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Third Quarter 2016
Earnings Conference Call
October 26, 2016
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Forward-Looking Statements: This presentation contains statements that are based on management’s
beliefs, assumptions, current expectations, estimates, and projections about BOK Financial Corporation, the
financial services industry, and the economy generally. These remarks constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. 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 BOKF 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 expressed, 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 interest rates and interest rate relationships, demand for products and services, the degree of
competition by traditional and non-traditional 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. For a discussion of risk factors that may cause actual results to differ from
expectations, please refer to BOK Financial Corporation’s most recent annual and quarterly reports. BOK
Financial Corporation and its affiliates undertake no obligation to update, amend, or clarify forward-looking
statements, whether as a result of new information, future events, or otherwise.
Non-GAAP Financial Measures: This presentation may refer to non-GAAP financial measures. Additional
information on these financial measures is available in BOK Financial’s 10-Q and 10-K filings with the
Securities and Exchange Commission which can be accessed at www.BOKF.com.
All data is presented as of September 30, 2016 unless otherwise noted.
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Steven G. Bradshaw
Chief Executive Officer
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Third Quarter Summary:
• Noteworthy items impacting Q3 profitability:
• The energy credit environment continues to stabilize. Loan loss provision fell to $10 million this
quarter and should remain near that level in Q4 assuming relative stability in commodities market.
• Another record quarter for fees and commissions income. Good sequential growth from deposit
account service charges and mortgage banking income.
• Higher expenses partially driven by higher revenue levels as well as $5.0 million legal settlement
expense, continued elevated FDIC expense (including surcharge on banks >$10 billion), increased
MSR amortization expense due to strong refi market, and $1.2 million of Mobank-related
expenses.
• No share repurchase activity in Q3.
• 11th consecutive year with a dividend increase – from 43 to 44 cents per share per quarter
Q3 2016 Q2 2016 Q3 2015
Diluted EPS $1.13 $1.00 $1.09
Net income before
taxes ($M)
$107.1 $96.8 $109.9
Net income
attributable to BOKF
shareholders ($M)
$74.3 $65.8 $74.9
$74.9
$59.6
$42.6
$65.8
$74.3
$1.09
$0.89
$0.64
$1.00
$1.13
3Q15 4Q15 1Q16 2Q16 3Q16
Net Income
Net income attributable to shareholders
Net income per share - diluted
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Additional Details
($B)
Q3 2016
Quarterly
Growth
Annualized
Quarterly
Growth
Year over Year
Growth
Period-End Loans $16.5 0.4% 1.4% 7.1%
Average Loans $16.4 1.1% 4.5% 8.3%
Fiduciary Assets $41.2 3.3% 13.0% 9.0%
Assets Under Management
or in Custody
$75.3 3.2% 12.6% 12.4%
• Large end-of-quarter paydown in energy portfolio negatively impacted loan growth
• Average loan growth continues in mid single digits
• Continued strong asset gathering activities in wealth management
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Steven Nell
Chief Financial Officer
Financial Overview
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Net Interest Revenue
Net Interest Margin
($mil)
Q3
2016
Q2
2016
Q1
2016
Q4
2015
Q3
2015
Net Interest Revenue $187.8 $182.6 $182.6 $181.3 $178.6
Provision For Credit Losses $ 10.0 $ 20.0 $ 35.0 $ 22.5 $ 7.5
Net Interest Revenue After Provision $177.8 $162.6 $147.6 $158.8 $171.1
Net Interest Margin * 2.64% 2.63% 2.65% 2.64% 2.61%
• Nonaccrual loans negatively impacted NIR by $2.5 million compared to Q3 2015
• Yield on AFS securities was 2.01%, down 3 basis points sequentially, flat year over year
• Loan yields were 3.63%, up 5 basis point compared to the first quarter due to increased short term LIBOR rates,
higher loan fees, and loan mix.
* Note: 12 basis points of NIM dilution due to FHLB/Fed trade
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Fees and Commissions
Revenue, $mil Growth:
Q2 16
Quarterly,
Sequential
Quarterly,
Year over Year
Trailing 12
Months
Brokerage and Trading $38.0 (3.9)% 20.3% 7.9%
Transaction Card 33.9 (2.9)% 4.4% 4.5%
Fiduciary and Asset Management 34.1 (2.1)% 10.6% 5.1%
Deposit Service Charges and Fees 23.7 4.6% 0.3% 1.6%
Mortgage Banking 42.5 11.3% 28.3% 0.6%
Other Revenue 13.1 (2.1)% (0.1)% 9.3%
Total Fees and Commissions $185.3 1.0% 12.5% 4.4%
Fee and commission revenue drivers:
• Brokerage and trading: Lower investment banking revenue drives sequential decrease. 48% increase in derivative fees
and commissions drives year over year increase.
• Transaction card: Continued mid single digit year over year growth.
• Fiduciary and asset management: Sequential decrease due to Q2 seasonal tax business; YOY and TTM growth due to
Weaver acquisition and continued AUM growth.
• Mortgage banking: Strong refinancing market continued in Q3, increased HomeDirect originations. Correspondent channel
discontinued on 9/1/16
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Expenses
($mil)
Q3 2016
Q2 2016
Q3 2015
%Incr.
Seq.
%Incr.
YOY
Personnel Expense $143.2 $142.5 $129.1 0.5% 10.9%
Other Operating Expense $118.9 $112.2 $ 95.6 6.0% 24.5%
Total Operating Expense $262.1 $254.7 $224.6 2.9% 16.7%
• Increase in personnel expense largely due to higher variable compensation costs (tied to revenue) as well as higher
benefits cost
• Increase in other operating expenses driven by legal expenses, mobank acquisition, increased FDIC expense, and
higher MSR amortization within mortgage banking expenses
• MSR Amortization up $1.7 million from Q2 and $4.7 million year over year.
• October 2016 cost actions eliminate approximately $20 million from expense run rate in 2017 ($4-$5 million associated
severance and other expense expected in Q4)
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Other Balance Sheet Statistics
Q3 2016 Q2 2016 Q3 2015
Period End AFS Securities $8.9 billion $8.8 billion $8.8 billion
Average AFS securities $8.9 billion $8.9 billion $8.9 billion
Period End Deposits $21.1 billion $20.8 billion $20.6 billion
Average Deposits $20.8 billion $20.5 billion $20.7 billion
Common Equity Tier 1 12.0% 11.9% 12.8%
Tier 1 12.0% 11.9% 12.8%
Total Capital Ratio 13.7% 13.5% 13.9%
Leverage Ratio 9.1% 9.1% 9.6%
Tangible Common Equity Ratio 9.2% 9.3% 9.8%
Tangible Book Value per Share $45.12 $44.68 $43.52
• BOK Financial remains extremely well capitalized at quarter end.
• Strong 6.5 percent annualized deposit growth in Q3
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2016 and Preliminary 2017
Assumptions
Mid-single-digit loan growth
Stable net interest margin and net interest income
Loan loss provision $5-$15 million
Mid-single-digit revenue growth from fee-generating
businesses on a trailing twelve month basis
Capital deployment through organic growth,
acquisitions, dividends, and stock buybacks
Close Mobank acquisition - $102 million
capital deployment
Approximately $4 million of one time charges related
to October 2016 cost actions
Approximately $2 million contribution to BOKF
Foundation
Mid-single-digit loan growth for the full year
Stable to increasing net interest margin and net
interest income
Loan loss provision of $20-$30 million for the year
Mid-single-digit revenue growth from fee-generating
businesses on a trailing twelve month basis
Capital deployment through organic growth,
acquisitions, dividends, and stock buybacks
$0.04-$0.06 per share contribution from Mobank
Q4 2016: Preliminary 2017:
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Stacy Kymes
EVP-Corporate Banking
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Loan Portfolio by Geography
($mil)
Sep 30
2016
Jun 30
2016
Seq.
Loan
Growth
Sep 30
2015
YOY
Loan
Growth
OK $6,014.3 $6,141.7 (2.1)% $5,782.5 4.0%
TX 5,811.4 5,668.9 2.5% 5,426.4 7.1%
NM 819.7 846.2 (3.1)% 812.7 0.9%
AR 169.9 164.4 3.4% 171.3 (0.8)%
CO 1,370.1 1,408.7 (2.7)% 1,340.4 2.2%
AZ 1,477.4 1,373.2 7.6% 1,150.5 28.4%
KC 801.9 803.8 (0.2)% 638.8 17.3%
Total $16,464.8 $16,406.7 0.4% $15,367.4 7.1%
• Texas and Arizona continue strong recent growth trend
• Decrease in Oklahoma due to large paydown in energy portfolio
• Loan growth excluding large paydown would have been over 1.5% for the
quarter
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Commercial Loan Growth
($mil)
Sep 30
2016
Jun 30
2016
Seq.
Loan
Growth
Sep 30
2015
YOY
Loan
Growth
Energy $2,520.8 $2818.7 (10.6)% $2,838.2 (11.2)%
Services 2,936.6 2,830.9 4.5% 2,706.6 9.3%
Healthcare 2,085.1 2,051.1 1.7% 1,741.7 19.7%
Wholesale/retail 1,602.0 1,533.0 4.5% 1,461.9 9.6%
Manufacturing 499.5 595.4 (16.1)% 555.7 (10.1)%
Other 476.2 527.4 (13.7)% 493.3 (7.7)%
Total Commercial $10,120.2 $10,356.4 (2.3)% $9,797.4 3.3%
• Weaker commercial loan growth due to large energy paydown, softness in general C&I.
Excluding this paydown C&I would have been flat compared to Q2.
• Manufacturing loans down due to impact of energy downturn.
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Oil & Gas
Producers
79%
Midstream
& Other
13%
Energy
Services
8%
Energy
At 9/30/16:
$4.9 billion commitments and $2.5 billion O/S
$200 million new commitments booked in Q3 2016
~60/40 split between oil and gas
E&P line utilization 54%, compared to 60% at 6/30/16
Allowance for credit losses to period end loans: 3.67%, or
over $90 million
Q3 energy chargeoffs $6.3 million
Cumulative chargeoffs in the 2014-2016 commodity cycle: $41 million
($M)
As of Sep 30,
2016
As of Jun 30,
2016
As of Mar 31,
2016
As of Dec 31,
2015
Pass Performing Loans 1,869.6 74.2% 2,032.1 72.1% 2,197.9 72.6% 2,580.7 83.3%
Special Mention 147.2 5.8% 197.5 7.0% 269.0 8.9% 325.7 10.5%
Potential Problem Loans 361.1 14.3% 421.0 14.9% 403.0 13.3% 129.8 4.2%
Nonaccrual Loans 143.0 5.7% 168.1 6.0% 159.5 5.3% 61.2 2.0%
Total Energy Loans $2,520.8 $2,818.7 $3,029.4 $3,097.3
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Commercial Real Estate
($mil)
Sep 30
2016
Jun 30
2016
Seq.
Loan
Growth
Sep 30
2015
YOY
Loan
Growth
Residential Construction
and Land Development
$159.9 $157.6 1.5% $153.5 4.2%
Retail 801.4 795.4 0.7% 769.4 4.1%
Office 752.7 769.1 (2.1)% 626.2 20.2%
Multifamily 873.8 787.2 11.0% 758.7 15.2%
Industrial 838.0 645.6 29.8% 563.9 48.6%
Other CRE 367.8 427.1 (13.9)% 363.4 1.2%
Total CRE $3,793.6 $3,582.0 5.9% $3,235.1 17.3%
• Continued strong growth across the CRE business
• 50 percent of year over year growth outside of traditional BOKF footprint
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Key Credit Quality Metrics
$71.5
$85.9 $82.2 $79.1
$94.0
$17.8
$61.2
$159.6 $168.1 $143.0
$89.3
$147.1
$241.8 $247.2 $237.0
$-
$50.0
$100.0
$150.0
$200.0
$250.0
3Q15 4Q15 1Q16 2Q16 3Q16
Nonaccrual Loans
Other Non-Accruals Energy Non-Accruals
1.35%
1.43%
1.50%
1.54%
1.56%
1.20%
1.25%
1.30%
1.35%
1.40%
1.45%
1.50%
1.55%
1.60%
3Q15 4Q15 1Q16 2Q16 3Q16
Combined Allowance for Credit Losses
to Period End Loans
0.05%
0.08%
0.56%
0.18%
0.15%
-0.50%
-0.30%
-0.10%
0.10%
0.30%
0.50%
0.70%
0.90%
1.10%
3Q15 4Q15 1Q16 2Q16 3Q16
Net annualized charge offs
to average loans
Note: 10-yr NCO average is 36 bps
Stable credit environment in Q3
No signs of contagion/spillover of energy issues to
other lending areas
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Steven G. Bradshaw
Chief Executive Officer
Closing Remarks
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Question and Answer Session