EX-99 2 a20180630bokfex99.htm EXHIBIT 99 Exhibit


Exhibit 99 (a)
image0a01a01a01a12.jpg

NASD: BOKF


For Further Information Contact:
Joseph Crivelli             
Investor Relations             
(918) 595-3030             

BOK Financial Reports Record Quarterly Earnings of $114 million or $1.75 Per Share
Results Driven by Strong Loan Growth, Net Interest Margin Expansion, and Continued Expense Control
Quarterly Dividend Increased 11.1 percent to 50 Cents Per Share

TULSA, Okla. (Wednesday, July 25, 2018) - BOK Financial Corporation reported net income of $114.4 million or $1.75 per diluted share for the second quarter of 2018. Net income was $105.6 million or $1.61 per diluted share for the first quarter of 2018 and $88.1 million or $1.35 per diluted share for the second quarter of 2017.

Steven G. Bradshaw, president and chief executive officer, stated, “This was a record quarter for BOK Financial, with the highest level of pre–tax, pre–provision income in our company’s history. In addition, we saw sustainable momentum across all of our lending businesses, with a record $665 million of new loan production in the quarter and 3.8 percent sequential growth in period end loans outstanding. With continued loan growth and net interest margin expansion, a stable credit environment, and ongoing expense management as we move toward our 60 percent efficiency ratio goal, we see earnings leverage continuing for the foreseeable future. Accordingly, our Board of Directors approved an 11 percent increase in our regular quarterly dividend to 50 cents per share.”

Bradshaw continued, “We look forward to closing our acquisition of CoBiz Financial later this year, which we believe will further enhance our growth profile. We believe the combination of CoBiz and BOK Financial will create the premiere commercial bank in Colorado and Arizona. In addition, the financial metrics of the deal are highly compelling, as we expect it to be accretive to earnings per share, return on average assets, return on tangible common equity, net interest margin, and efficiency ratio.”

 Second Quarter 2018 Highlights
•
Net interest revenue totaled $238.6 million for the second quarter of 2018, growing $18.8 million over the first quarter of 2018. Net interest margin increased to 3.17 percent for the second quarter of 2018 from 2.99 percent for the first quarter of 2018. Recoveries of foregone interest on nonaccruing loans added $5.3 million or 7 basis points to net interest margin in the second quarter. Average earning assets grew by $423 million over the prior quarter.

1


•
Fees and commissions revenue totaled $157.9 million for the second quarter of 2018, largely unchanged compared to the first quarter of 2018. Modest changes in other revenue lines were offset by decreased brokerage and trading revenue.
•
Operating expense was $246.5 million for the second quarter of 2018, a $2.0 million increase compared to the first quarter of 2018. Personnel expense decreased $1.0 million, primarily due to decreased incentive compensation expense. Non-personnel expense increased $3.0 million including $1.0 million of professional fees associated with the pending CoBiz acquisition.
•
The Company recorded no provision for credit losses in the second quarter of 2018. A $5.0 million negative provision for credit losses was recorded in the first quarter of 2018. The company had net charge-offs of $10.5 million or 0.24 percent of average loans on an annualized basis for second quarter of 2018, compared to net charge-offs of $1.3 million or 0.03 percent of average loans on an annualized basis for the first quarter of 2018. Net charge-offs totaled $26.9 million or 0.16 percent of average loans over the last four quarters.
•
The combined allowance for credit losses totaled $218 million or 1.21 percent of outstanding loans at June 30, 2018, compared to $228 million or 1.32 percent of outstanding loans at March 31, 2018.
•
Nonperforming assets that are not guaranteed by U.S. government agencies totaled $186 million or 1.04 percent of outstanding loans and repossessed assets at June 30, 2018 and $195 million or 1.13 percent of outstanding loans and repossessed assets at March 31, 2018. In addition, potential problem loans decreased $82 million to $140 million at June 30, 2018.
•
Average loan balances grew by $490 million over the previous quarter, primarily due to growth in commercial and commercial real estate loan balances. Period-end outstanding loan balances increased more than $665 million to $18.0 billion at June 30, 2018.
•
Average deposits were largely unchanged compared to the previous quarter. Average interest-bearing transaction deposit balances decreased $155 million, partially offset by an increase in demand deposit balances of $72 million. Period-end deposits were $22.2 billion at June 30, 2018, a $36 million decrease compared to March 31, 2018.
•
The common equity Tier 1 capital ratio at June 30, 2018 was 11.92 percent. Other regulatory capital ratios were Tier 1 capital ratio, 11.92 percent, total capital ratio, 13.26 percent, and leverage ratio, 9.57 percent. At March 31, 2018, the common equity Tier 1 capital ratio was 12.06 percent, the Tier 1 capital ratio was 12.06 percent, total capital ratio was 13.49 percent, and leverage ratio was 9.40 percent.
•
The Company's Board of Directors declared a dividend on the Company's common stock of 50 cents per share. This is an increase of 11.1 percent from 45 cents per share previously. The dividend will be payable on or about August 27, 2018, to shareholders of record on August 13.



2


Net Interest Revenue
Net interest revenue was $238.6 million for the second quarter of 2018, an $18.8 million increase over the first quarter of 2018.
Net interest margin was 3.17 percent for the second quarter of 2018, an increase of 18 basis points over the first quarter of 2018. Recoveries of foregone interest on nonaccruing loans added $5.3 million or 7 basis points to net interest margin in the second quarter. Excluding the impact of interest recoveries in the second quarter, the yield on average earning assets was 3.84 percent, a 23 basis point increase over the prior quarter. The loan portfolio yield also increased 23 basis points to 4.68 percent. The yield on the available for sale securities portfolio increased 7 basis points to 2.30 percent. The yield on interest-bearing cash and cash equivalents increased 29 basis points. Funding costs were 1.11 percent, up 18 basis points. The cost of interest-bearing deposits increased 9 basis points to 0.66 percent. The cost of other borrowed funds was up 34 basis points to 1.84 percent. The benefit to net interest margin from assets funded by non-interest liabilities increased to 37 basis points from 31 basis points in the first quarter of 2018.
Average earning assets increased $423 million over the second quarter of 2018. Trading securities balances increased $549 million. Average loan balances grew by $490 million. Average interest-bearing cash and cash equivalents balances decreased $386 million. Average fair value option securities held as an economic hedge of our mortgage servicing rights decreased $139 million. Average available for sale securities decreased $74 million. Average interest-bearing deposit balances decreased $144 million compared to the first quarter of 2018. The average balance of borrowed funds increased $231 million.
Fees and Commissions Revenue
Fees and commissions revenue totaled $157.9 million for the second quarter of 2018, consistent with the results from the first quarter of 2018.
Brokerage and trading revenue decreased $4.2 million compared to the first quarter of 2018. Rising mortgage interest rates narrowed trading margins and slowed turnover of our trading inventory. However, the longer average hold time of trading securities increased net interest revenue by $3.1 million.
Other revenue increased $2.2 million compared to the first quarter of 2018 primarily due to appreciation in assets related to the deferred compensation plan. This is primarily offset by an increase in deferred compensation expense. Mortgage banking revenue was relatively consistent with the previous quarter. A 2 percent decrease in mortgage production volume was offset by an increase in the gain on sale margin.


3


Operating Expense
Total operating expense was $246.5 million for the second quarter of 2018, largely unchanged compared to the first quarter of 2018.
Personnel expense decreased $1.0 million. Incentive compensation expense decreased $1.0 million. Changes in assumptions for performance-based awards decreased equity compensation expense by $4.3 million. This was partially offset by an increase of $2.4 million in cash based incentive compensation. Employee benefits expense decreased $1.2 million primarily due to a seasonal decrease in payroll taxes partially offset by an overall increase in employee healthcare costs. Regular compensation increased $1.2 million as merit increases were effective for most employees in March 2018.
Non-personnel expense increased $3.0 million. Professional fees and services expense increased $4.8 million mainly due to $1.8 million in project costs, $1.0 million in costs related to the pending CoBiz acquisition and $953 thousand in seasonal tax preparation charges from trust operations. Mortgage banking costs increased $2.7 million primarily due to a $1.9 million increase in accruals related to default servicing and loss mitigation costs on loans serviced for others.
Net losses and operating expenses of repossessed assets decreased $5.0 million, primarily due to a $5.0 million write-down on a set of repossessed oil and gas properties in the first quarter of 2018.
Loans, Deposits and Capital
Loans
Outstanding loans were $18.0 billion at June 30, 2018, up more than $665 million or 3.8 percent over March 31, 2018. Loan growth can generally be attributed to tax reform changes and regulatory easing resulting in a better overall business environment. Specifically, growth in energy loans is consistent with our ongoing support and commitment to the oil and gas industry.
Outstanding commercial loan balances grew by $429 million or 3.9 percent over March 31, 2018. Energy loan balances were up $178 million. Unfunded energy loan commitments increased $80 million over March 31, 2018 to $3.0 billion at June 30, 2018. Wholesale/retail sector loan balances grew by $168 million. Manufacturing sector loan balances were up $88 million. Service sector loans increased $16 million, mostly offset by a $14 million decrease in other commercial and industrial loans.
Commercial real estate loan balances grew by $205 million or 5.9 percent over March 31, 2018. Loans secured by office buildings increased $83 million. Multifamily residential loan balances were up $48 million. Loans secured by industrial properties grew by $40 million. Loans secured by retail facilities and other commercial real estate loans increased $18 million and $15 million, respectively.
Deposits
Period-end deposits totaled $22.2 billion at June 30, 2018, a $36 million decrease compared to March 31, 2018. Interest-bearing transaction account balances decreased $63 million and time deposit balances decreased by $39 million. These decreases were partially offset by a $68 million increase in demand deposit balances. Consumer Banking deposits were down $71 million and Commercial Banking deposits decreased $41 million, partially offset by a $7.3 million increase in Wealth Management deposits.

4


Capital
The company's common equity Tier 1 capital ratio was 11.92 percent at June 30, 2018. In addition, the company's Tier 1 capital ratio was 11.92 percent, total capital ratio was 13.26 percent, and leverage ratio was 9.57 percent at June 30, 2018. At March 31, 2018, the company's common equity Tier 1 capital ratio was 12.06 percent, Tier 1 capital ratio was 12.06 percent, total capital ratio was 13.49 percent, and leverage ratio was 9.40 percent.
The decrease in regulatory capital ratios was due in part to introduction of the market risk capital rules. The company exceeded the $1 billion regulatory capital rules threshold for trading assets and liabilities at March 31. This subjects the company to the market risk rule, which imposed additional modeling, systems, oversight and reporting requirements beginning in the second quarter of 2018 and resulted in an increase in risk weighted assets associated with our trading activities.
The company's tangible common equity ratio, a non-GAAP measure, was 9.21 percent at June 30, 2018 and 9.18 percent at March 31, 2018. 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 $269 million or 1.49 percent of outstanding loans and repossessed assets at June 30, 2018, down from $278 million or 1.60 percent at March 31, 2018. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $186 million or 1.04 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at June 30, 2018, compared to $195 million or 1.13 percent at March 31, 2018.
Nonaccruing loans were $166 million or 0.92 percent of outstanding loans at June 30, 2018, compared to $180 million or 1.04 percent of outstanding loans at March 31, 2018. The decrease in nonaccruing loans was primarily due to a $24 million decrease in energy loans, partially offset by a $12 million increase in wholesale/retail sector loans. New nonaccruing loans identified in the second quarter totaled $42 million, offset by $31 million in payments received, $15 million in charge-offs, and $8.2 million in foreclosures and repossessions. At June 30, 2018, nonaccruing commercial loans totaled $121 million or 1.07 percent of outstanding commercial loans, nonaccruing commercial real estate loans totaled $2.0 million or 0.05 percent of outstanding commercial real estate loans, and nonaccruing residential mortgage loans totaled $42 million or 2.18 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, totaled $140 million at June 30, down from $222 million at March 31. The decrease largely resulted from energy, services, and wholesale/retail sector loans.
The company had net charge-offs of $10.5 million or 0.24 percent of average loans on an annualized basis for second quarter of 2018, compared to net charge-offs of $1.3 million or 0.03 percent of average loans on an annualized basis for the first quarter of 2018. Net charge-offs were 0.16 percent of average loans over the last four quarters. Over half of the second quarter net charge-offs was from one energy loan that had previously been identified as impaired and appropriately reserved. Gross charge-offs were $15.1 million for the second quarter compared to $2.9 million for the previous quarter. Recoveries totaled $4.6 million for the second quarter of 2018 and $1.6 million for the first quarter of 2018.
Based on an evaluation of all credit factors, including overall loan portfolio growth, changes in nonaccruing and potential problem loans and net charge-offs, the company determined that no provision for credit losses was appropriate for the second quarter of 2018. The company had a $5.0 million negative provision for credit losses in the first quarter of 2018.
The combined allowance for credit losses totaled $218 million or 1.21 percent of outstanding loans and 138 percent of nonaccruing loans at June 30, 2018, excluding residential mortgage loans guaranteed by U.S. government agencies. The allowance for loan losses was $215 million and the accrual for off-balance sheet credit losses was $2.4 million. At March 31, 2018, the combined allowance for credit losses was $228 million or 1.32 percent of outstanding loans and 133 percent of nonaccruing loans, excluding loans guaranteed by U.S. government agencies. The allowance for loan losses was $224 million and the accrual for off-balance sheet credit losses was $4.1 million.

6


Securities and Derivatives
The fair value of the available for sale securities portfolio totaled $8.2 billion at June 30, 2018, an $87 million decrease compared to March 31, 2018. At June 30, 2018, the available for sale portfolio consisted primarily of $5.3 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $2.7 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. At June 30, 2018, the available for sale securities portfolio had a net unrealized loss of $181 million compared to a $148 million net unrealized loss at March 31, 2018.
Trading securities increased $617 million to $1.9 billion during the second quarter of 2018 as a result of expanded relationships with mortgage loan originator clients along with slower inventory turnover rates. The company holds an inventory of trading securities in support of sales to a variety of customers, including banks, corporations, insurance companies, money managers, and others.
The company also maintains a portfolio 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 cost of the changes in fair value of mortgage servicing rights and related economic hedges was $3.5 million during the second quarter of 2018, including a $1.7 million increase in the fair value of mortgage servicing rights, a $6.4 million decrease in the fair value of securities and derivative contracts held as an economic hedge, and $1.2 million of related net interest revenue.
The fair value of mortgage servicing rights increased by $21.2 million during the first quarter of 2018. The fair value of securities and interest rate derivative contracts held as an economic hedge of mortgage servicing rights decreased by $23.3 million. Related net interest revenue was $1.8 million during the first quarter of 2018.

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Conference Call and Webcast

The company will hold a conference call at 9 a.m. Central time on Wednesday, July 25, 2018 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 # 13681367.

About BOK Financial Corporation
BOK Financial Corporation is a $34 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, 2018 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 within the meaning of the Private Securities Litigation Reform Act of 1995 including, but not limited to, CoBiz Financial Inc.’s and BOK Financial Corporation’s expectations or predictions of future financial or business performance or conditions. Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “target,” “estimate,” “continue,” “positions,” “plan,” “predict,” “project,” “forecast,” “guidance,” “goal,” “objective,” “prospects,” “possible” or “potential,” by future conditional verbs such as “assume,” “will,” “would,” “should,” “could” or “may”, or by variations of such words or by similar expressions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made and we assume no duty to update forward-looking statements. Actual results may differ materially from current projections.

In addition to factors previously disclosed in CoBiz Financial Inc.’s and BOK Financial Corporation’s reports filed with the SEC and those identified elsewhere in this communication, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: the ability to obtain regulatory approvals and meet other closing conditions to the merger, including approval by CoBiz Financial Inc.’s shareholders on the expected terms and schedule, including the risk that regulatory approvals required for the merger are not obtained or are obtained subject to conditions that are not anticipated; delay in closing the merger; difficulties and delays in integrating CoBiz Financial Inc.’s business or fully realizing cost savings and other benefits; business disruption following the merger; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer acceptance of BOK Financial Corporation’s products and services; customer borrowing, repayment, investment and deposit practices; customer disintermediation; the introduction, withdrawal, success and timing of business

8


initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with mergers, acquisitions and divestitures; economic conditions; and the impact, extent and timing of technological changes, capital management activities, and other actions of the Federal Reserve Board and legislative and regulatory actions and reforms.

Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.

In this news release we may sometimes use non-GAAP Financial information. Please note that although non-GAAP financial measures provide useful insight to analysts, investors and regulators, they should not be considered in isolation or relied upon as a substitute for analysis using GAAP measures. If applicable, we provide GAAP reconciliations for non-GAAP financial measures.

IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT

In connection with the proposed merger, BOK Financial Corporation has filed with the SEC a Registration Statement on Form S-4 that will include the Proxy Statement of CoBiz Financial Inc. and a Prospectus of BOK Financial Corporation, as well as other relevant documents concerning the proposed transaction. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. INVESTORS AND SHAREHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER E AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.

A free copy of the Proxy Statement/Prospectus, as well as other filings containing information about BOK Financial Corporation and CoBiz Financial Inc., may be obtained at the SEC’s Internet site (http://www.sec.gov). You will also be able to obtain these documents, free of charge, from CoBiz Financial Inc. at ir.cobizfinancial.com or from BOK Financial Corporation by accessing BOK Financial Corporation’s website at www.bokf.com. Copies of the Proxy Statement/Prospectus can also be obtained, free of charge, by directing a request to CoBiz Financial Inc. Investor Relations at CoBiz Financial Inc. Investor Relations, 1401 Lawrence Street, Suite 1200, Denver, CO, by calling (303) 312-3412, or by sending an e-mail to info@cobizfinancial.com or to BOK Financial Corporation Investor Relations at Bank of Oklahoma Tower, Boston Avenue at Second Street, Tulsa, Oklahoma, by calling (918) 588-6000 or by sending an e-mail to investorrelations@bokf.com.

CoBiz Financial Inc. and BOK Financial Corporation and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of CoBiz Financial Inc. in respect of the transaction described in the Proxy Statement/Prospectus. Information regarding CoBiz Financial Inc.’s directors and executive officers is contained in CoBiz Financial Inc.’s Annual Report on Form 10-K for the year ended December 31, 2017 and its Proxy Statement on Schedule 14A, dated March 9, 2018, which are filed with the SEC.  Information regarding BOK Financial Corporation’s directors and executive officers is contained in BOK Financial Corporation’s Annual Report on Form 10-K for the year ended December 31, 2017 and its Proxy Statement on Schedule 14A, dated March 15, 2018, which are filed with the SEC. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the Proxy Statement/Prospectus regarding the proposed merger when it becomes available. Free copies of this document may be obtained as described in the preceding paragraph.

9
Exhibit 99 (b)

BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
 
June 30, 2018
 
Mar. 31, 2018
 
June 30, 2017
ASSETS
 
 
 
 
 
Cash and due from banks
$
585,801

 
$
544,534

 
$
561,587

Interest-bearing cash and cash equivalents
872,999

 
2,054,899

 
2,078,831

Trading securities
1,909,615

 
1,292,432

 
441,414

Investment securities
392,013

 
416,672

 
490,426

Available for sale debt securities
8,162,866

 
8,249,432

 
8,341,041

Fair value option securities
482,227

 
513,668

 
445,169

Restricted equity securities
347,721

 
338,552

 
311,033

Residential mortgage loans held for sale
223,301

 
225,190

 
287,259

Loans:
 
 
 
 
 
Commercial
11,349,039

 
10,919,667

 
10,637,955

Commercial real estate
3,712,220

 
3,506,782

 
3,688,592

Residential mortgage
1,942,250

 
1,945,769

 
1,939,198

Personal
1,000,187

 
965,632

 
917,900

Total loans
18,003,696

 
17,337,850

 
17,183,645

Allowance for loan losses
(215,142
)
 
(223,967
)
 
(250,061
)
Loans, net of allowance
17,788,554

 
17,113,883

 
16,933,584

Premises and equipment, net
320,810

 
314,347

 
321,038

Receivables
212,893

 
206,577

 
170,094

Goodwill
453,093

 
447,430

 
446,697

Intangible assets, net
28,273

 
29,658

 
40,755

Mortgage servicing rights
278,719

 
274,978

 
245,239

Real estate and other repossessed assets, net
27,891

 
23,652

 
39,436

Derivative contracts, net
373,373

 
286,687

 
280,289

Cash surrender value of bank-owned life insurance
321,024

 
318,661

 
312,774

Receivable on unsettled securities sales
604,552

 
275,088

 
158,125

Other assets
447,382

 
435,152

 
358,741

TOTAL ASSETS
$
33,833,107

 
$
33,361,492

 
$
32,263,532

 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
 
Deposits:
 
 
 
 
 
Demand
$
9,373,959

 
$
9,306,023

 
$
9,568,895

Interest-bearing transaction
10,164,099

 
10,226,971

 
10,087,139

Savings
503,474

 
505,952

 
464,318

Time
2,127,732

 
2,166,254

 
2,196,122

Total deposits
22,169,264

 
22,205,200

 
22,316,474

Funds purchased and repurchase agreements
880,027

 
546,324

 
464,323

Other borrowings
5,929,445

 
5,727,025

 
5,232,343

Subordinated debentures
144,697

 
144,687

 
144,658

Accrued interest, taxes and expense
160,568

 
156,146

 
133,198

Due on unsettled securities purchases
571,034

 
553,840

 
31,214

Derivative contracts, net
234,856

 
233,202

 
285,819

Other liabilities
167,171

 
277,726

 
205,958

TOTAL LIABILITIES
30,257,062

 
29,844,150

 
28,813,987

Shareholders' equity:
 
 
 
 
 
Capital, surplus and retained earnings
3,688,736

 
3,606,220

 
3,414,505

Accumulated other comprehensive gain (loss)
(135,305
)
 
(111,191
)
 
7,964

TOTAL SHAREHOLDERS' EQUITY
3,553,431

 
3,495,029

 
3,422,469

Non-controlling interests
22,614

 
22,313

 
27,076

TOTAL EQUITY
3,576,045

 
3,517,342

 
3,449,545

TOTAL LIABILITIES AND EQUITY
$
33,833,107

 
$
33,361,492

 
$
32,263,532


10


AVERAGE BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
 
Three Months Ended
 
June 30, 2018
 
Mar. 31, 2018
 
Dec. 31, 2017
 
Sept. 30, 2017
 
June 30, 2017
ASSETS
 
 
 
 
 
 
 
 
 
Interest-bearing cash and cash equivalents
$
1,673,387

 
$
2,059,517

 
$
1,976,395

 
$
1,965,645

 
$
2,007,746

Trading securities
1,482,302

 
933,404

 
560,321

 
491,613

 
456,028

Investment securities
399,088

 
441,207

 
462,869

 
475,705

 
499,372

Available for sale debt securities
8,163,142

 
8,236,938

 
8,435,916

 
8,428,353

 
8,384,057

Fair value option securities
487,192

 
626,251

 
792,647

 
684,571

 
476,102

Restricted equity securities
348,546

 
349,176

 
337,673

 
328,677

 
295,743

Residential mortgage loans held for sale
218,600

 
199,380

 
257,927

 
256,343

 
245,401

Loans:
 
 
 
 
 
 
 
 
 
Commercial
11,189,899

 
10,871,569

 
10,751,235

 
10,827,198

 
10,604,456

Commercial real estate
3,660,166

 
3,491,335

 
3,485,583

 
3,528,330

 
3,676,976

Residential mortgage
1,915,015

 
1,937,198

 
1,976,860

 
1,951,385

 
1,933,091

Personal
986,162

 
961,379

 
967,329

 
949,750

 
915,010

Total loans
17,751,242

 
17,261,481

 
17,181,007

 
17,256,663

 
17,129,533

Allowance for loan losses
(222,856
)
 
(228,996
)
 
(246,143
)
 
(250,590
)
 
(251,632
)
Total loans, net
17,528,386

 
17,032,485

 
16,934,864

 
17,006,073

 
16,877,901

Total earning assets
30,300,643

 
29,878,358

 
29,758,612

 
29,636,980

 
29,242,350

Cash and due from banks
571,333

 
564,585

 
576,737

 
546,653

 
530,352

Derivative contracts, net
318,375

 
278,694

 
292,961

 
238,583

 
248,168

Cash surrender value of bank-owned life insurance
319,507

 
317,334

 
315,034

 
313,079

 
311,310

Receivable on unsettled securities sales
618,240

 
998,803

 
821,275

 
608,412

 
372,894

Other assets
1,777,937

 
1,687,178

 
1,687,496

 
1,664,463

 
1,663,497

TOTAL ASSETS
$
33,906,035

 
$
33,724,952

 
$
33,452,115

 
$
33,008,170

 
$
32,368,571

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
Demand
$
9,223,327

 
$
9,151,272

 
$
9,417,351

 
$
9,389,849

 
$
9,338,683

Interest-bearing transaction
10,189,354

 
10,344,469

 
10,142,744

 
10,088,522

 
10,087,640

Savings
503,671

 
480,110

 
466,496

 
464,130

 
461,586

Time
2,138,880

 
2,151,044

 
2,134,469

 
2,176,820

 
2,204,422

Total deposits
22,055,232

 
22,126,895

 
22,161,060

 
22,119,321

 
22,092,331

Funds purchased and repurchase agreements
593,250

 
532,412

 
488,330

 
411,286

 
490,616

Other borrowings
6,497,020

 
6,326,967

 
6,209,903

 
6,162,641

 
5,572,031

Subordinated debentures
144,692

 
144,682

 
144,673

 
144,663

 
144,654

Derivative contracts, net
235,543

 
223,373

 
288,408

 
221,371

 
178,695

Due on unsettled securities purchases
527,804

 
558,898

 
332,155

 
145,977

 
162,348

Other liabilities
340,322

 
333,151

 
312,196

 
318,270

 
318,463

TOTAL LIABILITIES
30,393,863

 
30,246,378

 
29,936,725

 
29,523,529

 
28,959,138

Total equity
3,512,172

 
3,478,574

 
3,515,390

 
3,484,641

 
3,409,433

TOTAL LIABILITIES AND EQUITY
$
33,906,035

 
$
33,724,952

 
$
33,452,115

 
$
33,008,170

 
$
32,368,571


11


STATEMENTS OF EARNINGS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except per share data)
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2018
 
2017
 
2018
 
2017
 
 
 
 
 
 
 
 
Interest revenue
$
294,180

 
$
235,181

 
$
559,587

 
$
461,571

Interest expense
55,618

 
29,977

 
101,289

 
55,185

Net interest revenue
238,562

 
205,204


458,298


406,386

Provision for credit losses
—

 
—

 
(5,000
)
 
—

Net interest revenue after provision for credit losses
238,562

 
205,204


463,298


406,386

Other operating revenue:
 
 
 
 
 
 
 
Brokerage and trading revenue
26,488

 
31,764

 
57,136

 
65,387

Transaction card revenue1
20,975

 
20,009

 
41,965

 
38,186

Fiduciary and asset management revenue
41,699

 
41,808

 
83,531

 
80,439

Deposit service charges and fees
27,827

 
28,422

 
54,988

 
56,199

Mortgage banking revenue
26,346

 
30,276

 
52,371

 
55,467

Other revenue
14,518

 
14,984

 
26,848

 
26,736

Total fees and commissions
157,853

 
167,263


316,839


322,414

Other gains, net
3,983

 
6,108

 
3,319

 
9,735

Gain (loss) on derivatives, net
(3,057
)
 
3,241

 
(8,742
)
 
2,791

Gain (loss) on fair value option securities, net
(3,341
)
 
1,984

 
(20,905
)
 
844

Change in fair value of mortgage servicing rights
1,723

 
(6,943
)
 
22,929

 
(5,087
)
Gain (loss) on available for sale securities, net
(762
)
 
380

 
(1,052
)
 
2,429

Total other operating revenue
156,399

 
172,033


312,388


333,126

Other operating expense:
 
 
 
 
 
 
 
Personnel
138,947

 
143,744

 
278,894

 
280,169

Business promotion
7,686

 
7,738

 
13,696

 
14,455

Professional fees and services
14,978

 
12,419

 
25,178

 
23,836

Net occupancy and equipment
22,761

 
21,125

 
46,807

 
42,749

Insurance
6,245

 
689

 
12,838

 
7,093

Data processing and communications1
27,739

 
26,111

 
55,556

 
51,810

Printing, postage and supplies
4,011

 
4,140

 
8,100

 
7,991

Net losses and operating expenses of repossessed assets
2,722

 
2,267

 
10,427

 
3,276

Amortization of intangible assets
1,386

 
1,803

 
2,686

 
3,605

Mortgage banking costs
12,890

 
12,072

 
23,039

 
25,075

Other expense
7,111

 
8,558

 
13,685

 
16,115

Total other operating expense
246,476

 
240,666


490,906


476,174

 
 
 
 
 
 
 
 
Net income before taxes
148,485

 
136,571


284,780


263,338

Federal and state income taxes
33,330

 
47,705

 
64,278

 
85,808

 
 
 
 
 
 
 
 
Net income
115,155

 
88,866


220,502


177,530

Net income attributable to non-controlling interests
783

 
719

 
568

 
1,027

Net income attributable to BOK Financial Corporation shareholders
$
114,372

 
$
88,147


$
219,934


$
176,503

 
 
 
 
 
 
 
 
Average shares outstanding:
 
 
 
 
 
 
 
Basic
64,901,975

 
64,729,752

 
64,874,567

 
64,722,744

Diluted
64,937,226

 
64,793,134

 
64,912,552

 
64,788,322

 
 
 
 
 
 
 
 
Net income per share:
 
 
 
 
 
 
 
Basic
$
1.75

 
$
1.35

 
$
3.36

 
$
2.70

Diluted
$
1.75

 
$
1.35

 
$
3.36

 
$
2.69

1 Non-GAAP measure to net interchange charges for periods prior to 2018 between transaction card revenue and data processing and communications expense. This measure has no effect on net income or earnings per share.


12


FINANCIAL HIGHLIGHTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and share data)
 
Three Months Ended
 
June 30, 2018
 
Mar. 31, 2018
 
Dec. 31, 2017
 
Sept. 30, 2017
 
June 30, 2017
Capital:
 
 
 
 
 
 
 
 
 
Period-end shareholders' equity
$
3,553,431

 
$
3,495,029

 
$
3,495,367

 
$
3,488,814

 
$
3,422,469

Risk weighted assets
$
27,004,559

 
$
26,025,660

 
$
25,733,711

 
$
25,409,728

 
$
25,130,802

Risk-based capital ratios:
 
 
 
 
 
 
 
 
 
Common equity tier 1
11.92
%
 
12.06
%
 
12.05
%
 
11.90
%
 
11.76
%
Tier 1
11.92
%
 
12.06
%
 
12.05
%
 
11.90
%
 
11.76
%
Total capital
13.26
%
 
13.49
%
 
13.54
%
 
13.47
%
 
13.36
%
Leverage ratio
9.57
%
 
9.40
%
 
9.31
%
 
9.30
%
 
9.27
%
Tangible common equity ratio1
9.21
%
 
9.18
%
 
9.50
%
 
9.23
%
 
9.24
%
 
 
 
 
 
 
 
 
 
 
Common stock:
 
 
 
 
 
 
 
 
 
Book value per share
$
54.30

 
$
53.39

 
$
53.45

 
$
53.30

 
$
52.32

Tangible book value per share
46.95

 
46.10

 
46.17

 
45.88

 
44.87

Market value per share:
 
 
 
 
 
 
 
 
 
High
$
106.65

 
$
107.00

 
$
93.97

 
$
90.69

 
$
88.31

Low
$
92.39

 
$
89.82

 
$
79.67

 
$
77.10

 
$
74.09

Cash dividends paid
$
29,340

 
$
29,342

 
$
29,328

 
$
28,655

 
$
28,652

Dividend payout ratio
25.65
%
 
27.80
%
 
40.46
%
 
33.46
%
 
32.50
%
Shares outstanding, net
65,439,090

 
65,459,505

 
65,394,937

 
65,456,786

 
65,416,403

Stock buy-back program:
 
 
 
 
 
 
 
 
 
Shares repurchased
8,257

 
82,583

 
80,000

 
—

 
—

Amount
$
824

 
$
7,584

 
$
7,403

 
$
—

 
$
—

Average price per share
$
99.84

 
$
91.83

 
$
92.54

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
 
Performance ratios (quarter annualized):
Return on average assets
1.35
%
 
1.27
%
 
0.86
%
 
1.03
%
 
1.09
%
Return on average equity
13.14
%
 
12.39
%
 
8.24
%
 
9.83
%
 
10.46
%
Net interest margin
3.17
%
 
2.99
%
 
2.97
%
 
3.01
%
 
2.89
%
Efficiency ratio3
61.68
%
 
65.09
%
 
66.07
%
 
65.92
%
 
63.66
%
 
 
 
 
 
 
 
 
 
 
Reconciliation of non-GAAP measures:
1      Tangible common equity ratio:
 
 
 
 
 
 
 
 
 
Total shareholders' equity
$
3,553,431

 
$
3,495,029

 
$
3,495,367

 
$
3,488,814

 
$
3,422,469

Less: Goodwill and intangible assets, net
481,366

 
477,088

 
476,088

 
485,710

 
487,452

Tangible common equity
$
3,072,065

 
$
3,017,941

 
$
3,019,279

 
$
3,003,104

 
$
2,935,017

 
 
 
 
 
 
 
 
 
 
Total assets
$
33,833,107

 
$
33,361,492

 
$
32,272,160

 
$
33,005,515

 
$
32,263,532

Less: Goodwill and intangible assets, net
481,366

 
477,088

 
476,088

 
485,710

 
487,452

Tangible assets
$
33,351,741

 
$
32,884,404

 
$
31,796,072

 
$
32,519,805

 
$
31,776,080

 
 
 
 
 
 
 
 
 
 
Tangible common equity ratio
9.21
%
 
9.18
%
 
9.50
%
 
9.23
%
 
9.24
%
 
 
 
 
 
 
 
 
 
 

13


FINANCIAL HIGHLIGHTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and share data)
 
Three Months Ended
 
June 30, 2018
 
Mar. 31, 2018
 
Dec. 31, 2017
 
Sept. 30, 2017
 
June 30, 2017
Other data:
 
 
 
 
 
 
 
 
 
Fiduciary assets
$
46,531,900

 
$
46,648,290

 
$
48,761,477

 
$
45,177,185

 
$
45,089,153

Tax equivalent interest
$
1,983

 
$
2,010

 
$
4,131

 
$
4,314

 
$
4,330

Net unrealized gain (loss) on available for sale securities
$
(180,602
)
 
$
(148,247
)
 
$
(47,497
)
 
$
14,061

 
$
16,041

 
 
 
 
 
 
 
 
 
 
Mortgage banking:
 
 
 
 
 
 
 
 
 
Mortgage production revenue
$
9,915

 
$
9,452

 
$
7,786

 
$
8,329

 
$
13,840

 
 
 
 
 
 
 
 
 
 
Mortgage loans funded for sale
$
773,910

 
$
664,958

 
$
840,080

 
$
832,796

 
$
902,978

Add: current period-end outstanding commitments
251,231

 
298,318

 
222,919

 
334,337

 
362,088

Less: prior period end outstanding commitments
298,318

 
222,919

 
334,337

 
362,088

 
381,732

Total mortgage production volume
$
726,823

 
$
740,357

 
$
728,662

 
$
805,045

 
$
883,334

 
 
 
 
 
 
 
 
 
 
Mortgage loan refinances to mortgage loans funded for sale
22
%
 
42
%
 
47
%
 
38
%
 
33
%
Gain on sale margin
1.36
%
 
1.28
%
 
1.07
%
 
1.03
%
 
1.57
%
 
 
 
 
 
 
 
 
 
 
Mortgage servicing revenue
$
16,431

 
$
16,573

 
$
16,576

 
$
16,561

 
$
16,436

Average outstanding principal balance of mortgage loans serviced for others
21,986,065

 
22,027,726

 
22,054,877

 
22,079,177

 
22,055,127

Average mortgage servicing revenue rates
0.30
%
 
0.31
%
 
0.30
%
 
0.30
%
 
0.30
%
 
 
 
 
 
 
 
 
 
 
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net
$
(3,070
)
 
$
(5,698
)
 
$
(3,057
)
 
$
1,025

 
$
3,241

Gain (loss) on fair value option securities, net
(3,341
)
 
(17,564
)
 
(4,238
)
 
661

 
1,984

Gain (loss) on economic hedge of mortgage servicing rights
(6,411
)
 
(23,262
)
 
(7,295
)
 
1,686

 
5,225

Gain (loss) on changes in fair value of mortgage servicing rights
1,723

 
21,206

 
5,898

 
(639
)
 
(6,943
)
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue
(4,688
)
 
(2,056
)
 
(1,397
)
 
1,047

 
(1,718
)
Net interest revenue on fair value option securities2
1,203

 
1,800

 
2,656

 
2,543

 
1,965

Total economic benefit (cost) of changes in the fair value of mortgage servicing rights, net of economic hedges
$
(3,485
)
 
$
(256
)
 
$
1,259

 
$
3,590

 
$
247

2  
Actual interest earned on fair value option securities less internal transfer-priced cost of funds.
3 
Periods prior to 2018 are shown on a comparable basis to net interchange charges between transaction card revenue and data processing and communications expense.

14


QUARTERLY EARNINGS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and per share data)
 
Three Months Ended
 
June 30, 2018
 
Mar. 31, 2018
 
Dec. 31, 2017
 
Sept. 30, 2017
 
June 30, 2017
 
 
 
 
 
 
 
 
 
 
Interest revenue
$
294,180

 
$
265,407

 
$
255,767

 
$
255,413

 
$
235,181

Interest expense
55,618

 
45,671

 
38,904

 
36,961

 
29,977

Net interest revenue
238,562

 
219,736

 
216,863

 
218,452

 
205,204

Provision for credit losses
—

 
(5,000
)
 
(7,000
)
 
—

 
—

Net interest revenue after provision for credit losses
238,562

 
224,736

 
223,863

 
218,452

 
205,204

Other operating revenue:
 
 
 
 
 
 
 
 
 
Brokerage and trading revenue
26,488

 
30,648

 
33,045

 
33,169

 
31,764

Transaction card revenue1
20,975

 
20,990

 
20,028

 
22,929

 
20,009

Fiduciary and asset management revenue
41,699

 
41,832

 
41,767

 
40,687

 
41,808

Deposit service charges and fees
27,827

 
27,161

 
27,685

 
28,191

 
28,422

Mortgage banking revenue
26,346

 
26,025

 
24,362

 
24,890

 
30,276

Other revenue
14,518

 
12,330

 
11,762

 
13,670

 
14,984

Total fees and commissions
157,853

 
158,986

 
158,649

 
163,536

 
167,263

Other gains (losses), net
3,983

 
(664
)
 
552

 
(1,283
)
 
6,108

Gain (loss) on derivatives, net
(3,057
)
 
(5,685
)
 
(3,045
)
 
1,033

 
3,241

Gain (loss) on fair value option securities, net
(3,341
)
 
(17,564
)
 
(4,238
)
 
661

 
1,984

Change in fair value of mortgage servicing rights
1,723

 
21,206

 
5,898

 
(639
)
 
(6,943
)
Gain (loss) on available for sale securities, net
(762
)
 
(290
)
 
(488
)
 
2,487

 
380

Total other operating revenue
156,399

 
155,989

 
157,328

 
165,795

 
172,033

Other operating expense:
 
 
 
 
 
 
 
 
 
Personnel
138,947

 
139,947

 
145,329

 
147,910

 
143,744

Business promotion
7,686

 
6,010

 
7,317

 
7,105

 
7,738

Charitable contributions to BOKF Foundation
—

 
—

 
2,000

 
—

 
—

Professional fees and services
14,978

 
10,200

 
15,344

 
11,887

 
12,419

Net occupancy and equipment
22,761

 
24,046

 
22,403

 
21,325

 
21,125

Insurance
6,245

 
6,593

 
6,555

 
6,005

 
689

Data processing and communications1
27,739

 
27,817

 
28,903

 
27,412

 
26,111

Printing, postage and supplies
4,011

 
4,089

 
3,781

 
3,917

 
4,140

Net losses (gains) and operating expenses of repossessed assets
2,722

 
7,705

 
340

 
6,071

 
2,267

Amortization of intangible assets
1,386

 
1,300

 
1,430

 
1,744

 
1,803

Mortgage banking costs
12,890

 
10,149

 
14,331

 
13,450

 
12,072

Other expense
7,111

 
6,574

 
6,746

 
9,193

 
8,558

Total other operating expense
246,476

 
244,430

 
254,479

 
256,019

 
240,666

Net income before taxes
148,485

 
136,295

 
126,712

 
128,228

 
136,571

Federal and state income taxes
33,330

 
30,948

 
54,347

 
42,438

 
47,705

Net income
115,155

 
105,347

 
72,365

 
85,790

 
88,866

Net income (loss) attributable to non-controlling interests
783

 
(215
)
 
(127
)
 
141

 
719

Net income attributable to BOK Financial Corporation shareholders
$
114,372

 
$
105,562

 
$
72,492

 
$
85,649

 
$
88,147

 
 
 
 
 
 
 
 
 
 
Average shares outstanding:
 
 
 
 
 
 
 
 
 
Basic
64,901,975

 
64,847,334

 
64,793,005

 
64,742,822

 
64,729,752

Diluted
64,937,226

 
64,888,033

 
64,843,179

 
64,805,172

 
64,793,134

Net income per share:
 
 
 
 
 
 
 
 
 
Basic
$
1.75

 
$
1.61

 
$
1.11

 
$
1.31

 
$
1.35

Diluted
$
1.75

 
$
1.61

 
$
1.11

 
$
1.31

 
$
1.35

1  
Non-GAAP measure to net interchange charges for periods prior to 2018 between transaction card revenue and data processing and communications expense. This measure has no effect on net income or earnings per share.

15


LOANS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
 
 
June 30, 2018
 
Mar. 31, 2018
 
Dec. 31, 2017
 
Sept. 30, 2017
 
June 30, 2017
Commercial:
 
 
 
 
 
 
 
 
 
 
Energy
 
$
3,147,219

 
$
2,969,618

 
$
2,930,156

 
$
2,867,981

 
$
2,847,240

Services
 
2,944,499

 
2,928,294

 
2,986,949

 
2,967,513

 
2,958,827

Healthcare
 
2,353,722

 
2,359,928

 
2,314,753

 
2,239,451

 
2,221,518

Wholesale/retail
 
1,699,554

 
1,531,576

 
1,471,256

 
1,658,098

 
1,543,695

Manufacturing
 
647,816

 
559,695

 
496,774

 
519,446

 
546,137

Other commercial and industrial
 
556,229

 
570,556

 
534,087

 
543,445

 
520,538

Total commercial
 
11,349,039

 
10,919,667

 
10,733,975

 
10,795,934

 
10,637,955

 
 
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 

 
 

 
 

 
 

 
 

Multifamily
 
1,056,984

 
1,008,903

 
980,017

 
999,009

 
952,380

Office
 
820,127

 
737,144

 
831,770

 
797,089

 
862,973

Retail
 
768,024

 
750,396

 
691,532

 
725,865

 
722,805

Industrial
 
653,384

 
613,608

 
573,014

 
591,080

 
693,635

Residential construction and land development
 
118,999

 
117,458

 
117,245

 
112,102

 
141,592

Other commercial real estate
 
294,702

 
279,273

 
286,409

 
292,997

 
315,207

Total commercial real estate
 
3,712,220

 
3,506,782

 
3,479,987

 
3,518,142

 
3,688,592

 
 
 
 
 
 
 
 
 
 
 
Residential mortgage:
 
 

 
 

 
 

 
 

 
 

Permanent mortgage
 
1,068,412

 
1,047,785

 
1,043,435

 
1,013,965

 
989,040

Permanent mortgages guaranteed by U.S. government agencies
 
169,653

 
177,880

 
197,506

 
187,370

 
191,729

Home equity
 
704,185

 
720,104

 
732,745

 
744,415

 
758,429

Total residential mortgage
 
1,942,250

 
1,945,769

 
1,973,686

 
1,945,750

 
1,939,198

 
 
 
 
 
 
 
 
 
 
 
Personal
 
1,000,187

 
965,632

 
965,776

 
947,008

 
917,900

 
 
 
 
 
 
 
 
 
 
 
Total
 
$
18,003,696

 
$
17,337,850

 
$
17,153,424

 
$
17,206,834

 
$
17,183,645



16


LOANS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
 
June 30, 2018
 
Mar. 31, 2018
 
Dec. 31, 2017
 
Sept. 30, 2017
 
June 30, 2017
 
 
 
 
 
 
 
 
 
 
Bank of Oklahoma:
 
 
 
 
 
 
 
 
 
Commercial
$
3,465,407

 
$
3,265,013

 
$
3,238,720

 
$
3,408,973

 
$
3,369,967

Commercial real estate
662,665

 
668,031

 
682,037

 
712,915

 
667,932

Residential mortgage
1,403,658

 
1,419,281

 
1,435,432

 
1,405,900

 
1,398,021

Personal
362,846

 
353,128

 
342,212

 
322,320

 
318,016

Total Bank of Oklahoma
5,894,576

 
5,705,453

 
5,698,401

 
5,850,108

 
5,753,936

 
 
 
 
 
 
 
 
 
 
Bank of Texas:
 
 
 
 
 
 
 
 
 
Commercial
4,922,451

 
4,715,841

 
4,520,401

 
4,434,595

 
4,339,634

Commercial real estate
1,336,101

 
1,254,421

 
1,261,864

 
1,236,702

 
1,360,164

Residential mortgage
243,400

 
229,761

 
233,675

 
229,993

 
232,074

Personal
394,021

 
363,608

 
375,084

 
375,173

 
354,222

Total Bank of Texas
6,895,973

 
6,563,631

 
6,391,024

 
6,276,463

 
6,286,094

 
 
 
 
 
 
 
 
 
 
Bank of Albuquerque:
 
 
 
 
 
 
 
 
 
Commercial
305,167

 
315,701

 
343,296

 
367,747

 
369,370

Commercial real estate
386,878

 
348,485

 
341,282

 
319,208

 
324,405

Residential mortgage
90,581

 
93,490

 
98,018

 
101,983

 
103,849

Personal
11,107

 
11,667

 
11,721

 
12,953

 
12,439

Total Bank of Albuquerque
793,733

 
769,343

 
794,317

 
801,891

 
810,063

 
 
 
 
 
 
 
 
 
 
Bank of Arkansas:
 
 
 
 
 
 
 
 
 
Commercial
93,217

 
94,430

 
95,644

 
91,051

 
85,020

Commercial real estate
90,807

 
88,700

 
87,393

 
80,917

 
73,943

Residential mortgage
6,927

 
7,033

 
6,596

 
6,318

 
6,395

Personal
12,331

 
9,916

 
9,992

 
10,388

 
11,993

Total Bank of Arkansas
203,282

 
200,079

 
199,625

 
188,674

 
177,351

 
 
 
 
 
 
 
 
 
 
Colorado State Bank & Trust:
 
 
 
 
 
 
 
 
 
Commercial
1,165,721

 
1,180,655

 
1,130,714

 
1,124,200

 
1,065,780

Commercial real estate
267,065

 
210,801

 
174,201

 
186,427

 
255,379

Residential mortgage
64,839

 
64,530

 
63,350

 
63,734

 
63,346

Personal
60,504

 
63,118

 
63,115

 
60,513

 
56,187

Total Colorado State Bank & Trust
1,558,129

 
1,519,104

 
1,431,380

 
1,434,874

 
1,440,692

 
 
 
 
 
 
 
 
 
 
Bank of Arizona:
 
 
 
 
 
 
 
 
 
Commercial
681,852

 
624,106

 
687,792

 
634,809

 
617,759

Commercial real estate
710,784

 
672,319

 
660,094

 
706,188

 
705,858

Residential mortgage
47,010

 
39,227

 
41,771

 
40,730

 
37,034

Personal
65,541

 
57,023

 
57,140

 
55,050

 
55,528

Total Bank of Arizona
1,505,187

 
1,392,675

 
1,446,797

 
1,436,777

 
1,416,179

 
 
 
 
 
 
 
 
 
 
Mobank (Kansas City):
 
 
 
 
 
 
 
 
 
Commercial
715,224

 
723,921

 
717,408

 
734,559

 
790,425

Commercial real estate
257,920

 
264,025

 
273,116

 
275,785

 
300,911

Residential mortgage
85,835

 
92,447

 
94,844

 
97,092

 
98,479

Personal
93,837

 
107,172

 
106,512

 
110,611

 
109,515

Total Mobank (Kansas City)
1,152,816

 
1,187,565

 
1,191,880

 
1,218,047

 
1,299,330

 
 
 
 
 
 
 
 
 
 
TOTAL BOK FINANCIAL
$
18,003,696

 
$
17,337,850

 
$
17,153,424

 
$
17,206,834

 
$
17,183,645


Loans attributed to a geographical region may not always represent the location of the borrower or the collateral.

17


DEPOSITS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
 
June 30, 2018
 
Mar. 31, 2018
 
Dec. 31, 2017
 
Sept. 30, 2017
 
June 30, 2017
Bank of Oklahoma:
 
 
 
 
 
 
 
 
 
    Demand
$
3,867,933

 
$
4,201,842

 
$
3,885,008

 
$
4,061,612

 
$
4,353,421

    Interest-bearing:
 
 
 
 
 
 
 
 
 
       Transaction
5,968,460

 
6,051,302

 
5,901,293

 
5,909,259

 
5,998,787

       Savings
289,202

 
289,351

 
265,870

 
265,023

 
263,664

       Time
1,207,471

 
1,203,534

 
1,092,133

 
1,131,547

 
1,170,014

    Total interest-bearing
7,465,133

 
7,544,187

 
7,259,296

 
7,305,829

 
7,432,465

Total Bank of Oklahoma
11,333,066

 
11,746,029

 
11,144,304

 
11,367,441

 
11,785,886

 
 
 
 
 
 
 
 
 
 
Bank of Texas:
 
 
 
 
 
 
 
 
 
    Demand
3,317,656

 
3,015,869

 
3,239,098

 
3,094,184

 
3,121,890

    Interest-bearing:
 
 
 
 
 
 
 
 
 
       Transaction
2,168,488

 
2,208,480

 
2,397,071

 
2,272,987

 
2,272,185

       Savings
97,809

 
98,852

 
93,620

 
93,400

 
91,491

       Time
445,500

 
475,967

 
502,879

 
521,072

 
502,128

    Total interest-bearing
2,711,797

 
2,783,299

 
2,993,570

 
2,887,459

 
2,865,804

Total Bank of Texas
6,029,453

 
5,799,168

 
6,232,668

 
5,981,643

 
5,987,694

 
 
 
 
 
 
 
 
 
 
Bank of Albuquerque:
 
 
 
 
 
 
 
 
 
    Demand
770,974

 
695,060

 
663,353

 
659,793

 
612,117

    Interest-bearing:
 
 
 
 
 
 
 
 
 
       Transaction
586,593

 
555,414

 
552,393

 
551,884

 
558,523

       Savings
59,415

 
60,596

 
55,647

 
53,532

 
54,136

       Time
212,689

 
216,306

 
216,743

 
224,773

 
229,616

    Total interest-bearing
858,697

 
832,316

 
824,783

 
830,189

 
842,275

Total Bank of Albuquerque
1,629,671

 
1,527,376

 
1,488,136

 
1,489,982

 
1,454,392

 
 
 
 
 
 
 
 
 
 
Bank of Arkansas:
 
 
 
 
 
 
 
 
 
    Demand
39,896

 
35,291

 
30,384

 
31,442

 
40,511

    Interest-bearing:
 
 
 
 
 
 
 
 
 
       Transaction
143,298

 
94,206

 
85,095

 
126,746

 
129,848

       Savings
1,885

 
1,960

 
1,881

 
1,876

 
2,135

       Time
10,771

 
11,878

 
14,045

 
14,434

 
14,876

    Total interest-bearing
155,954

 
108,044

 
101,021

 
143,056

 
146,859

Total Bank of Arkansas
195,850

 
143,335

 
131,405

 
174,498

 
187,370

 
 
 
 
 
 
 
 
 
 
Colorado State Bank & Trust:
 
 
 
 
 
 
 
 
 
    Demand
529,912

 
521,963

 
633,714

 
540,300

 
577,617

    Interest-bearing:
 
 
 
 
 
 
 
 
 
       Transaction
701,362

 
687,785

 
657,629

 
628,807

 
626,343

       Savings
38,176

 
37,232

 
35,223

 
34,776

 
35,651

       Time
208,049

 
215,330

 
224,962

 
231,927

 
228,458

    Total interest-bearing
947,587

 
940,347

 
917,814

 
895,510

 
890,452

Total Colorado State Bank & Trust
1,477,499

 
1,462,310

 
1,551,528

 
1,435,810

 
1,468,069

 
 
 
 
 
 
 
 
 
 

18


DEPOSITS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
 
June 30, 2018
 
Mar. 31, 2018
 
Dec. 31, 2017
 
Sept. 30, 2017
 
June 30, 2017
Bank of Arizona:
 
 
 
 
 
 
 
 
 
    Demand
387,952

 
330,196

 
334,701

 
335,740

 
366,866

    Interest-bearing:
 
 
 
 
 
 
 
 
 
       Transaction
194,353

 
248,337

 
274,846

 
174,010

 
154,457

       Savings
3,935

 
4,116

 
3,343

 
4,105

 
3,638

       Time
22,447

 
21,009

 
20,394

 
20,831

 
19,911

    Total interest-bearing
220,735

 
273,462

 
298,583

 
198,946

 
178,006

Total Bank of Arizona
608,687

 
603,658

 
633,284

 
534,686

 
544,872

 
 
 
 
 
 
 
 
 
 
Mobank (Kansas City):
 
 
 
 
 
 
 
 
 
    Demand
459,636

 
505,802

 
457,080

 
462,410

 
496,473

    Interest-bearing:
 
 
 
 
 
 
 
 
 
       Transaction
401,545

 
381,447

 
382,066

 
361,391

 
346,996

       Savings
13,052

 
13,845

 
13,574

 
12,513

 
13,603

       Time
20,805

 
22,230

 
27,260

 
27,705

 
31,119

    Total interest-bearing
435,402

 
417,522

 
422,900

 
401,609

 
391,718

Total Mobank (Kansas City)
895,038

 
923,324

 
879,980

 
864,019

 
888,191

 
 
 
 
 
 
 
 
 
 
TOTAL BOK FINANCIAL
$
22,169,264

 
$
22,205,200

 
$
22,061,305

 
$
21,848,079

 
$
22,316,474


19


NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
 
Three Months Ended
 
 June 30, 2018
 
Mar. 31, 2018
 
Dec. 31, 2017
 
Sept. 30, 2017
 
June 30, 2017
 
 
 
 
 
 
 
 
 
 
TAX-EQUIVALENT ASSETS YIELDS
 
 
 
 
 
 
 
 
 
Interest-bearing cash and cash equivalents
1.86
%
 
1.57
%
 
1.27
%
 
1.29
%
 
1.04
%
Trading securities
3.63
%
 
3.40
%
 
3.38
%
 
3.47
%
 
3.23
%
Investment securities:
 
 
 
 
 
 
 
 
 
    Taxable
5.23
%
 
5.21
%
 
5.31
%
 
5.31
%
 
5.34
%
    Tax-exempt
2.42
%
 
2.25
%
 
2.69
%
 
2.60
%
 
2.51
%
Total investment securities
3.95
%
 
3.78
%
 
3.98
%
 
3.86
%
 
3.76
%
Available for sale securities:
 
 
 
 
 
 
 
 
 
    Taxable
2.29
%
 
2.22
%
 
2.19
%
 
2.16
%
 
2.09
%
    Tax-exempt
3.26
%
 
3.26
%
 
5.41
%
 
5.27
%
 
6.09
%
Total available for sale securities
2.30
%
 
2.23
%
 
2.21
%
 
2.17
%
 
2.11
%
Fair value option securities
3.16
%
 
2.95
%
 
2.90
%
 
2.97
%
 
2.92
%
Restricted equity securities
6.21
%
 
5.86
%
 
5.87
%
 
5.87
%
 
5.95
%
Residential mortgage loans held for sale
4.28
%
 
3.71
%
 
3.72
%
 
3.36
%
 
3.92
%
Loans
4.80
%
 
4.45
%
 
4.29
%
 
4.31
%
 
4.03
%
Allowance for loan losses
 
 
 
 
 
 
 
 
 
Loans, net of allowance
4.86
%
 
4.51
%
 
4.35
%
 
4.38
%
 
4.09
%
Total tax-equivalent yield on earning assets
3.91
%
 
3.61
%
 
3.49
%
 
3.50
%
 
3.30
%
 
 
 
 
 
 
 
 
 
 
COST OF INTEREST-BEARING LIABILITIES
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
  Interest-bearing transaction
0.55
%
 
0.45
%
 
0.35
%
 
0.32
%
 
0.26
%
  Savings
0.08
%
 
0.07
%
 
0.07
%
 
0.08
%
 
0.08
%
  Time
1.29
%
 
1.25
%
 
1.17
%
 
1.16
%
 
1.11
%
Total interest-bearing deposits
0.66
%
 
0.57
%
 
0.48
%
 
0.45
%
 
0.40
%
Funds purchased and repurchase agreements
0.53
%
 
0.40
%
 
0.28
%
 
0.25
%
 
0.13
%
Other borrowings
1.96
%
 
1.60
%
 
1.36
%
 
1.29
%
 
1.09
%
Subordinated debt
5.67
%
 
5.61
%
 
5.55
%
 
5.68
%
 
5.55
%
Total cost of interest-bearing liabilities
1.11
%
 
0.93
%
 
0.79
%
 
0.75
%
 
0.63
%
Tax-equivalent net interest revenue spread
2.80
%
 
2.68
%
 
2.70
%
 
2.75
%
 
2.67
%
Effect of noninterest-bearing funding sources and other
0.37
%
 
0.31
%
 
0.27
%
 
0.26
%
 
0.22
%
Tax-equivalent net interest margin
3.17
%
 
2.99
%
 
2.97
%
 
3.01
%
 
2.89
%

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.

20


CREDIT QUALITY INDICATORS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratios)
 
Three Months Ended
 
June 30, 2018
 
Mar. 31, 2018
 
Dec. 31, 2017
 
Sept. 30, 2017
 
June 30, 2017
Nonperforming assets:
 
 
 
 
 
 
 
 
 
Nonaccruing loans:
 
 
 
 
 
 
 
 
 
Commercial
$
120,978

 
$
131,460

 
$
137,303

 
$
176,900

 
$
197,157

Commercial real estate
1,996

 
2,470

 
2,855

 
2,975

 
3,775

Residential mortgage
42,343

 
45,794

 
47,447

 
45,506

 
44,235

Personal
340

 
340

 
269

 
255

 
272

Total nonaccruing loans
165,657

 
180,064

 
187,874

 
225,636

 
245,439

Accruing renegotiated loans guaranteed by U.S. government agencies
75,374

 
74,418

 
73,994

 
69,440

 
80,624

Real estate and other repossessed assets
27,891

 
23,652

 
28,437

 
32,535

 
39,436

Total nonperforming assets
$
268,922

 
$
278,134

 
$
290,305

 
$
327,611

 
$
365,499

Total nonperforming assets excluding those guaranteed by U.S. government agencies
$
185,981

 
$
194,833

 
$
207,132

 
$
249,280

 
$
275,823

 
 
 
 
 
 
 
 
 
 
Nonaccruing loans by loan class:
 
 
 
 
 
 
 
 
 
Commercial:
 
 
 
 
 
 
 
 
 
Energy
$
65,597

 
$
89,942

 
$
92,284

 
$
110,683

 
$
123,992

Services
4,377

 
2,109

 
2,620

 
1,174

 
7,754

Healthcare
16,125

 
15,342

 
14,765

 
24,446

 
24,505

Wholesale/retail
14,095

 
2,564

 
2,574

 
1,893

 
10,620

Manufacturing
2,991

 
3,002

 
5,962

 
9,059

 
9,656

Other commercial and industrial
17,793

 
18,501

 
19,098

 
29,645

 
20,630

Total commercial
120,978

 
131,460

 
137,303

 
176,900

 
197,157

Commercial real estate:
 
 
 
 
 
 
 
 
 
Multifamily
—

 
—

 
—

 
—

 
10

Office
275

 
275

 
275

 
275

 
396

Retail
1,068

 
264

 
276

 
289

 
301

Industrial
—

 
—

 
—

 
—

 
—

Residential construction and land development
350

 
1,613

 
1,832

 
1,924

 
2,051

Other commercial real estate
303

 
318

 
472

 
487

 
1,017

Total commercial real estate
1,996

 
2,470

 
2,855

 
2,975

 
3,775

Residential mortgage:
 
 
 
 
 
 
 
 
 
Permanent mortgage
23,105

 
24,578

 
25,193

 
24,623

 
23,415

Permanent mortgage guaranteed by U.S. government agencies
7,567

 
8,883

 
9,179

 
8,891

 
9,052

Home equity
11,671

 
12,333

 
13,075

 
11,992

 
11,768

Total residential mortgage
42,343

 
45,794

 
47,447

 
45,506

 
44,235

Personal
340

 
340

 
269

 
255

 
272

Total nonaccruing loans
$
165,657

 
$
180,064

 
$
187,874

 
$
225,636

 
$
245,439

 
 
 
 
 
 
 
 
 
 

21


CREDIT QUALITY INDICATORS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratios)
 
Three Months Ended
 
June 30, 2018
 
Mar. 31, 2018
 
Dec. 31, 2017
 
Sept. 30, 2017
 
June 30, 2017
 
 
 
 
 
 
 
 
 
 
Performing loans 90 days past due1
$
879

 
$
90

 
$
633

 
$
253

 
$
1,414

 
 
 
 
 
 
 
 
 
 
Gross charge-offs
$
(15,105
)
 
$
(2,890
)
 
$
(14,749
)
 
$
(5,825
)
 
$
(2,872
)
Recoveries
4,578

 
1,576

 
3,061

 
2,437

 
1,214

Net charge-offs
$
(10,527
)
 
$
(1,314
)
 
$
(11,688
)
 
$
(3,388
)
 
$
(1,658
)
 
 
 
 
 
 
 
 
 
 
Provision for credit losses
$
—

 
$
(5,000
)
 
$
(7,000
)
 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
 
Allowance for loan losses to period end loans
1.19
%
 
1.29
%
 
1.34
%
 
1.44
%
 
1.46
%
Combined allowance for credit losses to period end loans
1.21
%
 
1.32
%
 
1.37
%
 
1.47
%
 
1.49
%
Nonperforming assets to period end loans and repossessed assets
1.49
%
 
1.60
%
 
1.69
%
 
1.90
%
 
2.12
%
Net charge-offs (annualized) to average loans
0.24
%
 
0.03
%
 
0.27
%
 
0.08
%
 
0.04
%
Allowance for loan losses to nonaccruing loans1
136.09
%
 
130.84
%
 
129.09
%
 
114.28
%
 
105.78
%
Combined allowance for credit losses to nonaccruing loans1
137.63
%
 
133.25
%
 
131.18
%
 
116.78
%
 
108.51
%
1 
Excludes residential mortgage loans guaranteed by agencies of the U.S. government.


22