0000875357-12-000027.txt : 20120801 0000875357-12-000027.hdr.sgml : 20120801 20120801113055 ACCESSION NUMBER: 0000875357-12-000027 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20120801 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20120801 DATE AS OF CHANGE: 20120801 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOK FINANCIAL CORP ET AL CENTRAL INDEX KEY: 0000875357 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 731373454 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-19341 FILM NUMBER: 12999035 BUSINESS ADDRESS: STREET 1: BANK OF OKLAHOMA TOWER STREET 2: PO BOX 2300 CITY: TULSA STATE: OK ZIP: 74192 BUSINESS PHONE: 9185953025 MAIL ADDRESS: STREET 1: BANK OF OKLAHOMA TOWER STREET 2: P O BOX 2300 CITY: TULSA STATE: OK ZIP: 74192 8-K 1 bokf-120630x8k.htm FORM 8-K 06/30/12 BOKF-12.06.30-8K


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):
August 1, 2012

Commission File No. 0-19341

BOK FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)

Oklahoma
 
73-1373454
(State or other jurisdiction
of Incorporation or Organization)
 
(IRS Employer
Identification No.)
 
 
 
Bank of Oklahoma Tower
 
 
P.O. Box 2300
 
 
Tulsa, Oklahoma
 
74192
(Address of Principal Executive Offices)
 
(Zip Code)
 
(918) 588-6000
(Registrant’s telephone number, including area code)

N/A
___________________________________________
(Former name or former address, if changes since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).

|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).

|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).

|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).







INFORMATION TO BE INCLUDED IN THE REPORT

ITEM 2.02. Results of Operations and Financial Condition.

On August 1, 2012, BOK Financial Corporation (“BOK Financial”) issued a press release announcing its financial results for the three and six months ended June 30, 2012 (“Press Release”). The full text of the Press Release is attached as Exhibit 99(a) to this report and is incorporated herein by reference. On August 1, 2012, in connection with issuance of the Press Release, BOK Financial released financial information related to the three and six months ended June 30, 2012 (“Financial Information”), which includes certain historical financial information relating to BOK Financial. The Financial Information is attached as Exhibit 99(b) to this report and is incorporated herein by reference.


ITEM 9.01. Financial Statements and Exhibits.

(a)
Exhibits

99
Text of Press Release, dated August 1, 2012 titled “BOK Financial Reports Quarterly Earnings of $98 million -- Non-interest Revenue Growth and Continued Credit Improvement Drive Results” and Financial Information for the Three and Six Months Ended June 30, 2012





Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


BOK FINANCIAL CORPORATION




By: /s/ Steven E. Nell            
Steven E. Nell
Executive Vice President
Chief Financial Officer
Date: August 1, 2012



EX-99.A 2 bokf-20120630xex99a.htm TEXT OF PRESS RELEASE BOKF-2012.06.30-EX 99


Exhibit 99 (a)

NASD: BOKF


For Further Information Contact:
Steven Nell             Andrea Myers
Chief Financial Officer     Corporate Communications
(918) 588-6752         (918) 594-7794

BOK Financial Reports Quarterly Earnings of $98 million
Non-interest Revenue Growth and Continued Credit Improvement Drive Results

TULSA, Okla. (Wednesday, August 1, 2012) - BOK Financial Corporation reported net income of $97.6 million or $1.43 per diluted share for the second quarter of 2012, up $14.0 million or 17% over the prior quarter. Net income was $83.6 million or $1.22 per diluted share for the first quarter of 2012 and $69.0 million or $1.00 per diluted share for the second quarter of 2011. Net income for the six months ended June 30, 2012 totaled $181.2 million or $2.65 per diluted share compared to $133.8 million or $1.95 per diluted share for the six months ended June 30, 2011.
“BOK Financial is pleased to announce solid performance for the second quarter of 2012,” said President and CEO Stan Lybarger. “All of our non-interest revenue sources increased over the previous quarter, led by a 20% increase in mortgage banking revenue. Our mortgage banking efforts produced outstanding results as the current low interest rate environment continues to drive demand. In addition, improvements in credit quality increased net income by more than $14 million or $0.21 per diluted share during the second quarter. We recognized a $14 million pretax gain on the sale of common stock received in settlement of a defaulted loan and recorded an $8 million negative provision for credit losses."
Highlights of second quarter of 2012 included:
Net interest revenue increased to $181.4 million for the second quarter of 2012 compared to $173.6 million for the first quarter of 2012. Net interest margin was 3.30% for the second quarter of 2012 and 3.19% for the first quarter of 2012. Net interest revenue for the second quarter of 2012 included $2.9 million from the full recovery of a nonaccruing commercial loan. Excluding this recovery, net interest margin was 3.25% for the second quarter of 2012.
Fees and commissions revenue totaled $154.5 million, up $10.1 million or 7% over the first quarter of 2012. Mortgage banking revenue increased $6.5 million. All other fee-based revenue sources also increased over the prior quarter.
Operating expenses, excluding changes in the fair value of mortgage servicing rights, totaled $212.3 million, up $20.0 million over the previous quarter. Personnel expenses were up $7.5 million due largely to incentive compensation. Non-personnel expense increased $12.4 million due primarily to higher mortgage banking, repossessed assets, and data processing expenses.

1



An $8.0 million negative provision for credit losses was recorded in the second quarter of 2012. No provision for credit losses was recorded in the first quarter of 2012. Net charge-offs continued to decrease and other credit quality indicators continue to improve. Net charge-offs totaled $4.8 million or 0.17% of average loans on an annualized basis in the second quarter of 2012 compared to $8.5 million or 0.30% of average loans on an annualized basis in the first quarter of 2012. Net charge-offs for the second quarter were reduced by $2.1 million from the full recovery of a nonaccruing commercial loan.
The combined allowance for credit losses totaled $241 million or 2.09% of outstanding loans at June 30, 2012 compared to $254 million or 2.20% of outstanding loans at March 31, 2012. Nonperforming assets totaled $279 million or 2.38% of outstanding loans and repossessed assets at June 30, 2012 and $336 million or 2.87% of outstanding loans and repossessed assets at March 31, 2012.
Outstanding loan balances were $11.6 billion at June 30, 2012, flat compared to the prior quarter. Commercial loan balances increased $93 million and residential mortgage loans increased $37 million over March 31, 2012. Commercial real estate loans decreased $107 million and consumer loans decreased $24 million.
Period end deposits totaled $18.4 billion at June 30, 2012 compared to $18.5 billion at March 31, 2012. Demand deposit accounts were up $251 million, offset by a $357 million decrease in interest-bearing transaction accounts and a $58 million decrease in time deposits.
Tangible common equity ratio was 10.07% at June 30, 2012 and 9.75% at March 31, 2012. 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 13.62% at June 30, 2012 and 13.03% at March 31, 2012.
The Company paid a cash dividend of $26 million or $0.38 per common share during the second quarter of 2012. On July 31, 2012, the board of directors approved a quarterly cash dividend of $0.38 per common share payable on or about August 31, 2012 to shareholders of record as of August 17, 2012.
Net Interest Revenue
Net interest revenue increased $7.8 million over the first quarter of 2012, including $2.9 million from the full recovery of a nonaccruing commercial loan during the second quarter. Excluding this interest recovery, net interest margin increased 6 basis points over the prior quarter to 3.25%.
The yield on average earning assets was flat compared to the prior quarter and the yield on the loan portfolio decreased by 2 basis point to 4.48%, excluding the impact of the interest recovery. The available for sale securities portfolio yield increased 4 basis points to 2.54% primarily due to efforts to reduce our exposure to prepayment risk on our mortgage-back securities portfolio. The cost of interest-bearing liabilities decreased 7 basis points from the previous quarter to 0.56%. The average rate of interest paid on subordinated debentures decreased 167 basis points compared to the first quarter of 2012 to 3.95%. The interest rate on $233 million of these subordinated debentures converted from a fixed interest rate of 5.75% to a floating interest rate based on LIBOR plus 0.69% during the second quarter.

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Average earning assets increased $163 million during the second quarter of 2012. Average outstanding loans increased $178 million due primarily to a $194 million increase in commercial loan balances. The average balance of the available for sale securities portfolio increased $144 million over the first quarter of 2012. The average balance of residential mortgage-backed securities we have elected to carry at fair value decreased $219 million compared to the first quarter of 2012. These securities are generally used as an economic hedge against changes in the value of mortgage servicing rights and the average outstanding balance can change significantly.
Average interest-bearing deposits decreased $637 million compared to the previous quarter. Average demand deposits balances were up $431 million over the prior quarter. Average interest-bearing transaction account balances decreased $540 million and average time deposit account balances decreased $114 million. Average balances of borrowed funds increased $328 million over the first quarter of 2012.

Fees and Commissions Revenue
Fees and commissions revenue totaled $154.5 million, up $10.1 million over the first quarter of 2012 due primarily to a $6.5 million increase in mortgage banking revenue. All other significant sources of fee revenue also increased over the previous quarter.
Growth in mortgage banking revenue was due to increased mortgage loan production volumes and improved pricing of loans sold which resulted from continued low interest rates. Residential mortgage loans funded for sale totaled $842 million for the second quarter of 2012, up $96 million or 13% over the previous quarter. Refinanced mortgage loans were 51% of loans originated for sale in the second quarter of 2012 compared to 67% of the loans originated for sale in the first quarter of 2012. The unpaid principal balance of residential mortgage loans held for sale was up $5.9 million or 3% and outstanding mortgage loan commitments were up $90 million or 30% over March 31, 2012. Expansion of our mortgage banking division in the Texas, Colorado and Kansas markets positioned us to benefit from increased demand as the result of continued low mortgage interest rates.
Trust fees and commissions revenue increased $1.5 million over the first quarter of 2012 primarily due to the seasonal timing of tax-service fees. Brokerage and trading revenue was up $1.5 million. Investment banking revenues increased $1.2 million primarily due to the expansion of our municipal financial advisory services, particularly in the Texas market. Retail brokerage fees were up $512 thousand due to increased market volatility and customer transactions. Securities trading and customer hedging revenue were flat compared to the prior quarter. The Company received a $2.9 million recovery of derivative contract losses from the 2008 Lehman Brothers bankruptcy. This recovery was offset by a decrease in revenue from energy derivative contracts due to a decline in contract volumes. Transaction card revenue increased $1.3 million due primarily to an increase in the volume of card transactions processed on behalf of merchant services customers. Deposits service charges and fees increased $837 thousand due primarily to an increased volume of overdraft charges compared to the first quarter of 2012.
Operating Expenses
Total operating expenses were $223.8 million for the second quarter of 2012 compared to $185.2 million for the first quarter of 2012. Excluding changes in the fair value of mortgage servicing rights, operating expenses totaled $212.3 million, up $20.0 million over the first quarter of 2012.
Personnel costs increased $7.5 million due primarily to increased incentive compensation expense. Stock-

3



based incentive compensation expense increased $4.7 million primarily due to the timing of accruals for the BOK Financial Corporation True-Up Plan, which provides incentive compensation for certain senior executives based on earnings per share performance and compensation of comparable senior executives at peer banks. 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 $1.7 million. Regular compensation expense was up $2.1 million primarily due to standard annual merit increases which were fully effective in the second quarter of 2012.
Non-personnel expense increased $12.4 million over the first quarter of 2012. Net losses and operating expenses on repossessed properties were up $3.7 million over the first quarter of 2012. Losses on sales and write-downs of repossessed assets increased by $2.7 million. Write-downs of repossessed assets were up primarily due regularly scheduled appraisal updates, partially offset by decreased losses on sales of repossessed assets. Operating expenses of repossessed assets were up $945 thousand over the first quarter. Mortgage banking costs were up $3.6 million due to increased provision for potential losses on loans sold to government sponsored entities under standard representation and warranties. While the number of actual repurchases has remained low, the loss severity has trended higher. At June 30, 2012, we have unresolved deficiency requests from the agencies on 303 loans with an aggregate outstanding principal balance of $40 million from our $11.6 billion mortgage servicing portfolio. Data processing and communications expense increased $3.1 million. Data processing and communications expense in the first quarter was lower due to the favorable resolution of a dispute with a service provider. Business promotion expense was up $2.4 million due primarily to timing of marketing expenses.

Loans, Deposits and Capital
Loans
Outstanding loans at June 30, 2012 were $11.6 billion, flat compared to March 31, 2012. Growth in commercial and residential mortgage loans was offset by decreases in commercial real estate and consumer loans.
Outstanding commercial loan balances increased $93 million over March 31, 2012 due primarily to a $69 million increase in loans attributed to Colorado and a $60 million increase in loans attributed to Texas, partially offset by a $15 million decrease in loans attributed to the Arkansas market. Energy sector loans increased $112 million, growing in the Colorado, Oklahoma and Texas markets. Service sector loans increased $19 million. Growth in the Texas, Colorado and Arizona markets was partially offset by decreased loan balances in the Oklahoma market. Wholesale/retail sector loans decreased $67 million primarily in the Texas and Oklahoma markets. Other commercial and industrial sector loans increased $5 million primarily due to a decrease in the Arkansas market, partially offset by an increase in the Texas market. Unfunded energy loan commitments increased $220 million during the second quarter to $2.1 billion. All other unfunded commercial loan commitments totaled $3.1 billion at June 30, 2012.
Commercial real estate loans decreased $107 million compared to March 31, 2012 due to improved market conditions for permanent financing. Loans secured by multifamily residential properties decreased $74 million primarily related to loans in the Texas market. Loans secured by industrial properties decreased $58 million primarily in the Texas market. Construction and land development loan balances continued to decline, down $31 million, primarily in the Oklahoma, Texas and Colorado markets. Unfunded commercial real estate loan commitments totaled $535 million at June 30, 2012, up $85 million over March 31, 2012.

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Residential mortgage loans increased $37 million over March 31, 2012. Home equity loans increased $48 million. Non-guaranteed permanent mortgage loans increased $6.4 million and permanent mortgage loans guaranteed by U.S. government agencies decreased $18 million.
Consumer loans decreased $24 million from March 31, 2012, primarily due to continued runoff of indirect automobile loans related to the previously announced decision to curtail that business in favor of a customer-focused direct approach to consumer lending. Approximately $63 million of indirect automobile loans remain outstanding at June 30, 2012.
Deposits
Deposits totaled $18.4 billion at June 30, 2012 compared to $18.5 billion at March 31, 2012. Demand deposit balances increased $251 million. Interest-bearing transaction account balances decreased $357 million and time deposits decreased $58 million. Among the lines of business, commercial deposits increased $35 million, wealth management deposits decreased $120 million and consumer deposits decreased $107 million. Increased commercial and industrial and energy account balances were partially offset by decreased treasury services customer balances. Commercial customers continue to maintain high account balances due to continued economic uncertainty and persistently low yields available on high quality investment alternatives.
Capital
The Company and its subsidiary bank exceeded the regulatory definition of well capitalized at June 30, 2012. The Company's Tier 1 capital ratio was 13.62% at June 30, 2012 and 13.03% at March 31, 2012. The total capital ratio was 16.19% at June 30, 2012 and 16.16% at March 31, 2012. In addition, the Company's tangible common equity ratio, a non-GAAP measure, was 10.07% at June 30, 2012 and 9.75% at March 31, 2012. Unrealized securities gains added 49 basis points to the tangible common equity ratio at June 30, 2012. The Company repurchased 39,496 common shares at an average price of $53.81 per share during the second quarter through a previously-announced share repurchase program.
In June, banking regulators issued a Notice of Proposed Rulemaking that will incorporate Basel III capital changes for substantially all U.S. banking organizations. If adopted as proposed, these changes will establish a 7% threshold for the Tier 1 common equity ratio consisting of a minimum level plus a capital conservation buffer. BOK Financial's Tier 1 common equity ratio based on the existing Basel I standards was 13.41% as of June 30, 2012. Our estimated Tier 1 common equity ratio under a fully phased in Basel III framework is approximately 12.75%, nearly 575 basis points above the 7% regulatory threshold. This estimate is subject to interpretation of rules that are not yet final. Additionally, the proposed definition of Tier 1 common equity includes unrealized gains and losses on available for sale securities which will vary based on market conditions.
Credit Quality
Nonperforming assets decreased $57 million during the second quarter of 2012 to $279 million or 2.38% of outstanding loans and repossessed assets at June 30, 2012. Nonaccruing loans decreased $39 million and real estate and other repossessed assets decreased $10 million. Renegotiated loans, largely consisting of residential mortgage loans guaranteed by U.S. government agencies, decreased $8 million due primarily to loans sold to government agencies.
Nonaccruing loans totaled $144 million or 1.25% of outstanding loans at June 30, 2012 and $183 million or 1.58% of outstanding loans at March 31, 2012. During the second quarter of 2012, $18 million of new

5



nonaccruing loans were identified, offset by $38 million in payments received, $12 million in charge-offs and $6.2 million in foreclosures and repossessions.
Nonaccruing commercial loans decreased to $35 million or 0.49% of outstanding commercial loans at June 30, 2012 from $62 million or 0.89% of outstanding commercial loans at March 31, 2012. Significant decreases included the full recovery of an $11 million wholesale/retail sector loan in the Arkansas market, plus recovery of $2.1 million previously charged off and $2.9 million of foregone interest and fees. In addition, a partial payment of $12 million was received during the second quarter on a nonaccruing manufacturing sector loan in the Oklahoma market. Nonaccruing commercial real estate loans decreased to $80 million or 3.77% of outstanding commercial real estate loans at June 30, 2012 from $86 million or 3.87% of outstanding commercial real estate loans at March 31, 2012. Nonaccruing commercial real estate loans consist primarily of land development and residential construction loans. Nonaccruing land development and residential construction loans decreased $6.4 million to $46 million or 16.04% of all land development and construction loans nonaccruing at June 30, 2012.
Nonaccruing residential mortgage loans decreased $4.7 million during the second quarter of 2012 to $23 million or 1.13% of outstanding residential mortgage loans. Principally all non-guaranteed residential mortgage loans past due 90 days or more are nonaccruing. Residential mortgage loans past due 30 to 89 days and still accruing interest, excluding loans guaranteed by U.S. government agencies, totaled $17 million at June 30, 2012 and $15 million at March 31, 2012.
The combined allowance for credit losses totaled $241 million or 2.09% of outstanding loans and 167.09% of nonaccruing loans at June 30, 2012. The allowance for loan losses was $232 million and the accrual for off-balance sheet credit losses was $9.7 million. Quarterly net charge-offs continued to decline. Net loans charged-off against the allowance for loan loss totaled $4.8 million or 0.17% on an annualized basis for the second quarter of 2012 compared to $8.5 million or 0.30% on an annualized basis for the first quarter of 2012. Gross charge-offs continue to decrease, down $2.1 million from the previous quarter. Other credit factors also continue to improve. Most economic indicators are stable or improving in our primary markets. After evaluating all credit factors, the Company recorded an $8.0 million negative provision for credit losses during the second quarter of 2012.
Subsequent to June 30, 2012, BOK Financial refunded $7.1 million received from the City of Tulsa in 2008 to settle claims related to a defaulted loan. The settlement agreement between BOK Financial and the City of Tulsa had been invalidated by the Oklahoma Supreme Court and the refund amount was fully accrued in 2011. The refund of this settlement will increase third quarter net charge-offs.
Real estate and other repossessed assets totaled $106 million at June 30, 2012, primarily consisting of $40 million of 1-4 family residential properties (including $21 million guaranteed by U.S. government agencies), $32 million of developed commercial real estate properties, $17 million of undeveloped land and $14 million of residential land and land development properties. The distribution of real estate owned and other repossessed assets among various markets included $28 million attributed to Arizona, $22 million attributed to Texas, $19 million attributed to New Mexico and $15 million attributed to Oklahoma. Real estate and other repossessed assets decreased by $10 million during the second quarter of 2012. Sales of $37 million were partially offset by $30 million of additions. Additions included $21 million and sales included $20 million of 1-4 family residential properties guaranteed by U.S. government agencies. Write-downs and net losses on sales of real estate and other repossessed assets totaled $3.2 million.
The Company also has off-balance sheet credit risk related to residential mortgage loans sold prior to 2008 to U.S. government agencies under various community development programs with full recourse for the life of the loans. The outstanding principal balance of these loans decreased to $241 million at

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June 30, 2012 from $248 million at March 31, 2012. The loans are primarily to borrowers in our market areas, including $170 million in Oklahoma. At June 30, 2012, approximately 5% of these loans are nonperforming and 6% were past due 30 to 89 days. A separate accrual for credit risk of $18 million is available to absorb losses on these loans.

Securities and Derivatives
The fair value of the available for sale securities portfolio totaled $10.4 billion at June 30, 2012 and $10.2 billion at March 31, 2012. The available for sale portfolio consisted primarily of residential mortgage-backed securities, including $9.9 billion fully backed by U.S. government agencies and $318 million privately issued by publicly owned financial institutions. Privately issued mortgage-backed securities included $199 million backed by Jumbo-A residential mortgage loans and $118 million backed by Alt-A residential mortgage loans. Net unamortized premiums are less than 1% of the securities portfolio amortized cost.
Net unrealized gains on available for sale securities totaled $242 million at June 30, 2012 and $277 million at March 31, 2012. Net unrealized gains on residential mortgage-backed securities issued by U.S. government agencies decreased $27 million during the second quarter to $272 million at June 30, 2012. Net unrealized losses on privately issued residential mortgage-backed securities totaled $36 million at June 30, 2012 and $45 million at March 31, 2012.
The amortized cost of privately issued residential mortgage-backed securities totaled $354 million at June 30, 2012, down $17 million since March 31, 2012. All of these securities are rated below investment grade by at least one nationally-recognized rating agency. The amortized cost of these securities was reduced during the second quarter of 2012 by $16 million of cash payments received and $858 thousand of credit-related impairment charges during the quarter.
In the second quarter of 2012, the Company recognized net gains of $20.5 million from sales of available for sale securities, including a gain of $14.2 million from the sale of $26 million of stock received in settlement of a defaulted loan. The Company also recognized $6.1 million of gains on sales of $433 million of residential mortgage-backed securities guaranteed by U.S. government agencies held in available for sale securities. These securities were sold either because they had reached their expected maximum potential total return or to mitigate exposure to prepayment risk. Net gains from sales of available for sale securities totaled $4.3 million in the first quarter of 2012.
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. Residential mortgage interest rates decreased during the second quarter of 2012, causing prepayment speeds to increase and the value of our mortgage servicing rights to decrease by $11.5 million. This decrease was partially offset by a $9.5 million increase in the value of securities and interest rate derivative contracts held as an economic hedge.



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About BOK Financial Corporation
BOK Financial is a $26 billion regional financial services company based in Tulsa, Oklahoma. The Company's stock is publicly traded on NASDAQ under the Global Select market listings (symbol: BOKF). BOK Financial's holdings include BOKF, NA, BOSC, Inc. and Cavanal Hill Investment Management, Inc. BOKF, NA operates the TransFund electronic funds network and seven banking divisions: Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas and Colorado State Bank and Trust. Through its subsidiaries, the Company provides commercial and consumer banking, investment and trust services, mortgage origination and servicing, and an electronic funds transfer network. For more information, visit www.bokf.com.
The Company will continue to evaluate critical assumptions and estimates, such as the adequacy of the allowance for credit losses and asset impairment as of June 30, 2012 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.



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BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
 
 
June 30,
2012
 
March 31,
2012
 
June 30,
2011
ASSETS
 
 
 
 
 
 
Cash and due from banks
 
$
628,092

 
$
691,697

 
$
1,098,721

Funds sold and resell agreements
 
11,171

 
14,609

 
12,040

Trading securities
 
149,317

 
128,376

 
99,846

Investment securities
 
412,479

 
427,259

 
349,583

Available for sale securities
 
10,395,415

 
10,186,597

 
9,567,008

Fair value option securities
 
325,177

 
347,952

 
553,231

Residential mortgage loans held for sale
 
259,174

 
247,039

 
169,609

Loans:
 
 
 
 
 
 
Commercial
 
7,052,544

 
6,959,092

 
6,170,245

Commercial real estate
 
2,126,214

 
2,233,683

 
2,188,031

Residential mortgage
 
2,005,097

 
1,968,372

 
1,871,954

Consumer
 
392,576

 
416,297

 
507,314

Total loans
 
11,576,431

 
11,577,444

 
10,737,544

Less allowance for loan losses
 
(231,669
)
 
(244,209
)
 
(286,611
)
Loans, net of allowance
 
11,344,762

 
11,333,235

 
10,450,933

Premises and equipment, net
 
261,508

 
263,579

 
265,057

Receivables
 
121,944

 
138,325

 
129,944

Goodwill
 
335,601

 
335,601

 
335,601

Intangible assets, net
 
9,098

 
9,645

 
12,010

Mortgage servicing rights, net
 
91,783

 
98,138

 
109,192

Real estate and other repossessed assets
 
105,708

 
115,790

 
129,026

Bankers' acceptances
 
2,873

 
3,493

 
1,661

Derivative contracts
 
366,204

 
384,996

 
229,887

Cash surrender value of bank-owned life insurance
 
269,093

 
266,227

 
261,203

Receivable on unsettled securities sales
 
32,876

 
511,288

 
170,600

Other assets
 
453,771

 
380,327

 
293,030

TOTAL ASSETS
 
$
25,576,046

 
$
25,884,173

 
$
24,238,182

LIABILITIES AND EQUITY
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
Demand
 
$
6,440,375

 
$
6,189,172

 
$
4,725,977

Interest-bearing transaction
 
8,551,874

 
8,908,397

 
9,013,323

Savings
 
261,998

 
259,619

 
211,877

Time
 
3,107,950

 
3,166,099

 
3,634,700

Total deposits
 
18,362,197

 
18,523,287

 
17,585,877

Funds purchased
 
1,453,750

 
1,784,940

 
1,706,893

Repurchase agreements
 
1,136,948

 
1,162,546

 
1,106,163

Other borrowings
 
58,056

 
209,230

 
149,703

Subordinated debentures
 
353,378

 
394,760

 
398,788

Accrued interest, taxes, and expense
 
140,434

 
180,840

 
104,493

Bankers' acceptances
 
2,873

 
3,493

 
1,661

Due on unsettled securities purchases
 
603,800

 
305,166

 
166,607

Derivative contracts
 
370,053

 
305,290

 
173,917

Other liabilities
 
171,836

 
144,220

 
151,906

TOTAL LIABILITIES
 
22,653,325

 
23,013,772

 
21,546,008

Shareholders' equity:
 
 
 
 
 
 
Capital, surplus and retained earnings
 
2,746,744

 
2,673,001

 
2,521,462

Accumulated other comprehensive income
 
139,190

 
161,418

 
146,255

TOTAL SHAREHOLDERS' EQUITY
 
2,885,934

 
2,834,419

 
2,667,717

Non-controlling interest
 
36,787

 
35,982

 
24,457

TOTAL EQUITY
 
2,922,721

 
2,870,401

 
2,692,174

TOTAL LIABILITIES AND EQUITY
 
$
25,576,046

 
$
25,884,173

 
$
24,238,182


9




AVERAGE BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
 
Three Months Ended
 
June 30,
2012
 
March 31,
2012
 
December 31,
2011
 
September 30,
2011
 
June 30,
2011
ASSETS
 
 
 
 
 
 
 
 
 
Funds sold and resell agreements
$
19,187

 
$
11,385

 
$
12,035

 
$
12,344

 
$
8,814

Trading securities
143,770

 
95,293

 
97,972

 
88,576

 
80,113

Investment securities
416,284

 
430,890

 
443,326

 
329,627

 
357,698

Available for sale securities
10,091,279

 
9,947,227

 
9,914,523

 
9,656,592

 
9,543,482

Fair value option securities
335,965

 
555,233

 
660,025

 
594,629

 
518,073

Residential mortgage loans held for sale
191,311

 
182,372

 
201,242

 
156,621

 
134,876

Loans:

 

 

 

 

  Commercial
7,075,871

 
6,882,277

 
6,502,981

 
6,329,135

 
6,145,918

  Commercial real estate
2,133,247

 
2,198,832

 
2,256,153

 
2,208,757

 
2,172,166

  Residential mortgage
2,011,729

 
1,944,462

 
1,949,929

 
1,868,627

 
1,858,117

  Consumer
393,875

 
411,240

 
443,252

 
466,285

 
504,553

Total loans
11,614,722

 
11,436,811

 
11,152,315

 
10,872,805

 
10,680,755

Less allowance for loan losses
(242,605
)
 
(252,538
)
 
(266,473
)
 
(285,570
)
 
(291,308
)
Total loans, net
11,372,117

 
11,184,273

 
10,885,842

 
10,587,235

 
10,389,447

Total earning assets
22,569,913

 
22,406,673

 
22,214,965

 
21,425,624

 
21,032,503

Cash and due from banks
748,811

 
908,628

 
1,234,312

 
1,045,450

 
764,806

Cash surrender value of bank-owned life insurance
267,246

 
264,354

 
261,496

 
260,505

 
259,337

Derivative contracts
371,690

 
311,178

 
247,411

 
228,466

 
253,163

Other assets
1,580,857

 
1,625,750

 
1,679,256

 
1,661,693

 
1,669,426

TOTAL ASSETS
$
25,538,517

 
$
25,516,583

 
$
25,637,440

 
$
24,621,738

 
$
23,979,235

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
  Demand
$
6,278,342

 
$
5,847,682

 
$
5,588,596

 
$
5,086,538

 
$
4,554,000

  Interest-bearing transaction
8,779,659

 
9,319,978

 
9,276,608

 
9,310,046

 
9,184,141

  Savings
259,386

 
241,442

 
220,236

 
214,979

 
210,707

  Time
3,132,220

 
3,246,362

 
3,485,059

 
3,617,731

 
3,632,130

Total deposits
18,449,607

 
18,655,464

 
18,570,499

 
18,229,294

 
17,580,978

Funds purchased
1,740,354

 
1,337,614

 
1,197,154

 
994,099

 
1,168,670

Repurchase agreements
1,095,298

 
1,183,778

 
1,189,861

 
1,128,275

 
1,004,217

Other borrowings
86,667

 
72,911

 
88,489

 
128,288

 
187,441

Subordinated debentures
357,609

 
397,440

 
398,858

 
398,812

 
398,767

Derivative contracts
302,329

 
207,864

 
180,623

 
187,515

 
175,199

Other liabilities
637,920

 
826,279

 
1,241,469

 
817,049

 
813,074

TOTAL LIABILITIES
22,669,784

 
22,681,350

 
22,866,953

 
21,883,332

 
21,328,346

Total equity
2,868,733

 
2,835,233

 
2,770,487

 
2,738,406

 
2,650,889

TOTAL LIABILITIES AND EQUITY
$
25,538,517

 
$
25,516,583

 
$
25,637,440

 
$
24,621,738

 
$
23,979,235




10



STATEMENTS OF EARNINGS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except per share data)
 
Three Months Ended
 
Six Months Ended
 
June 30, 2012
 
June 30, 2011
 
June 30, 2012
 
June 30, 2011
 
 
 
 
 
 
 
 
Interest revenue
$
203,055

 
$
205,717

 
$
401,263

 
$
407,806

Interest expense
21,694

 
31,716

 
46,333

 
63,166

Net interest revenue
181,361

 
174,001

 
354,930

 
344,640

Provision for credit losses
(8,000
)
 
2,700

 
(8,000
)
 
8,950

Net interest revenue after provision for credit losses
189,361

 
171,301

 
362,930

 
335,690

Other operating revenue:
 
 
 
 
 
 
 
Brokerage and trading revenue
32,600

 
23,725

 
63,711

 
49,101

Transaction card revenue
26,758

 
31,024

 
52,188

 
59,469

Trust fees and commissions
19,931

 
19,150

 
38,369

 
37,572

Deposit service charges and fees
25,216

 
23,857

 
49,595

 
46,337

Mortgage banking revenue
39,548

 
19,356

 
72,626

 
36,712

Bank-owned life insurance
2,838

 
2,872

 
5,709

 
5,735

Other revenue
7,559

 
7,842

 
16,586

 
16,174

Total fees and commissions
154,450

 
127,826

 
298,784

 
251,100

Gain on other assets, net
3,765

 
3,344

 
3,409

 
3,276

Gain (loss) on derivatives, net
2,345

 
1,225

 
(128
)
 
(1,188
)
Gain on fair value option securities, net
6,852

 
9,921

 
5,119

 
6,403

Gain on available for sale securities, net
20,481

 
5,468

 
24,812

 
10,370

Total other-than-temporary impairment losses
(135
)
 
(74
)
 
(640
)
 
(74
)
Portion of loss recognized in (reclassified from) other comprehensive income
(723
)
 
(4,750
)
 
(3,940
)
 
(9,349
)
Net impairment losses recognized in earnings
(858
)
 
(4,824
)
 
(4,580
)
 
(9,423
)
Total other operating revenue
187,035

 
142,960

 
327,416

 
260,538

Other operating expense:
 
 
 
 
 
 
 
Personnel
122,297

 
105,603

 
237,066

 
205,597

Business promotion
6,746

 
4,777

 
11,134

 
9,401

Professional fees and services
8,343

 
6,258

 
15,942

 
13,716

Net occupancy and equipment
16,906

 
15,554

 
32,929

 
31,158

Insurance
4,011

 
4,771

 
7,877

 
10,957

Data processing and communications
25,264

 
24,428

 
47,408

 
46,931

Printing, postage and supplies
3,903

 
3,586

 
7,214

 
6,668

Net losses and operating expenses of repossessed assets
5,912

 
5,859

 
8,157

 
11,874

Amortization of intangible assets
545

 
896

 
1,120

 
1,792

Mortgage banking costs
11,173

 
8,968

 
18,746

 
15,439

Change in fair value of mortgage servicing rights
11,450

 
13,493

 
4,323

 
10,364

Other expense
7,236

 
9,016

 
17,107

 
17,761

Total other operating expense
223,786

 
203,209

 
409,023

 
381,658

 
 
 
 
 
 
 
 
Net income before taxes
152,610

 
111,052

 
281,323

 
214,570

Federal and state income taxes
53,149

 
39,357

 
98,669

 
78,109

 
 
 
 
 
 
 
 
Net income
99,461

 
71,695

 
182,654

 
136,461

Net income attributable to non-controlling interest
1,833

 
2,688

 
1,411

 
2,680

Net income attributable to BOK Financial Corporation shareholders
$
97,628

 
$
69,007

 
$
181,243

 
$
133,781

 
 
 
 
 
 
 
 
Average shares outstanding:
 
 
 
 
 
 
 
Basic
67,472,665

 
67,898,483

 
67,573,280

 
67,900,279

Diluted
67,744,828

 
68,169,485

 
67,847,659

 
68,173,182

 
 
 
 
 
 
 
 
Net income per share:
 
 
 
 
 
 
 
Basic
$
1.43

 
$
1.01

 
$
2.66

 
$
1.96

Diluted
$
1.43

 
$
1.00

 
$
2.65

 
$
1.95



11




FINANCIAL HIGHLIGHTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and share data)
 
Three Months Ended
 
June 30,
2012
 
March 31,
2012
 
December 31,
2011
 
September 30,
2011
 
June 30,
2011
Capital:
 
 
 
 
 
 
 
 
 
Period-end shareholders' equity
$
2,885,934

 
$
2,834,419

 
$
2,750,468

 
$
2,732,592

 
$
2,667,717

Risk weighted assets
$
17,758,118

 
$
17,993,379

 
$
17,291,105

 
$
17,106,533

 
$
16,452,305

Risk-based capital ratios:
 
 
 
 
 
 
 
 
 
Tier 1
13.62
%
 
13.03
%
 
13.27
%
 
13.14
%
 
13.30
%
Total capital
16.19
%
 
16.16
%
 
16.49
%
 
16.54
%
 
16.80
%
Leverage ratio
9.64
%
 
9.35
%
 
9.15
%
 
9.37
%
 
9.29
%
Tangible common equity ratio1
10.07
%
 
9.75
%
 
9.56
%
 
9.65
%
 
9.71
%
Tier 1 common equity ratio2
13.41
%
 
12.83
%
 
13.06
%
 
12.93
%
 
13.15
%
 
 
 
 
 
 
 
 
 
 
Common stock:
 
 
 
 
 
 
 
 
 
Book value per share
$
42.35

 
$
41.61

 
$
40.36

 
$
40.18

 
$
38.97

Market value per share:
 
 
 
 
 
 
 
 
 
High
$
58.12

 
$
59.02

 
$
55.90

 
$
55.81

 
$
54.72

Low
$
53.34

 
$
52.56

 
$
45.68

 
$
44.00

 
$
50.13

Cash dividends paid
$
25,904

 
$
22,571

 
$
22,451

 
$
18,836

 
$
18,823

Dividend payout ratio
26.53
%
 
26.99
%
 
33.51
%
 
22.13
%
 
27.28
%
Shares outstanding, net
68,144,159

 
68,116,893

 
68,153,044

 
68,006,390

 
68,462,869

Stock buy-back program:
 
 
 
 
 
 
 
 
 
Shares repurchased
39,496

 
345,300

 
69,581

 
492,444

 
                       –
Amount
$
2,125

 
$
18,432

 
$
3,579

 
$
22,866

 
 $ –
Average price per share
$
53.81

 
$
53.38

 
$
51.44

 
$
46.43

 
 $ –
 
 
 
 
 
 
 
 
 
 
Performance ratios (quarter annualized):
Return on average assets
1.54
%
 
1.32
%
 
1.04
%
 
1.37
%
 
1.15
%
Return on average equity
13.69
%
 
11.86
%
 
9.59
%
 
12.33
%
 
10.44
%
Net interest margin
3.3
%
 
3.19
%
 
3.20
%
 
3.34
%
 
3.40
%
Efficiency ratio
62.45
%
 
59.77
%
 
69.73
%
 
60.13
%
 
62.23
%
 
 
 
 
 
 
 
 
 
 
Reconciliation of non-GAAP measures:
1      Tangible common equity ratio:
 
 
 
 
 
 
 
 
 
Total shareholders' equity
$
2,885,934

 
$
2,834,419

 
$
2,750,468

 
$
2,732,592

 
$
2,667,717

Less: Goodwill and intangible assets, net
(344,699
)
 
(345,246
)
 
(345,820
)
 
(346,716
)
 
(347,611
)
Tangible common equity
$
2,541,235

 
$
2,489,173

 
$
2,404,648

 
$
2,385,876

 
$
2,320,106

 
 
 
 
 
 
 
 
 
 
Total assets
$
25,576,046

 
$
25,884,173

 
$
25,493,946

 
$
25,066,265

 
$
24,238,182

Less: Goodwill and intangible assets, net
(344,699
)
 
(345,246
)
 
(345,820
)
 
(346,716
)
 
(347,611
)
Tangible assets
$
25,231,347

 
$
25,538,927

 
$
25,148,126

 
$
24,719,549

 
$
23,890,571

 
 
 
 
 
 
 
 
 
 
Tangible common equity ratio
10.07
%
 
9.75
%
 
9.56
%
 
9.65
%
 
9.71
%
 
 
 
 
 
 
 
 
 
 
2      Tier 1 common equity ratio:
 
 
 
 
 
 
 
 
 
Tier 1 capital
$
2,418,985

 
$
2,344,779

 
$
2,295,061

 
$
2,247,576

 
$
2,188,199

Less: Non-controlling interest
(36,787
)
 
(35,982
)
 
(36,184
)
 
(34,958
)
 
(24,457
)
Tier 1 common equity
$
2,382,198

 
$
2,308,797

 
$
2,258,877

 
$
2,212,618

 
$
2,163,742

 
 
 
 
 
 
 
 
 
 
Risk weighted assets
$
17,758,118

 
$
17,993,379

 
$
17,291,105

 
$
17,106,533

 
$
16,452,305

 
 
 
 
 
 
 
 
 
 
Tier 1 common equity ratio
13.41
%
 
12.83
%
 
13.06
%
 
12.93
%
 
13.15
%

12



FINANCIAL HIGHLIGHTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and share data)
 
Three Months Ended
 
June 30,
2012
 
March 31,
2012
 
December 31,
2011
 
September 30,
2011
 
June 30,
2011
Other data:
 
 
 
 
 
 
 
 
 
Trust assets
$
35,748,719

 
$
35,650,798

 
$
34,398,796

 
$
31,750,636

 
$
33,075,456

Mortgage servicing portfolio
$
11,564,643

 
$
11,378,806

 
$
11,300,986

 
$
11,249,503

 
$
11,283,442

Mortgage loans funded for sale
$
841,960

 
$
746,241

 
$
753,215

 
$
637,127

 
$
483,808

Mortgage loan refinances to total fundings
51
%
 
67
%
 
66
%
 
54
%
 
36
%
Tax equivalent adjustment
$
2,252

 
$
2,094

 
$
2,274

 
$
2,233

 
$
2,261

Net unrealized gain on available for sale securities
$
242,253

 
$
277,277

 
$
222,160

 
$
278,616

 
$
263,199

 
 
 
 
 
 
 
 
 
 
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts
$
2,623

 
$
(2,445
)
 
$
121

 
$
4,048

 
$
1,224

Gain (loss) on mortgage trading securities
6,908

 
(2,393
)
 
222

 
17,788

 
9,921

Gain (loss) on economic hedge of mortgage servicing rights
9,531

 
(4,838
)
 
343

 
21,836

 
11,145

Gain (loss) on changes in fair value of mortgage servicing rights
(11,450
)
 
7,127

 
(5,261
)
 
(24,822
)
 
(13,493
)
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges
$
(1,919
)
 
$
2,289

 
$
(4,918
)
 
$
(2,986
)
 
$
(2,348
)
 
 
 
 
 
 
 
 
 
 
Net interest revenue on mortgage trading securities
$
2,148

 
$
3,165

 
$
4,436

 
$
5,036

 
$
5,120



13



QUARTERLY EARNINGS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and per share data)
 
Three Months Ended
 
June 30,
2012
 
March 31,
2012
 
December 31,
2011
 
September 30,
2011
 
June 30,
2011
Interest revenue
$
203,055

 
$
198,208

 
$
198,040

 
$
205,749

 
$
205,717

Interest expense
21,694

 
24,639

 
26,570

 
30,365

 
31,716

Net interest revenue
181,361

 
173,569

 
171,470

 
175,384

 
174,001

Provision for credit losses
(8,000
)
 

 
(15,000
)
 

 
2,700

Net interest revenue after provision for credit losses
189,361

 
173,569

 
186,470

 
175,384

 
171,301

Other operating revenue:
 
 
 
 
 
 
 
 
 
Brokerage and trading revenue
32,600

 
31,111

 
25,629

 
29,451

 
23,725

Transaction card revenue
26,758

 
25,430

 
25,960

 
31,328

 
31,024

Trust fees and commissions
19,931

 
18,438

 
17,865

 
17,853

 
19,150

Deposit service charges and fees
25,216

 
24,379

 
24,921

 
24,614

 
23,857

Mortgage banking revenue
39,548

 
33,078

 
25,438

 
29,493

 
19,356

Bank-owned life insurance
2,838

 
2,871

 
2,784

 
2,761

 
2,872

Other revenue
7,559

 
9,027

 
9,189

 
10,535

 
7,842

Total fees and commissions
154,450

 
144,334

 
131,786

 
146,035

 
127,826

Gain (loss) on other assets, net
3,765

 
(356
)
 
1,897

 
712

 
3,344

Gain (loss) on derivatives, net
2,345

 
(2,473
)
 
(174
)
 
4,048

 
1,225

Gain (loss) on fair value option securities, net
6,852

 
(1,733
)
 
222

 
17,788

 
9,921

Gain on available for sale securities, net
20,481

 
4,331

 
7,080

 
16,694

 
5,468

Total other-than-temporary impairment losses
(135
)
 
(505
)
 
(1,037
)
 
(9,467
)
 
(74
)
Portion of loss recognized in (reclassified from) other comprehensive income
(723
)
 
(3,217
)
 
(1,747
)
 
(1,833
)
 
(4,750
)
Net impairment losses recognized in earnings
(858
)
 
(3,722
)
 
(2,784
)
 
(11,300
)
 
(4,824
)
Total other operating revenue
187,035

 
140,381

 
138,027

 
173,977

 
142,960

Other operating expense:
 
 
 
 
 
 
 
 
 
Personnel
122,297

 
114,769

 
121,129

 
103,260

 
105,603

Business promotion
6,746

 
4,388

 
5,868

 
5,280

 
4,777

Contribution to BOKF Charitable Foundation
                        –
 
                       –
 
                           –
 
4,000

 
                       –
Professional fees and services
8,343

 
7,599

 
7,664

 
7,418

 
6,258

Net occupancy and equipment
16,906

 
16,023

 
16,826

 
16,627

 
15,554

Insurance
4,011

 
3,866

 
3,636

 
2,206

 
4,771

Data processing and communications
25,264

 
22,144

 
26,599

 
24,446

 
24,428

Printing, postage and supplies
3,903

 
3,311

 
3,637

 
3,780

 
3,586

Net losses and operating expenses of repossessed assets
5,912

 
2,245

 
6,180

 
5,939

 
5,859

Amortization of intangible assets
545

 
575

 
895

 
896

 
896

Mortgage banking costs
11,173

 
7,573

 
10,154

 
9,349

 
8,968

Change in fair value of mortgage servicing rights
11,450

 
(7,127
)
 
5,261

 
24,822

 
13,493

Other expense
7,236

 
9,871

 
11,348

 
12,873

 
9,016

Total other operating expense
223,786

 
185,237

 
219,197

 
220,896

 
203,209

Net income before taxes
152,610

 
128,713

 
105,300

 
128,465

 
111,052

Federal and state income taxes
53,149

 
45,520

 
37,396

 
43,006

 
39,357

Net income
99,461

 
83,193

 
67,904

 
85,459

 
71,695

Net income (loss) attributable to non-controlling interest
1,833

 
(422
)
 
911

 
358

 
2,688

Net income attributable to BOK Financial Corporation shareholders
$
97,628

 
$
83,615

 
$
66,993

 
$
85,101

 
$
69,007

 
 
 
 
 
 
 
 
 
 
Average shares outstanding:
 
 
 
 
 
 
 
 
 
Basic
67,472,665

 
67,665,300

 
67,526,009

 
67,827,591

 
67,898,483

Diluted
67,744,828

 
67,941,895

 
67,774,721

 
68,037,419

 
68,169,485

Net income per share:
 
 
 
 
 
 
 
 
 
Basic
$
1.43

 
$
1.22

 
$
0.98

 
$
1.24

 
$
1.01

Diluted
$
1.43

 
$
1.22

 
$
0.98

 
$
1.24

 
$
1.00




14



LOANS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
 
Three Months Ended
 
June 30,
2012
 
March 31,
2012
 
December 31,
2011
 
September 30,
2011
 
June 30,
2011
 
 
 
 
 
 
 
 
 
 
Oklahoma:
 
 
 
 
 
 
 
 
 
    Commercial
$
3,098,651

 
$
3,107,726

 
$
2,826,649

 
$
2,865,740

 
$
2,722,370

    Commercial real estate
644,761

 
631,891

 
607,030

 
615,848

 
607,100

    Residential mortgage
1,332,319

 
1,303,486

 
1,320,051

 
1,251,874

 
1,180,502

    Consumer
205,436

 
215,693

 
235,909

 
250,048

 
267,993

        Total Oklahoma
5,281,167

 
5,258,796

 
4,989,639

 
4,983,510

 
4,777,965

 
 
 
 
 
 
 
 
 
 
Texas:
 
 
 
 
 
 
 
 
 
    Commercial
2,414,824

 
2,354,593

 
2,249,888

 
2,116,377

 
2,050,112

    Commercial real estate
678,745

 
802,979

 
830,642

 
759,574

 
727,940

    Residential mortgage
295,972

 
288,751

 
285,091

 
294,310

 
303,538

    Consumer
115,602

 
124,692

 
126,570

 
133,454

 
138,713

        Total Texas
3,505,143

 
3,571,015

 
3,492,191

 
3,303,715

 
3,220,303

 
 
 
 
 
 
 
 
 
 
New Mexico:
 
 
 
 
 
 
 
 
 
    Commercial
262,144

 
273,284

 
258,668

 
279,319

 
283,760

    Commercial real estate
285,871

 
282,834

 
303,500

 
302,980

 
307,190

    Residential mortgage
144,944

 
144,180

 
132,772

 
139,922

 
131,943

    Consumer
15,828

 
18,378

 
19,369

 
19,393

 
19,120

        Total New Mexico
708,787

 
718,676

 
714,309

 
741,614

 
742,013

 
 
 
 
 
 
 
 
 
 
Arkansas:
 
 
 
 
 
 
 
 
 
    Commercial
49,305

 
64,595

 
76,199

 
80,304

 
73,287

    Commercial real estate
119,895

 
139,670

 
136,170

 
134,028

 
122,749

    Residential mortgage
23,510

 
23,350

 
22,593

 
22,172

 
23,975

    Consumer
24,270

 
28,783

 
35,911

 
44,445

 
52,572

        Total Arkansas
216,980

 
256,398

 
270,873

 
280,949

 
272,583

 
 
 
 
 
 
 
 
 
 
Colorado:
 
 
 
 
 
 
 
 
 
    Commercial
610,384

 
541,280

 
544,020

 
495,429

 
500,442

    Commercial real estate
149,541

 
144,757

 
156,013

 
189,948

 
167,414

    Residential mortgage
89,428

 
89,861

 
85,689

 
104,572

 
92,769

    Consumer
20,612

 
19,790

 
21,598

 
22,183

 
19,619

        Total Colorado
869,965

 
795,688

 
807,320

 
812,132

 
780,244

 
 
 
 
 
 
 
 
 
 
Arizona:
 
 
 
 
 
 
 
 
 
    Commercial
278,119

 
269,099

 
271,914

 
269,381

 
275,469

    Commercial real estate
181,513

 
180,830

 
198,160

 
227,085

 
207,300

    Residential mortgage
76,616

 
81,281

 
94,363

 
100,132

 
103,657

    Consumer
6,227

 
5,381

 
5,633

 
6,670

 
6,813

        Total Arizona
542,475

 
536,591

 
570,070

 
603,268

 
593,239

 
 
 
 
 
 
 
 
 
 
Kansas / Missouri:
 
 
 
 
 
 
 
 
 
    Commercial
339,117

 
348,515

 
327,732

 
315,052

 
264,805

    Commercial real estate
65,888

 
50,722

 
59,788

 
43,370

 
48,338

    Residential mortgage
42,308

 
37,463

 
33,968

 
36,919

 
35,570

    Consumer
4,601

 
3,580

 
3,853

 
4,040

 
2,484

        Total Kansas / Missouri
451,914

 
440,280

 
425,341

 
399,381

 
351,197

 
 
 
 
 
 
 
 
 
 
TOTAL BOK FINANCIAL
$
11,576,431

 
$
11,577,444

 
$
11,269,743

 
$
11,124,569

 
$
10,737,544


Loans attributed to a geographical region may not always represent the location of the borrower or the collateral. The previous periods have been reclassified to conform to the current period loan classification and market attribution.




15



DEPOSITS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
 
Three Months Ended
 
June 30,
2012
 
March 31,
2012
 
December 31,
2011
 
September 30,
2011
 
June 30,
2011
Oklahoma:
 
 
 
 
 
 
 
 
 
    Demand
$
3,499,834

 
$
3,445,424

 
$
3,223,201

 
$
2,953,410

 
$
2,486,671

    Interest-bearing:
 
 
 
 
 
 
 
 
 
       Transaction
5,412,002

 
5,889,625

 
6,050,986

 
6,038,770

 
5,916,784

       Savings
150,353

 
148,556

 
126,763

 
122,829

 
120,278

       Time
1,354,148

 
1,370,868

 
1,450,571

 
1,489,486

 
1,462,137

    Total interest-bearing
6,916,503

 
7,409,049

 
7,628,320

 
7,651,085

 
7,499,199

Total Oklahoma
10,416,337

 
10,854,473

 
10,851,521

 
10,604,495

 
9,985,870

Texas:
 
 
 
 
 
 
 
 
 
    Demand
1,966,465

 
1,876,133

 
1,808,491

 
1,710,315

 
1,528,772

    Interest-bearing:
 
 
 
 
 
 
 
 
 
       Transaction
1,813,209

 
1,734,655

 
1,940,819

 
1,820,116

 
1,741,176

       Savings
51,114

 
50,331

 
45,872

 
42,272

 
42,185

       Time
772,809

 
789,860

 
867,664

 
938,200

 
992,366

    Total interest-bearing
2,637,132

 
2,574,846

 
2,854,355

 
2,800,588

 
2,775,727

Total Texas
4,603,597

 
4,450,979

 
4,662,846

 
4,510,903

 
4,304,499

New Mexico:
 
 
 
 
 
 
 
 
 
    Demand
357,367

 
333,707

 
319,269

 
325,612

 
299,305

    Interest-bearing:
 
 
 
 
 
 
 
 
 
       Transaction
506,165

 
503,015

 
491,068

 
480,816

 
483,026

       Savings
31,215

 
32,688

 
27,487

 
26,127

 
24,613

       Time
383,350

 
392,234

 
410,722

 
431,436

 
449,618

    Total interest-bearing
920,730

 
927,937

 
929,277

 
938,379

 
957,257

Total New Mexico
1,278,097

 
1,261,644

 
1,248,546

 
1,263,991

 
1,256,562

Arkansas:
 
 
 
 
 
 
 
 
 
    Demand
16,921

 
22,843

 
18,513

 
21,809

 
17,452

    Interest-bearing:
 
 
 
 
 
 
 
 
 
       Transaction
172,829

 
151,708

 
131,181

 
181,486

 
138,954

       Savings
2,220

 
2,358

 
1,727

 
1,735

 
1,673

       Time
48,517

 
54,157

 
61,329

 
74,163

 
82,112

    Total interest-bearing
223,566

 
208,223

 
194,237

 
257,384

 
222,739

Total Arkansas
240,487

 
231,066

 
212,750

 
279,193

 
240,191

Colorado:
 
 
 
 
 
 
 
 
 
    Demand
301,646

 
311,057

 
272,565

 
217,394

 
196,915

    Interest-bearing:
 
 
 
 
 
 
 
 
 
       Transaction
465,276

 
476,718

 
511,993

 
520,743

 
509,738

       Savings
24,202

 
23,409

 
22,771

 
22,599

 
21,406

       Time
491,280

 
498,124

 
523,969

 
547,481

 
563,642

    Total interest-bearing
980,758

 
998,251

 
1,058,733

 
1,090,823

 
1,094,786

Total Colorado
1,282,404

 
1,309,308

 
1,331,298

 
1,308,217

 
1,291,701

Arizona:
 
 
 
 
 
 
 
 
 
    Demand
137,313

 
131,539

 
106,741

 
138,971

 
150,194

    Interest-bearing:
 
 
 
 
 
 
 
 
 
       Transaction
113,310

 
95,010

 
104,961

 
101,933

 
107,961

       Savings
2,313

 
1,772

 
1,192

 
1,366

 
1,364

       Time
31,539

 
34,199

 
37,641

 
40,007

 
44,619

    Total interest-bearing
147,162

 
130,981

 
143,794

 
143,306

 
153,944

Total Arizona
284,475

 
262,520

 
250,535

 
282,277

 
304,138

Kansas / Missouri:
 
 
 
 
 
 
 
 
 
    Demand
160,829

 
68,469

 
51,004

 
46,773

 
46,668

    Interest-bearing:
 
 
 
 
 
 
 
 
 
       Transaction
69,083

 
57,666

 
123,449

 
108,973

 
115,684

       Savings
581

 
505

 
545

 
503

 
358

       Time
26,307

 
26,657

 
30,086

 
33,697

 
40,206

    Total interest-bearing
95,971

 
84,828

 
154,080

 
143,173

 
156,248

Total Kansas / Missouri
256,800

 
153,297

 
205,084

 
189,946

 
202,916

 
 
 
 
 
 
 
 
 
 
TOTAL BOK FINANCIAL
$
18,362,197

 
$
18,523,287

 
$
18,762,580

 
$
18,439,022

 
$
17,585,877


16




NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION

 
Three Months Ended
 
June 30,
2012
 
March 31,
2012
 
December 31,
2011
 
September 30,
2011
 
June 30,
2011
 
 
 
 
 
 
 
 
 
 
TAX-EQUIVALENT ASSETS YIELDS
 
 
 
 
 
 
 
 
 
Funds sold and resell agreements
0.08
%
 
0.07
%
 
0.10
%
 
0.16
%
 
0.14
%
Trading securities
1.53
%
 
1.88
%
 
2.79
%
 
2.85
%
 
2.92
%
Investment securities:
 
 
 
 
 
 
 
 
 
    Taxable1
5.93
%
 
5.89
%
 
5.91
%
 
5.63
%
 
6.13
%
    Tax-exempt1
4.90
%
 
4.87
%
 
4.81
%
 
4.94
%
 
4.82
%
Total investment securities1
5.63
%
 
5.59
%
 
5.59
%
 
5.35
%
 
5.49
%
Available for sale securities:
 
 
 
 
 
 
 
 
 
    Taxable1
2.52
%
 
2.48
%
 
2.36
%
 
2.82
%
 
3.02
%
    Tax-exempt1
4.69
%
 
5.17
%
 
5.14
%
 
4.92
%
 
5.12
%
Total available for sale securities1
2.54
%
 
2.50
%
 
2.38
%
 
2.83
%
 
3.04
%
Fair value option securities
2.62
%
 
2.79
%
 
2.98
%
 
3.66
%
 
4.42
%
Residential mortgage loans held for sale
3.75
%
 
3.90
%
 
4.01
%
 
4.09
%
 
4.48
%
Loans
4.58
%
 
4.50
%
 
4.65
%
 
4.71
%
 
4.69
%
Less allowance for loan losses
%
 
%
 
%
 
%
 
%
Loans, net of allowance
4.68
%
 
4.61
%
 
4.76
%
 
4.84
%
 
4.82
%
Total tax-equivalent yield on earning assets1
3.69
%
 
3.64
%
 
3.69
%
 
3.91
%
 
4.01
%
 
 
 
 
 
 
 
 
 
 
COST OF INTEREST-BEARING LIABILITIES
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
  Interest-bearing transaction
0.16
%
 
0.17
%
 
0.18
%
 
0.23
%
 
0.27
%
  Savings
0.23
%
 
0.24
%
 
0.26
%
 
0.34
%
 
0.39
%
  Time
1.63
%
 
1.68
%
 
1.70
%
 
1.84
%
 
1.86
%
Total interest-bearing deposits
0.54
%
 
0.55
%
 
0.59
%
 
0.68
%
 
0.71
%
Funds purchased
0.16
%
 
0.09
%
 
0.06
%
 
0.05
%
 
0.09
%
Repurchase agreements
0.10
%
 
0.09
%
 
0.13
%
 
0.17
%
 
0.20
%
Other borrowings
3.96
%
 
5.58
%
 
4.75
%
 
5.26
%
 
4.76
%
Subordinated debt
3.95
%
 
5.62
%
 
5.61
%
 
5.60
%
 
5.57
%
Total cost of interest-bearing liabilities
0.56
%
 
0.63
%
 
0.66
%
 
0.76
%
 
0.81
%
Tax-equivalent net interest revenue spread
3.13
%
 
3.01
%
 
3.03
%
 
3.15
%
 
3.20
%
Effect of noninterest-bearing funding sources and other
0.17
%
 
0.18
%
 
0.17
%
 
0.19
%
 
0.20
%
Tax-equivalent net interest margin1
3.30
%
 
3.19
%
 
3.20
%
 
3.34
%
 
3.40
%
1 
Yield calculations exclude security trades that have been recorded on trade date with no corresponding interest income.





17



CREDIT QUALITY INDICATORS
BOK FINANCIAL CORPORATION
(in thousands, except ratios)
 
Quarter Ended
 
June 30,
2012
 
March 31,
2012
 
December 31,
2011
 
September 30,
2011
 
June 30,
2011
Nonperforming assets:
 
 
 
 
 
 
 
 
 
Nonaccruing loans:
 
 
 
 
 
 
 
 
 
Commercial
$
34,529

 
$
61,750

 
$
68,811

 
$
83,736

 
$
53,365

Commercial real estate
80,214

 
86,475

 
99,193

 
110,048

 
110,363

Residential mortgage
22,727

 
27,462

 
29,767

 
31,731

 
31,693

Consumer
7,012

 
7,672

 
3,515

 
3,960

 
4,749

Total nonaccruing loans
144,482

 
183,359

 
201,286

 
229,475

 
200,170

Renegotiated loans1
28,415

 
36,764

 
32,893

 
30,477

 
22,261

Real estate and other repossessed assets
105,708

 
115,790

 
122,753

 
127,943

 
129,026

Total nonperforming assets
$
278,605

 
$
335,913

 
$
356,932

 
$
387,895

 
$
351,457

 
 
 
 
 
 
 
 
 
 
Nonaccruing loans by principal market:
 
 
 
 
 
 
 
 
 
Oklahoma
$
49,931

 
$
64,097

 
$
65,261

 
$
73,794

 
$
41,411

Texas
24,553

 
29,745

 
28,083

 
29,783

 
32,385

New Mexico
13,535

 
15,029

 
15,297

 
17,242

 
17,244

Arkansas
6,865

 
18,066

 
23,450

 
26,831

 
24,842

Colorado
28,239

 
28,990

 
33,522

 
36,854

 
37,472

Arizona
21,326

 
27,397

 
35,673

 
44,929

 
43,307

Kansas / Missouri
33

 
35

 

 
42

 
3,509

Total nonaccruing loans
$
144,482

 
$
183,359

 
$
201,286

 
$
229,475

 
$
200,170

 
 
 
 
 
 
 
 
 
 
Nonaccruing loans by loan portfolio sector:
 
 
 
 
 
 
 
 
 
Commercial:
 
 
 
 
 
 
 
 
 
Energy
$
3,087

 
$
336

 
$
336

 
$
3,900

 
$
345

Manufacturing
12,230

 
23,402

 
23,051

 
27,691

 
4,366

Wholesale / retail
4,175

 
15,388

 
21,180

 
27,088

 
25,138

Integrated food services

 

 

 

 

Services
10,123

 
12,890

 
16,968

 
18,181

 
16,254

Healthcare
3,310

 
7,946

 
5,486

 
5,715

 
5,962

Other commercial and industrial
1,604

 
1,788

 
1,790

 
1,161

 
1,300

Total commercial
34,529

 
61,750

 
68,811

 
83,736

 
53,365

Commercial real estate:
 
 
 
 
 
 
 
 

Construction and land development
46,050

 
52,416

 
61,874

 
72,207

 
76,265

Retail
7,908

 
6,193

 
6,863

 
6,492

 
4,642

Office
10,589

 
10,733

 
11,457

 
11,967

 
11,473

Multifamily
3,219

 
3,414

 
3,513

 
4,036

 
4,717

Industrial

 

 

 

 

Other commercial real estate
12,448

 
13,719

 
15,486

 
15,346

 
13,266

Total commercial real estate
80,214

 
86,475

 
99,193

 
110,048

 
110,363

Residential mortgage:
 
 
 
 
 
 
 
 

Permanent mortgage
18,136

 
22,822

 
25,366

 
27,486

 
27,991

Home equity
4,591

 
4,640

 
4,401

 
4,245

 
3,702

Total residential mortgage
22,727

 
27,462

 
29,767

 
31,731

 
31,693

Consumer
7,012

 
7,672

 
3,515

 
3,960

 
4,749

Total nonaccruing loans
$
144,482

 
$
183,359

 
$
201,286

 
$
229,475

 
$
200,170


18



CREDIT QUALITY INDICATORS
BOK FINANCIAL CORPORATION
(in thousands, except ratios)
 
Quarter Ended
 
June 30,
2012
 
March 31,
2012
 
December 31,
2011
 
September 30,
2011
 
June 30,
2011
 
 
 
 
 
 
 
 
 
 
Performing loans 90 days past due2
$
691

 
$
6,140

 
$
2,496

 
$
1,401

 
$
2,341

 
 
 
 
 
 
 
 
 
 
Gross charge-offs
$
11,544

 
$
13,674

 
$
14,771

 
$
14,023

 
$
12,774

Recoveries
6,703

 
5,189

 
5,311

 
3,869

 
4,256

Net charge-offs
$
4,841

 
$
8,485

 
$
9,460

 
$
10,154

 
$
8,518

 
 
 
 
 
 
 
 
 
 
Provision for (reduction of) allowances for credit losses
$
(8,000
)
 
$

 
$
(15,000
)
 
$

 
$
2,700

 
 
 
 
 
 
 
 
 
 
Allowance for loan losses to period end loans
2.00
%
 
2.11
%
 
2.25
%
 
2.44
%
 
2.67
%
Combined allowance for credit losses to period end loans
2.09
%
 
2.20
%
 
2.33
%
 
2.58
%
 
2.77
%
Nonperforming assets to period end loans and repossessed assets
2.38
%
 
2.87
%
 
3.13
%
 
3.45
%
 
3.23
%
Net charge-offs (annualized) to average loans
0.17
%
 
0.30
%
 
0.34
%
 
0.37
%
 
0.32
%
Allowance for loan losses to nonaccruing loans
160.34
%
 
133.19
%
 
125.93
%
 
118.29
%
 
143.18
%
Combined allowance for credit losses to nonaccruing loans
167.09
%
 
138.67
%
 
130.53
%
 
125.16
%
 
148.55
%
 
 
 
 
 
 
 
 
 
 
1   Includes residential mortgage loans guaranteed by agencies of the U.S. government. These loans have been modified to extend payment terms and/or reduce interest rates to current market.
$
24,760

 
$
32,770

 
$
28,974

 
$
26,670

 
$
18,716

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


19
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