securities portfolio yield, we expect the transition may cause a decrease in mortgage loan production volume and continued narrowing of gain on sale margins."

Other significant fee revenue sources increased over the previous quarter. Trust fees and commissions were up $2.5 million primarily due to the seasonal timing of tax service fees. Transaction card revenue grew by $2.3 million primarily due to increased merchant services fees related to higher transaction volumes of credit and debit cards processed. Revenues from interchange fees paid by merchants for transactions processed from debit cards issued by the Company and revenues from processing transactions on behalf of members of our TransFund electronic funds transfer network also increased on higher transaction volumes. Deposit service charges and fees increased $996 thousand on increased overdraft fee volumes and increased commercial service charge revenue.

Brokerage and trading revenue increased $1.1 million. Customer hedging revenue was up $2.3 million primarily related to increased hedging activity by our mortgage banking customers. Securities trading revenue decreased $2.9 million primarily due to the quarter-end mark-to-market of municipal securities and U.S. government agency securities which was affected by rising interest rates. Brokerage revenue grew $908 thousand and investment banking revenue was up $750 thousand over the first quarter.

Operating Expenses

Total operating expenses were $196.6 million for the second quarter of 2013 compared to $201.3 million for the first quarter of 2013. Excluding changes in the fair value of mortgage servicing rights, operating expenses totaled $210.9 million, up $6.9 million over the first quarter of 2013.

Personnel costs increased $2.5 million from the first quarter of 2013 due largely to incentive compensation. Incentive compensation expense increased $2.8 million. Cash-based incentive compensation, which rewards employees as they generate business opportunities for the Company by growing loans, deposits, customer relationships or other measurable metrics, increased $4.0 million. Stock-based incentive compensation expense decreased $1.2 million primarily due to decreased accruals for executive compensation plans, partially offset by the impact of the reversal of costs in the first quarter related to performance shares that did not vest.

Non-personnel expense increased $4.5 million over the first quarter of 2013. Professional fees and services increased $1.4 million and data processing and communications expense increased $1.3 million over the prior quarter, both due to higher transaction activity. All other non-personnel expenses increased $1.8 million.

Loans, Deposits and Capital

Loans

Outstanding loans increased $347 million over March 31, 2013 to $12.4 billion at June 30, 2013 due primarily to an increase in outstanding commercial loan balances. Commercial real estate and residential mortgage loans also increased during the second quarter. Consumer loans were largely unchanged.

Outstanding commercial loan balances grew by $290 million over March 31, 2013. Wholesale/retail sector loans increased $91 million and service sector loans increased $89 million. Other commercial and industrial loans increased $61 million, healthcare sector loans grew by $37 million and energy sector loans increased $35 million. Commercial loan growth was primarily attributed to the Oklahoma and Texas markets. Unfunded energy loan commitments grew by $137 million in the second quarter to $2.5 billion. All other unfunded commercial loan commitments totaled $3.4 billion at June 30, 2013, up $10 million over March 31, 2013.

Commercial real estate loans increased $32 million over March 31, 2013. Loans secured by multifamily residential properties were up $40 million, growing in almost all the markets, partially offset by decreases attributed to the Colorado and Arkansas markets. Loans secured by office buildings grew by $39 million primarily in the Arizona and Kansas City markets. Industrial sector loans were up $17 million primarily related to growth in the Kansas City market. Retail sector loans decreased $31 million, primarily in the Oklahoma, Arizona and New Mexico markets. Other real estate loans decreased $21 million primarily in the New Mexico market. Unfunded commercial real estate loan commitments totaled $605 million at June 30, 2013, a decrease of $47 million from March 31, 2013.

Residential mortgage loans increased $27 million from March 31, 2013, due primarily to an increase in first lien, fully amortizing home equity loans.

Deposits

Deposits totaled $19.5 billion at June 30, 2013 compared to $19.9 billion at March 31, 2013. Demand deposit balances increased $244 million. Interest-bearing transaction account balances decreased $476 million and time deposits decreased $132 million. Among the lines of business, commercial deposits increased $31 million, consumer deposits decreased $92 million and wealth management deposits decreased $365 million. Healthcare, small business and commercial and industrial account balances all increased over the prior quarter. Treasury services, energy and commercial real estate customer account balances decreased during the second quarter.

Capital

The Company and its subsidiary bank exceeded the regulatory definition of well capitalized at June 30, 2013. The Company's Tier 1 capital ratio was 13.37% at June 30, 2013 and 13.35% at March 31, 2013. The total capital ratio was 15.28% at June 30, 2013 and 15.68% at March 31, 2013. In addition, the Company's tangible common equity ratio, a non-GAAP measure, was 9.38% at June 30, 2013 and 9.70% at March 31, 2013. Unrealized securities gains added 8 basis points to the tangible common equity ratio at June 30, 2013 and added 44 basis points to the tangible common equity ratio at March 31, 2013.

In July 2013, banking regulators issued the final rule revising regulatory capital rules for substantially all U.S. banking organizations. The new capital rule will be effective for BOK Financial on January 1, 2015. The new capital rule establishes a 7% threshold for the Tier 1 common equity ratio consisting of a minimum level plus a capital conservation buffer. The Company expects to exclude unrealized gains and losses from available for sale securities from its calculation of Tier 1 capital, consistent with the treatment under current capital rules. BOK Financial's Tier 1 common equity ratio based on the existing Basel I standards was 13.19% as of June 30, 2013. Based on our interpretation of the new capital rule, our estimated Tier 1 common equity ratio is approximately 12.20%, nearly 520 basis points above the 7% regulatory threshold.

Credit Quality

Nonperforming assets totaled $281 million or 2.24% of outstanding loans and repossessed assets at June 30, 2013 compared to $283 million or 2.32% of outstanding loans and repossessed assets at March 31, 2013. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $200 million or 1.62% of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at June 30, 2013 and $207 million or 1.73% at March 31, 2013, a decrease of $7.2 million.

Nonaccruing loans totaled $122 million or 0.98% of outstanding loans at June 30, 2013 compared to $133 million or 1.10% of outstanding loans at March 31, 2013. New nonaccruing loans identified in the second quarter totaled $39 million, offset by $30 million in foreclosures and repossessions, $12 million in payments received and $8.6 million in charge-offs .

Nonaccruing commercial loans were $21 million or 0.27% of outstanding commercial loans at June 30, 2013 compared to $20 million or 0.27% of outstanding commercial loans at March 31, 2013.

Nonaccruing commercial real estate loans decreased to $59 million or 2.53% of outstanding commercial real estate loans at June 30, 2013 from $65 million or 2.85% of outstanding commercial real estate loans at March 31, 2013. Nonaccruing commercial real estate loans consist primarily of land development and residential construction loans. Nonaccruing land development and residential construction loans totaled $21 million at June 30, 2013, a decrease of $2.3 million during the second quarter.

Nonaccruing residential mortgage loans totaled $41 million or 1.99% of outstanding residential mortgage loans, a decrease of $4.9 million from March 31, 2013. 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 $11.1 million at June 30, 2013 and $8.4 million at March 31, 2013.

After evaluating all credit factors, the Company determined that no provision for credit losses was necessary during the second quarter of 2013. The combined allowance for credit losses totaled $205 million or 1.65% of outstanding loans and 167.63% of nonaccruing loans at June 30, 2013. The allowance for loan losses was $203 million and the accrual for off-balance sheet credit losses was $1.6 million. Gross charge-offs totaled $8.6 million for the second quarter, compared to $8.9 million for the previous quarter. Recoveries totaled $6.2 million for the second quarter of 2013. Net charge-offs were $2.3 million or 0.08% on an annualized basis for the second quarter of 2013 compared with net charge-offs of $2.4 million or 0.08% on an annualized basis for the first quarter of 2013.

Real estate and other repossessed assets totaled $110 million at June 30, 2013, primarily consisting of $53 million of 1-4 family residential properties (including $32 million guaranteed by U.S. government agencies), $26 million of developed commercial real estate properties, $17 million of undeveloped land and $13 million of residential land and land development properties. The distribution of real estate owned and other repossessed assets among various markets included $31 million attributed to New Mexico, $20 million attributed to Arizona, $16 million attributed to Oklahoma, $13 million attributed to Texas and $10 million attributed to Colorado. Real estate and other repossessed assets increased $7.4 million during the second quarter of 2013. Additions of $30 million were partially offset by $24 million of sales. Additions included $16 million and sales included $11 million of 1-4 family residential properties guaranteed by U.S. government agencies. Net gains on sales and writedowns of real estate and other repossessed assets totaled $1.1 million in the second quarter of 2013 compared to $273 thousand in the first quarter.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $10.7 billion at June 30, 2013 and $11.1 billion at March 31, 2013. At June 30, 2013, the available for sale portfolio consisted primarily of $8.4 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $1.8 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. Net unamortized premiums are less than 1% of the securities portfolio amortized cost.

Net unrealized gains on available for sale securities totaled $42 million at June 30, 2013 and $229 million at March 31, 2013. Substantially all of the decrease in net unrealized gains resulted from negative market valuations driven by the upward movement in interest rates. Net unrealized gains on residential mortgage-backed securities issued by U.S. government agencies decreased $138 million during the second quarter to $70 million at June 30, 2013. Commercial mortgage-backed securities had a net unrealized loss of $39 million at June 30, 2013 compared to a net unrealized gain of $2.8 million at March 31, 2013.

In the second quarter of 2013, the Company recognized net gains of $3.8 million from sales of $1.1 billion of available for sale securities. Securities were sold either because they had reached their expected maximum potential return or sold to reinvest those proceeds into shorter average life securities. Net gains from sales of $728 million of available for sale securities in the first quarter of 2013 totaled $4.9 million.

The Company also maintains a portfolio of residential mortgage-backed securities issued by U.S. government agencies and interest rate derivative contracts designated as an economic hedge of the changes in the fair value of our mortgage servicing rights. Due to changes in residential mortgage interest rates during the second quarter of 2013, prepayment speeds decreased and the value of our mortgage servicing rights increased by $14.3 million. This increase was partially offset by an $11.6 million decrease in the value of securities and interest rate derivative contracts held as an economic hedge.

About BOK Financial Corporation

BOK Financial is a $28 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., The Milestone Group, Inc. and Cavanal Hill Investment Management, Inc. BOKF, NA operates the TransFund electronic funds network and seven banking divisions: Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas and Colorado State Bank and Trust. Through its subsidiaries, the Company provides commercial and consumer banking, investment and trust services, mortgage origination and servicing, and an electronic funds transfer network. For more information, visit www.bokf.com.

The Company will continue to evaluate critical assumptions and estimates, such as the appropriateness of the allowance for credit losses and asset impairment as of June 30, 2013 through the date its financial statements are filed with the Securities and Exchange Commission and will adjust amounts reported if necessary.

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

     
 
 
BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION

(in thousands)
June 30, March 31, June 30,
2013 2013 2012
ASSETS
Cash and due from banks $ 1,026,497 $ 928,035 $ 628,092
Funds sold and resell agreements 51,888 17,582 11,171
Trading securities 190,591 206,598 149,317
Investment securities 615,790 589,271 412,479
Available for sale securities 10,698,074 11,059,145 10,395,415
Fair value option securities 205,756 210,192 325,177
Residential mortgage loans held for sale 301,057 286,211 259,174
Loans:
Commercial 7,708,120 7,418,305 7,035,535
Commercial real estate 2,317,096 2,285,160 2,149,730
Residential mortgage 2,039,785 2,012,450 2,002,885
Consumer     375,781       377,649       388,281  
Total loans 12,440,782 12,093,564 11,576,431
Allowance for loan losses     (203,124 )     (205,965 )     (231,669 )
Loans, net of allowance 12,237,658 11,887,599 11,344,762
Premises and equipment, net 271,191 270,130 261,508
Receivables 136,605 116,028 121,944
Goodwill 359,759 359,759 335,601
Intangible assets, net 26,242 27,117 9,098
Mortgage servicing rights, net 132,889 109,840 91,783
Real estate and other repossessed assets, net 110,112 102,701 105,708
Bankers' acceptances 198 1,762 2,873
Derivative contracts 546,206 320,473 366,204
Cash surrender value of bank-owned life insurance 280,047 277,776 269,093
Receivable on unsettled securities sales 182,147 190,688 32,876
Other assets     435,493       486,251       453,771  
TOTAL ASSETS   $ 27,808,200     $ 27,447,158     $ 25,576,046  
LIABILITIES AND EQUITY
Deposits:
Demand $ 7,145,323 $ 6,900,860 $ 6,440,375
Interest-bearing transaction 9,266,560 9,742,302 8,551,874
Savings 316,375 317,075 261,998
Time     2,767,972       2,900,054       3,107,950  
Total deposits 19,496,230 19,860,291 18,362,197
Funds purchased 747,165 853,843 1,453,750
Repurchase agreements 845,106 806,526 1,136,948
Other borrowings 2,481,644 1,733,047 58,056
Subordinated debentures 347,716 347,674 353,378
Accrued interest, taxes, and expense 175,677 192,358 140,434
Bankers' acceptances 198 1,762 2,873
Due on unsettled securities purchases 49,369 158,984 603,800
Derivative contracts 521,991 251,836 370,053
Other liabilities     150,222       192,945       171,836  
TOTAL LIABILITIES 24,815,318 24,399,266 22,653,325
Shareholders' equity:
Capital, surplus and retained earnings 2,938,623 2,878,575 2,746,744
Accumulated other comprehensive income     19,014       133,383       139,190  
TOTAL SHAREHOLDERS' EQUITY 2,957,637 3,011,958 2,885,934
Non-controlling interest     35,245       35,934       36,787  
TOTAL EQUITY     2,992,882       3,047,892       2,922,721  
TOTAL LIABILITIES AND EQUITY   $ 27,808,200     $ 27,447,158     $ 25,576,046  
 
 
 
AVERAGE BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION

(in thousands)
Three Months Ended
June 30,   March 31,   December 31,   September 30,   June 30,
2013 2013 2012 2012 2012
ASSETS
Funds sold and resell agreements $ 42,604 $ 25,418 $ 19,553 $ 17,837 $ 19,187
Trading securities 181,866 162,353 165,109 132,213 143,770
Investment securities 610,940 534,772 474,085 408,646 416,284
Available for sale securities 11,060,700 11,292,181 11,482,212 11,058,055 10,091,279
Fair value option securities 216,312 251,725 292,490 336,160 335,965
Residential mortgage loans held for sale 261,977 216,816 272,581 264,024 191,311
Loans:
Commercial 7,606,919 7,498,905 7,441,957 7,209,972 7,058,806
Commercial real estate 2,286,674 2,309,988 2,170,676 2,160,213 2,156,841
Residential mortgage 2,013,004 2,034,315 1,991,530 2,000,506 2,009,510
Consumer     370,847       381,752       385,156       368,971       389,565  
Total loans 12,277,444 12,224,960 11,989,319 11,739,662 11,614,722
Allowance for loan losses     (206,807 )     (214,017 )     (229,095 )     (231,177 )     (242,605 )
Total loans, net     12,070,637       12,010,943       11,760,224       11,508,485       11,372,117  
Total earning assets 24,445,036 24,494,208 24,466,254 23,725,420 22,569,913
Cash and due from banks 912,178 828,126 849,614 746,364 748,811
Derivative contracts 401,485 286,772 316,579 291,965 371,690
Cash surrender value of bank-owned life insurance 278,501 275,705 272,778 270,084 267,246
Receivable on unsettled securities sales 135,964 178,561 144,077 99,355 163,940
Other assets     1,486,160       1,450,059       1,447,474       1,454,984       1,416,917  
TOTAL ASSETS   $ 27,659,324     $ 27,513,431     $ 27,496,776     $ 26,588,172     $ 25,538,517  
 
LIABILITIES AND EQUITY
Deposits:
Demand $ 6,888,983 $ 7,002,046 $ 7,505,074 $ 6,718,572 $ 6,278,342
Interest-bearing transaction 9,504,128 9,836,204 9,343,421 8,719,648 8,779,659
Savings 315,421 296,319 278,714 267,498 259,386
Time     2,818,533       2,913,999       3,010,367       3,068,870       3,132,220  
Total deposits 19,527,065 20,048,568 20,137,576 18,774,588 18,449,607
Funds purchased 789,302 1,155,983 1,295,442 1,678,006 1,740,354
Repurchase agreements 819,373 878,679 900,131 1,112,847 1,095,298
Other borrowings 2,172,417 863,360 364,425 97,003 86,667
Subordinated debentures 347,695 347,654 347,613 352,432 357,609
Derivative contracts 334,877 220,037 246,296 247,148 302,329
Due on unsettled securities purchases 330,926 665,175 854,474 1,054,239 342,853
Other liabilities     310,015       336,136       379,332       324,717       295,067  
TOTAL LIABILITIES 24,631,670 24,515,592 24,525,289 23,640,980 22,669,784
Total equity     3,027,654       2,997,839       2,971,487       2,947,192       2,868,733  
TOTAL LIABILITIES AND EQUITY   $ 27,659,324     $ 27,513,431     $ 27,496,776     $ 26,588,172     $ 25,538,517  
       
 
 
STATEMENTS OF EARNINGS -- UNAUDITED
BOK FINANCIAL CORPORATION

(in thousands, except per share data)

 
Three Months Ended Six Months Ended
June 30, June 30,
2013 2012 2013 2012
 
Interest revenue $ 185,041 $ 203,055 $ 374,040 $ 401,263
Interest expense     17,885       21,694       36,479       46,333  
Net interest revenue 167,156 181,361 337,561 354,930
Provision for credit losses           (8,000 )     (8,000 )     (8,000 )
Net interest revenue after provision for credit losses     167,156       189,361       345,561       362,930  
Other operating revenue:
Brokerage and trading revenue 32,874 32,600 64,625 63,711
Transaction card revenue 29,942 26,758 57,634 52,188
Trust fees and commissions 24,803 19,931 47,116 38,369
Deposit service charges and fees 23,962 25,216 46,928 49,595
Mortgage banking revenue 36,596 39,548 76,572 72,626
Bank-owned life insurance 2,236 2,838 5,462 5,709
Other revenue     10,496       8,860       20,683       18,124  
Total fees and commissions 160,909 155,751 319,020 300,322
Gain (loss) on other assets, net (1,666 ) 1,689 (1,199 ) (2,004 )
Gain (loss) on derivatives, net (2,527 ) 2,345 (3,468 ) (128 )
Gain (loss) on fair value option securities, net (9,156 ) 6,852 (12,327 ) 5,119
Gain on available for sale securities, net 3,753 20,481 8,608 24,812
Total other-than-temporary impairment losses (1,138 ) (135 ) (1,138 ) (640 )
Portion of loss recognized in (reclassified from) other comprehensive income     586       (723 )     339       (3,940 )
Net impairment losses recognized in earnings     (552 )     (858 )     (799 )     (4,580 )
Total other operating revenue 150,761 186,260 309,835 323,541
Other operating expense:
Personnel 128,110 122,297 253,764 237,066
Business promotion 5,770 6,746 11,223 11,134
Professional fees and services 8,381 8,343 15,366 15,942
Net occupancy and equipment 16,909 16,906 33,390 32,929
Insurance 4,044 4,011 7,789 7,877
Data processing and communications 26,734 25,264 52,184 47,408
Printing, postage and supplies 3,580 3,903 7,254 7,214
Net losses and operating expenses of repossessed assets 282 5,912 1,528 8,157
Amortization of intangible assets 875 545 1,751 1,120
Mortgage banking costs 7,910 12,315 15,264 20,754
Change in fair value of mortgage servicing rights (14,315 ) 11,450 (16,973 ) 4,323
Other expense     8,326       5,319       15,390       11,224  
Total other operating expense 196,606 223,011 397,930 405,148
 
Net income before taxes 121,311 152,610 257,466 281,323
Federal and state income taxes     41,423       53,149       88,519       98,669  
 
Net income 79,888 99,461 168,947 182,654
Net income (loss) attributable to non-controlling interest     (43 )     1,833       1,052       1,411  
Net income attributable to BOK Financial Corporation shareholders   $ 79,931     $ 97,628     $ 167,895     $ 181,243  
 
Average shares outstanding:
Basic 67,993,822 67,472,665 67,904,599 67,573,280
Diluted 68,212,497 67,744,828 68,126,751 67,847,659
 
Net income per share:
Basic $ 1.16 $ 1.43 $ 2.45 $ 2.66
Diluted $ 1.16 $ 1.43 $ 2.44 $ 2.65
 
 
 
FINANCIAL HIGHLIGHTS -- UNAUDITED
BOK FINANCIAL CORPORATION

(in thousands, except ratio and share data)
Three Months Ended
June 30,   March 31,   December 31,   September 30,   June 30,
2013 2013 2012 2012 2012
Capital:
Period-end shareholders' equity $ 2,957,637 $ 3,011,958 $ 2,957,860 $ 2,975,657 $ 2,885,934
Risk weighted assets $ 19,157,978 $ 18,756,648 $ 19,016,673 $ 18,448,854 $ 17,758,118
Risk-based capital ratios:
Tier 1 13.37 % 13.35 % 12.78 % 13.21 % 13.62 %
Total capital 15.28 % 15.68 % 15.13 % 15.71 % 16.19 %
Leverage ratio 9.43 % 9.28 % 9.01 % 9.34 % 9.64 %
Tangible common equity ratio1 9.38 % 9.70 % 9.25 % 9.67 % 10.07 %
Tier 1 common equity ratio2 13.19 % 13.16 % 12.59 % 13.01 % 13.41 %
 
Common stock:
Book value per share $ 43.03 $ 43.85 $ 43.29 $ 43.62 $ 42.35
Market value per share:
High $ 65.95 $ 62.77 $ 59.77 $ 59.47 $ 58.12
Low $ 60.52 $ 55.05 $ 54.19 $ 55.63 $ 53.34
Cash dividends paid $ 26,118 $ 26,067 $ 94,231 $ 25,912 $ 25,904
Dividend payout ratio 32.68 % 29.63 % 114.13 % 29.65 % 26.53 %
Shares outstanding, net 68,739,208 68,687,718 68,327,351 68,215,354 68,144,159
Stock buy-back program:
Shares repurchased 39,496
Amount   $     $     $     $     $ 2,125  
Average price per share   $     $     $     $     $ 53.81  
 
Performance ratios (quarter annualized):
Return on average assets 1.16 % 1.30 % 1.19 % 1.31 % 1.54 %
Return on average equity 10.59 % 11.90 % 11.05 % 11.80 % 13.69 %
Net interest margin 2.81 % 2.92 % 2.95 % 3.12 % 3.30 %
Efficiency ratio 63.11 % 61.04 % 66.00 % 61.18 % 61.98 %
 
Reconciliation of non-GAAP measures:
1 Tangible common equity ratio:
Total shareholders' equity $ 2,957,637 $ 3,011,958 $ 2,957,860 $ 2,975,657 $ 2,885,934
Less: Goodwill and intangible assets, net     (386,001 )     (386,876 )     (390,171 )     (392,158 )     (344,699 )
Tangible common equity   $ 2,571,636     $ 2,625,082     $ 2,567,689     $ 2,583,499     $ 2,541,235  
 
Total assets $ 27,808,200 $ 27,447,158 $ 28,148,631 $ 27,117,641 $ 25,576,046
Less: Goodwill and intangible assets, net     (386,001 )     (386,876 )     (390,171 )     (392,158 )     (344,699 )
Tangible assets   $ 27,422,199     $ 27,060,282     $ 27,758,460     $ 26,725,483     $ 25,231,347  
 
Tangible common equity ratio     9.38 %     9.70 %     9.25 %     9.67 %     10.07 %
 
2 Tier 1 common equity ratio:
Tier 1 capital $ 2,561,399 $ 2,503,892 $ 2,430,671 $ 2,436,791 $ 2,418,985
Less: Non-controlling interest     (35,245 )     (35,934 )     (35,821 )     (36,818 )     (36,787 )
Tier 1 common equity   $ 2,526,154     $ 2,467,958     $ 2,394,850     $ 2,399,973     $ 2,382,198  
 
Risk weighted assets   $ 19,157,978     $ 18,756,648     $ 19,016,673     $ 18,448,854     $ 17,758,118  
 
Tier 1 common equity ratio     13.19 %     13.16 %     12.59 %     13.01 %     13.41 %
 
Other data:
Fiduciary assets $ 28,280,214 $ 27,606,180 $ 25,829,038 $ 25,208,276 $ 23,136,625
Mortgage servicing portfolio $ 12,741,651 $ 12,272,691 $ 11,981,624 $ 11,756,350 $ 11,564,643
Mortgage loans funded for sale $ 1,196,038 $ 956,315 $ 1,073,541 $ 1,046,608 $ 840,765
Mortgage loan refinances to total fundings 48 % 62 % 62 % 61 % 51 %
Tax equivalent adjustment $ 2,647 $ 2,619 $ 2,472 $ 2,509 $ 2,252
Net unrealized gain on available for sale securities $ 42,233 $ 228,620 $ 254,587 $ 281,455 $ 242,253
 
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts $ (2,526 ) $ (1,654 ) $ (707 ) $ 645 $ 2,623
Gain (loss) on fair value option securities     (9,102 )     (3,232 )     (2,177 )     5,455       6,908  
Gain (loss) on economic hedge of mortgage servicing rights (11,628 ) (4,886 ) (2,884 ) 6,100 9,531
Gain (loss) on changes in fair value of mortgage servicing rights     14,315       2,658       4,689       (9,576 )     (11,450 )
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges   $ 2,687     $ (2,228 )   $ 1,805     $ (3,476 )   $ (1,919 )
 
Net interest revenue on fair value option securities   $ 910     $ 828     $ 748     $ 1,750     $ 2,148  
 
 
 
QUARTERLY EARNINGS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION

(in thousands, except ratio and per share data)
Three Months Ended
June 30,   March 31,   December 31,   September 30,   June 30,
2013 2013 2012 2012 2012
Interest revenue $ 185,041 $ 188,999 $ 194,314 $ 196,071 $ 203,055
Interest expense     17,885       18,594       20,945       20,044       21,694  
Net interest revenue 167,156 170,405 173,369 176,027 181,361
Provision for credit losses           (8,000 )     (14,000 )           (8,000 )
Net interest revenue after provision for credit losses 167,156 178,405 187,369 176,027 189,361
Other operating revenue:
Brokerage and trading revenue 32,874 31,751 31,958 31,261 32,600
Transaction card revenue 29,942 27,692 28,009 27,788 26,758
Trust fees and commissions 24,803 22,313 22,030 19,654 19,931
Deposit service charges and fees 23,962 22,966 24,174 25,148 25,216
Mortgage banking revenue 36,596 39,976 46,410 50,266 39,548
Bank-owned life insurance 2,236 3,226 2,673 2,707 2,838
Other revenue     10,496       10,187       10,554       9,149       8,860  
Total fees and commissions 160,909 158,111 165,808 165,973 155,751
Gain (loss) on other assets, net (1,666 ) 467 137 452 1,689
Gain (loss) on derivatives, net (2,527 ) (941 ) (637 ) 464 2,345
Gain (loss) on fair value option securities, net (9,156 ) (3,171 ) (2,081 ) 6,192 6,852
Gain on available for sale securities, net 3,753 4,855 1,066 7,967 20,481
Total other-than-temporary impairment losses (1,138 ) (504 ) (135 )
Portion of loss recognized in (reclassified from) other comprehensive income     586       (247 )     (1,163 )     (1,104 )     (723 )
Net impairment losses recognized in earnings     (552 )     (247 )     (1,667 )     (1,104 )     (858 )
Total other operating revenue 150,761 159,074 162,626 179,944 186,260
Other operating expense:
Personnel 128,110 125,654 131,192 122,775 122,297
Business promotion 5,770 5,453 6,150 6,054 6,746
Contribution to BOKF Charitable Foundation 2,062
Professional fees and services 8,381 6,985 10,082 7,991 8,343
Net occupancy and equipment 16,909 16,481 16,883 16,914 16,906
Insurance 4,044 3,745 3,789 3,690 4,011
Data processing and communications 26,734 25,450 25,010 26,486 25,264
Printing, postage and supplies 3,580 3,674 3,403 3,611 3,903
Net losses and operating expenses of repossessed assets 282 1,246 6,665 5,706 5,912
Amortization of intangible assets 875 876 1,065 742 545
Mortgage banking costs 7,910 7,354 10,542 13,036 12,315
Change in fair value of mortgage servicing rights (14,315 ) (2,658 ) (4,689 ) 9,576 11,450
Other expense     8,326       7,064       9,931       5,759       5,319  
Total other operating expense 196,606 201,324 222,085 222,340 223,011
Net income before taxes 121,311 136,155 127,910 133,631 152,610
Federal and state income taxes     41,423       47,096       44,293       45,778       53,149  
Net income 79,888 89,059 83,617 87,853 99,461
Net income (loss) attributable to non-controlling interest     (43 )     1,095       1,051       471       1,833  
Net income attributable to BOK Financial Corporation shareholders   $ 79,931     $ 87,964     $ 82,566     $ 87,382     $ 97,628  
 
Average shares outstanding:
Basic 67,993,822 67,814,550 67,622,777 67,966,700 67,472,665
Diluted 68,212,497 68,040,180 67,914,717 68,334,989 67,744,828
Net income per share:
Basic $ 1.16 $ 1.28 $ 1.21 $ 1.28 $ 1.43
Diluted $ 1.16 $ 1.28 $ 1.21 $ 1.27 $ 1.43
 
 
 
LOANS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION

(in thousands)
June 30,   March 31,   December 31,   September 30,   June 30,
2013 2013 2012 2012 2012
 
Bank of Oklahoma:
Commercial $ 2,993,247 $ 2,853,608 $ 3,089,686 $ 3,015,621 $ 3,012,458
Commercial real estate 569,780 568,500 580,694 598,667 614,541
Residential mortgage 1,503,457 1,468,434 1,488,486 1,466,590 1,452,269
Consumer     211,744     207,662     220,096     197,457     201,926
Total Bank of Oklahoma     5,278,228     5,098,204     5,378,962     5,278,335     5,281,194
 
Bank of Texas:
Commercial 2,849,888 2,718,050 2,726,925 2,572,928 2,443,946
Commercial real estate 813,659 800,577 771,796 712,899 678,882
Residential mortgage 263,916 272,406 275,408 268,250 269,704
Consumer     105,390     110,060     116,252     108,854     115,203
Total Bank of Texas     4,032,853     3,901,093     3,890,381     3,662,931     3,507,735
 
Bank of Albuquerque:
Commercial 296,036 271,075 265,830 267,467 262,493
Commercial real estate 314,871 332,928 326,135 316,040 308,060
Residential mortgage 133,058 129,727 130,337 120,606 115,599
Consumer     14,364     14,403     15,456     15,883     15,534
Total Bank of Albuquerque     758,329     748,133     737,758     719,996     701,686
 
Bank of Arkansas:
Commercial 61,414 54,191 62,049 48,097 49,344
Commercial real estate 85,546 88,264 90,821 119,306 119,919
Residential mortgage 10,691 11,285 13,046 12,939 13,083
Consumer     11,819     13,943     15,421     19,720     24,246
Total Bank of Arkansas     169,470     167,683     181,337     200,062     206,592
 
Colorado State Bank & Trust:
Commercial 786,262 822,942 776,610 708,223 662,583
Commercial real estate 146,137 171,251 173,327 158,387 163,175
Residential mortgage 62,490 56,052 59,363 59,395 62,313
Consumer     23,148     20,990     19,333     19,029     20,570
Total Colorado State Bank & Trust     1,018,037     1,071,235     1,028,633     945,034     908,641
 
Bank of Arizona:
Commercial 355,698 326,266 313,296 300,544 278,184
Commercial real estate 258,938 229,020 201,760 204,164 199,252
Residential mortgage 51,774 54,285 57,803 65,513 67,767
Consumer     4,947     5,664     4,686     6,150     6,220
Total Bank of Arizona     671,357     615,235     577,545     576,371     551,423
 
Bank of Kansas City:
Commercial 365,575 372,173 407,516 354,027 326,527
Commercial real estate 128,165 94,620 84,466 67,809 65,901
Residential mortgage 14,399 20,261 20,597 23,010 22,150
Consumer     4,369     4,927     4,261     4,792     4,582
Total Bank of Kansas City     512,508     491,981     516,840     449,638     419,160
 
TOTAL BOK FINANCIAL   $ 12,440,782   $ 12,093,564   $ 12,311,456   $ 11,832,367   $ 11,576,431

Loans attributed to a geographical region may not always represent the location of the borrower or the collateral.
 
 
 
DEPOSITS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION

(in thousands)
  June 30,   March 31,   December 31,   September 30,   June 30,
2013 2013 2012 2012 2012
Bank of Oklahoma:
Demand $ 3,561,255 $ 3,602,581 $ 4,223,923 $ 3,734,901 $ 3,499,834
Interest-bearing:
Transaction 5,653,062 6,140,899 6,031,541 5,496,724 5,412,002
Savings 185,345 185,363 163,512 155,276 150,353
Time     1,180,265     1,264,415     1,267,904     1,274,336     1,354,148
Total interest-bearing     7,018,672     7,590,677     7,462,957     6,926,336     6,916,503
Total Bank of Oklahoma     10,579,927     11,193,258     11,686,880     10,661,237     10,416,337
Bank of Texas:
Demand 2,299,631 2,098,891 2,606,176 1,983,678 1,966,465
Interest-bearing:
Transaction 1,931,758 1,979,318 2,129,084 1,782,296 1,813,209
Savings 63,745 63,218 58,429 52,561 51,114
Time     692,888     717,974     762,233     789,725     772,809
Total interest-bearing     2,688,391     2,760,510     2,949,746     2,624,582     2,637,132
Total Bank of Texas     4,988,022     4,859,401     5,555,922     4,608,260     4,603,597
Bank of Albuquerque:
Demand 455,580 446,841 427,510 416,796 357,367
Interest-bearing:
Transaction 525,481 513,611 511,593 526,029 506,165
Savings 34,096 35,560 31,926 31,940 31,215
Time     346,506     354,303     364,928     375,611     383,350
Total interest-bearing     906,083     903,474     908,447     933,580     920,730
Total Bank of Albuquerque     1,361,663     1,350,315     1,335,957     1,350,376     1,278,097
Bank of Arkansas:
Demand 31,108 31,957 38,935 29,254 16,921
Interest-bearing:
Transaction 186,689 155,571 101,366 168,827 172,829
Savings 1,974 2,642 2,239 2,246 2,220
Time     37,272     41,613     42,573     45,719     48,517
Total interest-bearing     225,935     199,826     146,178     216,792     223,566
Total Bank of Arkansas     257,043     231,783     185,113     246,046     240,487
Colorado State Bank & Trust:
Demand 365,161 295,067 331,157 330,641 301,646
Interest-bearing:
Transaction 519,580 528,056 676,140 627,015 465,276
Savings 27,948 27,187 25,889 24,689 24,202
Time     451,168     461,496     472,305     476,564     491,280
Total interest-bearing     998,696     1,016,739     1,174,334     1,128,268     980,758
Total Colorado State Bank & Trust     1,363,857     1,311,806     1,505,491     1,458,909     1,282,404
Bank of Arizona:
Demand 186,381 157,754 161,094 151,738 137,313
Interest-bearing:
Transaction 376,305 378,421 360,275 298,048 113,310
Savings 2,238 2,122 1,978 2,201 2,313
Time     35,490     34,690     31,371     33,169     31,539
Total interest-bearing     414,033     415,233     393,624     333,418     147,162
Total Bank of Arizona     600,414     572,987     554,718     485,156     284,475
Bank of Kansas City:
Demand 246,207 267,769 249,491 201,393 160,829
Interest-bearing:
Transaction 73,685 46,426 78,039 103,628 69,083
Savings 1,029 983 771 660 581
Time     24,383     25,563     26,678     27,202     26,307
Total interest-bearing     99,097     72,972     105,488     131,490     95,971
Total Bank of Kansas City     345,304     340,741     354,979     332,883     256,800
TOTAL BOK FINANCIAL   $ 19,496,230   $ 19,860,291   $ 21,179,060   $ 19,142,867   $ 18,362,197
 
 
 
NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
  Three Months Ended
June 30,   March 31,   December 31,   September 30,   June 30,
2013 2013 2012 2012 2012
 
TAX-EQUIVALENT ASSETS YIELDS
Funds sold and resell agreements 0.04 % 0.03 % 0.06 % 0.07 % 0.08 %
Trading securities 1.83 % 1.77 % 1.06 % 2.12 % 1.53 %
Investment securities:
Taxable1 5.89 % 5.97 % 5.86 % 5.83 % 5.93 %
Tax-exempt1   1.89 %   2.42 %   2.93 %   4.12 %   4.90 %
Total investment securities1   3.59 %   4.22 %   4.67 %   5.33 %   5.63 %
Available for sale securities:
Taxable1 1.91 % 2.07 % 2.08 % 2.36 % 2.52 %
Tax-exempt1   4.46 %   4.25 %   3.80 %   4.70 %   4.69 %
Total available for sale securities1   1.93 %   2.09 %   2.10 %   2.38 %   2.54 %
Fair value option securities 1.91 % 2.05 % 1.58 % 2.27 % 2.62 %
Residential mortgage loans held for sale 3.51 % 3.35 % 3.39 % 3.48 % 3.75 %
Loans 4.12 % 4.20 % 4.33 % 4.33 % 4.58 %
Allowance for loan losses                    
Loans, net of allowance 4.19 % 4.28 % 4.41 % 4.42 % 4.68 %
Total tax-equivalent yield on earning assets1 3.11 % 3.24 % 3.30 % 3.47 % 3.69 %
 
COST OF INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest-bearing transaction 0.12 % 0.13 % 0.15 % 0.16 % 0.16 %
Savings 0.15 % 0.16 % 0.18 % 0.19 % 0.23 %
Time   1.57 %   1.62 %   1.80 %   1.61 %   1.63 %
Total interest-bearing deposits 0.44 % 0.46 % 0.54 % 0.53 % 0.54 %
Funds purchased 0.10 % 0.13 % 0.15 % 0.15 % 0.16 %
Repurchase agreements 0.06 % 0.07 % 0.09 % 0.10 % 0.10 %
Other borrowings 0.27 % 0.49 % 0.90 % 3.03 % 3.96 %
Subordinated debt   2.54 %   2.52 %   2.56 %   2.79 %   3.95 %
Total cost of interest-bearing liabilities   0.43 %   0.46 %   0.54 %   0.52 %   0.56 %
Tax-equivalent net interest revenue spread 2.68 % 2.78 % 2.76 % 2.95 % 3.13 %
Effect of noninterest-bearing funding sources and other   0.13 %   0.14 %   0.19 %   0.17 %   0.17 %
Tax-equivalent net interest margin1   2.81 %   2.92 %   2.95 %   3.12 %   3.30 %

1 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)
Three Months Ended
June 30, March 31, December 31, September 30, June 30,
2013 2013 2012 2012 2012
Nonperforming assets:
Nonaccruing loans:
Commercial $ 20,869 $ 19,861 $ 24,467 $ 21,762 $ 34,529
Commercial real estate 58,693 65,175 60,626 75,761 80,214
Residential mortgage 40,534 45,426 46,608 29,267 22,727
Consumer     2,037       2,171       2,709       5,109         7,012  
Total nonaccruing loans 122,133 132,633 134,410 131,899 144,482
Accruing renegotiated loans:
Guaranteed by U.S. government agencies 48,733 47,942 38,515 24,590 24,760
Other                       3,402         3,655  
Total accruing renegotiated loans 48,733 47,942 38,515 27,992 28,415
Real estate and other repossessed assets:
Guaranteed by U.S. government agencies 32,155 27,864 22,365 22,819 21,405
Other     77,957       74,837       81,426       81,309         84,303  
Total real estate and other repossessed assets     110,112       102,701       103,791       104,128         105,708  
Total nonperforming assets   $ 280,978     $ 283,276     $ 276,716     $ 264,019       $ 278,605  
Total nonperforming assets excluding those guaranteed by U.S. government agencies   $ 200,007     $ 207,256     $ 215,347     $ 216,610       $ 232,440  
 
Nonaccruing loans by loan portfolio sector:
Commercial:
Energy $ 2,277 $ 2,377 $ 2,460 $ 3,063 $ 3,087
Manufacturing 876 1,848 2,007 2,283 12,230
Wholesale / retail 6,700 2,239 3,077 2,007 4,175
Integrated food services 684
Services 7,448 9,474 12,090 10,099 10,123
Healthcare 2,670 2,962 3,166 3,305 3,310
Other commercial and industrial     898       961       983       1,005         1,604  
Total commercial     20,869       19,861       24,467       21,762         34,529  
Commercial real estate:
Construction and land development 21,135 23,462 26,131 38,143 46,050
Retail 8,406 8,921 8,117 6,692 7,908
Office 7,828 12,851 6,829 9,833 10,589
Multifamily 6,447 4,501 2,706 3,145 3,219
Industrial 2,198 3,968 4,064
Other commercial real estate     14,877       13,242       12,875       13,884         12,448  
Total commercial real estate     58,693       65,175       60,626       75,761         80,214  
Residential mortgage:
Permanent mortgage 32,747 38,153 39,863 23,717 18,136
Permanent mortgage guaranteed by U.S. government agencies 83 214 489
Home equity     7,704       7,059       6,256       5,550         4,591  
Total residential mortgage     40,534       45,426       46,608       29,267         22,727  
Consumer     2,037       2,171       2,709       5,109         7,012  
Total nonaccruing loans   $ 122,133     $ 132,633     $ 134,410     $ 131,899       $ 144,482  
 

Nonaccruing loans by principal market1:
Bank of Oklahoma $ 52,541 $ 54,392 $ 56,424 $ 41,599 $ 49,931
Bank of Texas 21,620 37,571 31,623 28,046 24,553
Bank of Albuquerque 24,134 12,479 13,401 13,233 13,535
Bank of Arkansas 998 1,008 1,132 5,958 6,865
Colorado State Bank & Trust 9,510 11,771 14,364 22,878 28,239
Bank of Arizona 13,323 15,392 17,407 20,145 21,326
Bank of Kansas City     7       20       59       40         33  
Total nonaccruing loans   $ 122,133     $ 132,633     $ 134,410     $ 131,899       $ 144,482  
 
Performing loans 90 days past due2 $ 2,460 $ 4,229 $ 3,925 $ 1,181 $ 691
 
Gross charge-offs $ (8,552 ) $ (8,909 ) $ (8,000 ) $ (8,921 ) $ (11,543 )
Recoveries     6,210       6,557       3,723       3,204  

3
    6,702  
Net charge-offs   $ (2,342 )   $ (2,352 )   $ (4,277 )   $ (5,717 )     $ (4,841 )
 
Provision for credit losses $ $ (8,000 ) $ (14,000 ) $ $ (8,000 )
 
Allowance for loan losses to period end loans 1.63 % 1.70 % 1.75 % 1.98 % 2.00 %
Combined allowance for credit losses to period end loans 1.65 % 1.71 % 1.77 % 1.99 % 2.09 %
Nonperforming assets to period end loans and repossessed assets 2.24 % 2.32 % 2.23 % 2.21 % 2.38 %
Net charge-offs (annualized) to average loans 0.08 % 0.08 % 0.14 % 0.19 %

3
0.17 %
Allowance for loan losses to nonaccruing loans 166.31 % 155.29 % 160.34 % 177.22 % 160.34 %
Combined allowance for credit losses to nonaccruing loans 167.63 % 156.12 % 161.76 % 178.70 % 167.09 %
 
1 Nonaccruing loans attributed to a principal market do not always represent the location of the borrower or the collateral.
 
2 Excludes residential mortgage loans guaranteed agencies of the U.S. government.
 
3 Includes $7.1 million of negative recovery related to a refund of a settlement agreement between BOK Financial and the City of Tulsa invalidated by the Oklahoma Supreme Court. Excluding this refund, BOK Financial had net charge-offs (recoveries) to average loans of (0.05%) on an annualized basis.

Copyright Business Wire 2010

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