0000875357-17-000037.txt : 20170726 0000875357-17-000037.hdr.sgml : 20170726 20170726115505 ACCESSION NUMBER: 0000875357-17-000037 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20170726 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20170726 DATE AS OF CHANGE: 20170726 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: 001-37811 FILM NUMBER: 17982046 BUSINESS ADDRESS: STREET 1: BANK OF OKLAHOMA TOWER STREET 2: BOSTON AVENUE AT SECOND STREET CITY: TULSA STATE: OK ZIP: 74172 BUSINESS PHONE: 9185886000 MAIL ADDRESS: STREET 1: BANK OF OKLAHOMA TOWER STREET 2: P O BOX 2300 CITY: TULSA STATE: OK ZIP: 74192 8-K 1 a20170630bokfpressrelease8.htm 8-K Document


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):
July 26, 2017

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
 
 
Boston Avenue at Second Street
 
 
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)).

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
¨ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨







INFORMATION TO BE INCLUDED IN THE REPORT

ITEM 2.02. Results of Operations and Financial Condition.

On July 26, 2017, BOK Financial Corporation (“BOK Financial”) issued a press release announcing its financial results for the three months and year ended June 30, 2017 (“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 July 26, 2017, in connection with issuance of the Press Release, BOK Financial released financial information related to the three months and year ended June 30, 2017 (“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 July 26, 2017 titled "BOK Financial Reports Quarterly Earnings of $88 Million" and Financial Information for the Three Months and Year Ended June 30, 2017.
  


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: July 26, 2017



EX-99 2 a20170630bokfex99.htm EXHIBIT 99 Exhibit


Exhibit 99 (a)
image0a01a01a01a07.jpg

NASD: BOKF


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

BOK Financial Reports Quarterly Earnings of $88 Million

TULSA, Okla. (Wednesday, July 26, 2017) - BOK Financial Corporation reported net income of $88.1 million or $1.35 per diluted share for the second quarter of 2017. Net income was $88.4 million or $1.35 per diluted share for the first quarter of 2017 and $65.8 million or $1.00 per diluted share for the second quarter of 2016.

Steven G. Bradshaw, president and chief executive officer of BOK Financial, stated, “It was another very strong quarter for BOK Financial, with net income up 34 percent compared to the second quarter of 2016 and 63 percent compared to the first half of 2016. Profit growth was driven by higher net interest margin and net interest income combined with continued careful expense management, as total expenses are essentially flat compared to last year. At the same time, credit quality remains sound, resulting in us recording no provision for credit losses for the third consecutive quarter.”
 
Bradshaw continued, “I want to commend all of our employees for their dedication to the company, as evidenced by BOK Financial being named one of the most respected banks in America in an annual survey by Reputation Institute and American Banker magazine. The survey ranks BOK Financial highest in the areas that are very important to us, including corporate citizenship, governance, workplace, ethical behavior and fairness in the way we conduct business. This validates that we have a strong and effective culture and that our employees show pride in our company and their work.” 
Second Quarter 2017 Highlights
Net interest revenue totaled $205.2 million for the second quarter of 2017, up $4.0 million over the first quarter of 2017. Net interest margin increased to 2.89 percent for the second quarter of 2017 from 2.81 percent for the first quarter of 2017. Average earning assets decreased $359 million compared to the first quarter of 2017.
Fees and commissions revenue totaled $177.5 million for the second quarter of 2017, a $13.1 million increase over the prior quarter. Mortgage banking revenue was up $5.1 million. Fiduciary and asset management revenue grew by $3.2 million and transaction card revenue increased $3.2 million.

1



Operating expense was $250.9 million for the second quarter of 2017, an increase of $6.2 million over the prior quarter. Personnel expense was up $7.3 million over the prior quarter, primarily due to certain performance-based equity awards. Non-personnel expense decreased $1.1 million. Deposit insurance expense decreased primarily due to $5.1 million in credits received during the second quarter of 2017 related to revision of certain inputs to the assessment calculation filed in previous periods. Combined, all other non-personnel expense increased $4.0 million.
Income tax expense was $47.7 million or 34.9 percent of net income before taxes for the second quarter of 2017, compared to $38.1 million or 30.1 percent in the first quarter of 2017. The effective tax rate was 33.7 percent for the second quarter of 2017 and 33.2 percent for the first quarter of 2017, excluding a change in accounting for the tax effect of equity compensation. Tax expense may fluctuate based on the time period when equity awards vest as a result of this change.
No provision for credit losses was recorded in the second quarter of 2017 or the first quarter of 2017. The company had net charge-offs of $1.7 million in the second quarter of 2017, compared to a net recovery of $747 thousand in the previous quarter.
The combined allowance for credit losses totaled $256 million or 1.49 percent of outstanding loans at June 30, 2017 compared to $258 million or 1.52 percent of outstanding loans at March 31, 2017.
Nonperforming assets that are not guaranteed by U.S. government agencies totaled $276 million or 1.62 percent of outstanding loans and repossessed assets at June 30, 2017 and $240 million or 1.43 percent of outstanding loans and repossessed assets at March 31, 2017. The increase in nonperforming assets was primarily due to nonaccruing healthcare and energy loans.
Average loans were largely unchanged compared to the previous quarter. Period-end outstanding loan balances totaled $17.2 billion at June 30, 2017, an increase of $192 million over March 31, 2017.
Average deposits decreased $277 million compared to the previous quarter. Average demand deposit balances grew by $237 million, offset by a $480 million decrease in average interest-bearing transaction deposits and a $55 million decrease in time deposit balances. Period-end deposits were $22.3 billion at June 30, 2017, a $259 million decrease compared to March 31, 2017.
The common equity Tier 1 capital ratio at June 30, 2017 was 11.76 percent. Other regulatory capital ratios were Tier 1 capital ratio, 11.76 percent, total capital ratio, 13.37 percent and leverage ratio, 9.27 percent. At March 31, 2017, the common equity Tier 1 capital ratio was 11.59 percent, the Tier 1 capital ratio was 11.59 percent, total capital ratio was 13.25 percent, and leverage ratio was 8.89 percent.
The company paid a regular quarterly cash dividend of $29 million or $0.44 per common share during the second quarter of 2017. On July 25, 2017, the board of directors approved a quarterly cash dividend of $0.44 per common share payable on or about August 25, 2017 to shareholders of record as of August 11, 2017.

2



Net Interest Revenue
Net interest revenue was $205.2 million for the second quarter of 2017, up $4.0 million over the first quarter of 2017.
Net interest margin was 2.89 percent for the second quarter of 2017, an increase of 8 basis points over the first quarter of 2017, due largely to the impact of an increase in short-term market interest rates. The Federal Reserve's 25 basis point hikes in March and June increased yields on floating-rate earning assets, but had minimal impact on deposit costs. The yield on average earning assets was 3.30 percent, an increase of 15 basis points. The loan portfolio yield increased 15 basis points to 4.03 percent. The yield on the available for sale securities portfolio increased 6 basis points to 2.11 percent. The yield on interest-bearing cash and cash equivalents increased 22 basis points. Funding costs were 0.63 percent, up 11 basis points. Growth in the cost of interest-bearing deposits increased 5 basis points to 0.40 percent as market pricing pressure remained relatively subdued.
Steven Nell, chief financial officer, added, “We are encouraged that net interest margins continue to migrate back to pre–Great Recession levels. The banking industry still has a lot of ground to make up after a decade of near-zero interest rates. To date, we are seeing limited deposit price competition across our footprint, and we are hopeful that this rational behavior will continue."
Average earning assets decreased $359 million compared to the second quarter of 2017. The average balance of the available for sale securities portfolio decreased $183 million. Average trading securities portfolio balances decreased $124 million and interest-bearing cash and cash equivalents balances decreased $80 million. These decreases were partially offset by a $60 million increase in the average balance of fair value option securities held as an economic hedge of our mortgage servicing rights.
Average interest-bearing deposit balances decreased $514 million compared to the first quarter of 2017. The average balance of borrowed funds decreased $254 million.
Fees and Commissions Revenue
Fees and commissions revenue totaled $177.5 million for the second quarter of 2017, an increase of $13.1 million over the first quarter of 2017.
Mortgage banking revenue totaled $30.3 million for the second quarter of 2017, a $5.1 million increase over the first quarter of 2017. Revenue from mortgage loan production increased $5.3 million. Mortgage production volume increased $109 million in response to lower primary mortgage interest rates and normal seasonality. Gain on sale margin improved 47 basis points over the first quarter of 2017, primarily due to increased retail margins and improved pipeline hedging performance.
Fiduciary and asset management revenue grew by $3.2 million to $41.8 million, primarily due to an annual assessment of tax preparation fees and a $96 million increase in the value of fiduciary assets under management.
Transaction card revenue was up $3.2 million, primarily due to a seasonal increase in transaction volumes and a full quarter's impact of TransFund's expansion into the Arizona market.

3



Brokerage and trading revenue decreased $1.9 million primarily due to a $1.0 million decrease in trading revenue and an $862 thousand decrease in retail brokerage revenue. Institutional trading volumes were lower compared to the prior quarter, primarily due to customer anticipation of future interest rate increases. Implementation of the fiduciary rule during the second quarter slowed retail sales activity.
Other Gains, Net
Other gains totaled $6.1 million primarily due to a $5.7 million gain on sale of a merchant banking investment during the second quarter of 2017. Other gains totaled $3.6 million in the first quarter of 2017.
Operating Expense
Total operating expense was $250.9 million for the second quarter of 2017, a $6.2 million increase over the first quarter of 2017.
Personnel expense increased $7.3 million. Incentive compensation expense increased $7.1 million. Share-based compensation expense was up $5.8 million related to adjustments in the vesting assumptions of certain performance-based awards that were granted in January 2015 and a $5.86 per share increase in the fair value of BOK Financial common shares. Cash-based incentive compensation expense increased $1.1 million. A $2.6 million increase in employee healthcare costs were offset by a $2.2 million seasonal decrease in payroll tax expense.
Non-personnel expense decreased $1.1 million compared to the first quarter of 2017. Deposit insurance expense decreased $5.7 million. In conjunction with ongoing cost reduction efforts, management performed a comprehensive review of inputs into the deposit insurance assessment calculation that resulted in $5.1 million of rebates for years 2013 through 2016. Data processing and communication expense increased $1.4 million primarily due to increased transaction activity. Net losses and operating expenses of repossessed assets increased $1.3 million primarily due to increased operating expenses related to repossessed oil and gas properties. This increased expense was offset by revenue from these properties included in other revenue.


4



Loans, Deposits and Capital
Loans
Outstanding loans were $17.2 billion at June 30, 2017, an increase of $192 million over March 31, 2017. Growth in commercial loan balances was partially offset by a decrease in commercial real estate loan balances.
Outstanding commercial loan balances increased $311 million, primarily due to growth in energy loan balances. Unfunded energy loan commitments were largely unchanged at $2.7 billion. Other commercial and industrial loans increased by $59 million and wholesale/retail sector loan balances increased by $37 million. This growth was offset by a $55 million decrease in service sector loan balances and a $44 million decrease in healthcare sector loan balances.
Commercial real estate loan balances decreased $182 million from March 31, 2017. Loans secured by industrial properties decreased $178 million. Retail sector loans decreased $22 million, primarily in the Oklahoma, Arizona and Texas markets, partially offset by growth in the Kansas/Missouri and Colorado markets. Multifamily residential loans increased $29 million. Growth in the Texas market was partially offset by a decrease in the Kansas/Missouri market.
Deposits
Period-end deposits totaled $22.3 billion at June 30, 2017, a $259 million decrease compared to March 31, 2017. Interest-bearing transaction account balances decreased $272 million and time deposits decreased $48 million, partially offset by a $62 million increase in demand deposit balances. Wealth Management deposits grew by $207 million and Commercial Banking deposits decreased $344 million. Consumer Banking deposits were largely unchanged compared to the previous quarter.
Capital
The company's common equity Tier 1 capital ratio was 11.76 percent at June 30, 2017. In addition, the company's Tier 1 capital ratio was 11.76 percent, total capital ratio was 13.37 percent and leverage ratio was 9.27 percent at June 30, 2017. At March 31, 2017, the company's common equity Tier 1 capital ratio was 11.59 percent, Tier 1 capital ratio was 11.59 percent, total capital ratio was 13.25 percent, and leverage ratio was 8.89 percent.
The company's tangible common equity ratio, a non-GAAP measure, was 9.24 percent at June 30, 2017 and 8.88 percent at March 31, 2017. 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 $365 million or 2.12 percent of outstanding loans and repossessed assets at June 30, 2017, compared to $334 million or 1.96 percent at March 31, 2017. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $276 million or 1.62 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at June 30, 2017, compared to $240 million or 1.43 percent at March 31, 2017.
Nonaccruing loans totaled $245 million or 1.43 percent of outstanding loans at June 30, 2017, up from $208 million or 1.22 percent of outstanding loans at March 31, 2017. The increase in nonaccruing loans was primarily due to a $24 million increase in healthcare loans and a $14 million increase in energy loans. New nonaccruing loans identified in the second quarter totaled $59 million, offset by $15 million in payments received, $2.9 million in charge-offs and $2.3 million in foreclosures and repossessions. Additionally, $618 thousand was returned to accruing status based on improved credit risk and performance. At June 30, 2017, nonaccruing commercial loans totaled $197 million or 1.85 percent of outstanding commercial loans, nonaccruing commercial real estate loans totaled $3.8 million or 0.10 percent of outstanding commercial real estate loans and nonaccruing residential mortgage loans totaled $44 million or 2.28 percent of outstanding residential mortgage loans.
Approximately $73 million of nonaccruing loans required a specific allowance of $9.7 million. No specific allowance was necessary for the remaining $172 million of nonaccruing loans based on estimated cash flows or collateral value. At March 31, 2017, $52 million of nonaccruing loans required specific allowances of $3.5 million. No specific allowance was necessary for the remaining $156 million of nonaccruing 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, totaled $327 million at June 30 compared to $413 million at March 31. The decrease largely resulted from energy, manufacturing and service sector potential problem loans, partially offset by an increase in other commercial and industrial potential problem loans.
The company had net charge-offs of $1.7 million for the second quarter of 2017, compared to a net recovery of $747 thousand in the first quarter of 2017. Gross charge-offs totaled $2.9 million for the second quarter, compared to $2.2 million for the previous quarter. Recoveries totaled $1.2 million for the second quarter of 2017 and $2.9 million for the first quarter of 2017.
Based on an evaluation of all credit factors, including changes in nonaccruing and potential problem loans, overall loan portfolio growth and net charge-offs, the company determined that no provision for credit losses was necessary during the first and second quarter of 2017.
The combined allowance for credit losses totaled $256 million or 1.49 percent of outstanding loans and 109 percent of nonaccruing loans at June 30, 2017, excluding residential mortgage loans guaranteed by U.S. government agencies. The allowance for loan losses was $250 million and the accrual for off-balance sheet credit losses was $6.4 million. At March 31, 2017, the combined allowance for credit losses was $258 million or 1.52 percent of outstanding loans and 131 percent of nonaccruing loans, excluding loans guaranteed by U.S. government agencies. The allowance for loan losses was $249 million and the accrual for off-balance sheet credit losses was $9.4 million

6



Securities and Derivatives
The fair value of the available for sale securities portfolio totaled $8.3 billion at June 30, 2017, a $96 million decrease compared to March 31, 2017. At June 30, 2017, the available for sale portfolio consisted primarily of $5.4 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $2.8 billion of commercial mortgage-backed securities fully backed by U.S. government agencies.
At June 30, 2017, the available for sale securities portfolio had a net unrealized gain of $16 million compared to a net unrealized loss of $5.5 million at March 31, 2017, primarily due to changes in interest rates. The $7.3 million net unrealized loss on residential mortgage-backed securities issued by U.S. government agencies at March 31, 2017 improved to a net unrealized gain of $995 thousand at June 30, 2017. Commercial mortgage-backed securities had a net unrealized loss of $6.5 million at June 30, 2017, a $12 million improvement compared to March 31, 2017.
The company also maintains a portfolio of financial instruments consisting primarily of 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.
The net economic benefit of the changes in fair value of mortgage servicing rights and related economic hedges was $247 thousand during the second quarter of 2017, including a $6.9 million decrease in the fair value of mortgage servicing rights, a $5.2 million increase in the fair value of securities and derivative contracts held as an economic hedge and $2.0 million of related net interest revenue.
The fair value of mortgage servicing rights increased by $1.9 million during the first quarter of 2017 primarily due to an increase in residential mortgage rates. The fair value of securities and interest rate derivative contracts held as an economic hedge of mortgage servicing rights decreased by $1.7 million.

7



Conference Call and Webcast

The company will hold a conference call at 9 a.m. Central time on Wednesday, July 26, 2017 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 1-201-689-8471. A conference call and webcast replay will also be available shortly after conclusion of the live call at www.bokf.com or by dialing 1-412-317-6671 and referencing conference ID # 13666185.

About BOK Financial Corporation
BOK Financial Corporation is a $32 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, Mobank, Bank of Oklahoma, Bank of Texas and Colorado State Bank and Trust. Through its subsidiaries, the company provides commercial and consumer banking, investment and trust services, mortgage origination and servicing, and an electronic funds transfer network. For more information, visit www.bokf.com.
The company will continue to evaluate critical assumptions and estimates, such as the appropriateness of the allowance for credit losses and asset impairment as of June 30, 2017 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)
 
June 30, 2017
 
Mar. 31, 2017
 
June 30, 2016
ASSETS
 
 
 
 
 
Cash and due from banks
$
561,587

 
$
546,575

 
$
498,713

Interest-bearing cash and cash equivalents
2,078,831

 
2,220,640

 
1,907,838

Trading securities
441,414

 
677,156

 
211,622

Investment securities
490,426

 
519,402

 
560,711

Available for sale securities
8,341,041

 
8,437,291

 
8,830,689

Fair value option securities
445,169

 
441,714

 
263,265

Restricted equity securities
311,033

 
283,936

 
319,639

Residential mortgage loans held for sale
287,259

 
248,707

 
430,728

Loans:
 
 
 
 
 
Commercial
10,637,955

 
10,327,110

 
10,356,437

Commercial real estate
3,688,592

 
3,871,063

 
3,581,966

Residential mortgage
1,939,198

 
1,946,274

 
1,880,923

Personal
917,900

 
847,459

 
587,423

Total loans
17,183,645

 
16,991,906

 
16,406,749

Allowance for loan losses
(250,061
)
 
(248,710
)
 
(243,259
)
Loans, net of allowance
16,933,584

 
16,743,196

 
16,163,490

Premises and equipment, net
321,038

 
325,546

 
315,199

Receivables
295,042

 
394,394

 
173,638

Goodwill
446,697

 
445,738

 
382,739

Intangible assets, net
40,755

 
42,556

 
43,372

Mortgage servicing rights
245,239

 
249,403

 
190,747

Real estate and other repossessed assets, net
39,436

 
42,726

 
24,054

Derivative contracts, net
280,289

 
304,727

 
883,673

Cash surrender value of bank-owned life insurance
312,774

 
310,537

 
307,860

Receivable on unsettled securities sales
33,177

 
9,921

 
142,820

Other assets
358,741

 
384,767

 
319,653

TOTAL ASSETS
$
32,263,532

 
$
32,628,932

 
$
31,970,450

 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
 
Deposits:
 
 
 
 
 
Demand
$
9,568,895

 
$
9,506,573

 
$
8,424,609

Interest-bearing transaction
10,087,139

 
10,359,214

 
9,668,869

Savings
464,318

 
465,724

 
419,262

Time
2,196,122

 
2,243,848

 
2,247,061

Total deposits
22,316,474

 
22,575,359

 
20,759,801

Funds purchased
67,990

 
47,629

 
56,780

Repurchase agreements
396,333

 
508,352

 
472,683

Other borrowings
5,232,343

 
5,238,947

 
5,830,736

Subordinated debentures
144,658

 
144,649

 
371,812

Accrued interest, taxes and expense
133,198

 
140,235

 
197,742

Due on unsettled securities purchases
32,636

 
137,069

 
11,757

Derivative contracts, net
285,819

 
276,422

 
719,159

Other liabilities
204,536

 
189,376

 
147,242

TOTAL LIABILITIES
28,813,987

 
29,258,038

 
28,567,712

Shareholders' equity:
 
 
 
 
 
Capital, surplus and retained earnings
3,414,505

 
3,346,965

 
3,251,201

Accumulated other comprehensive income (loss)
7,964

 
(5,221
)
 
117,632

TOTAL SHAREHOLDERS' EQUITY
3,422,469

 
3,341,744

 
3,368,833

Non-controlling interests
27,076

 
29,150

 
33,905

TOTAL EQUITY
3,449,545

 
3,370,894

 
3,402,738

TOTAL LIABILITIES AND EQUITY
$
32,263,532

 
$
32,628,932

 
$
31,970,450


9



AVERAGE BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
 
Three Months Ended
 
June 30, 2017
 
Mar. 31, 2017
 
Dec. 31, 2016
 
Sept. 30, 2016
 
June 30, 2016
ASSETS
 
 
 
 
 
 
 
 
 
Interest-bearing cash and cash equivalents
$
2,007,746

 
$
2,087,964

 
$
2,032,785

 
$
2,047,991

 
$
2,022,028

Trading securities
456,028

 
579,549

 
476,498

 
366,545

 
237,808

Investment securities
499,372

 
530,936

 
542,869

 
552,592

 
562,391

Available for sale securities
8,384,057

 
8,567,049

 
8,766,555

 
8,862,590

 
8,890,112

Fair value option securities
476,102

 
416,524

 
210,733

 
266,998

 
368,434

Restricted equity securities
295,743

 
312,498

 
334,114

 
335,812

 
319,136

Residential mortgage loans held for sale
245,401

 
220,325

 
345,066

 
445,930

 
401,114

Loans:
 
 
 
 
 
 
 
 
 
Commercial
10,604,456

 
10,414,579

 
10,228,095

 
10,109,692

 
10,265,782

Commercial real estate
3,676,976

 
3,903,850

 
3,749,393

 
3,789,673

 
3,550,611

Residential mortgage
1,933,091

 
1,962,759

 
1,919,296

 
1,870,855

 
1,864,458

Personal
915,010

 
854,637

 
826,804

 
677,530

 
582,281

Total loans
17,129,533

 
17,135,825

 
16,723,588

 
16,447,750

 
16,263,132

Allowance for loan losses
(251,632
)
 
(249,379
)
 
(246,977
)
 
(247,901
)
 
(245,448
)
Total loans, net
16,877,901

 
16,886,446

 
16,476,611

 
16,199,849

 
16,017,684

Total earning assets
29,242,350

 
29,601,291

 
29,185,231

 
29,078,307

 
28,818,707

Cash and due from banks
530,352

 
547,104

 
578,694

 
511,534

 
507,085

Derivative contracts, net
248,168

 
401,886

 
681,455

 
766,671

 
823,584

Cash surrender value of bank-owned life insurance
311,310

 
309,223

 
309,532

 
308,670

 
306,318

Receivable on unsettled securities sales
79,248

 
62,641

 
33,813

 
259,906

 
49,568

Other assets
1,957,143

 
2,032,844

 
2,172,351

 
1,721,385

 
1,480,780

TOTAL ASSETS
$
32,368,571

 
$
32,954,989

 
$
32,961,076

 
$
32,646,473

 
$
31,986,042

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
Demand
$
9,338,683

 
$
9,101,763

 
$
9,124,595

 
$
8,497,037

 
$
8,162,134

Interest-bearing transaction
10,087,640

 
10,567,475

 
9,980,132

 
9,650,618

 
9,590,855

Savings
461,586

 
441,254

 
421,654

 
420,009

 
417,122

Time
2,204,422

 
2,258,930

 
2,177,035

 
2,197,350

 
2,297,621

Total deposits
22,092,331

 
22,369,422

 
21,703,416

 
20,765,014

 
20,467,732

Funds purchased
63,263

 
55,508

 
62,004

 
68,280

 
70,682

Repurchase agreements
427,353

 
523,561

 
560,891

 
522,822

 
611,264

Other borrowings
5,572,031

 
5,737,955

 
6,072,150

 
6,342,369

 
6,076,028

Subordinated debentures
144,654

 
144,644

 
144,635

 
255,890

 
232,795

Derivative contracts, net
178,695

 
405,444

 
682,808

 
747,187

 
791,313

Due on unsettled securities purchases
157,438

 
91,529

 
77,575

 
200,574

 
93,812

Other liabilities
323,373

 
299,534

 
321,404

 
352,671

 
298,170

TOTAL LIABILITIES
28,959,138

 
29,627,597

 
29,624,883

 
29,254,807

 
28,641,796

Total equity
3,409,433

 
3,327,392

 
3,336,193

 
3,391,666

 
3,344,246

TOTAL LIABILITIES AND EQUITY
$
32,368,571

 
$
32,954,989

 
$
32,961,076

 
$
32,646,473

 
$
31,986,042


10



STATEMENTS OF EARNINGS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except per share data)
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
Interest revenue
$
235,181

 
$
202,267

 
$
461,571

 
$
404,063

Interest expense
29,977

 
19,655

 
55,185

 
38,879

Net interest revenue
205,204

 
182,612


406,386


365,184

Provision for credit losses

 
20,000

 

 
55,000

Net interest revenue after provision for credit losses
205,204

 
162,612


406,386


310,184

Other operating revenue:
 
 
 
 
 
 
 
Brokerage and trading revenue
31,764

 
39,530

 
65,387

 
71,871

Transaction card revenue
35,296

 
34,950

 
67,423

 
67,304

Fiduciary and asset management revenue
41,808

 
34,813

 
80,439

 
66,869

Deposit service charges and fees
23,354

 
22,618

 
46,384

 
45,160

Mortgage banking revenue
30,276

 
34,884

 
55,467

 
66,984

Other revenue
14,984

 
13,352

 
26,736

 
25,256

Total fees and commissions
177,482

 
180,147


341,836


343,444

Other gains, net
6,108

 
1,307

 
9,735

 
2,867

Gain on derivatives, net
3,241

 
10,766

 
2,791

 
17,904

Gain on fair value option securities, net
1,984

 
4,279

 
844

 
13,722

Change in fair value of mortgage servicing rights
(6,943
)
 
(16,283
)
 
(5,087
)
 
(44,271
)
Gain on available for sale securities, net
380

 
5,326

 
2,429

 
9,290

Total other operating revenue
182,252

 
185,542


352,548


342,956

Other operating expense:
 
 
 
 
 
 
 
Personnel
143,744

 
139,213

 
280,169

 
272,775

Business promotion
7,738

 
6,703

 
14,455

 
12,399

Professional fees and services
12,419

 
14,158

 
23,836

 
25,917

Net occupancy and equipment
21,125

 
19,677

 
42,749

 
38,443

Insurance
689

 
7,129

 
7,093

 
14,394

Data processing and communications
36,330

 
32,802

 
71,232

 
64,819

Printing, postage and supplies
4,140

 
3,889

 
7,991

 
7,796

Net losses and operating expenses of repossessed assets
2,267

 
1,588

 
3,276

 
2,658

Amortization of intangible assets
1,803

 
2,624

 
3,605

 
3,783

Mortgage banking costs
12,072

 
15,746

 
25,075

 
28,076

Other expense
8,558

 
7,856

 
16,115

 
22,895

Total other operating expense
250,885

 
251,385


495,596


493,955

 
 
 
 
 
 
 
 
Net income before taxes
136,571

 
96,769


263,338


159,185

Federal and state income taxes
47,705

 
30,497

 
85,808

 
51,925

 
 
 
 
 
 
 
 
Net income
88,866

 
66,272


177,530


107,260

Net income (loss) attributable to non-controlling interests
719

 
471

 
1,027

 
(1,105
)
Net income attributable to BOK Financial Corporation shareholders
$
88,147

 
$
65,801


$
176,503


$
108,365

 
 
 
 
 
 
 
 
Average shares outstanding:
 
 
 
 
 
 
 
Basic
64,729,752

 
65,245,887

 
64,722,744

 
65,271,214

Diluted
64,793,134

 
65,302,926

 
64,788,322

 
65,317,177

 
 
 
 
 
 
 
 
Net income per share:
 
 
 
 
 
 
 
Basic
$
1.35

 
$
1.00

 
$
2.70

 
$
1.64

Diluted
$
1.35

 
$
1.00

 
$
2.69

 
$
1.64


11



FINANCIAL HIGHLIGHTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and share data)
 
Three Months Ended
 
June 30, 2017
 
Mar. 31, 2017
 
Dec. 31, 2016
 
Sept. 30, 2016
 
June 30, 2016
Capital:
 
 
 
 
 
 
 
 
 
Period-end shareholders' equity
$
3,422,469

 
$
3,341,744

 
$
3,274,854

 
$
3,398,311

 
$
3,368,833

Risk weighted assets
$
25,127,604

 
$
24,901,019

 
$
25,274,848

 
$
24,358,385

 
$
24,191,016

Risk-based capital ratios:
 
 
 
 
 
 
 
 
 
Common equity tier 1
11.76
%
 
11.59
%
 
11.21
%
 
11.99
%
 
11.86
%
Tier 1
11.76
%
 
11.59
%
 
11.21
%
 
11.99
%
 
11.86
%
Total capital
13.37
%
 
13.25
%
 
12.81
%
 
13.65
%
 
13.51
%
Leverage ratio
9.27
%
 
8.89
%
 
8.72
%
 
9.06
%
 
9.06
%
Tangible common equity ratio1
9.24
%
 
8.88
%
 
8.61
%
 
9.19
%
 
9.33
%
 
 
 
 
 
 
 
 
 
 
Common stock:
 
 
 
 
 
 
 
 
 
Book value per share
$
52.32

 
$
51.09

 
$
50.12

 
$
51.56

 
$
51.15

Tangible book value per share
44.87

 
43.63

 
42.53

 
45.12

 
44.68

Market value per share:
 
 
 
 
 
 
 
 
 
High
$
88.31

 
$
85.25

 
$
85.00

 
$
70.05

 
$
65.14

Low
$
74.09

 
$
73.44

 
$
67.11

 
$
56.36

 
$
51.00

Cash dividends paid
$
28,652

 
$
28,646

 
$
28,860

 
$
28,181

 
$
28,241

Dividend payout ratio
32.50
%
 
32.42
%
 
57.69
%
 
37.94
%
 
42.92
%
Shares outstanding, net
65,416,403

 
65,408,019

 
65,337,432

 
65,910,454

 
65,866,317

Stock buy-back program:
 
 
 
 
 
 
 
 
 
Shares repurchased

 

 
700,000

 

 
305,169

Amount
$

 
$

 
$
49,021

 
$

 
$
17,771

Average price per share
$

 
$

 
$
70.03

 
$

 
$
58.23

 
 
 
 
 
 
 
 
 
 
Performance ratios (quarter annualized):
Return on average assets
1.09
%
 
1.09
%
 
0.60
%
 
0.91
%
 
0.83
%
Return on average equity
10.46
%
 
10.86
%
 
6.03
%
 
8.80
%
 
8.00
%
Net interest margin
2.89
%
 
2.81
%
 
2.69
%
 
2.64
%
 
2.63
%
Efficiency ratio
64.61
%
 
65.77
%
 
72.93
%
 
68.88
%
 
68.16
%
 
 
 
 
 
 
 
 
 
 
Reconciliation of non-GAAP measures:
1      Tangible common equity ratio:
 
 
 
 
 
 
 
 
 
Total shareholders' equity
$
3,422,469

 
$
3,341,744

 
$
3,274,854

 
$
3,398,311

 
$
3,368,833

Less: Goodwill and intangible assets, net
487,452

 
488,294

 
495,830

 
424,716

 
426,111

Tangible common equity
$
2,935,017

 
$
2,853,450

 
$
2,779,024

 
$
2,973,595

 
$
2,942,722

 
 
 
 
 
 
 
 
 
 
Total assets
$
32,263,532

 
$
32,628,932

 
$
32,772,281

 
$
32,779,231

 
$
31,970,450

Less: Goodwill and intangible assets, net
487,452

 
488,294

 
495,830

 
424,716

 
426,111

Tangible assets
$
31,776,080

 
$
32,140,638

 
$
32,276,451

 
$
32,354,515

 
$
31,544,339

 
 
 
 
 
 
 
 
 
 
Tangible common equity ratio
9.24
%
 
8.88
%
 
8.61
%
 
9.19
%
 
9.33
%
 
 
 
 
 
 
 
 
 
 

12



FINANCIAL HIGHLIGHTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and share data)
 
Three Months Ended
 
June 30, 2017
 
Mar. 31, 2017
 
Dec. 31, 2016
 
Sept. 30, 2016
 
June 30, 2016
Other data:
 
 
 
 
 
 
 
 
 
Fiduciary assets
$
45,089,153

 
$
44,992,920

 
$
42,378,053

 
$
41,810,943

 
$
40,496,583

Tax equivalent interest
$
4,330

 
$
4,428

 
$
4,389

 
$
4,455

 
$
4,372

Net unrealized gain (loss) on available for sale securities
$
16,041

 
$
(5,537
)
 
$
(14,899
)
 
$
159,533

 
$
195,385

 
 
 
 
 
 
 
 
 
 
Mortgage banking:
 
 
 
 
 
 
 
 
 
Mortgage production revenue
$
13,840

 
$
8,543

 
$
11,937

 
$
21,958

 
$
19,086

 
 
 
 
 
 
 
 
 
 
Mortgage loans funded for sale
$
902,978

 
$
711,019

 
$
1,189,975

 
$
1,864,583

 
$
1,818,844

Add: current period-end outstanding commitments
362,088

 
381,732

 
318,359

 
630,804

 
965,631

Less: prior period end outstanding commitments
381,732

 
318,359

 
630,804

 
965,631

 
902,986

Total mortgage production volume
$
883,334

 
$
774,392

 
$
877,530

 
$
1,529,756

 
$
1,881,489

 
 
 
 
 
 
 
 
 
 
Mortgage loan refinances to mortgage loans funded for sale
33
%
 
44
%
 
63
%
 
51
%
 
44
%
Gain on sale margin
1.57
%
 
1.10
%
 
1.36
%
 
1.44
%
 
1.01
%
 
 
 
 
 
 
 
 
 
 
Mortgage servicing revenue
$
16,436

 
$
16,648

 
$
16,477

 
$
16,558

 
$
15,798

Average outstanding principal balance of mortgage loans service for others
22,055,127

 
22,006,295

 
21,924,552

 
21,514,962

 
20,736,525

Average mortgage servicing revenue rates
0.30
%
 
0.31
%
 
0.30
%
 
0.31
%
 
0.31
%
 
 
 
 
 
 
 
 
 
 
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net
$
3,241

 
$
(528
)
 
$
(35,868
)
 
$
2,268

 
$
10,766

Gain (loss) on fair value option securities, net
1,984

 
(1,140
)
 
(20,922
)
 
(3,355
)
 
4,279

Gain (loss) on economic hedge of mortgage servicing rights
5,225

 
(1,668
)
 
(56,790
)
 
(1,087
)
 
15,045

Gain (loss) on changes in fair value of mortgage servicing rights
(6,943
)
 
1,856

 
39,751

 
2,327

 
(16,283
)
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue
(1,718
)
 
188

 
(17,039
)
 
1,240

 
(1,238
)
Net interest revenue on fair value option securities2
1,965

 
1,271

 
114

 
861

 
1,348

Total economic benefit (cost) of changes in the fair value of mortgage servicing rights, net of economic hedges
$
247

 
$
1,459

 
$
(16,925
)
 
$
2,101

 
$
110

2    Actual interest earned on fair value option securities less internal transfer-priced cost of funds.

13



QUARTERLY EARNINGS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and per share data)
 
Three Months Ended
 
June 30, 2017
 
Mar. 31, 2017
 
Dec. 31, 2016
 
Sept. 30, 2016
 
June 30, 2016
 
 
 
 
 
 
 
 
 
 
Interest revenue
$
235,181

 
$
226,390

 
$
215,737

 
$
209,317

 
$
202,267

Interest expense
29,977

 
25,208

 
21,539

 
21,471

 
19,655

Net interest revenue
205,204

 
201,182

 
194,198

 
187,846

 
182,612

Provision for credit losses

 

 

 
10,000

 
20,000

Net interest revenue after provision for credit losses
205,204

 
201,182

 
194,198

 
177,846

 
162,612

Other operating revenue:
 
 
 
 
 
 
 
 
 
Brokerage and trading revenue
31,764

 
33,623

 
28,500

 
38,006

 
39,530

Transaction card revenue
35,296

 
32,127

 
34,521

 
33,933

 
34,950

Fiduciary and asset management revenue
41,808

 
38,631

 
34,535

 
34,073

 
34,813

Deposit service charges and fees
23,354

 
23,030

 
23,365

 
23,668

 
22,618

Mortgage banking revenue
30,276

 
25,191

 
28,414

 
38,516

 
34,884

Other revenue
14,984

 
11,752

 
12,693

 
13,080

 
13,352

Total fees and commissions
177,482

 
164,354

 
162,028

 
181,276

 
180,147

Other gains (losses), net
6,108

 
3,627

 
(1,279
)
 
2,442

 
1,307

Gain (loss) on derivatives, net
3,241

 
(450
)
 
(35,815
)
 
2,226

 
10,766

Gain (loss) on fair value option securities, net
1,984

 
(1,140
)
 
(20,922
)
 
(3,355
)
 
4,279

Change in fair value of mortgage servicing rights
(6,943
)
 
1,856

 
39,751

 
2,327

 
(16,283
)
Gain (loss) on available for sale securities, net
380

 
2,049

 
(9
)
 
2,394

 
5,326

Total other operating revenue
182,252

 
170,296

 
143,754

 
187,310

 
185,542

Other operating expense:
 
 
 
 
 
 
 
 
 
Personnel
143,744

 
136,425

 
141,132

 
139,212

 
139,213

Business promotion
7,738

 
6,717

 
7,344

 
6,839

 
6,703

Charitable contributions to BOKF Foundation

 

 
2,000

 

 

Professional fees and services
12,419

 
11,417

 
16,828

 
14,038

 
14,158

Net occupancy and equipment
21,125

 
21,624

 
21,470

 
20,111

 
19,677

Insurance
689

 
6,404

 
8,705

 
9,390

 
7,129

Data processing and communications
36,330

 
34,902

 
33,691

 
33,331

 
32,802

Printing, postage and supplies
4,140

 
3,851

 
3,998

 
3,790

 
3,889

Net losses (gains) and operating expenses of repossessed assets
2,267

 
1,009

 
1,627

 
(926
)
 
1,588

Amortization of intangible assets
1,803

 
1,802

 
1,558

 
1,521

 
2,624

Mortgage banking costs
12,072

 
13,003

 
17,348

 
15,963

 
15,746

Other expense
8,558

 
7,557

 
9,846

 
14,819

 
7,856

Total other operating expense
250,885

 
244,711

 
265,547

 
258,088

 
251,385

Net income before taxes
136,571

 
126,767

 
72,405

 
107,068

 
96,769

Federal and state income taxes
47,705

 
38,103

 
22,496

 
31,956

 
30,497

Net income
88,866

 
88,664

 
49,909

 
75,112

 
66,272

Net income (loss) attributable to non-controlling interests
719

 
308

 
(117
)
 
835

 
471

Net income attributable to BOK Financial Corporation shareholders
$
88,147

 
$
88,356

 
$
50,026

 
$
74,277

 
$
65,801

 
 
 
 
 
 
 
 
 
 
Average shares outstanding:
 
 
 
 
 
 
 
 
 
Basic
64,729,752

 
64,715,964

 
64,719,018

 
65,085,392

 
65,245,887

Diluted
64,793,134

 
64,783,737

 
64,787,728

 
65,157,841

 
65,302,926

Net income per share:
 
 
 
 
 
 
 
 
 
Basic
$
1.35

 
$
1.35

 
$
0.76

 
$
1.13

 
$
1.00

Diluted
$
1.35

 
$
1.35

 
$
0.76

 
$
1.13

 
$
1.00


14



LOANS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
 
 
June 30, 2017
 
Mar. 31, 2017
 
Dec. 31, 2016
 
Sept. 30, 2016
 
June 30, 2016
Commercial:
 
 
 
 
 
 
 
 
 
 
Energy
 
$
2,847,240

 
$
2,537,112

 
$
2,497,868

 
$
2,520,804

 
$
2,818,656

Services
 
2,958,827

 
3,013,375

 
3,108,990

 
2,936,599

 
2,830,864

Healthcare
 
2,221,518

 
2,265,604

 
2,201,916

 
2,085,046

 
2,051,146

Wholesale/retail
 
1,543,695

 
1,506,243

 
1,576,818

 
1,602,030

 
1,532,957

Manufacturing
 
546,137

 
543,430

 
514,975

 
499,486

 
595,403

Other commercial and industrial
 
520,538

 
461,346

 
490,257

 
476,198

 
527,411

Total commercial
 
10,637,955

 
10,327,110

 
10,390,824

 
10,120,163

 
10,356,437

 
 
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 

 
 

 
 

 
 

 
 

Retail
 
722,805

 
745,046

 
761,888

 
801,377

 
795,419

Multifamily
 
952,380

 
922,991

 
903,272

 
873,773

 
787,200

Office
 
862,973

 
860,889

 
798,888

 
752,705

 
769,112

Industrial
 
693,635

 
871,463

 
871,749

 
838,021

 
645,586

Residential construction and land development
 
141,592

 
135,994

 
135,533

 
159,946

 
157,576

Other commercial real estate
 
315,207

 
334,680

 
337,716

 
367,776

 
427,073

Total commercial real estate
 
3,688,592

 
3,871,063

 
3,809,046

 
3,793,598

 
3,581,966

 
 
 
 
 
 
 
 
 
 
 
Residential mortgage:
 
 

 
 

 
 

 
 

 
 

Permanent mortgage
 
989,040

 
977,743

 
1,006,820

 
969,558

 
969,007

Permanent mortgages guaranteed by U.S. government agencies
 
191,729

 
204,181

 
199,387

 
190,309

 
192,732

Home equity
 
758,429

 
764,350

 
743,625

 
712,926

 
719,184

Total residential mortgage
 
1,939,198

 
1,946,274

 
1,949,832

 
1,872,793

 
1,880,923

 
 
 
 
 
 
 
 
 
 
 
Personal
 
917,900

 
847,459

 
839,958

 
678,232

 
587,423

 
 
 
 
 
 
 
 
 
 
 
Total
 
$
17,183,645

 
$
16,991,906

 
$
16,989,660

 
$
16,464,786

 
$
16,406,749



15



LOANS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
 
June 30, 2017
 
Mar. 31, 2017
 
Dec. 31, 2016
 
Sept. 30, 2016
 
June 30, 2016
 
 
 
 
 
 
 
 
 
 
Bank of Oklahoma:
 
 
 
 
 
 
 
 
 
Commercial
$
3,369,967

 
$
3,189,183

 
$
3,370,259

 
$
3,545,924

 
$
3,698,215

Commercial real estate
667,932

 
691,332

 
684,381

 
795,806

 
781,458

Residential mortgage
1,398,021

 
1,404,054

 
1,407,197

 
1,401,166

 
1,415,766

Personal
318,016

 
310,708

 
303,823

 
271,420

 
246,229

Total Bank of Oklahoma
5,753,936

 
5,595,277

 
5,765,660

 
6,014,316

 
6,141,668

 
 
 
 
 
 
 
 
 
 
Bank of Texas:
 
 
 
 
 
 
 
 
 
Commercial
4,339,634

 
4,148,316

 
4,022,455

 
3,903,218

 
3,901,632

Commercial real estate
1,360,164

 
1,452,988

 
1,415,011

 
1,400,709

 
1,311,408

Residential mortgage
232,074

 
231,647

 
233,981

 
229,345

 
222,548

Personal
354,222

 
312,092

 
306,748

 
278,167

 
233,304

Total Bank of Texas
6,286,094

 
6,145,043

 
5,978,195

 
5,811,439

 
5,668,892

 
 
 
 
 
 
 
 
 
 
Bank of Albuquerque:
 
 
 
 
 
 
 
 
 
Commercial
369,370

 
407,403

 
399,256

 
398,147

 
398,427

Commercial real estate
324,405

 
307,927

 
284,603

 
299,785

 
322,956

Residential mortgage
103,849

 
106,432

 
108,058

 
110,478

 
114,226

Personal
12,439

 
11,305

 
11,483

 
11,333

 
10,569

Total Bank of Albuquerque
810,063

 
833,067

 
803,400

 
819,743

 
846,178

 
 
 
 
 
 
 
 
 
 
Bank of Arkansas:
 
 
 
 
 
 
 
 
 
Commercial
85,020

 
88,010

 
86,577

 
83,544

 
81,227

Commercial real estate
73,943

 
74,469

 
73,616

 
72,649

 
69,235

Residential mortgage
6,395

 
6,829

 
7,015

 
6,936

 
6,874

Personal
11,993

 
6,279

 
6,524

 
6,757

 
7,025

Total Bank of Arkansas
177,351

 
175,587

 
173,732

 
169,886

 
164,361

 
 
 
 
 
 
 
 
 
 
Colorado State Bank & Trust:
 
 
 
 
 
 
 
 
 
Commercial
1,065,780

 
998,216

 
1,018,208

 
1,013,314

 
1,076,620

Commercial real estate
255,379

 
266,218

 
265,264

 
254,078

 
237,569

Residential mortgage
63,346

 
62,313

 
59,631

 
59,838

 
59,425

Personal
56,187

 
49,523

 
50,372

 
42,901

 
35,064

Total Colorado State Bank & Trust
1,440,692

 
1,376,270

 
1,393,475

 
1,370,131

 
1,408,678

 
 
 
 
 
 
 
 
 
 
Bank of Arizona:
 
 
 
 
 
 
 
 
 
Commercial
617,759

 
643,222

 
686,253

 
680,447

 
670,814

Commercial real estate
705,858

 
737,088

 
747,409

 
726,542

 
639,112

Residential mortgage
37,034

 
36,737

 
36,265

 
39,206

 
38,998

Personal
55,528

 
51,386

 
52,553

 
31,205

 
24,248

Total Bank of Arizona
1,416,179

 
1,468,433

 
1,522,480

 
1,477,400

 
1,373,172

 
 
 
 
 
 
 
 
 
 
Mobank:
 
 
 
 
 
 
 
 
 
Commercial
790,425

 
852,760

 
807,816

 
495,569

 
529,502

Commercial real estate
300,911

 
341,041

 
338,762

 
244,029

 
220,228

Residential mortgage
98,479

 
98,262

 
97,685

 
25,824

 
23,086

Personal
109,515

 
106,166

 
108,455

 
36,449

 
30,984

Total Mobank
1,299,330

 
1,398,229

 
1,352,718

 
801,871

 
803,800

 
 
 
 
 
 
 
 
 
 
TOTAL BOK FINANCIAL
$
17,183,645

 
$
16,991,906

 
$
16,989,660

 
$
16,464,786

 
$
16,406,749


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)
 
June 30, 2017
 
Mar. 31, 2017
 
Dec. 31, 2016
 
Sept. 30, 2016
 
June 30, 2016
Bank of Oklahoma:
 
 
 
 
 
 
 
 
 
    Demand
$
4,353,421

 
$
4,320,666

 
$
3,993,170

 
$
4,158,273

 
$
4,020,181

    Interest-bearing:
 
 
 
 
 
 
 
 
 
       Transaction
5,998,787

 
6,114,288

 
6,345,536

 
5,701,983

 
5,741,302

       Savings
263,664

 
265,014

 
241,696

 
242,959

 
247,984

       Time
1,170,014

 
1,189,144

 
1,118,355

 
1,091,464

 
1,167,271

    Total interest-bearing
7,432,465

 
7,568,446

 
7,705,587

 
7,036,406

 
7,156,557

Total Bank of Oklahoma
11,785,886

 
11,889,112

 
11,698,757

 
11,194,679

 
11,176,738

 
 
 
 
 
 
 
 
 
 
Bank of Texas:
 
 
 
 
 
 
 
 
 
    Demand
3,121,890

 
3,091,258

 
3,137,009

 
2,734,981

 
2,677,253

    Interest-bearing:
 
 
 
 
 
 
 
 
 
       Transaction
2,272,185

 
2,317,576

 
2,388,812

 
2,240,040

 
2,035,634

       Savings
91,491

 
89,640

 
83,101

 
84,642

 
83,862

       Time
502,128

 
511,037

 
535,642

 
528,380

 
516,231

    Total interest-bearing
2,865,804

 
2,918,253

 
3,007,555

 
2,853,062

 
2,635,727

Total Bank of Texas
5,987,694

 
6,009,511

 
6,144,564

 
5,588,043

 
5,312,980

 
 
 
 
 
 
 
 
 
 
Bank of Albuquerque:
 
 
 
 
 
 
 
 
 
    Demand
612,117

 
593,117

 
627,979

 
584,681

 
530,853

    Interest-bearing:
 
 
 
 
 
 
 
 
 
       Transaction
558,523

 
623,677

 
590,571

 
555,326

 
573,690

       Savings
54,136

 
53,683

 
49,963

 
54,480

 
49,200

       Time
229,616

 
233,506

 
238,408

 
244,706

 
250,068

    Total interest-bearing
842,275

 
910,866

 
878,942

 
854,512

 
872,958

Total Bank of Albuquerque
1,454,392

 
1,503,983

 
1,506,921

 
1,439,193

 
1,403,811

 
 
 
 
 
 
 
 
 
 
Bank of Arkansas:
 
 
 
 
 
 
 
 
 
    Demand
40,511

 
42,622

 
26,389

 
32,203

 
30,607

    Interest-bearing:
 
 
 
 
 
 
 
 
 
       Transaction
129,848

 
106,804

 
105,232

 
313,480

 
278,335

       Savings
2,135

 
2,304

 
2,192

 
2,051

 
1,853

       Time
14,876

 
15,067

 
16,696

 
17,534

 
18,911

    Total interest-bearing
146,859

 
124,175

 
124,120

 
333,065

 
299,099

Total Bank of Arkansas
187,370

 
166,797

 
150,509

 
365,268

 
329,706

 
 
 
 
 
 
 
 
 
 
Colorado State Bank & Trust:
 
 
 
 
 
 
 
 
 
    Demand
577,617

 
601,778

 
576,000

 
517,063

 
528,124

    Interest-bearing:
 
 
 
 
 
 
 
 
 
       Transaction
626,343

 
610,510

 
616,679

 
623,055

 
625,240

       Savings
35,651

 
37,801

 
32,866

 
31,613

 
31,509

       Time
228,458

 
234,740

 
242,782

 
247,667

 
254,164

    Total interest-bearing
890,452

 
883,051

 
892,327

 
902,335

 
910,913

Total Colorado State Bank & Trust
1,468,069

 
1,484,829

 
1,468,327

 
1,419,398

 
1,439,037

 
 
 
 
 
 
 
 
 
 

17



DEPOSITS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
 
June 30, 2017
 
Mar. 31, 2017
 
Dec. 31, 2016
 
Sept. 30, 2016
 
June 30, 2016
Bank of Arizona:
 
 
 
 
 
 
 
 
 
    Demand
366,866

 
342,854

 
366,755

 
418,718

 
396,837

    Interest-bearing:
 
 
 
 
 
 
 
 
 
       Transaction
154,457

 
180,254

 
305,099

 
303,750

 
302,297

       Savings
3,638

 
3,858

 
2,973

 
2,959

 
3,198

       Time
19,911

 
26,112

 
27,765

 
27,935

 
28,681

    Total interest-bearing
178,006

 
210,224

 
335,837

 
334,644

 
334,176

Total Bank of Arizona
544,872

 
553,078

 
702,592

 
753,362

 
731,013

 
 
 
 
 
 
 
 
 
 
Mobank:
 
 
 
 
 
 
 
 
 
    Demand
496,473

 
514,278

 
508,418

 
235,445

 
240,755

    Interest-bearing:
 
 
 
 
 
 
 
 
 
       Transaction
346,996

 
406,105

 
513,176

 
86,526

 
112,371

       Savings
13,603

 
13,424

 
12,679

 
1,645

 
1,656

       Time
31,119

 
34,242

 
42,152

 
11,945

 
11,735

    Total interest-bearing
391,718

 
453,771

 
568,007

 
100,116

 
125,762

Total Mobank
888,191

 
968,049

 
1,076,425

 
335,561

 
366,517

 
 
 
 
 
 
 
 
 
 
TOTAL BOK FINANCIAL
$
22,316,474

 
$
22,575,359

 
$
22,748,095

 
$
21,095,504

 
$
20,759,802


18



NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
 
Three Months Ended
 
June 30, 2017
 
Mar. 31, 2017
 
Dec. 31, 2016
 
Sept. 30, 2016
 
June 30, 2016
 
 
 
 
 
 
 
 
 
 
TAX-EQUIVALENT ASSETS YIELDS
 
 
 
 
 
 
 
 
 
Interest-bearing cash and cash equivalents
1.04
%
 
0.82
%
 
0.55
%
 
0.51
%
 
0.51
%
Trading securities
3.23
%
 
3.87
%
 
3.91
%
 
2.71
%
 
1.89
%
Investment securities:
 
 
 
 
 
 
 
 
 
    Taxable
5.34
%
 
5.44
%
 
5.39
%
 
5.34
%
 
5.41
%
    Tax-exempt
2.51
%
 
2.45
%
 
2.33
%
 
2.26
%
 
2.25
%
Total investment securities
3.76
%
 
3.70
%
 
3.60
%
 
3.51
%
 
3.52
%
Available for sale securities:
 
 
 
 
 
 
 
 
 
    Taxable
2.09
%
 
2.02
%
 
1.98
%
 
1.99
%
 
2.01
%
    Tax-exempt
6.09
%
 
5.37
%
 
5.27
%
 
5.47
%
 
5.06
%
Total available for sale securities
2.11
%
 
2.05
%
 
2.00
%
 
2.01
%
 
2.04
%
Fair value option securities
2.92
%
 
2.27
%
 
0.99
%
 
1.70
%
 
2.19
%
Restricted equity securities
5.95
%
 
5.52
%
 
5.45
%
 
5.37
%
 
4.84
%
Residential mortgage loans held for sale
3.92
%
 
3.35
%
 
3.31
%
 
3.28
%
 
3.53
%
Loans
4.03
%
 
3.88
%
 
3.67
%
 
3.63
%
 
3.58
%
Allowance for loan losses
 
 
 
 
 
 
 
 
 
Loans, net of allowance
4.09
%
 
3.94
%
 
3.72
%
 
3.69
%
 
3.63
%
Total tax-equivalent yield on earning assets
3.30
%
 
3.15
%
 
2.98
%
 
2.93
%
 
2.91
%
 
 
 
 
 
 
 
 
 
 
COST OF INTEREST-BEARING LIABILITIES
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
  Interest-bearing transaction
0.26
%
 
0.20
%
 
0.16
%
 
0.14
%
 
0.14
%
  Savings
0.08
%
 
0.08
%
 
0.09
%
 
0.09
%
 
0.10
%
  Time
1.11
%
 
1.09
%
 
1.12
%
 
1.14
%
 
1.16
%
Total interest-bearing deposits
0.40
%
 
0.35
%
 
0.32
%
 
0.32
%
 
0.33
%
Funds purchased
0.61
%
 
0.47
%
 
0.28
%
 
0.19
%
 
0.19
%
Repurchase agreements
0.06
%
 
0.02
%
 
0.02
%
 
0.04
%
 
0.05
%
Other borrowings
1.09
%
 
0.83
%
 
0.61
%
 
0.57
%
 
0.57
%
Subordinated debt
5.55
%
 
5.68
%
 
5.51
%
 
3.84
%
 
1.52
%
Total cost of interest-bearing liabilities
0.63
%
 
0.52
%
 
0.44
%
 
0.44
%
 
0.41
%
Tax-equivalent net interest revenue spread
2.67
%
 
2.63
%
 
2.54
%
 
2.49
%
 
2.50
%
Effect of noninterest-bearing funding sources and other
0.22
%
 
0.18
%
 
0.15
%
 
0.15
%
 
0.13
%
Tax-equivalent net interest margin
2.89
%
 
2.81
%
 
2.69
%
 
2.64
%
 
2.63
%

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
 
June 30, 2017
 
Mar. 31, 2017
 
Dec. 31, 2016
 
Sept. 30, 2016
 
June 30, 2016
Nonperforming assets:
 
 
 
 
 
 
 
 
 
Nonaccruing loans:
 
 
 
 
 
 
 
 
 
Commercial
$
197,157

 
$
156,825

 
$
178,953

 
$
176,464

 
$
181,989

Commercial real estate
3,775

 
4,475

 
5,521

 
7,350

 
7,780

Residential mortgage
44,235

 
46,081

 
46,220

 
52,452

 
57,061

Personal
272

 
235

 
290

 
686

 
354

Total nonaccruing loans
245,439

 
207,616

 
230,984

 
236,952

 
247,184

Accruing renegotiated loans guaranteed by U.S. government agencies
80,624

 
83,577

 
81,370

 
80,306

 
78,806

Real estate and other repossessed assets
39,436

 
42,726

 
44,287

 
31,941

 
24,054

Total nonperforming assets
$
365,499

 
$
333,919

 
$
356,641

 
$
349,199

 
$
350,044

Total nonperforming assets excluding those guaranteed by U.S. government agencies
$
275,823

 
$
240,234

 
$
263,425

 
$
253,461

 
$
251,497

 
 
 
 
 
 
 
 
 
 
Nonaccruing loans by loan class:
 
 
 
 
 
 
 
 
 
Commercial:
 
 
 
 
 
 
 
 
 
Energy
$
123,992

 
$
110,425

 
$
132,499

 
$
142,966

 
$
168,145

Services
7,754

 
7,713

 
8,173

 
8,477

 
9,388

Wholesale / retail
10,620

 
11,090

 
11,407

 
2,453

 
2,772

Manufacturing
9,656

 
5,907

 
4,931

 
274

 
293

Healthcare
24,505

 
909

 
825

 
855

 
875

Other commercial and industrial
20,630

 
20,781

 
21,118

 
21,439

 
516

Total commercial
197,157

 
156,825

 
178,953

 
176,464

 
181,989

Commercial real estate:
 
 
 
 
 
 
 
 
 
Residential construction and land development
2,051

 
2,616

 
3,433

 
3,739

 
4,261

Retail
301

 
314

 
326

 
1,249

 
1,265

Office
396

 
413

 
426

 
882

 
606

Multifamily
10

 
24

 
38

 
51

 
65

Industrial

 
76

 
76

 
76

 
76

Other commercial real estate
1,017

 
1,032

 
1,222

 
1,353

 
1,507

Total commercial real estate
3,775

 
4,475

 
5,521

 
7,350

 
7,780

Residential mortgage:
 
 
 
 
 
 
 
 
 
Permanent mortgage
23,415

 
24,188

 
22,855

 
25,956

 
27,228

Permanent mortgage guaranteed by U.S. government agencies
9,052

 
10,108

 
11,846

 
15,432

 
19,741

Home equity
11,768

 
11,785

 
11,519

 
11,064

 
10,092

Total residential mortgage
44,235

 
46,081

 
46,220

 
52,452

 
57,061

Personal
272

 
235

 
290

 
686

 
354

Total nonaccruing loans
$
245,439

 
$
207,616

 
$
230,984

 
$
236,952

 
$
247,184

 
 
 
 
 
 
 
 
 
 

20



CREDIT QUALITY INDICATORS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratios)
 
Three Months Ended
 
June 30, 2017
 
Mar. 31, 2017
 
Dec. 31, 2016
 
Sept. 30, 2016
 
June 30, 2016
 
 
 
 
 
 
 
 
 
 
Performing loans 90 days past due1
$
1,414

 
$
95

 
$
5

 
$
3,839

 
$
2,899

 
 
 
 
 
 
 
 
 
 
Gross charge-offs
$
(2,872
)
 
$
(2,153
)
 
$
(1,651
)
 
$
(8,101
)
 
$
(8,845
)
Recoveries
1,214

 
2,900

 
2,813

 
2,038

 
1,386

Net recoveries (charge-offs)
$
(1,658
)
 
$
747

 
$
1,162

 
$
(6,063
)
 
$
(7,459
)
 
 
 
 
 
 
 
 
 
 
Provision for credit losses
$

 
$

 
$

 
$
10,000

 
$
20,000

 
 
 
 
 
 
 
 
 
 
Allowance for loan losses to period end loans
1.46
%
 
1.46
 %
 
1.45
 %
 
1.49
%
 
1.48
%
Combined allowance for credit losses to period end loans
1.49
%
 
1.52
 %
 
1.52
 %
 
1.56
%
 
1.54
%
Nonperforming assets to period end loans and repossessed assets
2.12
%
 
1.96
 %
 
2.09
 %
 
2.12
%
 
2.13
%
Net charge-offs (annualized) to average loans
0.04
%
 
(0.02
)%
 
(0.03
)%
 
0.15
%
 
0.18
%
Allowance for loan losses to nonaccruing loans1
105.78
%
 
125.92
 %
 
112.33
 %
 
110.65
%
 
106.95
%
Combined allowance for credit losses to nonaccruing loans1
108.51
%
 
130.70
 %
 
117.46
 %
 
115.67
%
 
110.93
%
1 
Excludes residential mortgage loans guaranteed by agencies of the U.S. government.


21
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