BOK Financial Reports Quarterly Earnings Of $74 Million

TULSA, Okla., Oct. 26, 2016 (GLOBE NEWSWIRE) -- BOK Financial Corporation (NASDAQ:BOKF) reported net income of $74.3 million or $1.13 per diluted share for the third quarter of 2016. Net income was $65.8 million or $1.00 per diluted share for the second quarter of 2016 and $74.9 million or $1.09 per diluted share for the third quarter of 2015.

Steven G. Bradshaw, president and chief executive officer of BOK Financial, stated, "Earnings were strong in the third quarter due to record revenue combined with lower credit costs as the commodities market continues to normalize. While loan growth was a bit softer than expected, this was in large part due to one significant paydown in the energy portfolio, and we continue to forecast mid-single-digit annual loan growth for the foreseeable future."

Bradshaw continued, "In 2016 we have seen elevated expenses from a variety of sources including foreclosure and loss mitigation in mortgage, the settlement of litigation issues, and continued investment in systems and technology. While we have tactically reduced expenses and headcount over the past few years, in October we took further decisive action to align expenses with expected revenue growth. By reducing contract labor, not backfilling some open positions, and right-sizing our workforce, we believe we will reduce annual expenses by approximately $20 million in 2017."

Third Quarter 2016 Highlights 
  • Net interest revenue totaled $187.8 million for the third quarter of 2016, up $5.2 million over the second quarter of 2016. Net interest margin was 2.64 percent for the third quarter of 2016, compared to 2.63 percent for the second quarter of 2016. Average earning assets increased $260 million during the third quarter of 2016, including a $185 million increase in average loan balances.
  • Fees and commissions revenue totaled $185.3 million for the third quarter of 2016, an increase of $1.8 million over the prior quarter. Mortgage banking revenue grew by $4.3 million and deposit service charges and fees increased $1.1 million. Brokerage and trading revenue decreased $1.5 million, transaction card revenue decreased $1.0 million and fiduciary and asset management revenue decreased $740 thousand.
  • Operating expense was $262.1 million for the third quarter, an increase of $7.4 million over the previous quarter, primarily due to a $5.0 million accrual related to a legal settlement during the quarter. All other non-personnel expenses increased $1.7 million. Deposit insurance expense was up $2.3 million, offset by a $2.5 million decrease in net losses and operating expenses of repossessed assets compared to the prior quarter. Personnel expense increased $695 thousand.
  • Income tax expense was reduced by $2.6 million during the third quarter of 2016 due to the expiration of the statute of limitations on uncertain tax positions and the annual adjustment of the previous year's current income tax liability to amounts on filed tax returns for 2015. The effective tax rate was 29.8 percent for the third quarter of 2016. Excluding these adjustments the effective tax rate would have been 32.3 percent for the third quarter, up from 31.5 percent for the second quarter of 2016.
  • A $10.0 million provision for credit losses was recorded in the third quarter of 2016 compared to a $20.0 million provision in the second quarter of 2016. The decrease in the provision for credit losses was due to improving credit metric trends, largely driven by energy price stability. Net loans charged off totaled $6.1 million in the third quarter of 2016, compared to $7.5 million in the previous quarter.
  • The combined allowance for credit losses totaled $256 million or 1.56 percent of outstanding loans at September 30, 2016 compared to $252 million or 1.54 percent of outstanding loans at June 30, 2016. The portion of the combined allowance attributed to the energy portfolio totaled 3.67 percent of outstanding energy loans at September 30, 2016, an increase from 3.58 percent of outstanding energy loans at June 30, 2016.
  • Nonperforming assets that are not guaranteed by U.S. government agencies totaled $253 million or 1.55 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at September 30, 2016 and $251 million or 1.55 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at June 30, 2016. Nonaccruing energy loans decreased $25 million during the third quarter, partially offset by a $21 million increase in nonaccruing other commercial and industrial sector loans.
  • Average loans increased by $185 million over the previous quarter. Commercial real estate loans grew by $239 million, partially offset by a $156 million decrease in average commercial loan balances. Period-end outstanding loan balances increased $58 million to $16.5 billion at September 30, 2016.
  • Average deposits increased $297 million over the previous quarter primarily due to growth in demand deposit balances of $335 million. Period-end deposits were $21.1 billion at September 30, 2016, an increase of $336 million from June 30, 2016. 
  • The common equity Tier 1 capital ratio at September 30, 2016 was 11.99 percent. Other regulatory capital ratios were Tier 1 capital ratio, 11.99 percent, total capital ratio, 13.65 percent and leverage ratio, 9.06 percent. At June 30, 2016, the common equity Tier 1 capital ratio was 11.86 percent, the Tier 1 capital ratio was 11.86 percent, total capital ratio was 13.51 percent, and leverage ratio was 9.06 percent.
  • The company paid a regular quarterly cash dividend of $28 million or $0.43 per common share during the third quarter of 2016. On October 25, 2016, the board of directors approved an increase in the quarterly cash dividend to $0.44 per common share payable on or about November 28, 2016 to shareholders of record as of November 14, 2016.

Net Interest Revenue

Net interest revenue was $187.8 million for the third quarter of 2016, up $5.2 million over the second quarter of 2016.

Net interest margin was 2.64 percent for the third quarter of 2016, an increase of 1 basis point over the second quarter of 2016. The yield on average earning assets was 2.93 percent, an increase of 2 basis points. The loan portfolio yield increased 5 basis points to 3.63 percent primarily due to increases in the 30 day and 90 day LIBOR and improved energy loan yields. The yield on the available for sale securities portfolio decreased 3 basis points to 2.01 percent. Funding costs were 0.44 percent, up 3 basis points.

Average earning assets increased $260 million during the third quarter of 2016. Average loan balances increased $185 million, primarily due to growth in commercial real estate balances. Average trading securities balances increased $129 million and the average balance of residential mortgage loans held for sale was up $45 million, partially offset by a $101 million decrease in the balance of fair value option securities held as an economic hedge of our mortgage servicing rights. Average interest-bearing deposit balances decreased $38 million compared to the second quarter of 2016. The average balance of borrowed funds increased $175 million.

Fees and Commissions Revenue

Fees and commissions revenue totaled $185.3 million for the third quarter of 2016, an increase of $1.8 million over the second quarter of 2016.

Mortgage banking revenue totaled $42.5 million for the third quarter of 2016, a $4.3 million increase over the second quarter of 2016. Revenue from mortgage loan production increased $3.6 million due to growth in the volume of mortgage loans sold and increased gains on sale, partially offset by a decrease in mortgage loan commitments during the quarter. Average primary mortgage interest rates were 14 basis points lower than in the second quarter of 2016. Total mortgage loans originated during the third quarter increased $46 million or 3 percent over the prior quarter.

Outstanding mortgage loan commitments at September 30 decreased $335 million or 35 percent compared to June 30. The Company made a strategic decision to exit the correspondent lending channel based on careful consideration of continued pressure on margin due to the competitive landscape and increasing regulatory costs. This strategic decision decreased outstanding commitments by $414 million. Mortgage loan commitments continued to grow in our retail and HomeDirect online channels. The correspondent lending channel represented $4.6 million of the $26.0 million in total mortgage loan production revenue for the third quarter.

Brokerage and trading revenue decreased $1.5 million, primarily due to a $1.7 million decrease related to lower loan syndication fees and bond underwriting fees, which are both dependent on the timing and volume of completed transactions. Trading revenue decreased $307 thousand compared to the second quarter. The Company added a new group trading in U.S. government agency residential mortgage-backed securities and related to-be-announced securities. The addition of this group added $1.9 million of trading revenue during the third quarter and $426 million to the trading securities portfolio at September 30. This increase was partially offset by lower volumes of residential mortgage-backed and municipal securities sold to our institutional customers. Retail brokerage fees and customer hedging revenue were both up over the prior quarter.

Deposit service charges and fees were up $1.1 million over the prior quarter due to seasonal increases in overdraft volumes and higher commercial account service charge revenue. Transaction card revenue decreased $1.0 million, primarily due to a $1.2 million customer early termination fee recognized in the second quarter. A $740 thousand decrease in fiduciary and asset management revenue was largely due to an annual assessment of tax preparation fees in the second quarter, partially offset by growth in assets under management during the third quarter.

Operating Expense

Total operating expense was $262.1 million for the third quarter of 2016, an increase of $7.4 million over the second quarter of 2016. The Company agreed to settle a class action lawsuit concerning the manner in which the Company posted charges to certain deposit accounts for $7.8 million, $5.0 million of which was accrued in the third quarter.

Personnel expense increased by $695 thousand over the second quarter of 2016. Increased regular compensation expense and revenue-driven cash-based incentive compensation expense, was offset by a decrease in share-based compensation expense and a seasonal decrease in payroll tax expense.

Excluding the impact of the legal settlement accrual, non-personnel expense increased $1.7 million over the second quarter of 2016. Deposit insurance expense was up $2.3 million. The deposit insurance fund reached a target of 1.15 percent of insured deposits during the third quarter which triggered a new surcharge for banks with more than $10 billion in assets to bring the deposit insurance fund to 1.35 percent of insured deposits. This impact was partially offset by a reduction in the base rate.

Loans, Deposits and Capital

Loans

Outstanding loans were $16.5 billion at September 30, 2016, an increase of $58 million over the previous quarter. Growth in commercial real estate and personal loans, was partially offset by a decrease in commercial loan balances compared to the prior quarter.

Outstanding commercial loan balances decreased $236 million compared to June 30, 2016. Energy loan balances decreased $298 million compared to June 30, 2016 largely due to payments received from a single borrower. Unfunded energy loan commitments increased by $326 million during the third quarter to $2.3 billion. Service sector loans grew by $106 million, wholesale/retail sector loans increased $69 million and healthcare sector loans were up $34 million over the prior quarter. Manufacturing loans decreased $96 million and other commercial and industrial loans decreased $51 million.

Commercial real estate loans grew by $212 million over June 30, 2016. Loans secured by industrial facilities grew by $192 million and were broadly distributed across the Texas, Arizona, Colorado and Oklahoma markets. Multifamily residential loans increased $87 million primarily in the Kansas/Missouri, Texas and Arizona markets. Other commercial real estate loans decreased $59 million and loans secured by office buildings decreased $16 million.

Deposits

Period-end deposits totaled $21.1 billion at September 30, 2016, an increase of $336 million over June 30, 2016. Demand deposit balances increased by $257 million and interest-bearing transaction account balances increased $155 million, partially offset by a $77 million decrease in time deposits. Among the lines of business, Consumer Banking deposits increased $166 million, Wealth Management deposits increased by $105 million and Commercial Banking deposits increased $61 million. Growth in Consumer Banking deposits includes escrow funds associated with mortgage loan servicing. These deposits tend to grow throughout the year and are largely disbursed near year end. Growth in Wealth Management deposits include funds being held temporarily in anticipation of money market reforms. The net increase in Commercial Banking deposits was due to increased balances held by our healthcare, small business and treasury services customers, partially offset by a decrease in balances held by energy customers.

Capital

The company's common equity Tier 1 capital ratio was 11.99 percent at September 30, 2016. In addition, the company's Tier 1 capital ratio was 11.99 percent, total capital ratio was 13.65 percent and leverage ratio was 9.06 percent at September 30, 2016. At June 30, 2016, the company's common equity Tier 1 capital ratio was 11.86 percent, Tier 1 capital ratio was 11.86 percent, total capital ratio was 13.51 percent, and leverage ratio was 9.06 percent.

The company's tangible common equity ratio, a non-GAAP measure, was 9.19 percent at September 30, 2016 and 9.33 percent at June 30, 2016. The tangible common equity ratio is primarily based on total shareholders' equity which includes unrealized gains and losses on available for sale securities. The company has elected to exclude unrealized gains and losses from available for sale securities from its calculation of Tier 1 capital for regulatory capital purposes, consistent with the treatment under the previous capital rules.

Credit Quality

Nonperforming assets totaled $349 million or 2.12 percent of outstanding loans and repossessed assets at September 30, 2016 compared to $350 million or 2.13 percent at June 30, 2016. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $253 million or 1.55 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at September 30, 2016 compared to $251 million or 1.55 percent at June 30, 2016. 

Nonaccruing loans totaled $237 million or 1.44 percent of outstanding loans at September 30, 2016, compared to $247 million or 1.51 percent of outstanding loans at June 30, 2016. The decrease in nonaccruing loans was primarily due to a $25 million decrease in nonaccruing energy loans, partially offset by a $21 million increase in nonaccruing other commercial and industrial sector loans. New nonaccruing loans identified in the third quarter totaled $29 million, offset by $15 million in foreclosures and repossessions, $11 million in payments received and $8.1 million in charge-offs. At September 30, 2016, nonaccruing commercial loans totaled $176 million or 1.74 percent of outstanding commercial loans, nonaccruing commercial real estate loans totaled $7.4 million or 0.19 percent of outstanding commercial real estate loans and nonaccruing residential mortgage loans totaled $52 million or 2.80 percent of outstanding residential mortgage loans.

Potential problem loans, which are defined as performing loans that based on known information cause management concern as to the borrowers' ability to continue to perform, decreased to $478 million at September 30 from $501 million at June 30. The decrease largely resulted from a decrease in potential problem energy loans, partially offset by an increase in potential problem services loans.

Net loans charged off totaled $6.1 million for the third quarter of 2016, compared to $7.5 million in the second quarter of 2016. Gross charge-offs totaled $8.1 million for the third quarter, compared to $8.8 million for the previous quarter. Charge-offs in both quarters largely came from the energy loan portfolio. Recoveries totaled $2.0 million for the third quarter of 2016 and $1.4 million for the second quarter of 2016.

After evaluating all credit factors, the company recorded a $10.0 million provision for credit losses during the third quarter of 2016. The company recorded a $20.0 million provision for credit losses in the previous quarter. The lower provision reflects improvement in credit metrics over the previous quarter, largely driven by energy price stability and decreased rates of newly identified nonaccruing and potential problem loans.

The combined allowance for credit losses totaled $256 million or 1.56 percent of outstanding loans and 116 percent of nonaccruing loans at September 30, 2016. The allowance for loan losses was $245 million and the accrual for off-balance sheet credit losses was $11.1 million.

Energy Portfolio Credit Quality

The company's $2.5 billion energy portfolio consists of 79 percent of loans to exploration and production companies, 8 percent to energy services companies and 13 percent to midstream and other energy borrowers. Substantially all of the loans to exploration and production companies are secured by first lien positions in established energy reserves. Only $10 million of these loans are in junior lien positions. None represent higher-risk mezzanine financing or subordinated debt and none are high-yield debt.

Credit quality metrics in the energy portfolio continued to improve during the third quarter. Nonaccruing energy loans decreased $25 million to $143 million or 5.67 percent of outstanding energy loans. Potential problem energy loans decreased $60 million to $361 million and other loans especially mentioned decreased $50 million to $147 million. Approximately $100 million of the nonaccruing energy loans require no allowance for loan losses based on underlying collateral values and $85 million of the nonaccruing energy loans are current on all payments due. At September 30, 2016, the portion of the combined allowance for credit losses attributed to the energy portfolio totaled $92 million or 3.67 percent of outstanding energy loans compared to $101 million or 3.58 percent of outstanding energy loans at June 30, 2016.

Marc Maun, chief credit officer added, "There were continued positive trends in our energy portfolio in the third quarter. Line of credit utilization, criticized loans and charge-offs were all down, and while we saw a decrease in overall commitments and outstandings, our energy banking team booked $200 million of new commitments to high-quality borrowers. If oil and natural gas prices remain in recent ranges, we expect the positive trends to continue in the fourth quarter."

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $8.9 billion at September 30, 2016, a $32 million increase compared to June 30, 2016. At September 30, 2016, the available for sale portfolio consisted primarily of $5.7 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $3.0 billion of commercial mortgage-backed securities fully backed by U.S. government agencies.

At September 30, 2016, the available for sale securities portfolio had a net unrealized gain of $160 million compared to a net unrealized gain of $195 million at June 30, 2016. The increase in net unrealized gain was primarily due to changes in interest rates during the quarter. Net unrealized gains on residential mortgage-backed securities issued by U.S. government agencies at September 30, 2016 decreased $25 million during the third quarter to $98 million. Commercial mortgage-backed securities had a net unrealized gain of $44 million at September 30, 2016, compared to $58 million at June 30, 2016.

The company also maintains a portfolio of U.S. Treasury securities, residential mortgage-backed securities issued by U.S. government agencies and interest rate derivative contracts as an economic hedge of the changes in the fair value of our mortgage servicing rights. Changes in the fair value of mortgage servicing rights are highly dependent on primary mortgage interest rates offered to borrowers and other factors. Changes in the fair value of securities and interest rate derivatives are highly dependent on secondary mortgage rates, or rates required by investors. Changes in the spread between primary and secondary mortgage rates cannot be effectively hedged and can cause significant earnings volatility.

The fair value of mortgage servicing rights increased by $2.3 million during the third quarter of 2016 primarily due to changes in short term interest rates. The fair value of securities and interest rate derivative contracts held as an economic hedge decreased by $1.1 million during the quarter due to an increase in interest rate swap rates, partially offset by a decrease in average secondary mortgage rates. The fair value of mortgage servicing rights, net of economic hedges, decreased $1.2 million in the second quarter of 2016, primarily due to a decrease in secondary mortgage and interest rate swap rates. Hedge coverage was increased during the second quarter to improve its effectiveness.

Conference Call and Webcast

The company will hold a conference call at 9 a.m. Central time on Wednesday, October 26, 2016 to discuss the financial results with investors. The live audio webcast and presentation slides will be available on the company's website at www.bokf.com. The conference call can also be accessed by dialing 1-201-689-8597. A conference call and webcast replay will also be available shortly after conclusion of the live call at www.bokf.com or by dialing 1-201-612-7415 and referencing conference ID # 13646085.

About BOK Financial Corporation

BOK Financial Corporation is a $33 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, BOK Financial Securities, Inc. and The Milestone Group, Inc. BOKF, NA operates TransFund, Cavanal Hill Investment Management, BOK Financial Asset Management, Inc. 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 September 30, 2016 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,"  "will,"  "intends," variations of such words and similar expressions are intended to identify such forward-looking statements. Management judgments relating to and discussion of the provision and allowance for credit losses, allowance for uncertain tax positions, accruals for loss contingencies and valuation of mortgage servicing rights involve judgments as to expected events and are inherently forward-looking statements. Assessments that 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 changes in commodity prices, interest rates and interest rate relationships, demand for products and services, the degree of competition by traditional and nontraditional competitors, changes in banking regulations, tax laws, prices, levies and assessments, the impact of technological advances, and trends in customer behavior as well as their ability to repay loans. BOK Financial 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)
  Sept. 30, 2016   June 30, 2016   Sept. 30, 2015
ASSETS          
Cash and due from banks $ 535,916     $ 498,713     $ 489,268  
Interest-bearing cash and cash equivalents 2,080,978     1,907,838     1,830,105  
Trading securities 546,615     211,622     181,131  
Investment securities 546,457     560,711     612,384  
Available for sale securities 8,862,283     8,830,689     8,801,089  
Fair value option securities 222,409     263,265     427,760  
Restricted equity securities 333,391     319,639     263,587  
Residential mortgage loans held for sale 447,592     430,728     357,414  
Loans:          
Commercial 10,120,163     10,356,437     9,797,422  
Commercial real estate 3,793,598     3,581,966     3,235,067  
Residential mortgage 1,872,793     1,880,923     1,868,995  
Personal 678,232     587,423     465,957  
Total loans 16,464,786     16,406,749     15,367,441  
Allowance for loan losses (245,103 )   (243,259 )   (204,116 )
Loans, net of allowance 16,219,683     16,163,490     15,163,325  
Premises and equipment, net 318,196     315,199     294,669  
Receivables 650,368     173,638     151,451  
Goodwill 382,739     382,739     385,461  
Intangible assets, net 41,977     43,372     44,999  
Mortgage servicing rights 203,621     190,747     200,049  
Real estate and other repossessed assets, net 31,941     24,054     33,116  
Derivative contracts, net 655,078     883,673     726,159  
Cash surrender value of bank-owned life insurance 310,211     307,860     300,981  
Receivable on unsettled securities sales 19,642     142,820     30,009  
Other assets 370,134     319,653     273,948  
TOTAL ASSETS $ 32,779,231     $ 31,970,450     $ 30,566,905  
           
LIABILITIES AND EQUITY          
Deposits:          
Demand $ 8,681,364     $ 8,424,609     $ 8,041,767  
Interest-bearing transaction 9,824,160     9,668,869     9,698,849  
Savings 420,349     419,262     380,296  
Time 2,169,631     2,247,061     2,498,531  
Total deposits 21,095,504     20,759,801     20,619,443  
Funds purchased 109,031     56,780     62,297  
Repurchase agreements 504,573     472,683     555,677  
Other borrowings 6,533,443     5,830,736     4,635,150  
Subordinated debentures 144,631     371,812     226,314  
Accrued interest, taxes and expense 191,276     197,742     158,048  
Due on unsettled securities purchases 677     11,757     98,351  
Derivative contracts, net 573,987     719,159     636,115  
Other liabilities 193,698     147,242     159,348  
TOTAL LIABILITIES 29,346,820     28,567,712     27,150,743  
Shareholders' equity:          
Capital, surplus and retained earnings 3,302,584     3,251,201     3,291,450  
Accumulated other comprehensive income 95,727     117,632     85,776  
TOTAL SHAREHOLDERS' EQUITY 3,398,311     3,368,833     3,377,226  
Non-controlling interests 34,100     33,905     38,936  
TOTAL EQUITY 3,432,411     3,402,738     3,416,162  
TOTAL LIABILITIES AND EQUITY $ 32,779,231     $ 31,970,450     $ 30,566,905  
                       

AVERAGE BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
  Three Months Ended
  Sept. 30,2016   June 30, 2016   Mar. 31, 2016   Dec. 31, 2015   Sept. 30,2015
ASSETS                  
Interest-bearing cash and cash equivalents $ 2,047,991     $ 2,022,028     $ 2,052,840     $ 1,995,945     $ 2,038,611  
Trading securities 366,545     237,808     188,100     150,402     179,098  
Investment securities 552,592     562,391     587,465     602,369     616,091  
Available for sale securities 8,862,590     8,890,112     8,951,435     8,971,090     8,942,261  
Fair value option securities 266,998     368,434     450,478     435,449     429,951  
Restricted equity securities 335,812     319,136     294,529     262,461     255,610  
Residential mortgage loans held for sale 445,930     401,114     289,743     310,425     401,359  
Loans:                  
Commercial 10,109,692     10,265,782     10,268,793     10,024,756     9,685,768  
Commercial real estate 3,789,673     3,550,611     3,364,076     3,186,629     3,198,200  
Residential mortgage 1,870,855     1,864,458     1,865,742     1,835,195     1,847,696  
Personal 677,530     582,281     493,382     540,418     460,647  
Total loans 16,447,750     16,263,132     15,991,993     15,586,998     15,192,311  
Allowance for loan losses (247,901 )   (245,448 )   (234,116 )   (207,156 )   (202,829 )
Total loans, net 16,199,849     16,017,684     15,757,877     15,379,842     14,989,482  
Total earning assets 29,078,307     28,818,707     28,572,467     28,107,983     27,852,463  
Cash and due from banks 511,534     507,085     505,522     514,629     487,283  
Derivative contracts, net 766,671     823,584     632,102     657,780     669,264  
Cash surrender value of bank-owned life insurance 308,670     306,318     304,141     301,793     299,424  
Receivable on unsettled securities sales 259,906     49,568     115,101     62,228     64,591  
Other assets 1,721,385     1,480,780     1,379,138     1,435,763     1,396,708  
TOTAL ASSETS $ 32,646,473     $ 31,986,042     $ 31,508,471     $ 31,080,176     $ 30,769,733  
                   
LIABILITIES AND EQUITY                  
Deposits:                  
Demand $ 8,497,037     $ 8,162,134     $ 8,105,756     $ 8,312,961     $ 7,994,607  
Interest-bearing transaction 9,650,618     9,590,855     9,756,843     9,527,491     9,760,839  
Savings 420,009     417,122     397,479     382,284     379,828  
Time 2,197,350     2,297,621     2,366,543     2,482,714     2,557,874  
Total deposits 20,765,014     20,467,732     20,626,621     20,705,450     20,693,148  
Funds purchased 68,280     70,682     112,211     73,220     70,281  
Repurchase agreements 522,822     611,264     662,640     623,921     672,085  
Other borrowings 6,342,369     6,076,028     5,583,917     4,957,175     4,779,981  
Subordinated debentures 255,890     232,795     226,368     226,332     226,296  
Derivative contracts, net 747,187     791,313     544,722     632,699     597,908  
Due on unsettled securities purchases 200,574     93,812     158,050     248,811     90,135  
Other liabilities 352,671     298,170     268,705     251,953     240,704  
TOTAL LIABILITIES 29,254,807     28,641,796     28,183,234     27,719,561     27,370,538  
Total equity 3,391,666     3,344,246     3,325,237     3,360,615     3,399,195  
TOTAL LIABILITIES AND EQUITY $ 32,646,473     $ 31,986,042     $ 31,508,471     $ 31,080,176     $ 30,769,733  
                                       

STATEMENTS OF EARNINGS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except per share data)
  Three Months Ended     Nine Months Ended
  September 30,     September 30,
  2016   2015     2016   2015
                 
Interest revenue $ 209,317     $ 193,664       $ 613,380     $ 570,046  
Interest expense 21,471     15,028       60,350     47,953  
Net interest revenue 187,846     178,636       553,030     522,093  
Provision for credit losses 10,000     7,500       65,000     11,500  
Net interest revenue after provision for credit losses 177,846     171,136       488,030     510,593  
Other operating revenue:                
Brokerage and trading revenue 38,006     31,582       109,877     99,301  
Transaction card revenue 33,933     32,514       101,237     96,302  
Fiduciary and asset management revenue 34,073     30,807       100,942     94,988  
Deposit service charges and fees 23,668     23,606       68,828     67,618  
Mortgage banking revenue 42,548     33,170       115,202     109,336  
Other revenue 13,080     12,978       38,336     35,650  
Total fees and commissions 185,308     164,657       534,422     503,195  
Other gains, net 2,442     1,161       5,309     3,373  
Gain on derivatives, net 2,226     1,283       20,130     1,162  
Gain (loss) on fair value option securities, net (3,355 )   5,926       10,367     443  
Change in fair value of mortgage servicing rights 2,327     (11,757 )     (41,944 )   (12,269 )
Gain on available for sale securities, net 2,394     2,166       11,684     9,926  
Total other-than-temporary impairment losses               (781 )
Portion of loss recognized in other comprehensive income               689  
Net impairment losses recognized in earnings               (92 )
Total other operating revenue 191,342     163,436       539,968     505,738  
Other operating expense:                
Personnel 143,185     129,062       421,518     390,305  
Business promotion 6,839     5,922       19,238     19,435  
Charitable contributions to BOKF Foundation     796           796  
Professional fees and services 14,038     10,147       39,955     29,766  
Net occupancy and equipment 20,111     18,689       58,554     56,660  
Insurance 9,390     4,864       23,784     14,960  
Data processing and communications 33,331     30,708       98,150     91,135  
Printing, postage and supplies 3,790     3,376       11,586     10,390  
Net losses (gains) and operating expenses of repossessed assets (926 )   267       1,732     1,103  
Amortization of intangible assets 1,521     1,089       5,304     3,269  
Mortgage banking costs 16,022     9,107       44,210     27,501  
Other expense 14,819     10,601       37,714     26,686  
Total other operating expense 262,120     224,628       761,745     672,006  
                 
Net income before taxes 107,068     109,944       266,253     344,325  
Federal and state income taxes 31,956     34,128       83,881     113,142  
                 
Net income 75,112     75,816       182,372     231,183  
Net income (loss) attributable to non-controlling interests 835     925       (270 )   2,219  
Net income attributable to BOK Financial Corporation shareholders $ 74,277     $ 74,891       $ 182,642     $ 228,964  
                 
Average shares outstanding:                
Basic 65,085,392     67,668,076       65,208,774     68,004,508  
Diluted 65,157,841     67,762,483       65,263,566     68,104,017  
                 
Net income per share:                
Basic $ 1.13     $ 1.09       $ 2.77     $ 3.33  
Diluted $ 1.13     $ 1.09       $ 2.76     $ 3.32  
                                 

FINANCIAL HIGHLIGHTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and share data)
  Three Months Ended
  Sept. 30,2016   June 30, 2016   Mar. 31, 2016   Dec. 31, 2015   Sept. 30,2015
Capital:                  
Period-end shareholders' equity $ 3,398,311     $ 3,368,833     $ 3,321,555     $ 3,230,556     $ 3,377,226  
Risk weighted assets $ 24,358,342     $ 24,191,016     $ 23,707,824     $ 23,429,897     $ 22,706,537  
Risk-based capital ratios:                  
Common equity tier 1 11.99 %   11.86 %   12.00 %   12.13 %   12.78 %
Tier 1 11.99 %   11.86 %   12.00 %   12.13 %   12.78 %
Total capital 13.65 %   13.51 %   13.21 %   13.30 %   13.89 %
Leverage ratio 9.06 %   9.06 %   9.12 %   9.25 %   9.55 %
Tangible common equity ratio 1 9.19 %   9.33 %   9.34 %   9.02 %   9.78 %
                   
Common stock:                  
Book value per share $ 51.56     $ 51.15     $ 50.21     $ 49.03     $ 49.88  
Tangible book value per share 45.12     44.68     43.73     42.51     43.52  
Market value per share:                  
High $ 70.05     $ 65.14     $ 60.16     $ 74.73     $ 70.26  
Low $ 56.36     $ 51.00     $ 43.74     $ 58.25     $ 57.04  
Cash dividends paid $ 28,181     $ 28,241     $ 28,294     $ 28,967     $ 28,766  
Dividend payout ratio 37.94 %   42.92 %   66.47 %   48.60 %   38.41 %
Shares outstanding, net 65,910,454     65,866,317     66,155,103     65,894,032     67,713,031  
Stock buy-back program:                  
Shares repurchased     305,169         1,874,074     1,258,348  
Amount $     $ 17,771     $     $ 119,780     $ 80,276  
Average price per share $     $ 58.23     $     $ 63.91     $ 63.79  
                   
Performance ratios (quarter annualized):
Return on average assets 0.91 %   0.83 %   0.54 %   0.76 %   0.97 %
Return on average equity 8.80 %   8.00 %   5.21 %   7.12 %   8.84 %
Net interest margin 2.64 %   2.63 %   2.65 %   2.64 %   2.61 %
Efficiency ratio 69.21 %   68.45 %   69.05 %   67.93 %   64.34 %
                   
Reconciliation of non-GAAP measures:
1      Tangible common equity ratio:                  
Total shareholders' equity $ 3,398,311     $ 3,368,833     $ 3,321,555     $ 3,230,556     $ 3,377,226  
Less: Goodwill and intangible assets, net 424,716     426,111     428,733     429,370     430,460  
Tangible common equity $ 2,973,595     $ 2,942,722     $ 2,892,822     $ 2,801,186     $ 2,946,766  
                   
Total assets $ 32,779,231     $ 31,970,450     $ 31,413,945     $ 31,476,128     $ 30,566,905  
Less: Goodwill and intangible assets, net 424,716     426,111     428,733     429,370     430,460  
Tangible assets $ 32,354,515     $ 31,544,339     $ 30,985,212     $ 31,046,758     $ 30,136,445  
                   
Tangible common equity ratio 9.19 %   9.33 %   9.34 %   9.02 %   9.78 %
                   
Other data:                  
Fiduciary assets $ 41,222,162     $ 39,924,734     $ 39,113,305     $ 38,333,638     $ 37,780,669  
Tax equivalent adjustment $ 4,455     $ 4,372     $ 4,385     $ 3,222     $ 3,244  
Net unrealized gain on available for sale securities $ 159,533     $ 195,385     $ 155,236     $ 38,109     $ 144,884  
                   
                   
Mortgage banking:                  
Mortgage servicing portfolio $ 21,851,536     $ 21,178,387     $ 20,294,662     $ 19,678,226     $ 18,928,726  
Mortgage commitments $ 630,804     $ 965,631     $ 902,986     $ 601,147     $ 742,742  
Mortgage loans funded for sale $ 1,864,583     $ 1,818,844     $ 1,244,015     $ 1,365,431     $ 1,614,225  
Mortgage loan refinances to total fundings 51 %   44 %   49 %   41 %   30 %
Mortgage loans sold $ 1,873,709     $ 1,742,582     $ 1,239,391     $ 1,424,527     $ 1,778,099  
                   
Net realized gains on mortgage loans sold $ 27,142     $ 19,205     $ 10,779     $ 15,705     $ 18,968  
Change in net unrealized gain on mortgage loans held for sale (1,152 )   3,221     8,198     (5,615 )   (251 )
Total production revenue 25,990     22,426     18,977     10,090     18,717  
Servicing revenue 16,558     15,798     15,453     14,949     14,453  
Total mortgage banking revenue $ 42,548     $ 38,224     $ 34,430     $ 25,039     $ 33,170  
                   
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net $ 2,268     $ 10,766     $ 7,138     $ (732 )   $ 1,460  
Gain (loss) on fair value option securities, net (3,355 )   4,279     9,443     (4,127 )   5,926  
Gain (loss) on economic hedge of mortgage servicing rights (1,087 )   15,045     16,581     (4,859 )   7,386  
Gain (loss) on changes in fair value of mortgage servicing rights 2,327     (16,283 )   (27,988 )   7,416     (11,757 )
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges $ 1,240     $ (1,238 )   $ (11,407 )   $ 2,557     $ (4,371 )
                   
Net interest revenue on fair value option securities $ 861     $ 1,348     $ 2,033     $ 2,137     $ 2,140  
                                       

QUARTERLY EARNINGS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and per share data)
  Three Months Ended
  Sept. 30,2016   June 30, 2016   Mar. 31, 2016   Dec. 31, 2015   Sept. 30,2015
                   
Interest revenue $ 209,317     $ 202,267     $ 201,796     $ 196,782     $ 193,664  
Interest expense 21,471     19,655     19,224     15,521     15,028  
Net interest revenue 187,846     182,612     182,572     181,261     178,636  
Provision for credit losses 10,000     20,000     35,000     22,500     7,500  
Net interest revenue after provision for credit losses 177,846     162,612     147,572     158,761     171,136  
Other operating revenue:                  
Brokerage and trading revenue 38,006     39,530     32,341     30,255     31,582  
Transaction card revenue 33,933     34,950     32,354     32,319     32,514  
Fiduciary and asset management revenue 34,073     34,813     32,056     31,165     30,807  
Deposit service charges and fees 23,668     22,618     22,542     22,813     23,606  
Mortgage banking revenue 42,548     38,224     34,430     25,039     33,170  
Other revenue 13,080     13,352     11,904     14,233     12,978  
Total fees and commissions 185,308     183,487     165,627     155,824     164,657  
Other gains, net 2,442     1,307     1,560     2,329     1,161  
Gain (loss) on derivatives, net 2,226     10,766     7,138     (732 )   1,283  
Gain (loss) on fair value option securities, net (3,355 )   4,279     9,443     (4,127 )   5,926  
Change in fair value of mortgage servicing rights 2,327     (16,283 )   (27,988 )   7,416     (11,757 )
Gain on available for sale securities, net 2,394     5,326     3,964     2,132     2,166  
Total other-than-temporary impairment losses             (2,114 )    
Portion of loss recognized in other comprehensive income             387      
Net impairment losses recognized in earnings             (1,727 )    
Total other operating revenue 191,342     188,882     159,744     161,115     163,436  
Other operating expense:                  
Personnel 143,185     142,490     135,843     133,182     129,062  
Business promotion 6,839     6,703     5,696     8,416     5,922  
Charitable contributions to BOKF Foundation                 796  
Professional fees and services 14,038     14,158     11,759     10,357     10,147  
Net occupancy and equipment 20,111     19,677     18,766     19,356     18,689  
Insurance 9,390     7,129     7,265     5,415     4,864  
Data processing and communications 33,331     32,802     32,017     31,248     30,708  
Printing, postage and supplies 3,790     3,889     3,907     3,108     3,376  
Net losses (gains) and operating expenses of repossessed assets (926 )   1,588     1,070     343     267  
Amortization of intangible assets 1,521     2,624     1,159     1,090     1,089  
Mortgage banking costs 16,022     15,809     12,379     11,496     9,107  
Other expense 14,819     7,856     15,039     8,547     10,601  
Total other operating expense 262,120     254,725     244,900     232,558     224,628  
Net income before taxes 107,068     96,769     62,416     87,318     109,944  
Federal and state income taxes 31,956     30,497     21,428     26,242     34,128  
Net income 75,112     66,272     40,988     61,076     75,816  
Net income (loss) attributable to non-controlling interests 835     471     (1,576 )   1,475     925  
Net income attributable to BOK Financial Corporation shareholders $ 74,277     $ 65,801     $ 42,564     $ 59,601     $ 74,891  
                   
Average shares outstanding:                  
Basic 65,085,392     65,245,887     65,296,541     66,378,380     67,668,076  
Diluted 65,157,841     65,302,926     65,331,428     66,467,729     67,762,483  
Net income per share:                  
Basic $ 1.13     $ 1.00     $ 0.64     $ 0.89     $ 1.09  
Diluted $ 1.13     $ 1.00     $ 0.64     $ 0.89     $ 1.09  
                                       

LOANS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
    Sept. 30,2016   June 30, 2016   Mar. 31, 2016   Dec. 31, 2015   Sept. 30,2015
Commercial:                    
Energy   $ 2,520,804     $ 2,818,656     $ 3,029,420     $ 3,097,328     $ 2,838,167  
Services   2,936,599     2,830,864     2,728,891     2,784,276     2,706,624  
Healthcare   2,085,046     2,051,146     1,995,425     1,883,380     1,741,680  
Wholesale/retail   1,602,030     1,532,957     1,451,846     1,422,064     1,461,936  
Manufacturing   499,486     595,403     600,645     556,729     555,677  
Other commercial and industrial   476,198     527,411     482,198     508,754     493,338  
Total commercial   10,120,163     10,356,437     10,288,425     10,252,531     9,797,422  
                     
Commercial real estate:                    
Retail   801,377     795,419     810,522     796,499     769,449  
Multifamily   873,773     787,200     733,689     751,085     758,658  
Office   752,705     769,112     695,552     637,707     626,151  
Industrial   838,021     645,586     564,467     563,169     563,871  
Residential construction and land development   159,946     157,576     171,949     160,426     153,510  
Other commercial real estate   367,776     427,073     394,328     350,147     363,428  
Total commercial real estate   3,793,598     3,581,966     3,370,507     3,259,033     3,235,067  
                     
Residential mortgage:                    
Permanent mortgage   969,558     969,007     948,405     945,336     937,664  
Permanent mortgages guaranteed by U.S. government agencies   190,309     192,732     197,350     196,937     192,712  
Home equity   712,926     719,184     723,554     734,620     738,619  
Total residential mortgage   1,872,793     1,880,923     1,869,309     1,876,893     1,868,995  
                     
Personal   678,232     587,423     494,325     552,697     465,957  
                     
Total   $ 16,464,786     $ 16,406,749     $ 16,022,566     $ 15,941,154     $ 15,367,441  
                                         

LOANS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
  Sept. 30, 2016   June 30, 2016   March 31, 2016   Dec. 31, 2015   Sept. 30, 2015
                   
Bank of Oklahoma:                  
Commercial $ 3,545,924     $ 3,698,215     $ 3,656,034     $ 3,782,687     $ 3,514,391  
Commercial real estate 795,806     781,458     747,689     739,829     677,372  
Residential mortgage 1,401,166     1,415,766     1,411,409     1,409,114     1,405,235  
Personal 271,420     246,229     204,158     255,387     185,463  
Total Bank of Oklahoma 6,014,316     6,141,668     6,019,290     6,187,017     5,782,461  
                   
Bank of Texas:                  
Commercial 3,903,218     3,901,632     3,936,809     3,908,425     3,752,193  
Commercial real estate 1,400,709     1,311,408     1,211,978     1,204,202     1,257,741  
Residential mortgage 229,345     222,548     217,539     219,126     222,395  
Personal 278,167     233,304     210,456     203,496     194,051  
Total Bank of Texas 5,811,439     5,668,892     5,576,782     5,535,249     5,426,380  
                   
Bank of Albuquerque:                  
Commercial 398,147     398,427     402,082     375,839     368,027  
Commercial real estate 299,785     322,956     323,059     313,422     312,953  
Residential mortgage 110,478     114,226     117,655     120,507     121,232  
Personal 11,333     10,569     10,823     11,557     10,477  
Total Bank of Albuquerque 819,743     846,178     853,619     821,325     812,689  
                   
Bank of Arkansas:                  
Commercial 83,544     81,227     79,808     92,359     76,044  
Commercial real estate 72,649     69,235     66,674     69,320     82,225  
Residential mortgage 6,936     6,874     7,212     8,169     8,063  
Personal 6,757     7,025     918     819     4,921  
Total Bank of Arkansas 169,886     164,361     154,612     170,667     171,253  
                   
Colorado State Bank & Trust:                  
Commercial 1,013,314     1,076,620     1,030,348     987,076     1,029,694  
Commercial real estate 254,078     237,569     219,078     223,946     229,835  
Residential mortgage 59,838     59,425     52,961     53,782     50,138  
Personal 42,901     35,064     24,497     23,384     30,683  
Total Colorado State Bank & Trust 1,370,131     1,408,678     1,326,884     1,288,188     1,340,350  
                   
Bank of Arizona:                  
Commercial 680,447     670,814     656,527     606,733     608,235  
Commercial real estate 726,542     639,112     605,383     507,523     482,918  
Residential mortgage 39,206     38,998     40,338     44,047     41,722  
Personal 31,205     24,248     18,372     31,060     17,609  
Total Bank of Arizona 1,477,400     1,373,172     1,320,620     1,189,363     1,150,484  
                   
Bank of Kansas City:                  
Commercial 495,569     529,502     526,817     499,412     448,838  
Commercial real estate 244,029     220,228     196,646     200,791     192,023  
Residential mortgage 25,824     23,086     22,195     22,148     20,210  
Personal 36,449     30,984     25,101     26,994     22,753  
Total Bank of Kansas City 801,871     803,800     770,759     749,345     683,824  
                   
TOTAL BOK FINANCIAL $ 16,464,786     $ 16,406,749     $ 16,022,566     $ 15,941,154     $ 15,367,441  
                                       

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)
  Sept. 30, 2016   June 30, 2016   March 31, 2016   Dec. 31, 2015   Sept. 30, 2015
Bank of Oklahoma:                  
Demand $ 4,158,273     $ 4,020,181     $ 3,813,128     $ 4,133,520     $ 3,834,145  
Interest-bearing:                  
Transaction 5,701,983     5,741,302     5,706,067     5,971,819     5,783,258  
Savings 242,959     247,984     246,122     226,733     225,580  
Time 1,091,464     1,167,271     1,198,022     1,202,274     1,253,137  
Total interest-bearing 7,036,406     7,156,557     7,150,211     7,400,826     7,261,975  
Total Bank of Oklahoma 11,194,679     11,176,738     10,963,339     11,534,346     11,096,120  
                   
Bank of Texas:                  
Demand 2,734,981     2,677,253     2,571,883     2,627,764     2,689,493  
Interest-bearing:                  
Transaction 2,240,040     2,035,634     2,106,905     2,132,099     1,996,223  
Savings 84,642     83,862     83,263     77,902     74,674  
Time 528,380     516,231     530,657     549,740     554,106  
Total interest-bearing 2,853,062     2,635,727     2,720,825     2,759,741     2,625,003  
Total Bank of Texas 5,588,043     5,312,980     5,292,708     5,387,505     5,314,496  
                   
Bank of Albuquerque:                  
Demand 584,681     530,853     557,200     487,286     520,785  
Interest-bearing:                  
Transaction 555,326     573,690     560,684     563,723     529,862  
Savings 54,480     49,200     47,187     43,672     41,380  
Time 244,706     250,068     259,630     267,821     281,426  
Total interest-bearing 854,512     872,958     867,501     875,216     852,668  
Total Bank of Albuquerque 1,439,193     1,403,811     1,424,701     1,362,502     1,373,453  
                   
Bank of Arkansas:                  
Demand 32,203     30,607     31,318     27,252     25,397  
Interest-bearing:                  
Transaction 313,480     278,335     265,803     202,857     290,728  
Savings 2,051     1,853     1,929     1,747     1,573  
Time 17,534     18,911     21,035     24,983     26,203  
Total interest-bearing 333,065     299,099     288,767     229,587     318,504  
Total Bank of Arkansas 365,268     329,706     320,085     256,839     343,901  
                   
Colorado State Bank & Trust:                  
Demand 517,063     528,124     413,506     497,318     430,675  
Interest-bearing:                  
Transaction 623,055     625,240     610,077     616,697     655,206  
Savings 31,613     31,509     33,108     31,927     31,398  
Time 247,667     254,164     271,475     296,224     320,279  
Total interest-bearing 902,335     910,913     914,660     944,848     1,006,883  
Total Colorado State Bank & Trust 1,419,398     1,439,037     1,328,166     1,442,166     1,437,558  
                   
Bank of Arizona:                  
Demand 418,718     396,837     341,828     326,324     306,425  
Interest-bearing:                  
Transaction 303,750     302,297     313,825     358,556     293,319  
Savings 2,959     3,198     3,277     2,893     4,121  
Time 27,935     28,681     29,053     29,498     26,750  
Total interest-bearing 334,644     334,176     346,155     390,947     324,190  
Total Bank of Arizona 753,362     731,013     687,983     717,271     630,615  
                   
Bank of Kansas City:                  
Demand 235,445     240,754     221,812     197,424     234,847  
Interest-bearing:                  
Transaction 86,526     112,371     146,405     153,203     150,253  
Savings 1,645     1,656     1,619     1,378     1,570  
Time 11,945     11,735     31,502     35,524     36,630  
Total interest-bearing 100,116     125,762     179,526     190,105     188,453  
Total Bank of Kansas City 335,561     366,516     401,338     387,529     423,300  
                   
TOTAL BOK FINANCIAL $ 21,095,504     $ 20,759,801     $ 20,418,320     $ 21,088,158     $ 20,619,443  
                                       

NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
  Three Months Ended
  Sept. 30, 2016   June 30, 2016   March 31, 2016   Dec. 31, 2015   Sept. 30, 2015
                   
TAX-EQUIVALENT ASSETS YIELDS                  
Interest-bearing cash and cash equivalents 0.51 %   0.51 %   0.53 %   0.29 %   0.28 %
Trading securities 2.71 %   1.89 %   2.47 %   2.86 %   2.70 %
Investment securities:                            
Taxable 5.34 %   5.41 %   5.53 %   5.41 %   5.49 %
Tax-exempt 2.26 %   2.25 %   2.22 %   1.53 %   1.54 %
Total investment securities 3.51 %   3.52 %   3.51 %   3.03 %   3.04 %
Available for sale securities:                            
Taxable 1.99 %   2.01 %   2.06 %   2.02 %   1.99 %
Tax-exempt 5.47 %   5.06 %   4.95 %   4.22 %   4.15 %
Total available for sale securities 2.01 %   2.04 %   2.08 %   2.04 %   2.01 %
Fair value option securities 1.70 %   2.19 %   2.38 %   2.32 %   2.30 %
Restricted equity securities 5.37 %   4.84 %   5.85 %   5.95 %   5.95 %
Residential mortgage loans held for sale 3.28 %   3.53 %   3.75 %   3.85 %   3.79 %
Loans 3.63 %   3.58 %   3.57 %   3.55 %   3.54 %
Allowance for loan losses                            
Loans, net of allowance 3.69 %   3.63 %   3.63 %   3.60 %   3.59 %
Total tax-equivalent yield on earning assets 2.93 %   2.91 %   2.92 %   2.86 %   2.83 %
                             
COST OF INTEREST-BEARING LIABILITIES                            
Interest-bearing deposits:                            
Interest-bearing transaction 0.14 %   0.14 %   0.14 %   0.09 %   0.08 %
Savings 0.09 %   0.10 %   0.09 %   0.09 %   0.10 %
Time 1.14 %   1.16 %   1.21 %   1.26 %   1.33 %
Total interest-bearing deposits 0.32 %   0.33 %   0.34 %   0.32 %   0.34 %
Funds purchased 0.19 %   0.19 %   0.27 %   0.11 %   0.08 %
Repurchase agreements 0.04 %   0.05 %   0.05 %   0.04 %   0.03 %
Other borrowings 0.57 %   0.57 %   0.56 %   0.38 %   0.30 %
Subordinated debt 3.84 %   1.52 %   1.26 %   1.13 %   1.04 %
Total cost of interest-bearing liabilities 0.44 %   0.41 %   0.40 %   0.34 %   0.32 %
Tax-equivalent net interest revenue spread 2.49 %   2.50 %   2.52 %   2.52 %   2.51 %
Effect of noninterest-bearing funding sources and other 0.15 %   0.13 %   0.13 %   0.12 %   0.10 %
Tax-equivalent net interest margin 2.64 %   2.63 %   2.65 %   2.64 %   2.61 %
                             

Yield calculations are shown on a tax equivalent basis at the statutory federal and state rates for the periods presented. The yield calculations exclude security trades that have been recorded on trade date with no corresponding interest income and the unrealized gains and losses. The yield calculation also includes average loan balances for which the accrual of interest has been discontinued and are net of unearned income. Yield/rate calculations are generally based on the conventions that determine how interest income and expense is accrued.
 
CREDIT QUALITY INDICATORS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratios)
  Three Months Ended
  Sept. 30, 2016   June 30, 2016   March 31, 2016   Dec. 31, 2015   Sept. 30, 2015
Nonperforming assets:                  
Nonaccruing loans:                  
Commercial $ 176,464     $ 181,989     $ 174,652     $ 76,424     $ 33,798  
Commercial real estate 7,350     7,780     9,270     9,001     10,956  
Residential mortgage 52,452     57,061     57,577     61,240     44,099  
Personal 686     354     331     463     494  
Total nonaccruing loans 236,952     247,184     241,830     147,128     89,347  
Accruing renegotiated loans guaranteed by U.S. government agencies 80,306     78,806     77,597     74,049     81,598  
Real estate and other repossessed assets 31,941     24,054     29,896     30,731     33,116  
Total nonperforming assets $ 349,199     $ 350,044     $ 349,323     $ 251,908     $ 204,061  
Total nonperforming assets excluding those guaranteed by U.S. government agencies $ 253,461     $ 251,497     $ 252,176     $ 155,959     $ 118,578  
                   
Nonaccruing loans by loan class:                  
Commercial:                  
Energy $ 142,966     $ 168,145     $ 159,553     $ 61,189     $ 17,880  
Services 8,477     9,388     9,512     10,290     10,692  
Wholesale / retail 2,453     2,772     3,685     2,919     3,058  
Manufacturing 274     293     312     331     352  
Healthcare 855     875     1,023     1,072     1,218  
Other commercial and industrial 21,439     516     567     623     598  
Total commercial 176,464     181,989     174,652     76,424     33,798  
Commercial real estate:                  
Residential construction and land development 3,739     4,261     4,789     4,409     4,748  
Retail 1,249     1,265     1,302     1,319     1,648  
Office 882     606     629     651     684  
Multifamily 51     65     250     274     185  
Industrial 76     76     76     76     76  
Other commercial real estate 1,353     1,507     2,224     2,272     3,615  
Total commercial real estate 7,350     7,780     9,270     9,001     10,956  
Residential mortgage:                  
Permanent mortgage 25,956     27,228     27,497     28,984     30,660  
Permanent mortgage guaranteed by U.S. government agencies 15,432     19,741     19,550     21,900     3,885  
Home equity 11,064     10,092     10,530     10,356     9,554  
Total residential mortgage 52,452     57,061     57,577     61,240     44,099  
Personal 686     354     331     463     494  
Total nonaccruing loans $ 236,952     $ 247,184     $ 241,830     $ 147,128     $ 89,347  
                   
                   
Performing loans 90 days past due 1 $ 3,839     $ 2,899     $ 8,019     $ 1,207     $ 101  
                   
Gross charge-offs $ (8,101 )   $ (8,845 )   $ (23,991 )   $ (4,851 )   $ (5,274 )
Recoveries 2,038     1,386     1,519     1,870     3,521  
Net charge-offs $ (6,063 )   $ (7,459 )   $ (22,472 )   $ (2,981 )   $ (1,753 )
                   
Provision for credit losses $ 10,000     $ 20,000     $ 35,000     $ 22,500     $ 7,500  
                   
Allowance for loan losses to period end loans 1.49 %   1.48 %   1.46 %   1.41 %   1.33 %
Combined allowance for credit losses to period end loans 1.56 %   1.54 %   1.50 %   1.43 %   1.35 %
Nonperforming assets to period end loans and repossessed assets 2.12 %   2.13 %   2.18 %   1.58 %   1.33 %
Net charge-offs (annualized) to average loans 0.15 %   0.18 %   0.56 %   0.08 %   0.05 %
Allowance for loan losses to nonaccruing loans 1 110.65 %   106.95 %   104.89 %   180.09 %   238.84 %
Combined allowance for credit losses to nonaccruing loans 1 115.67 %   110.93 %   107.87 %   181.46 %   243.05 %

1   Excludes residential mortgage loans guaranteed by agencies of the U.S. government.

 
For Further Information Contact:Joseph CrivelliInvestor Relations(918) 595-3027

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