EX-99 2 a20160930bokfex99.htm EXHIBIT 99 Exhibit


Exhibit 99 (a)
image0a01a01a01a05.jpg

NASD: BOKF


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

BOK Financial Reports Quarterly Earnings of $74 Million
Board of Directors Approves Increase in Quarterly Cash Dividend
TULSA, Okla. (Wednesday, October 26, 2016) - BOK Financial Corporation 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.

1


•
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.

2


•
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.

3


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.

4


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.

5


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.

6


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.

7


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.

8
Exhibit 99 (b)

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


9


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


10


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


11


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 ratio1
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
%
 
 
 
 
 
 
 
 
 
 

12


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
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



13


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


14


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



15


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.


16


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

 
 
 
 
 
 
 
 
 
 

17


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 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


18


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.

19


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

 
 
 
 
 
 
 
 
 
 

20


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
 
 
 
 
 
 
 
 
 
 
Performing loans 90 days past due1
$
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 loans1
110.65
%
 
106.95
%
 
104.89
%
 
180.09
%
 
238.84
%
Combined allowance for credit losses to nonaccruing loans1
115.67
%
 
110.93
%
 
107.87
%
 
181.46
%
 
243.05
%
1 
Excludes residential mortgage loans guaranteed by agencies of the U.S. government.


21