Exhibit 99(a)
NASD: BOKF
BOK Financial Reports Record Annual Earnings of $501 million or $7.03 Per Share
Earnings of $110 million or $1.56 Per Share in the Fourth Quarter
CEO Commentary |
“The fourth quarter concluded our second-consecutive year of record earnings for the organization,” said Steven G. Bradshaw, president and chief executive officer. “Achieving our business integration and financial goals for CoBiz early in 2019 set the tone for a monumental year, and helped drive momentum in two of our high-growth markets. The balance between our banking and fee service businesses was evident all year, allowing us to continue our strong earnings growth even with industry headwinds intensifying. This is a testament to how BOK Financial has been carefully constructed over many years with the distinct ability to outperform in challenging conditions.” Bradshaw continued, “While the economic and political environment in 2020 will bring its own set of challenges, our focus remains on the long-term. We fully expect that our approach to creating and sustaining earnings and growing shareholder value will continue to serve us well in 2020.” |
2019 Financial Highlights |
• | Net income for the year ended December 31, 2019 totaled $500.8 million or $7.03 per diluted share compared to $445.6 million or $6.63 per diluted share for the year ended December 31, 2018. |
• | Net interest revenue totaled $1.1 billion, an increase of $128.0 million. CoBiz added $158.5 million to net interest revenue, including $37.8 million of net purchase accounting discount accretion for 2019. CoBiz added $43.1 million to net interest revenue for 2018. Net interest margin was 3.11 percent for 2019 compared to 3.20 percent for 2018. |
• | Fees and commissions revenue increased $59.0 million to $702.2 million in 2019. Strong growth in brokerage and trading revenue and mortgage banking revenue, which were both positively affected by lower mortgage interest rates in 2019, contributed to the majority of the increase. |
• | Operating expense totaled $1.1 billion in 2019, an increase of $104.2 million. We incurred $17.2 million of closing and integration costs in 2019 compared to $16.6 million in 2018. Expenses related to CoBiz operations were $84.0 million in 2019 and $29.7 million in 2018. Excluding these costs, operating expense increased $49.3 million or 5 percent, primarily related to growth in personnel expense. |
• | Period-end loans were up $94 million to $21.8 billion at December 31, 2019 and period-end deposits grew $2.4 billion to $27.6 billion. |
Fourth Quarter 2019 Financial Highlights |
• | Net income was $110.4 million or $1.56 per diluted share for the fourth quarter of 2019 and $142.2 million or $2.00 per diluted share for the third quarter of 2019. |
• | Net interest revenue totaled $270.2 million, a decrease of $8.8 million. Net interest margin was 2.88 percent compared to 3.01 percent in the third quarter of 2019. Lower loan discount accretion, changes in funding mix, and the two recent federal funds rate cuts by the Federal Reserve contributed to compression in the net interest margin. |
• | Fees and commissions revenue totaled $179.4 million, a decrease of $6.7 million, primarily due to a seasonal decline in mortgage banking revenue. |
1
Fourth Quarter 2019 Financial Highlights con't |
• | Operating expense increased $9.5 million to $288.8 million. Personnel expense increased $5.8 million while non-personnel expense increased $3.7 million over the third quarter of 2019. |
• | A $19.0 million provision for credit losses was recorded in the fourth quarter of 2019 compared to $12.0 million in the third quarter of 2019. The combined allowance for credit losses totaled $212 million or 0.98 percent of outstanding loans compared to $206 million or 0.92 percent in the previous quarter. |
• | Average loans decreased $177 million to $22.2 billion while period-end loans decreased $534 million to $21.8 billion, largely due to decreases in commercial and commercial real estate loans. |
• | Average deposits increased $1.4 billion to $27.1 billion and period-end deposits increased $1.5 billion to $27.6 billion. |
• | Commercial banking contributed $81.7 million to net income, a decrease of $18.9 million compared to the prior quarter. Net interest revenue decreased by $16.7 million due to a decrease in loan volume combined with decreased yields. Average loans decreased by $126 million to $19.1 billion. Fee revenue decreased $2.8 million, largely due to lower syndication fees. Average deposits increased $587 million to $11.4 billion, including an increase in interest-bearing transaction deposits partially offset by a decrease in demand deposits. |
• | Consumer banking contributed $8.3 million to net income, decreasing $8.4 million. Net interest revenue decreased $5.3 million, largely due to a lower yield on deposits sold to our Funds Management unit. Fee revenue decreased $6.6 million. A seasonal decline in mortgage production reduced mortgage banking revenue by $4.8 million. Mortgage production volume decreased $278 million to $635 million and gain on sale margin decreased 7 basis points to 1.44 percent. |
• | Wealth Management contributed $22.9 million to net income, consistent with the prior quarter. Fee revenue increased $3.3 million, largely related to brokerage and trading revenue, partially offset by a $1.2 million decrease in net interest revenue. Total operating expenses increased $3.1 million, primarily related to variable compensation that is related to revenue growth. Assets under management or administration were $82.7 billion at December 31, 2019 compared to $80.8 billion at September 30, 2019. Fiduciary assets totaled $52.4 billion at December 31, 2019 and $49.3 billion at September 30, 2019. |
2
Net Interest Revenue | ||||
Net interest revenue was $270.2 million for the fourth quarter of 2019, an $8.8 million decrease compared to the third quarter of 2019. Discount accretion on acquired loans totaled $5.8 million for the fourth quarter and $10.9 million for the third quarter.
Average earning assets increased $415 million compared to the third quarter of 2019. Available for sale securities increased $586 million as we continue to position our balance sheet for the current rate environment. Average loan balances decreased $177 million and interest-bearing cash and cash equivalents increased $72 million. Growth in average earning assets was largely funded by a $1.5 billion increase in interest-bearing deposits while other borrowed funds decreased $863 million.
Net interest margin was 2.88 percent compared to 3.01 percent in the previous quarter. A decrease in demand deposits combined with an increase in receivables from trading activities reduced net interest margin by 9 basis points. Lower loan discount accretion reduced net interest margin by 6 basis points. A 3 basis point increase from higher loan fees was partially offset by spread compression.
The yield on average earning assets was 3.93 percent, a 32 basis point decrease from the prior quarter. The loan portfolio yield was 4.75 percent, down 37 basis points. The yield on the available for sale securities portfolio decreased 8 basis points to 2.52 percent while the yield on interest-bearing cash and cash equivalents decreased 80 basis points.
Funding costs were 1.40 percent, down 28 basis points. The cost of interest-bearing deposits decreased 8 basis points to 1.09 percent. The cost of other borrowed funds was down 48 basis points to 1.83 percent.
Fees and Commissions Revenue | ||||
Fees and commissions revenue totaled $179.4 million for the fourth quarter of 2019, a decrease of $6.7 million compared to the third quarter of 2019.
Mortgage banking revenue decreased $4.8 million. Mortgage loan production volume decreased 30 percent, primarily due to seasonality. Other revenue decreased $2.3 million primarily due to lower revenue from repossessed oil and gas properties. Brokerage and trading revenue was unchanged from the previous quarter. Growth in trading revenue of $5.6 million was offset by decreases in customer hedging revenue and loan syndication fees. A decrease in overdraft service charges was offset by an increase in trust fees and commissions.
3
Operating Expense | ||||
Total operating expense was $288.8 million for the fourth quarter of 2019, an increase of $9.5 million over the third quarter of 2019.
Personnel expense increased $5.8 million. Incentive compensation increased $4.3 million, primarily due to increased transaction activity in wealth management. The fourth quarter included approximately $2.0 million in severance costs due to realignment of personnel for the current operating environment.
Non-personnel expense increased $3.7 million over the third quarter of 2019. The fourth quarter included a $2.0 million charitable contribution to the BOKF Foundation, which provides support to many nonprofit partners in our communities.
Loans, Deposits and Capital | ||||
Loans
Outstanding loans were $21.8 billion at December 31, 2019, a decrease of $534 million compared September 30, 2019. General paydowns in energy and commercial real estate, along with two anticipated large year-end paydowns in commercial, contributed to the decline in balances.
Outstanding commercial loan balances decreased by $393 million or 3 percent compared to September 30, 2019. Services loan balances decreased $144 million. Energy loan balances decreased $141 million. Wholesale/retail sector loans decreased $88 million. Public finance loans decreased by $35 million and manufacturing loans decreased $33 million while other commercial and industrial loans increased $47 million.
Commercial real estate loan balances decreased $192 million or 4 percent compared to September 30, 2019. Loans secured by office buildings decreased $86 million. Loans secured by multifamily residential properties decreased $59 million. Loans secured by retail properties decreased $24 million and loans secured by other commercial real estate properties decreased $22 million.
Deposits
Period-end deposits totaled $27.6 billion at December 31, 2019, a $1.5 billion increase over September 30, 2019. A focus on deposit growth throughout the year led to the execution of several specific initiatives that resulted in large deposit acquisitions during the fourth quarter. Interest-bearing transaction account balances grew by $1.9 billion and demand deposit balances decreased $383 million. Average deposits were $27.1 billion at December 31, 2019, an increase of $1.4 billion compared to September 30, 2019. Total interest-bearing transaction deposits increased $1.6 billion, partially offset by a decrease in demand deposits of $147 million.
Capital
The company's common equity Tier 1 capital ratio was 11.39 percent at December 31, 2019. In addition, the company's Tier 1 capital ratio was 11.39 percent, total capital ratio was 12.94 percent, and leverage ratio was 8.40 percent at December 31, 2019. At September 30, 2019, the company's common equity Tier 1 capital ratio was 11.06 percent, Tier 1 capital ratio was 11.06 percent, total capital ratio was 12.56 percent, and leverage ratio was 8.41 percent.
4
The company's tangible common equity ratio, a non-GAAP measure, was 8.98 percent at December 31, 2019 and 8.72 percent at September 30, 2019. 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.
The company repurchased 280,000 shares at an average price of $81.59 per share in the fourth quarter of 2019 and 336,713 shares at an average price of $77.03 in the third quarter of 2019.
Credit Quality | ||||
Nonperforming assets totaled $294 million or 1.35 percent of outstanding loans and repossessed assets at December 31, 2019, compared to $286 million or 1.28 percent at September 30, 2019. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $195 million or 0.90 percent of outstanding loans and repossessed assets at December 31, 2019, compared to $187 million or 0.85 percent at September 30, 2019.
Nonaccruing loans were $181 million or 0.83 percent of outstanding loans at December 31, 2019. Nonaccruing commercial loans totaled $115 million or 0.82 percent of outstanding commercial loans. Nonaccruing commercial real estate loans totaled $28 million or 0.62 percent of outstanding commercial real estate loans. Nonaccruing residential mortgage loans totaled $38 million or 1.81 percent of outstanding residential mortgage loans.
Nonaccruing loans increased $8.5 million from September 30, 2019, primarily due to a $6.6 million multifamily community development credit. Nonaccruing energy loans also increased $2.8 million. New nonaccruing loans identified in the fourth quarter totaled $49 million, offset by $24 million in payments received and $14 million in charge-offs.
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 $160 million at December 31, compared to $143 million at September 30. The increase largely resulted from energy loans, partially offset by a decrease in loans secured by commercial real estate.
Net charge-offs were $12.5 million or 0.22 percent of average loans on an annualized basis for the fourth quarter of 2019, compared to $10.6 million or 0.19 percent of average loans on an annualized basis for the third quarter of 2019. Net charge-offs were 0.21 percent of average loans over the last four quarters. Gross charge-offs were $14.3 million for the fourth quarter compared to $11.7 million for the previous quarter. Recoveries totaled $1.8 million for the fourth quarter of 2019 and $1.1 million for the third quarter of 2019.
Based on an evaluation of all credit factors, including specific impairment of two shared national credit energy loans where the Company is not the lead agent, changes in nonaccruing and potential problem loans and net charge-offs, the company determined that a $19.0 million provision for credit losses was appropriate for the fourth quarter of 2019. The company recorded a $12.0 million provision for credit losses in the third quarter of 2019.
5
The combined allowance for credit losses totaled $212 million or 0.98 percent of outstanding loans and 121 percent of nonaccruing loans at December 31, 2019, excluding residential mortgage loans guaranteed by U.S. government agencies. Excluding loans acquired in the CoBiz acquisition, which are measured at acquisition-date fair value, the combined allowance for loan losses was 1.06 percent of outstanding loans and 127 percent of nonaccruing loans at December 31, 2019 compared to 1.02 percent of outstanding loans and 130 percent of nonaccruing loans at September 30, 2019. The allowance for loan losses was $211 million and the accrual for off-balance sheet credit losses was $1.6 million. At September 30, 2019, the combined allowance for credit losses was $206 million or 0.92 percent of outstanding loans and 124 percent of nonaccruing loans, excluding loans guaranteed by U.S. government agencies. The allowance for loan losses was $204 million and the accrual for off-balance sheet credit losses was $1.4 million.
Securities and Derivatives | ||||
The fair value of the available for sale securities portfolio totaled $11.3 billion at December 31, 2019, a $245 million increase compared to September 30, 2019. At December 31, 2019, the available for sale securities portfolio consisted primarily of $8.0 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $3.2 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. At December 31, 2019, the available for sale securities portfolio had a net unrealized gain of $138 million compared to $178 million at September 30, 2019.
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. This portfolio of fair value option securities decreased $718 million to $1.1 billion at December 31, 2019.
The net economic cost of the changes in fair value of mortgage servicing rights and related economic hedges was $2.2 million during the fourth quarter of 2019, including a $13.0 million decrease in the fair value of securities and derivative contracts held as an economic hedge, a $9.3 million increase in the fair value of mortgage servicing rights, and $1.5 million of related net interest revenue.
6
Conference Call and Webcast | ||||
The company will hold a conference call at 9 a.m. Central time on Wednesday, January 22, 2020 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 # 13697774.
About BOK Financial Corporation | ||||
BOK Financial Corporation is a $42 billion regional financial services company headquartered in Tulsa, Oklahoma with $83 billion in assets under management and administration. The company's stock is publicly traded on NASDAQ under the Global Select market listings (BOKF). BOK Financial Corporation's holdings include BOKF, NA; BOK Financial Securities, Inc., BOK Financial Private Wealth, Inc. and BOK Financial Insurance, Inc. BOKF, NA operates TransFund, Cavanal Hill Investment Management and BOK Financial Asset Management, Inc. BOKF, NA operates banking divisions across eight states as: Bank of Albuquerque; Bank of Oklahoma; Bank of Texas; and BOK Financial in Arizona, Arkansas, Colorado, Kansas and Missouri; as well as having limited purpose offices in Nebraska, Milwaukee and Connecticut. Through its subsidiaries, BOK Financial Corporation provides commercial and consumer banking, brokerage trading, investment, trust and insurance 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 December 31, 2019 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, including its latest acquisition of CoBiz Financial, Inc., 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, inflation, 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
7
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) | |||||||
Dec. 31, 2019 | Sept. 30, 2019 | ||||||
ASSETS | |||||||
Cash and due from banks | $ | 735,836 | $ | 761,130 | |||
Interest-bearing cash and cash equivalents | 522,985 | 465,458 | |||||
Trading securities | 1,623,921 | 1,675,212 | |||||
Investment securities | 293,418 | 304,224 | |||||
Available for sale securities | 11,269,643 | 11,024,551 | |||||
Fair value option securities | 1,098,577 | 1,816,398 | |||||
Restricted equity securities | 460,552 | 479,018 | |||||
Residential mortgage loans held for sale | 182,271 | 282,487 | |||||
Loans: | |||||||
Commercial | 14,031,650 | 14,424,625 | |||||
Commercial real estate | 4,433,783 | 4,626,057 | |||||
Residential mortgage | 2,084,172 | 2,117,303 | |||||
Personal | 1,201,382 | 1,117,382 | |||||
Total loans | 21,750,987 | 22,285,367 | |||||
Allowance for loan losses | (210,759 | ) | (204,432 | ) | |||
Loans, net of allowance | 21,540,228 | 22,080,935 | |||||
Premises and equipment, net | 535,519 | 516,597 | |||||
Receivables | 231,811 | 219,420 | |||||
Goodwill | 1,048,091 | 1,048,091 | |||||
Intangible assets, net | 125,271 | 124,320 | |||||
Mortgage servicing rights | 201,886 | 193,661 | |||||
Real estate and other repossessed assets, net | 20,359 | 21,026 | |||||
Derivative contracts, net | 323,375 | 352,019 | |||||
Cash surrender value of bank-owned life insurance | 389,879 | 387,035 | |||||
Receivable on unsettled securities sales | 1,020,404 | 904,630 | |||||
Other assets | 547,995 | 470,993 | |||||
TOTAL ASSETS | $ | 42,172,021 | $ | 43,127,205 | |||
LIABILITIES AND EQUITY | |||||||
Deposits: | |||||||
Demand | $ | 9,461,291 | $ | 9,844,397 | |||
Interest-bearing transaction | 15,391,752 | 13,521,545 | |||||
Savings | 550,276 | 557,593 | |||||
Time | 2,217,849 | 2,243,541 | |||||
Total deposits | 27,621,168 | 26,167,076 | |||||
Funds purchased and repurchase agreements | 3,818,350 | 3,413,051 | |||||
Other borrowings | 4,527,055 | 6,822,334 | |||||
Subordinated debentures | 275,923 | 275,909 | |||||
Accrued interest, taxes and expense | 259,701 | 218,775 | |||||
Due on unsettled securities purchases | 182,547 | 703,448 | |||||
Derivative contracts, net | 251,128 | 336,791 | |||||
Other liabilities | 372,230 | 352,156 | |||||
TOTAL LIABILITIES | 37,308,102 | 38,289,540 | |||||
Shareholders' equity: | |||||||
Capital, surplus and retained earnings | 4,750,872 | 4,695,263 | |||||
Accumulated other comprehensive gain | 104,923 | 133,753 | |||||
TOTAL SHAREHOLDERS' EQUITY | 4,855,795 | 4,829,016 | |||||
Non-controlling interests | 8,124 | 8,649 | |||||
TOTAL EQUITY | 4,863,919 | 4,837,665 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 42,172,021 | $ | 43,127,205 | |||
9
AVERAGE BALANCE SHEETS -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands) | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |||||||||||||||
ASSETS | |||||||||||||||||||
Interest-bearing cash and cash equivalents | $ | 573,203 | $ | 500,823 | $ | 535,491 | $ | 537,903 | $ | 563,132 | |||||||||
Trading securities | 1,672,426 | 1,696,568 | 1,757,335 | 1,968,399 | 1,929,601 | ||||||||||||||
Investment securities | 298,567 | 308,090 | 328,482 | 343,282 | 364,737 | ||||||||||||||
Available for sale securities | 11,333,524 | 10,747,439 | 9,435,668 | 8,883,054 | 8,704,963 | ||||||||||||||
Fair value option securities | 1,521,528 | 1,553,879 | 898,772 | 594,349 | 277,575 | ||||||||||||||
Restricted equity securities | 479,687 | 476,781 | 413,812 | 395,432 | 362,729 | ||||||||||||||
Residential mortgage loans held for sale | 203,535 | 203,319 | 192,102 | 145,040 | 179,553 | ||||||||||||||
Loans: | |||||||||||||||||||
Commercial | 14,344,534 | 14,507,185 | 14,175,057 | 13,966,521 | 13,587,344 | ||||||||||||||
Commercial real estate | 4,532,649 | 4,652,534 | 4,656,861 | 4,602,149 | 4,747,784 | ||||||||||||||
Residential mortgage | 2,130,646 | 2,129,421 | 2,146,315 | 2,193,334 | 2,222,063 | ||||||||||||||
Personal | 1,228,171 | 1,123,778 | 1,026,172 | 1,004,061 | 1,022,140 | ||||||||||||||
Total loans | 22,236,000 | 22,412,918 | 22,004,405 | 21,766,065 | 21,579,331 | ||||||||||||||
Allowance for loan losses | (205,417 | ) | (201,714 | ) | (205,532 | ) | (206,092 | ) | (209,613 | ) | |||||||||
Total loans, net | 22,030,583 | 22,211,204 | 21,798,873 | 21,559,973 | 21,369,718 | ||||||||||||||
Total earning assets | 38,113,053 | 37,698,103 | 35,360,535 | 34,427,432 | 33,752,008 | ||||||||||||||
Cash and due from banks | 690,806 | 717,338 | 703,294 | 705,411 | 731,700 | ||||||||||||||
Derivative contracts, net | 311,542 | 331,834 | 328,802 | 262,927 | 299,319 | ||||||||||||||
Cash surrender value of bank-owned life insurance | 388,012 | 385,190 | 384,974 | 382,538 | 379,893 | ||||||||||||||
Receivable on unsettled securities sales | 1,973,604 | 1,742,794 | 1,437,462 | 1,224,700 | 799,548 | ||||||||||||||
Other assets | 2,736,337 | 2,705,089 | 2,629,710 | 2,669,673 | 2,423,275 | ||||||||||||||
TOTAL ASSETS | $ | 44,213,354 | $ | 43,580,348 | $ | 40,844,777 | $ | 39,672,681 | $ | 38,385,743 | |||||||||
LIABILITIES AND EQUITY | |||||||||||||||||||
Deposits: | |||||||||||||||||||
Demand | $ | 9,612,533 | $ | 9,759,710 | $ | 9,883,965 | $ | 9,988,088 | $ | 10,648,683 | |||||||||
Interest-bearing transaction | 14,685,385 | 13,131,542 | 12,512,282 | 11,931,539 | 11,773,651 | ||||||||||||||
Savings | 554,605 | 557,122 | 558,738 | 541,575 | 526,275 | ||||||||||||||
Time | 2,247,717 | 2,251,800 | 2,207,391 | 2,153,277 | 2,146,786 | ||||||||||||||
Total deposits | 27,100,240 | 25,700,174 | 25,162,376 | 24,614,479 | 25,095,395 | ||||||||||||||
Funds purchased and repurchase agreements | 4,120,610 | 3,106,163 | 2,066,950 | 2,033,036 | 1,205,568 | ||||||||||||||
Other borrowings | 6,247,194 | 8,125,023 | 7,175,617 | 7,040,279 | 6,361,141 | ||||||||||||||
Subordinated debentures | 275,916 | 275,900 | 275,887 | 275,882 | 276,378 | ||||||||||||||
Derivative contracts, net | 276,078 | 300,051 | 283,484 | 273,786 | 268,848 | ||||||||||||||
Due on unsettled securities purchases | 784,174 | 745,893 | 821,688 | 453,937 | 493,887 | ||||||||||||||
Other liabilities | 561,654 | 547,144 | 460,732 | 501,788 | 341,438 | ||||||||||||||
TOTAL LIABILITIES | 39,365,866 | 38,800,348 | 36,246,734 | 35,193,187 | 34,042,655 | ||||||||||||||
Total equity | 4,847,488 | 4,780,000 | 4,598,043 | 4,479,494 | 4,343,088 | ||||||||||||||
TOTAL LIABILITIES AND EQUITY | $ | 44,213,354 | $ | 43,580,348 | $ | 40,844,777 | $ | 39,672,681 | $ | 38,385,743 | |||||||||
10
STATEMENTS OF EARNINGS -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands, except per share data) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Interest revenue | $ | 369,857 | $ | 365,592 | $ | 1,531,958 | $ | 1,228,426 | |||||||
Interest expense | 99,608 | 79,906 | 419,079 | 243,559 | |||||||||||
Net interest revenue | 270,249 | 285,686 | 1,112,879 | 984,867 | |||||||||||
Provision for credit losses | 19,000 | 9,000 | 44,000 | 8,000 | |||||||||||
Net interest revenue after provision for credit losses | 251,249 | 276,686 | 1,068,879 | 976,867 | |||||||||||
Other operating revenue: | |||||||||||||||
Brokerage and trading revenue | 43,843 | 28,101 | 159,826 | 108,323 | |||||||||||
Transaction card revenue | 22,548 | 20,664 | 87,216 | 84,025 | |||||||||||
Fiduciary and asset management revenue | 45,021 | 43,665 | 177,025 | 184,703 | |||||||||||
Deposit service charges and fees | 27,331 | 29,393 | 112,485 | 112,153 | |||||||||||
Mortgage banking revenue | 25,396 | 21,880 | 107,541 | 97,787 | |||||||||||
Other revenue | 15,283 | 16,404 | 58,108 | 56,185 | |||||||||||
Total fees and commissions | 179,422 | 160,107 | 702,201 | 643,176 | |||||||||||
Other gains (losses), net | (1,649 | ) | (8,305 | ) | 9,351 | (2,265 | ) | ||||||||
Gain (loss) on derivatives, net | (4,644 | ) | 11,167 | 14,951 | (422 | ) | |||||||||
Gain (loss) on fair value option securities, net | (8,328 | ) | (282 | ) | 15,787 | (25,572 | ) | ||||||||
Change in fair value of mortgage servicing rights | 9,297 | (24,233 | ) | (53,517 | ) | 4,668 | |||||||||
Gain (loss) on available for sale securities, net | 4,487 | (1,999 | ) | 5,597 | (2,801 | ) | |||||||||
Total other operating revenue | 178,585 | 136,455 | 694,370 | 616,784 | |||||||||||
Other operating expense: | |||||||||||||||
Personnel | 168,422 | 160,706 | 660,565 | 583,131 | |||||||||||
Business promotion | 8,787 | 9,207 | 35,662 | 30,523 | |||||||||||
Charitable contributions to BOKF Foundation | 2,000 | 2,846 | 3,000 | 2,846 | |||||||||||
Professional fees and services | 13,408 | 20,712 | 54,861 | 59,099 | |||||||||||
Net occupancy and equipment | 26,316 | 27,780 | 110,275 | 97,981 | |||||||||||
Insurance | 5,393 | 4,248 | 20,906 | 23,318 | |||||||||||
Data processing and communications | 31,884 | 27,575 | 124,983 | 114,796 | |||||||||||
Printing, postage and supplies | 3,700 | 5,232 | 16,517 | 17,169 | |||||||||||
Net losses and operating expenses of repossessed assets | 2,403 | 2,581 | 6,707 | 17,052 | |||||||||||
Amortization of intangible assets | 5,225 | 5,331 | 20,618 | 9,620 | |||||||||||
Mortgage banking costs | 14,259 | 11,518 | 50,685 | 46,298 | |||||||||||
Other expense | 6,998 | 6,907 | 27,602 | 26,333 | |||||||||||
Total other operating expense | 288,795 | 284,643 | 1,132,381 | 1,028,166 | |||||||||||
Net income before taxes | 141,039 | 128,498 | 630,868 | 565,485 | |||||||||||
Federal and state income taxes | 30,257 | 20,121 | 130,183 | 119,061 | |||||||||||
Net income | 110,782 | 108,377 | 500,685 | 446,424 | |||||||||||
Net income (loss) attributable to non-controlling interests | 430 | (79 | ) | (73 | ) | 778 | |||||||||
Net income attributable to BOK Financial Corporation shareholders | $ | 110,352 | $ | 108,456 | $ | 500,758 | $ | 445,646 | |||||||
Average shares outstanding: | |||||||||||||||
Basic | 70,295,899 | 71,808,029 | 70,787,700 | 66,628,640 | |||||||||||
Diluted | 70,309,644 | 71,833,334 | 70,802,612 | 66,662,273 | |||||||||||
Net income per share: | |||||||||||||||
Basic | $ | 1.56 | $ | 1.50 | $ | 7.03 | $ | 6.63 | |||||||
Diluted | $ | 1.56 | $ | 1.50 | $ | 7.03 | $ | 6.63 | |||||||
11
FINANCIAL HIGHLIGHTS -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands, except ratio and share data) | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |||||||||||||||
Capital: | |||||||||||||||||||
Period-end shareholders' equity | $ | 4,855,795 | $ | 4,829,016 | $ | 4,709,438 | $ | 4,522,873 | $ | 4,432,109 | |||||||||
Risk weighted assets | $ | 31,671,519 | $ | 32,159,139 | $ | 32,040,741 | $ | 31,601,558 | $ | 30,742,295 | |||||||||
Risk-based capital ratios: | |||||||||||||||||||
Common equity tier 1 | 11.39 | % | 11.06 | % | 10.84 | % | 10.71 | % | 10.92 | % | |||||||||
Tier 1 | 11.39 | % | 11.06 | % | 10.84 | % | 10.71 | % | 10.92 | % | |||||||||
Total capital | 12.94 | % | 12.56 | % | 12.34 | % | 12.24 | % | 12.50 | % | |||||||||
Leverage ratio | 8.40 | % | 8.41 | % | 8.75 | % | 8.76 | % | 8.96 | % | |||||||||
Tangible common equity ratio1 | 8.98 | % | 8.72 | % | 8.69 | % | 8.64 | % | 8.82 | % | |||||||||
Common stock: | |||||||||||||||||||
Book value per share | $ | 68.80 | $ | 68.15 | $ | 66.15 | $ | 63.30 | $ | 61.45 | |||||||||
Tangible book value per share | 52.17 | 51.60 | 49.68 | 46.82 | 45.03 | ||||||||||||||
Market value per share: | |||||||||||||||||||
High | $ | 88.28 | $ | 84.35 | $ | 88.17 | $ | 93.72 | $ | 98.29 | |||||||||
Low | $ | 71.85 | $ | 72.96 | $ | 72.60 | $ | 72.11 | $ | 69.96 | |||||||||
Cash dividends paid | $ | 36,011 | $ | 35,472 | $ | 35,631 | $ | 35,885 | $ | 35,977 | |||||||||
Dividend payout ratio | 32.63 | % | 24.94 | % | 25.90 | % | 32.44 | % | 33.17 | % | |||||||||
Shares outstanding, net | 70,579,598 | 70,858,010 | 71,193,770 | 71,449,982 | 72,122,932 | ||||||||||||||
Stock buy-back program: | |||||||||||||||||||
Shares repurchased | 280,000 | 336,713 | 250,000 | 705,609 | 525,000 | ||||||||||||||
Amount | $ | 22,844 | $ | 25,937 | $ | 20,125 | $ | 60,577 | $ | 45,057 | |||||||||
Average price per share | $ | 81.59 | $ | 77.03 | $ | 80.50 | $ | 85.85 | $ | 85.82 | |||||||||
Performance ratios (quarter annualized): | |||||||||||||||||||
Return on average assets | 0.99 | % | 1.29 | % | 1.35 | % | 1.13 | % | 1.12 | % | |||||||||
Return on average equity | 9.05 | % | 11.83 | % | 12.02 | % | 10.04 | % | 9.93 | % | |||||||||
Net interest margin | 2.88 | % | 3.01 | % | 3.30 | % | 3.30 | % | 3.40 | % | |||||||||
Efficiency ratio | 63.65 | % | 59.31 | % | 59.51 | % | 64.80 | % | 63.25 | % | |||||||||
Reconciliation of non-GAAP measures: | |||||||||||||||||||
1 Tangible common equity ratio: | |||||||||||||||||||
Total shareholders' equity | $ | 4,855,795 | $ | 4,829,016 | $ | 4,709,438 | $ | 4,522,873 | $ | 4,432,109 | |||||||||
Less: Goodwill and intangible assets, net | 1,173,362 | 1,172,411 | 1,172,564 | 1,177,573 | 1,184,112 | ||||||||||||||
Tangible common equity | $ | 3,682,433 | $ | 3,656,605 | $ | 3,536,874 | $ | 3,345,300 | $ | 3,247,997 | |||||||||
Total assets | $ | 42,172,021 | $ | 43,127,205 | $ | 41,893,073 | $ | 39,882,962 | $ | 38,020,504 | |||||||||
Less: Goodwill and intangible assets, net | 1,173,362 | 1,172,411 | 1,172,564 | 1,177,573 | 1,184,112 | ||||||||||||||
Tangible assets | $ | 40,998,659 | $ | 41,954,794 | $ | 40,720,509 | $ | 38,705,389 | $ | 36,836,392 | |||||||||
Tangible common equity ratio | 8.98 | % | 8.72 | % | 8.69 | % | 8.64 | % | 8.82 | % | |||||||||
12
FINANCIAL HIGHLIGHTS -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands, except ratio and share data) | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |||||||||||||||
Other data: | |||||||||||||||||||
Tax equivalent interest | $ | 2,726 | $ | 2,936 | $ | 3,481 | $ | 2,529 | $ | 3,067 | |||||||||
Net unrealized gain (loss) on available for sale securities | $ | 138,149 | $ | 178,060 | $ | 131,780 | $ | (2,609 | ) | $ | (95,271 | ) | |||||||
Mortgage banking: | |||||||||||||||||||
Mortgage production revenue | $ | 9,169 | $ | 13,814 | $ | 11,869 | $ | 7,868 | $ | 5,073 | |||||||||
Mortgage loans funded for sale | $ | 855,643 | $ | 877,280 | $ | 729,841 | $ | 510,527 | $ | 497,353 | |||||||||
Add: current period-end outstanding commitments | 158,460 | 379,377 | 344,087 | 263,434 | 160,848 | ||||||||||||||
Less: prior period end outstanding commitments | 379,377 | 344,087 | 263,434 | 160,848 | 197,752 | ||||||||||||||
Total mortgage production volume | $ | 634,726 | $ | 912,570 | $ | 810,494 | $ | 613,113 | $ | 460,449 | |||||||||
Mortgage loan refinances to mortgage loans funded for sale | 57 | % | 56 | % | 31 | % | 30 | % | 23 | % | |||||||||
Gain on sale margin | 1.44 | % | 1.51 | % | 1.46 | % | 1.28 | % | 1.10 | % | |||||||||
Mortgage servicing revenue | $ | 16,227 | $ | 16,366 | $ | 16,262 | $ | 15,966 | $ | 16,807 | |||||||||
Average outstanding principal balance of mortgage loans serviced for others | 20,856,446 | 21,172,874 | 21,418,690 | 21,581,835 | 21,706,541 | ||||||||||||||
Average mortgage servicing revenue rates | 0.31 | % | 0.31 | % | 0.30 | % | 0.30 | % | 0.31 | % | |||||||||
Gain (loss) on mortgage servicing rights, net of economic hedge: | |||||||||||||||||||
Gain (loss) on mortgage hedge derivative contracts, net | $ | (4,714 | ) | $ | 3,742 | $ | 11,128 | $ | 4,432 | $ | 12,162 | ||||||||
Gain (loss) on fair value option securities, net | (8,328 | ) | 4,597 | 9,853 | 9,665 | (282 | ) | ||||||||||||
Gain (loss) on economic hedge of mortgage servicing rights | (13,042 | ) | 8,339 | 20,981 | 14,097 | 11,880 | |||||||||||||
Gain (loss) on changes in fair value of mortgage servicing rights | 9,297 | (12,593 | ) | (29,555 | ) | (20,666 | ) | (24,233 | ) | ||||||||||
Loss on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue | (3,745 | ) | (4,254 | ) | (8,574 | ) | (6,569 | ) | (12,353 | ) | |||||||||
Net interest revenue on fair value option securities2 | 1,544 | 1,245 | 1,296 | 1,129 | 695 | ||||||||||||||
Total economic cost of changes in the fair value of mortgage servicing rights, net of economic hedges | $ | (2,201 | ) | $ | (3,009 | ) | $ | (7,278 | ) | $ | (5,440 | ) | $ | (11,658 | ) | ||||
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 | |||||||||||||||||||
Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |||||||||||||||
Interest revenue | $ | 369,857 | $ | 395,207 | $ | 390,820 | $ | 376,074 | $ | 365,592 | |||||||||
Interest expense | 99,608 | 116,111 | 105,388 | 97,972 | 79,906 | ||||||||||||||
Net interest revenue | 270,249 | 279,096 | 285,432 | 278,102 | 285,686 | ||||||||||||||
Provision for credit losses | 19,000 | 12,000 | 5,000 | 8,000 | 9,000 | ||||||||||||||
Net interest revenue after provision for credit losses | 251,249 | 267,096 | 280,432 | 270,102 | 276,686 | ||||||||||||||
Other operating revenue: | |||||||||||||||||||
Brokerage and trading revenue | 43,843 | 43,840 | 40,526 | 31,617 | 28,101 | ||||||||||||||
Transaction card revenue | 22,548 | 22,015 | 21,915 | 20,738 | 20,664 | ||||||||||||||
Fiduciary and asset management revenue | 45,021 | 43,621 | 45,025 | 43,358 | 43,665 | ||||||||||||||
Deposit service charges and fees | 27,331 | 28,837 | 28,074 | 28,243 | 29,393 | ||||||||||||||
Mortgage banking revenue | 25,396 | 30,180 | 28,131 | 23,834 | 21,880 | ||||||||||||||
Other revenue | 15,283 | 17,626 | 12,437 | 12,762 | 16,404 | ||||||||||||||
Total fees and commissions | 179,422 | 186,119 | 176,108 | 160,552 | 160,107 | ||||||||||||||
Other gains (losses), net | (1,649 | ) | 4,544 | 3,480 | 2,976 | (8,305 | ) | ||||||||||||
Gain (loss) on derivatives, net | (4,644 | ) | 3,778 | 11,150 | 4,667 | 11,167 | |||||||||||||
Gain (loss) on fair value option securities, net | (8,328 | ) | 4,597 | 9,853 | 9,665 | (282 | ) | ||||||||||||
Change in fair value of mortgage servicing rights | 9,297 | (12,593 | ) | (29,555 | ) | (20,666 | ) | (24,233 | ) | ||||||||||
Gain (loss) on available for sale securities, net | 4,487 | 5 | 1,029 | 76 | (1,999 | ) | |||||||||||||
Total other operating revenue | 178,585 | 186,450 | 172,065 | 157,270 | 136,455 | ||||||||||||||
Other operating expense: | |||||||||||||||||||
Personnel | 168,422 | 162,573 | 160,342 | 169,228 | 160,706 | ||||||||||||||
Business promotion | 8,787 | 8,859 | 10,142 | 7,874 | 9,207 | ||||||||||||||
Charitable contributions to BOKF Foundation | 2,000 | — | 1,000 | — | 2,846 | ||||||||||||||
Professional fees and services | 13,408 | 12,312 | 13,002 | 16,139 | 20,712 | ||||||||||||||
Net occupancy and equipment | 26,316 | 27,558 | 26,880 | 29,521 | 27,780 | ||||||||||||||
Insurance | 5,393 | 4,220 | 6,454 | 4,839 | 4,248 | ||||||||||||||
Data processing and communications | 31,884 | 31,915 | 29,735 | 31,449 | 27,575 | ||||||||||||||
Printing, postage and supplies | 3,700 | 3,825 | 4,107 | 4,885 | 5,232 | ||||||||||||||
Net losses and operating expenses of repossessed assets | 2,403 | 1,728 | 580 | 1,996 | 2,581 | ||||||||||||||
Amortization of intangible assets | 5,225 | 5,064 | 5,138 | 5,191 | 5,331 | ||||||||||||||
Mortgage banking costs | 14,259 | 14,975 | 11,545 | 9,906 | 11,518 | ||||||||||||||
Other expense | 6,998 | 6,263 | 8,212 | 6,129 | 6,907 | ||||||||||||||
Total other operating expense | 288,795 | 279,292 | 277,137 | 287,157 | 284,643 | ||||||||||||||
Net income before taxes | 141,039 | 174,254 | 175,360 | 140,215 | 128,498 | ||||||||||||||
Federal and state income taxes | 30,257 | 32,396 | 37,580 | 29,950 | 20,121 | ||||||||||||||
Net income | 110,782 | 141,858 | 137,780 | 110,265 | 108,377 | ||||||||||||||
Net income (loss) attributable to non-controlling interests | 430 | (373 | ) | 217 | (347 | ) | (79 | ) | |||||||||||
Net income attributable to BOK Financial Corporation shareholders | $ | 110,352 | $ | 142,231 | $ | 137,563 | $ | 110,612 | $ | 108,456 | |||||||||
Average shares outstanding: | |||||||||||||||||||
Basic | 70,295,899 | 70,596,307 | 70,887,063 | 71,387,070 | 71,808,029 | ||||||||||||||
Diluted | 70,309,644 | 70,609,924 | 70,902,033 | 71,404,388 | 71,833,334 | ||||||||||||||
Net income per share: | |||||||||||||||||||
Basic | $ | 1.56 | $ | 2.00 | $ | 1.93 | $ | 1.54 | $ | 1.50 | |||||||||
Diluted | $ | 1.56 | $ | 2.00 | $ | 1.93 | $ | 1.54 | $ | 1.50 | |||||||||
14
LOANS TREND -- UNAUDITED BOK FINANCIAL CORPORATION (In thousands) | ||||||||||||||||||||
Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | ||||||||||||||||
Commercial: | ||||||||||||||||||||
Energy | $ | 3,973,377 | $ | 4,114,269 | $ | 3,921,353 | $ | 3,705,099 | $ | 3,590,333 | ||||||||||
Services | 3,122,163 | 3,266,249 | 3,309,458 | 3,287,563 | 3,258,192 | |||||||||||||||
Healthcare | 3,033,916 | 3,032,968 | 2,926,510 | 2,915,885 | 2,799,277 | |||||||||||||||
Wholesale/retail | 1,760,866 | 1,848,617 | 1,793,118 | 1,706,900 | 1,621,158 | |||||||||||||||
Public finance | 709,868 | 744,840 | 795,659 | 803,083 | 804,550 | |||||||||||||||
Manufacturing | 665,449 | 698,408 | 761,357 | 742,374 | 730,521 | |||||||||||||||
Other commercial and industrial | 766,011 | 719,274 | 829,453 | 801,071 | 832,047 | |||||||||||||||
Total commercial | 14,031,650 | 14,424,625 | 14,336,908 | 13,961,975 | 13,636,078 | |||||||||||||||
Commercial real estate: | ||||||||||||||||||||
Multifamily | 1,265,562 | 1,324,839 | 1,300,372 | 1,210,358 | 1,288,065 | |||||||||||||||
Office | 928,379 | 1,014,275 | 1,056,306 | 1,033,158 | 1,072,920 | |||||||||||||||
Industrial | 856,117 | 873,536 | 828,569 | 767,757 | 778,106 | |||||||||||||||
Retail | 775,521 | 799,169 | 825,399 | 890,685 | 919,082 | |||||||||||||||
Residential construction and land development | 150,879 | 135,361 | 141,509 | 149,686 | 148,584 | |||||||||||||||
Other commercial real estate | 457,325 | 478,877 | 557,878 | 549,007 | 558,056 | |||||||||||||||
Total commercial real estate | 4,433,783 | 4,626,057 | 4,710,033 | 4,600,651 | 4,764,813 | |||||||||||||||
Residential mortgage: | ||||||||||||||||||||
Permanent mortgage | 1,057,321 | 1,066,460 | 1,088,370 | 1,098,481 | 1,122,610 | |||||||||||||||
Permanent mortgages guaranteed by U.S. government agencies | 197,794 | 191,764 | 195,373 | 193,308 | 190,866 | |||||||||||||||
Home equity | 829,057 | 859,079 | 887,079 | 900,831 | 916,557 | |||||||||||||||
Total residential mortgage | 2,084,172 | 2,117,303 | 2,170,822 | 2,192,620 | 2,230,033 | |||||||||||||||
Personal | 1,201,382 | 1,117,382 | 1,037,889 | 1,003,734 | 1,025,806 | |||||||||||||||
Total | $ | 21,750,987 | $ | 22,285,367 | $ | 22,255,652 | $ | 21,758,980 | $ | 21,656,730 | ||||||||||
15
LOANS BY PRINCIPAL MARKET AREA -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands) | |||||||||||||||||||
Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |||||||||||||||
Texas: | |||||||||||||||||||
Commercial | $ | 6,174,894 | $ | 6,220,227 | $ | 5,877,265 | $ | 5,754,018 | $ | 5,438,133 | |||||||||
Commercial real estate | 1,259,117 | 1,292,116 | 1,341,609 | 1,344,810 | 1,341,783 | ||||||||||||||
Residential mortgage | 268,282 | 273,931 | 272,878 | 265,927 | 266,805 | ||||||||||||||
Personal | 458,893 | 475,430 | 400,585 | 396,794 | 394,743 | ||||||||||||||
Total Texas | 8,161,186 | 8,261,704 | 7,892,337 | 7,761,549 | 7,441,464 | ||||||||||||||
Oklahoma: | |||||||||||||||||||
Commercial | 3,454,825 | 3,690,100 | 3,762,234 | 3,551,054 | 3,491,117 | ||||||||||||||
Commercial real estate | 631,026 | 679,786 | 717,970 | 665,190 | 700,756 | ||||||||||||||
Residential mortgage | 1,375,080 | 1,370,452 | 1,403,398 | 1,417,381 | 1,440,566 | ||||||||||||||
Personal | 479,784 | 383,246 | 382,764 | 374,807 | 375,543 | ||||||||||||||
Total Oklahoma | 5,940,715 | 6,123,584 | 6,266,366 | 6,008,432 | 6,007,982 | ||||||||||||||
Colorado: | |||||||||||||||||||
Commercial | 2,169,598 | 2,247,798 | 2,325,742 | 2,231,703 | 2,275,069 | ||||||||||||||
Commercial real estate | 927,826 | 975,066 | 1,023,410 | 957,348 | 963,575 | ||||||||||||||
Residential mortgage | 196,326 | 224,872 | 241,780 | 241,722 | 251,849 | ||||||||||||||
Personal | 80,613 | 78,733 | 72,537 | 65,812 | 72,916 | ||||||||||||||
Total Colorado | 3,374,363 | 3,526,469 | 3,663,469 | 3,496,585 | 3,563,409 | ||||||||||||||
Arizona: | |||||||||||||||||||
Commercial | 1,307,073 | 1,276,534 | 1,330,415 | 1,335,140 | 1,320,139 | ||||||||||||||
Commercial real estate | 728,832 | 771,425 | 761,243 | 791,466 | 889,903 | ||||||||||||||
Residential mortgage | 89,396 | 92,121 | 91,684 | 98,973 | 97,959 | ||||||||||||||
Personal | 97,143 | 78,694 | 76,335 | 61,875 | 68,546 | ||||||||||||||
Total Arizona | 2,222,444 | 2,218,774 | 2,259,677 | 2,287,454 | 2,376,547 | ||||||||||||||
Kansas/Missouri: | |||||||||||||||||||
Commercial | 527,872 | 566,969 | 602,836 | 667,859 | 659,793 | ||||||||||||||
Commercial real estate | 322,541 | 374,795 | 331,443 | 327,870 | 343,228 | ||||||||||||||
Residential mortgage | 66,771 | 67,035 | 71,229 | 75,560 | 77,971 | ||||||||||||||
Personal | 64,298 | 79,487 | 84,224 | 81,831 | 91,441 | ||||||||||||||
Total Kansas/Missouri | 981,482 | 1,088,286 | 1,089,732 | 1,153,120 | 1,172,433 | ||||||||||||||
New Mexico: | |||||||||||||||||||
Commercial | 305,320 | 335,409 | 350,520 | 342,915 | 340,489 | ||||||||||||||
Commercial real estate | 402,148 | 374,331 | 385,058 | 371,416 | 383,670 | ||||||||||||||
Residential mortgage | 80,325 | 81,383 | 82,390 | 85,326 | 87,346 | ||||||||||||||
Personal | 9,932 | 10,887 | 10,236 | 11,065 | 10,662 | ||||||||||||||
Total New Mexico | 797,725 | 802,010 | 828,204 | 810,722 | 822,167 | ||||||||||||||
Arkansas: | |||||||||||||||||||
Commercial | 92,068 | 87,588 | 87,896 | 79,286 | 111,338 | ||||||||||||||
Commercial real estate | 162,293 | 158,538 | 149,300 | 142,551 | 141,898 | ||||||||||||||
Residential mortgage | 7,992 | 7,509 | 7,463 | 7,731 | 7,537 | ||||||||||||||
Personal | 10,719 | 10,905 | 11,208 | 11,550 | 11,955 | ||||||||||||||
Total Arkansas | 273,072 | 264,540 | 255,867 | 241,118 | 272,728 | ||||||||||||||
TOTAL BOK FINANCIAL | $ | 21,750,987 | $ | 22,285,367 | $ | 22,255,652 | $ | 21,758,980 | $ | 21,656,730 | |||||||||
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) | |||||||||||||||||||
Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |||||||||||||||
Oklahoma: | |||||||||||||||||||
Demand | $ | 3,257,337 | $ | 3,515,312 | $ | 3,279,359 | $ | 3,432,239 | $ | 3,610,593 | |||||||||
Interest-bearing: | |||||||||||||||||||
Transaction | 8,574,912 | 7,447,799 | 7,020,484 | 6,542,548 | 6,445,831 | ||||||||||||||
Savings | 306,194 | 308,103 | 307,785 | 309,875 | 288,210 | ||||||||||||||
Time | 1,125,446 | 1,198,170 | 1,253,804 | 1,217,371 | 1,118,643 | ||||||||||||||
Total interest-bearing | 10,006,552 | 8,954,072 | 8,582,073 | 8,069,794 | 7,852,684 | ||||||||||||||
Total Oklahoma | 13,263,889 | 12,469,384 | 11,861,432 | 11,502,033 | 11,463,277 | ||||||||||||||
Texas: | |||||||||||||||||||
Demand | 2,766,379 | 2,870,429 | 2,974,005 | 2,966,743 | 3,291,433 | ||||||||||||||
Interest-bearing: | |||||||||||||||||||
Transaction | 2,912,302 | 2,589,511 | 2,453,619 | 2,385,305 | 2,295,169 | ||||||||||||||
Savings | 102,456 | 100,597 | 103,125 | 101,849 | 99,624 | ||||||||||||||
Time | 495,343 | 464,264 | 425,253 | 419,269 | 423,880 | ||||||||||||||
Total interest-bearing | 3,510,101 | 3,154,372 | 2,981,997 | 2,906,423 | 2,818,673 | ||||||||||||||
Total Texas | 6,276,480 | 6,024,801 | 5,956,002 | 5,873,166 | 6,110,106 | ||||||||||||||
Colorado: | |||||||||||||||||||
Demand | 1,729,674 | 1,694,044 | 1,621,820 | 1,897,547 | 1,658,473 | ||||||||||||||
Interest-bearing: | |||||||||||||||||||
Transaction | 1,769,037 | 1,910,874 | 1,800,271 | 1,844,632 | 1,899,203 | ||||||||||||||
Savings | 53,307 | 60,107 | 57,263 | 58,919 | 57,289 | ||||||||||||||
Time | 283,517 | 273,622 | 246,198 | 261,235 | 274,877 | ||||||||||||||
Total interest-bearing | 2,105,861 | 2,244,603 | 2,103,732 | 2,164,786 | 2,231,369 | ||||||||||||||
Total Colorado | 3,835,535 | 3,938,647 | 3,725,552 | 4,062,333 | 3,889,842 | ||||||||||||||
New Mexico: | |||||||||||||||||||
Demand | 623,722 | 645,698 | 630,861 | 662,362 | 691,692 | ||||||||||||||
Interest-bearing: | |||||||||||||||||||
Transaction | 558,493 | 539,260 | 557,881 | 573,203 | 571,347 | ||||||||||||||
Savings | 63,999 | 62,863 | 62,636 | 61,497 | 58,194 | ||||||||||||||
Time | 238,140 | 236,135 | 232,569 | 228,212 | 224,515 | ||||||||||||||
Total interest-bearing | 860,632 | 838,258 | 853,086 | 862,912 | 854,056 | ||||||||||||||
Total New Mexico | 1,484,354 | 1,483,956 | 1,483,947 | 1,525,274 | 1,545,748 | ||||||||||||||
Arizona: | |||||||||||||||||||
Demand | 672,265 | 703,381 | 700,480 | 695,238 | 707,402 | ||||||||||||||
Interest-bearing: | |||||||||||||||||||
Transaction | 684,358 | 599,655 | 560,429 | 621,735 | 575,567 | ||||||||||||||
Savings | 10,314 | 12,487 | 11,966 | 12,144 | 10,545 | ||||||||||||||
Time | 49,676 | 44,347 | 43,099 | 44,004 | 43,051 | ||||||||||||||
Total interest-bearing | 744,348 | 656,489 | 615,494 | 677,883 | 629,163 | ||||||||||||||
Total Arizona | 1,416,613 | 1,359,870 | 1,315,974 | 1,373,121 | 1,336,565 | ||||||||||||||
17
DEPOSITS BY PRINCIPAL MARKET AREA -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands) | |||||||||||||||||||
Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |||||||||||||||
Kansas/Missouri: | |||||||||||||||||||
Demand | 384,533 | 376,020 | 431,856 | 410,799 | 418,199 | ||||||||||||||
Interest-bearing: | |||||||||||||||||||
Transaction | 784,574 | 284,940 | 310,774 | 361,590 | 327,866 | ||||||||||||||
Savings | 12,169 | 11,689 | 13,125 | 13,815 | 13,721 | ||||||||||||||
Time | 17,877 | 19,126 | 19,205 | 19,977 | 19,688 | ||||||||||||||
Total interest-bearing | 814,620 | 315,755 | 343,104 | 395,382 | 361,275 | ||||||||||||||
Total Kansas/Missouri | 1,199,153 | 691,775 | 774,960 | 806,181 | 779,474 | ||||||||||||||
Arkansas: | |||||||||||||||||||
Demand | 27,381 | 39,513 | 29,176 | 31,624 | 36,800 | ||||||||||||||
Interest-bearing: | |||||||||||||||||||
Transaction | 108,076 | 149,506 | 148,485 | 147,964 | 91,593 | ||||||||||||||
Savings | 1,837 | 1,747 | 1,783 | 1,785 | 1,632 | ||||||||||||||
Time | 7,850 | 7,877 | 7,810 | 8,321 | 8,726 | ||||||||||||||
Total interest-bearing | 117,763 | 159,130 | 158,078 | 158,070 | 101,951 | ||||||||||||||
Total Arkansas | 145,144 | 198,643 | 187,254 | 189,694 | 138,751 | ||||||||||||||
TOTAL BOK FINANCIAL | $ | 27,621,168 | $ | 26,167,076 | $ | 25,305,121 | $ | 25,331,802 | $ | 25,263,763 | |||||||||
18
NET INTEREST MARGIN TREND -- UNAUDITED BOK FINANCIAL CORPORATION | ||||||||||||||
Three Months Ended | ||||||||||||||
Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | ||||||||||
TAX-EQUIVALENT ASSETS YIELDS | ||||||||||||||
Interest-bearing cash and cash equivalents | 1.62 | % | 2.42 | % | 2.57 | % | 2.56 | % | 2.23 | % | ||||
Trading securities | 3.19 | % | 3.49 | % | 3.59 | % | 3.88 | % | 4.10 | % | ||||
Investment securities | 4.69 | % | 4.46 | % | 4.41 | % | 4.50 | % | 4.26 | % | ||||
Available for sale securities | 2.52 | % | 2.60 | % | 2.63 | % | 2.57 | % | 2.51 | % | ||||
Fair value option securities | 2.62 | % | 2.79 | % | 3.34 | % | 3.62 | % | 3.56 | % | ||||
Restricted equity securities | 5.37 | % | 6.34 | % | 6.30 | % | 6.42 | % | 6.39 | % | ||||
Residential mortgage loans held for sale | 3.55 | % | 3.73 | % | 3.65 | % | 4.58 | % | 4.00 | % | ||||
Loans | 4.75 | % | 5.12 | % | 5.39 | % | 5.26 | % | 5.09 | % | ||||
Allowance for loan losses | ||||||||||||||
Loans, net of allowance | 4.80 | % | 5.17 | % | 5.45 | % | 5.31 | % | 5.14 | % | ||||
Total tax-equivalent yield on earning assets | 3.93 | % | 4.25 | % | 4.51 | % | 4.46 | % | 4.33 | % | ||||
COST OF INTEREST-BEARING LIABILITIES | ||||||||||||||
Interest-bearing deposits: | ||||||||||||||
Interest-bearing transaction | 1.00 | % | 1.08 | % | 1.04 | % | 0.94 | % | 0.79 | % | ||||
Savings | 0.11 | % | 0.14 | % | 0.12 | % | 0.12 | % | 0.11 | % | ||||
Time | 1.94 | % | 1.94 | % | 1.90 | % | 1.80 | % | 1.54 | % | ||||
Total interest-bearing deposits | 1.09 | % | 1.17 | % | 1.13 | % | 1.04 | % | 0.87 | % | ||||
Funds purchased and repurchase agreements | 1.56 | % | 2.01 | % | 2.08 | % | 2.07 | % | 1.36 | % | ||||
Other borrowings | 2.01 | % | 2.42 | % | 2.67 | % | 2.68 | % | 2.51 | % | ||||
Subordinated debt | 5.40 | % | 5.48 | % | 5.53 | % | 5.51 | % | 5.38 | % | ||||
Total cost of interest-bearing liabilities | 1.40 | % | 1.68 | % | 1.70 | % | 1.66 | % | 1.42 | % | ||||
Tax-equivalent net interest revenue spread | 2.53 | % | 2.57 | % | 2.81 | % | 2.80 | % | 2.91 | % | ||||
Effect of noninterest-bearing funding sources and other | 0.35 | % | 0.44 | % | 0.49 | % | 0.50 | % | 0.49 | % | ||||
Tax-equivalent net interest margin | 2.88 | % | 3.01 | % | 3.30 | % | 3.30 | % | 3.40 | % | ||||
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 | |||||||||||||||||||
Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |||||||||||||||
Nonperforming assets: | |||||||||||||||||||
Nonaccruing loans: | |||||||||||||||||||
Commercial | $ | 115,416 | $ | 111,706 | $ | 123,395 | $ | 90,358 | $ | 99,841 | |||||||||
Commercial real estate | 27,626 | 23,185 | 21,670 | 21,508 | 21,621 | ||||||||||||||
Residential mortgage | 37,622 | 37,304 | 38,477 | 40,409 | 41,555 | ||||||||||||||
Personal | 287 | 271 | 237 | 302 | 230 | ||||||||||||||
Total nonaccruing loans | 180,951 | 172,466 | 183,779 | 152,577 | 163,247 | ||||||||||||||
Accruing renegotiated loans guaranteed by U.S. government agencies | 92,452 | 92,718 | 95,989 | 91,787 | 86,428 | ||||||||||||||
Real estate and other repossessed assets | 20,359 | 21,026 | 16,940 | 17,139 | 17,487 | ||||||||||||||
Total nonperforming assets | $ | 293,762 | $ | 286,210 | $ | 296,708 | $ | 261,503 | $ | 267,162 | |||||||||
Total nonperforming assets excluding those guaranteed by U.S. government agencies | $ | 195,210 | $ | 187,160 | $ | 193,976 | $ | 162,770 | $ | 173,602 | |||||||||
Nonaccruing loans by loan class: | |||||||||||||||||||
Commercial: | |||||||||||||||||||
Energy | $ | 91,722 | $ | 88,894 | $ | 71,632 | $ | 35,332 | $ | 47,494 | |||||||||
Services | 7,483 | 6,119 | 10,087 | 9,555 | 8,567 | ||||||||||||||
Healthcare | 4,480 | 5,978 | 16,148 | 18,768 | 16,538 | ||||||||||||||
Manufacturing | 10,133 | 8,741 | 8,613 | 9,548 | 8,919 | ||||||||||||||
Wholesale/retail | 1,163 | 1,504 | 1,390 | 1,425 | 1,316 | ||||||||||||||
Public finance | — | — | — | — | — | ||||||||||||||
Other commercial and industrial | 435 | 470 | 15,525 | 15,730 | 17,007 | ||||||||||||||
Total commercial | 115,416 | 111,706 | 123,395 | 90,358 | 99,841 | ||||||||||||||
Commercial real estate: | |||||||||||||||||||
Retail | 18,868 | 20,132 | 20,057 | 20,159 | 20,279 | ||||||||||||||
Residential construction and land development | 350 | 350 | 350 | 350 | 350 | ||||||||||||||
Multifamily | 6,858 | 286 | 275 | — | 301 | ||||||||||||||
Office | — | 855 | 855 | 855 | — | ||||||||||||||
Industrial | 909 | 909 | — | — | — | ||||||||||||||
Other commercial real estate | 641 | 653 | 133 | 144 | 691 | ||||||||||||||
Total commercial real estate | 27,626 | 23,185 | 21,670 | 21,508 | 21,621 | ||||||||||||||
Residential mortgage: | |||||||||||||||||||
Permanent mortgage | 20,441 | 20,165 | 21,803 | 22,937 | 23,951 | ||||||||||||||
Permanent mortgage guaranteed by U.S. government agencies | 6,100 | 6,332 | 6,743 | 6,946 | 7,132 | ||||||||||||||
Home equity | 11,081 | 10,807 | 9,931 | 10,526 | 10,472 | ||||||||||||||
Total residential mortgage | 37,622 | 37,304 | 38,477 | 40,409 | 41,555 | ||||||||||||||
Personal | 287 | 271 | 237 | 302 | 230 | ||||||||||||||
Total nonaccruing loans | $ | 180,951 | $ | 172,466 | $ | 183,779 | $ | 152,577 | $ | 163,247 | |||||||||
20
CREDIT QUALITY INDICATORS -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands, except ratios) | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
Dec. 31, 2019 | Sept. 30, 2019 | June 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |||||||||||||||
Performing loans 90 days past due1 | $ | 7,680 | $ | 1,541 | $ | 2,698 | $ | 610 | $ | 1,338 | |||||||||
Gross charge-offs | $ | 14,268 | $ | 11,707 | $ | 13,227 | $ | 11,775 | $ | 14,515 | |||||||||
Recoveries | (1,816 | ) | (1,066 | ) | (5,503 | ) | (1,689 | ) | (2,168 | ) | |||||||||
Net charge-offs | $ | 12,452 | $ | 10,641 | $ | 7,724 | $ | 10,086 | $ | 12,347 | |||||||||
Provision for credit losses | $ | 19,000 | $ | 12,000 | $ | 5,000 | $ | 8,000 | $ | 9,000 | |||||||||
Allowance for loan losses to period end loans | 0.97 | % | 0.92 | % | 0.91 | % | 0.94 | % | 0.96 | % | |||||||||
Combined allowance for credit losses to period end loans | 0.98 | % | 0.92 | % | 0.92 | % | 0.95 | % | 0.97 | % | |||||||||
Nonperforming assets to period end loans and repossessed assets | 1.35 | % | 1.28 | % | 1.33 | % | 1.20 | % | 1.23 | % | |||||||||
Net charge-offs (annualized) to average loans | 0.22 | % | 0.19 | % | 0.14 | % | 0.19 | % | 0.23 | % | |||||||||
Allowance for loan losses to nonaccruing loans1 | 120.54 | % | 123.05 | % | 114.40 | % | 141.00 | % | 132.89 | % | |||||||||
Combined allowance for credit losses to nonaccruing loans1 | 121.44 | % | 123.87 | % | 115.48 | % | 142.25 | % | 134.03 | % | |||||||||
1 | Excludes residential mortgage loans guaranteed by agencies of the U.S. government. |
21
SEGMENTS -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands, except ratios) | ||||||||||||||||||
Three Months Ended | Change | |||||||||||||||||
Commercial Banking | Dec. 31, 2019 | Sept. 30, 2019 | Dec. 31, 2018 | 1 | 4Q19 vs 3Q19 | 4Q19 vs 4Q18 | ||||||||||||
Net interest revenue | $ | 162,232 | $ | 178,955 | $ | 147,314 | (9.3 | )% | 10.1 | % | ||||||||
Fees and commissions revenue | 43,357 | 46,159 | 39,667 | (6.1 | )% | 9.3 | % | |||||||||||
Other operating expense | 68,900 | 68,697 | 51,663 | 0.3 | % | 33.4 | % | |||||||||||
Corporate expense allocations | 11,942 | 12,613 | 9,112 | (5.3 | )% | 31.1 | % | |||||||||||
Net income | 81,732 | 100,675 | 83,783 | (18.8 | )% | (2.4 | )% | |||||||||||
Average assets | 24,345,447 | 23,973,067 | 19,341,921 | 1.6 | % | 25.9 | % | |||||||||||
Average loans | 19,100,101 | 19,226,347 | 15,628,731 | (0.7 | )% | 22.2 | % | |||||||||||
Average deposits | 11,419,558 | 10,833,057 | 8,393,016 | 5.4 | % | 36.1 | % | |||||||||||
Consumer Banking | ||||||||||||||||||
Net interest revenue | $ | 43,176 | $ | 48,462 | $ | 41,364 | (10.9 | )% | 4.4 | % | ||||||||
Fees and commissions revenue | 44,884 | 51,460 | 42,840 | (12.8 | )% | 4.8 | % | |||||||||||
Other operating expense | 59,702 | 59,699 | 56,346 | — | % | 6.0 | % | |||||||||||
Corporate expense allocations | 11,798 | 11,776 | 11,114 | 0.2 | % | 6.2 | % | |||||||||||
Net income | 8,287 | 16,640 | 2,531 | (50.2 | )% | 227.4 | % | |||||||||||
Average assets | 9,772,710 | 9,827,130 | 8,071,978 | (0.6 | )% | 21.1 | % | |||||||||||
Average loans | 1,730,467 | 1,773,831 | 1,745,642 | (2.4 | )% | (0.9 | )% | |||||||||||
Average deposits | 6,974,453 | 6,983,018 | 6,542,188 | (0.1 | )% | 6.6 | % | |||||||||||
Wealth Management | ||||||||||||||||||
Net interest revenue | $ | 21,826 | $ | 23,066 | $ | 28,949 | (5.4 | )% | (24.6 | )% | ||||||||
Fees and commissions revenue | 92,729 | 89,422 | 72,452 | 3.7 | % | 28.0 | % | |||||||||||
Other operating expense | 74,688 | 71,620 | 66,658 | 4.3 | % | 12.0 | % | |||||||||||
Corporate expense allocations | 9,296 | 9,416 | 11,256 | (1.3 | )% | (17.4 | )% | |||||||||||
Net income | 22,863 | 23,205 | 17,447 | (1.5 | )% | 31.0 | % | |||||||||||
Average assets | 11,225,213 | 10,391,225 | 8,694,289 | 8.0 | % | 29.1 | % | |||||||||||
Average loans | 1,667,278 | 1,671,102 | 1,448,805 | (0.2 | )% | 15.1 | % | |||||||||||
Average deposits | 7,301,391 | 6,590,332 | 5,483,455 | 10.8 | % | 33.2 | % | |||||||||||
Fiduciary assets | 52,352,135 | 49,259,697 | 44,841,339 | 6.3 | % | 16.7 | % | |||||||||||
Assets under management or administration | 82,740,961 | 80,796,949 | 76,279,777 | 2.4 | % | 8.5 | % | |||||||||||
1 Acquired assets and liabilities were allocated to segments in the second quarter of 2019.
22