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CST: 21/11/2019 19:49:59   

BOK Financial Reports Record Earnings for Second Straight Quarter

29 Days ago

$142 million or $2.00 Per Share in the Third Quarter

TULSA, Okla., Oct. 23, 2019 (GLOBE NEWSWIRE) -- BOK Financial (NASDAQ: BOKF) today reported net earnings applicable to common shareholders for the third quarter of 2019 of $142.2 million, or $2.00 per diluted common share.

CEO Commentary

“The third quarter was the second-consecutive record quarter for BOK Financial,” said Steven G. Bradshaw, president and chief executive officer. “It was a quarter that really illustrated the value of having an optimum balance between our banking and fee service businesses. This balance benefits our clients in a meaningful way as we are able to serve a broader spectrum of their needs, while reducing earnings volatility for shareholders. Our results suggest that our entire team is executing at a very high level.”

Bradshaw continued, “This counter-cyclical strength, combined with continued expense management and sound credit underwriting discipline, positions us well for the remainder of 2019 and into 2020.”

Third Quarter 2019 Financial Highlights

  • Net income was $142.2 million or $2.00 per diluted share for the third quarter of 2019 and $137.6 million or $1.93 per diluted share for the second quarter of 2019.
  • Net interest revenue totaled $279.1 million, a decrease of $6.3 million. Net interest margin was 3.01 percent compared to 3.30 percent in the second quarter of 2019. Falling interest rates compressed the net interest margin by 9 basis points.
  • Fees and commissions revenue totaled $186.1 million, an increase of $10.0 million. Falling interest rates led to growth in brokerage and trading revenue and mortgage banking revenue.
  • Operating expense increased $2.2 million to $279.3 million. Personnel expense increased $2.2 million while non-personnel expense was consistent with the second quarter of 2019.
  • A $12.0 million provision for credit losses was recorded in the third quarter of 2019. The combined allowance for credit losses totaled $206 million or 0.92 percent of outstanding loans compared to $204 million or 0.92 percent in the previous quarter.
  • Average loans increased $409 million to $22.4 billion. Period-end loans increased $30 million to $22.3 billion. Average deposits increased $538 million to $25.7 billion. Period-end deposits increased $862 million.
  • Income tax expense decreased $5.2 million during the third quarter primarily due to completion of 2018 tax filings and tax credit projects.

Third Quarter 2019 Business Segment Highlights

Commercial Banking

  • Contributed $101.6 million to net income, a decrease of $5.4 million compared to the prior quarter. Net interest revenue decreased by $5.5 million. Fee revenue increased $5.1 million, offset by an increase in operating expense of $5.7 million.
  • Average loans grew by $414 million and average deposits increased $109 million.

Consumer Banking

  • Contributed $16.6 million to net income, consistent with the second quarter. Net interest revenue decreased $4.3 million, fee revenue increased $2.6 million and operating expense increased $2.0 million.
  • The recent decrease in mortgage interest rates continues to drive mortgage origination activity. Mortgage production volume increased $102 million to $913 million and gain on sale margin increased 5 basis points to 1.51 percent.

Wealth Management

  • Contributed $23.2 million to net income, a decrease of $2.3 million compared to the prior quarter. Net interest revenue decreased $3.9 million, fees and commissions revenue increased $3.5 million and operating expense increased $2.2 million.
  • Assets under management or administration were $80.8 billion at September 30, 2019 compared to $81.8 billion at June 30, 2019. Fiduciary assets totaled $49.3 billion at September 30, 2019 and $49.3 billion at June 30, 2019.

Net Interest Revenue

Net interest revenue was $279.1 million for the third quarter of 2019, a $6.3 million decrease compared to the second quarter of 2019. Discount accretion on acquired loans totaled $10.9 million for the third quarter and $13.4 million for the second quarter. Recoveries of foregone interest on nonaccruing loans added $3.4 million to the second quarter of 2019.

Average earning assets increased $2.3 billion compared to the second quarter of 2019. Available for sale securities increased $1.3 billion during the third quarter as the balance sheet was repositioned to reduce the Company's exposure to further interest rate decreases. Fair value option securities balances, which we use as an economic hedge against changes in the fair value of mortgage servicing rights, increased $655 million. Average loan balances were up $409 million. Growth in average earning assets was largely funded by a $2.0 billion increase in borrowed funds and a $662 million increase in interest-bearing deposits.

Net interest margin was 3.01 percent compared to 3.30 percent in the previous quarter. Net interest margin was reduced 9 basis points due to available for sale securities expansion and 4 basis points due to the increase in the fair value hedge portfolio. In addition, lower foregone interest recoveries and discount accretion reduced net interest margin by 7 basis points. Falling interest rates compressed the net interest margin by an additional 9 basis points.

Excluding interest recoveries, the yield on average earning assets was 4.25 percent, a 22 basis point decrease from the second quarter. The loan portfolio yield was 5.12 percent, down 21 basis points. The yield on the available for sale securities portfolio decreased 3 basis points to 2.60 percent.

Funding costs were 1.68 percent, down 2 basis points. The cost of interest-bearing deposits increased 4 basis points to 1.17 percent. The cost of other borrowed funds was down 22 basis points to 2.31 percent. The benefit to net interest margin from assets funded by non-interest liabilities decreased 5 basis points to 44 basis points.

Fees and Commissions Revenue

Fees and commissions revenue totaled $186.1 million for the third quarter of 2019, an increase of $10.0 million over the second quarter of 2019.

Brokerage and trading revenue increased $3.3 million primarily due to higher trading volume and loan syndication activity. Mortgage banking revenue increased $2.0 million. A continued decline in primary mortgage interest rates increased mortgage loan production. Mortgage production volume increased $102 million and the gain on sale margin increased 5 basis points over the second quarter of 2019.Fees and commissions revenue totaled $186.1 million for the third quarter of 2019, an increase of $10.0 million over the second quarter of 2019.

Other revenue increased $5.2 million. This increase is largely due to the combination of an increase in repossessed asset revenue from a certain set of oil and gas properties, which is offset by an increase in related operating expenses, a business insurance credit, and other timing variances.

Fiduciary and asset management revenue decreased $1.4 million compared to the second quarter of 2019, primarily due to seasonal tax fees earned in the second quarter.

Operating Expense

Total operating expense was $279.3 million for the third quarter of 2019, an increase of $2.2 million over the second quarter of 2019.

Personnel expense increased $2.2 million. Incentive compensation increased $5.5 million led by an increase in cash based incentive compensation primarily due to increased sales activities in wealth management and commercial banking. Increased incentive compensation was partially offset by a decrease in regular compensation of $1.2 million and employee benefits of $2.0 million. Employee benefits expense was down largely due to a seasonal decrease in payroll taxes.

Non-personnel expense was largely unchanged in total compared to the second quarter of 2019. Mortgage banking costs increased $3.4 million primarily due to an increase in amortization of mortgage servicing rights as lower interest rates drive an increase in prepayment speeds. In addition, data processing and communications expense increased $2.2 million. Net losses and expenses of repossessed assets increased $1.1 million.

Insurance expense decreased $2.2 million, other expense decreased $1.9 million, and business promotion expense decreased $1.3 million, all following higher activity in the second quarter of 2019 largely related to the CoBiz acquisition.

Income Taxes

The effective tax rate was 18.6 percent for the third quarter of 2019, down from 21.4 percent for the second quarter of 2019.  Tax expense for the third quarter of 2019 included $5.2 million of benefits related to completion of 2018 tax returns for the Company and CoBiz, and the finalization of tax credit projects.

Loans, Deposits and Capital

Loans

Outstanding loans were $22.3 billion at September 30, 2019, up $30 million over June 30, 2019. Growth in commercial and personal loans was partially offset by a decrease in commercial real estate and residential mortgage loans.

Outstanding commercial loan balances grew by $88 million or 1 percent over June 30, 2019. Energy loan balances were up $193 million. Healthcare loans increased $106 million and wholesale/retail sector loans increased $55 million. Other commercial and industrial loans decreased $110 million, manufacturing loans decreased $63 million and public finance loans decreased by $51 million.

Commercial real estate loan balances decreased $84 million or 2 percent compared to June 30, 2019. Loans secured by industrial properties increased $45 million. Loans secured by multifamily residential properties increased $24 million. Other real estate loans decreased $79 million. Loans secured by office buildings decreased $42 million and loans secured by retail properties decreased $26 million.

Deposits

Period-end deposits totaled $26.2 billion at September 30, 2019, an $862 million increase over June 30, 2019. Interest-bearing transaction account balances grew by $670 million and demand deposit balances increased $177 million. Average deposits were $25.7 billion at September 30, 2019, an increase of $538 million compared to June 30, 2019. Total interest-bearing transaction deposits increased $619 million, partially offset by a decrease in demand deposits of $124 million.

Capital

The company's common equity Tier 1 capital ratio was 11.06 percent at September 30, 2019. In addition, the company's Tier 1 capital ratio was 11.06 percent, total capital ratio was 12.56 percent, and leverage ratio was 8.41 percent at September 30, 2019. At June 30, 2019, the company's common equity Tier 1 capital ratio was 10.84 percent, Tier 1 capital ratio was 10.84 percent, total capital ratio was 12.34 percent, and leverage ratio was 8.75 percent.

The company's tangible common equity ratio, a non-GAAP measure, was 8.72 percent at September 30, 2019 and 8.69 percent at June 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 336,713 shares at an average price of $77.03 per share in the third quarter of 2019 and 250,000 shares at an average price of $80.50 in the second quarter of 2019.

Credit Quality

Nonperforming assets totaled $286 million or 1.28 percent of outstanding loans and repossessed assets at September 30, 2019, compared to $297 million or 1.33 percent at June 30, 2019. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $187 million or 0.85 percent of outstanding loans and repossessed assets at September 30, 2019, compared to $194 million or 0.88 percent at June 30, 2019.

Nonaccruing loans were $172 million or 0.77 percent of outstanding loans at September 30, 2019. Nonaccruing commercial loans totaled $112 million or 0.77 percent of outstanding commercial loans. Nonaccruing commercial real estate loans totaled $23 million or 0.50 percent of outstanding commercial real estate loans. Nonaccruing residential mortgage loans totaled $37 million or 1.76 percent of outstanding residential mortgage loans.

Nonaccruing loans decreased $11 million from June 30, 2019, primarily due to a $15 million decrease in other commercial and industrial loans and a $10 million decrease in healthcare sector loans. Nonaccruing energy loans increased $17 million. New nonaccruing loans identified in the third quarter totaled $36 million, offset by $28 million in payments received and $12 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 $143 million at September 30, compared to $161 million at June 30. The decrease largely resulted from energy, wholesale/retail sector and other commercial and industrial loans, partially offset by an increase in services and healthcare sector loans.

Net charge-offs were $10.6 million or 0.19 percent of average loans on an annualized basis for the third quarter of 2019, compared to $7.7 million or 0.14 percent of average loans on an annualized basis for the second quarter of 2019. Net charge-offs were 0.21 percent of average loans over the last four quarters. Gross charge-offs were $11.7 million for the third quarter compared to $13.2 million for the previous quarter. Recoveries totaled $1.1 million for the third quarter of 2019 and $5.5 million for the second quarter of 2019.

Based on an evaluation of all credit factors, including growth in the originated loan portfolio, changes in nonaccruing and potential problem loans and net charge-offs, the company determined that a $12.0 million provision for credit losses was appropriate for the third quarter of 2019. The company recorded a $5.0 million provision for credit losses in the second quarter of 2019.

The combined allowance for credit losses totaled $206 million or 0.92 percent of outstanding loans and 124 percent of nonaccruing loans at September 30, 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 1.02 percent of outstanding loans and 130 percent of nonaccruing loans at September 30, 2019 compared to 1.03 percent of outstanding loans and 126 percent of nonaccruing loans at June 30, 2019. The allowance for loan losses was $204 million and the accrual for off-balance sheet credit losses was $1.4 million. At June 30, 2019, the combined allowance for credit losses was $204 million or 0.92 percent of outstanding loans and 115 percent of nonaccruing loans, excluding loans guaranteed by U.S. government agencies. The allowance for loan losses was $203 million and the accrual for off-balance sheet credit losses was $1.9 million.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $11.0 billion at September 30, 2019, a $510 million increase compared to June 30, 2019. At September 30, 2019, the available for sale securities portfolio consisted primarily of $7.7 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 September 30, 2019, the available for sale securities portfolio had a net unrealized gain of $178 million compared to $132 million at June 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 increased $678 million to $1.8 billion at September 30, 2019.

The net economic cost of the changes in fair value of mortgage servicing rights and related economic hedges was $3.0 million during the third quarter of 2019, including a $12.6 million decrease in the fair value of mortgage servicing rights, an $8.3 million increase in the fair value of securities and derivative contracts held as an economic hedge, and $1.2 million of related net interest revenue.

Commercial Banking

Net income for Commercial Banking was $101.6 million for the third quarter of 2019, a decrease of $5.4 million compared to the second quarter of 2019.

Net interest revenue decreased $5.5 million largely as a result of a decrease in interest recoveries on loans paired with a change in the mix of deposits from non-interest bearing to interest bearing. Average loans increased $414 million or 2 percent while average customer deposits increased $109 million or 1 percent.

Fees and commissions revenue increased $5.1 million over the second quarter of 2019. Loan syndication revenue increased $1.9 million based on the timing of completed transactions. Operating expense increased $5.7 million. Personnel expense increased $1.4 million primarily due to incentive compensation related to syndication activity.  Non-personnel expense increased $4.3 million. Other revenue increased $3.3 million, offset by an increase in repossession expense of $2.4 million, largely due to expenses related to repossessed assets on certain oil and gas properties.

Consumer Banking

Net income from Consumer Banking was $16.6 million in the third quarter of 2019, consistent with the second quarter of 2019.

Net interest revenue from Consumer Banking activities decreased $4.3 million largely due to decrease in the yield on deposits sold to our Funds Management unit. Average loans decreased $23 million or 1 percent and average deposits were relatively consistent with the previous quarter.

Revenues from mortgage banking activities increased $2.0 million over the prior quarter due to lower interest rates which have led to an increase in mortgage production and improved gain on sale margin.

Operating expenses increased $2.0 million. Mortgage banking costs increased $3.4 million related to increased payoffs as mortgage interest rates declined during the quarter. This increase was partially offset by a decrease in business promotion expense and personnel expense

Wealth Management

Net income for Wealth Management decreased $2.3 million to $23.2 million during the third quarter of 2019.

Net interest revenue decreased $3.9 million primarily due to a change in deposit mix to interest bearing deposits along with an increase in unsettled securities receivables. Brokerage and trading revenue increased $3.0 million due to higher trading activity and volumes as a result of interest rate changes. Operating expenses increased $2.2 million, largely related to an increase in incentive compensation.

Average loans increased $23 million to $1.7 billion. Average deposits increased $369 million to $6.6 billion, primarily due to an increase in interest-bearing transaction account balances. Assets under management or administration were $80.8 billion at September 30, 2019 compared to $81.8 billion at June 30, 2019. Fiduciary assets totaled $49.3 billion at September 30, 2019 and $49.3 billion at June 30, 2019.

Conference Call and Webcast

The company will hold a conference call at 9 a.m. Central time on Wednesday, October 23, 2019 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 # 13695151.

About BOK Financial Corporation

BOK Financial Corporation is a $43 billion regional financial services company headquartered in Tulsa, Oklahoma with $81 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 Arkansas; Bank of Oklahoma; Bank of Texas; BOK Financial in Colorado and Arizona; and Mobank in 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 September 30, 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. There may also be difficulties and delays in integrating CoBiz Financial Inc.'s business or fully realizing cost savings and other benefits including, but not limited to, business disruption and customer acceptance of BOK Financial Corporation's products and services. BOK Financial and its affiliates undertake no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events, or otherwise.

Contact:
Cody McAlester
Phone Number: +1 918-295-0486
Email: cmcalester@bokf.com

BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
  Sept. 30, 2019   June 30, 2019
ASSETS      
Cash and due from banks $ 761,130     $ 739,109  
Interest-bearing cash and cash equivalents 465,458     596,382  
Trading securities 1,675,212     1,900,395  
Investment securities 304,224     327,677  
Available for sale securities 11,024,551     10,514,414  
Fair value option securities 1,816,398     1,138,819  
Restricted equity securities 479,018     461,017  
Residential mortgage loans held for sale 282,487     193,570  
Loans:      
Commercial 14,424,625     14,336,908  
Commercial real estate 4,626,057     4,710,033  
Residential mortgage 2,117,303     2,170,822  
Personal 1,117,382     1,037,889  
Total loans 22,285,367     22,255,652  
Allowance for loan losses (204,432 )   (202,534 )
Loans, net of allowance 22,080,935     22,053,118  
Premises and equipment, net 516,597     468,368  
Receivables 219,420     213,608  
Goodwill 1,048,091     1,048,091  
Intangible assets, net 124,320     124,473  
Mortgage servicing rights 193,661     208,308  
Real estate and other repossessed assets, net 21,026     16,940  
Derivative contracts, net 352,019     415,221  
Cash surrender value of bank-owned life insurance 387,035     384,193  
Receivable on unsettled securities sales 904,630     583,421  
Other assets 470,993     505,949  
TOTAL ASSETS $ 43,127,205     $ 41,893,073  
       
LIABILITIES AND EQUITY      
Deposits:      
Demand $ 9,844,397     $ 9,667,557  
Interest-bearing transaction 13,521,545     12,851,943  
Savings 557,593     557,683  
Time 2,243,541     2,227,938  
Total deposits 26,167,076     25,305,121  
Funds purchased and repurchase agreements 3,413,051     2,331,947  
Other borrowings 6,822,334     7,823,809  
Subordinated debentures 275,909     275,892  
Accrued interest, taxes and expense 218,775     181,413  
Due on unsettled securities purchases 703,448     565,268  
Derivative contracts, net 336,791     381,454  
Other liabilities 352,156     309,694  
TOTAL LIABILITIES 38,289,540     37,174,598  
Shareholders' equity:      
Capital, surplus and retained earnings 4,695,263     4,610,869  
Accumulated other comprehensive gain 133,753     98,569  
TOTAL SHAREHOLDERS' EQUITY 4,829,016     4,709,438  
Non-controlling interests 8,649     9,037  
TOTAL EQUITY 4,837,665     4,718,475  
TOTAL LIABILITIES AND EQUITY $ 43,127,205     $ 41,893,073  


AVERAGE BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
  Three Months Ended
  Sept. 30, 2019   June 30, 2019   Mar. 31, 2019   Dec. 31, 2018   Sept. 30, 2018
ASSETS                  
Interest-bearing cash and cash equivalents $ 500,823     $ 535,491     $ 537,903     $ 563,132     $ 688,872  
Trading securities 1,696,568     1,757,335     1,968,399     1,929,601     1,762,794  
Investment securities 308,090     328,482     343,282     364,737     379,566  
Available for sale securities 10,747,439     9,435,668     8,883,054     8,704,963     8,129,214  
Fair value option securities 1,553,879     898,772     594,349     277,575     469,398  
Restricted equity securities 476,781     413,812     395,432     362,729     328,842  
Residential mortgage loans held for sale 203,319     192,102     145,040     179,553     207,488  
Loans:                  
Commercial 14,507,185     14,175,057     13,966,521     13,587,344     11,484,200  
Commercial real estate 4,652,534     4,656,861     4,602,149     4,747,784     3,774,470  
Residential mortgage 2,129,421     2,146,315     2,193,334     2,222,063     1,956,089  
Personal 1,123,778     1,026,172     1,004,061     1,022,140     989,026  
Total loans 22,412,918     22,004,405     21,766,065     21,579,331     18,203,785  
Allowance for loan losses (201,714 )   (205,532 )   (206,092 )   (209,613 )   (214,160 )
Total loans, net 22,211,204     21,798,873     21,559,973     21,369,718     17,989,625  
Total earning assets 37,698,103     35,360,535     34,427,432     33,752,008     29,955,799  
Cash and due from banks 717,338     703,294     705,411     731,700     578,905  
Derivative contracts, net 331,834     328,802     262,927     299,319     294,126  
Cash surrender value of bank-owned life insurance 385,190     384,974     382,538     379,893     322,038  
Receivable on unsettled securities sales 1,742,794     1,437,462     1,224,700     799,548     768,785  
Other assets 2,705,089     2,629,710     2,669,673     2,423,275     1,776,164  
TOTAL ASSETS $ 43,580,348     $ 40,844,777     $ 39,672,681     $ 38,385,743     $ 33,695,817  
                   
LIABILITIES AND EQUITY                  
Deposits:                  
Demand $ 9,759,710     $ 9,883,965     $ 9,988,088     $ 10,648,683     $ 9,325,002  
Interest-bearing transaction 13,131,542     12,512,282     11,931,539     11,773,651     10,010,031  
Savings 557,122     558,738     541,575     526,275     503,821  
Time 2,251,800     2,207,391     2,153,277     2,146,786     2,097,441  
Total deposits 25,700,174     25,162,376     24,614,479     25,095,395     21,936,295  
Funds purchased and repurchase agreements 3,106,163     2,066,950     2,033,036     1,205,568     1,193,583  
Other borrowings 8,125,023     7,175,617     7,040,279     6,361,141     5,765,440  
Subordinated debentures 275,900     275,887     275,882     276,378     144,702  
Derivative contracts, net 300,051     283,484     273,786     268,848     185,029  
Due on unsettled securities purchases 745,893     821,688     453,937     493,887     544,263  
Other liabilities 547,144     460,732     501,788     341,438     311,605  
TOTAL LIABILITIES 38,800,348     36,246,734     35,193,187     34,042,655     30,080,917  
Total equity 4,780,000     4,598,043     4,479,494     4,343,088     3,614,900  
TOTAL LIABILITIES AND EQUITY $ 43,580,348     $ 40,844,777     $ 39,672,681     $ 38,385,743     $ 33,695,817  


STATEMENTS OF EARNINGS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except per share data)
  Three Months Ended   Nine Months Ended
  September 30,   September 30,
  2019   2018   2019   2018
               
Interest revenue $ 395,207     $ 303,247     $ 1,162,101     $ 862,834  
Interest expense 116,111     62,364     319,471     163,653  
Net interest revenue 279,096     240,883     842,630     699,181  
Provision for credit losses 12,000     4,000     25,000     (1,000 )
Net interest revenue after provision for credit losses 267,096     236,883     817,630     700,181  
Other operating revenue:              
Brokerage and trading revenue 43,840     23,086     115,983     80,222  
Transaction card revenue 22,015     21,396     64,668     63,361  
Fiduciary and asset management revenue 43,621     57,514     132,004     141,038  
Deposit service charges and fees 28,837     27,765     85,154     82,760  
Mortgage banking revenue 30,180     23,536     82,145     75,907  
Other revenue 17,626     12,900     42,825     39,781  
Total fees and commissions 186,119     166,197     522,779     483,069  
Other gains, net 4,544     2,754     11,000     6,040  
Gain (loss) on derivatives, net 3,778     (2,847 )   19,595     (11,589 )
Gain (loss) on fair value option securities, net 4,597     (4,385 )   24,115     (25,290 )
Change in fair value of mortgage servicing rights (12,593 )   5,972     (62,814 )   28,901  
Gain (loss) on available for sale securities, net 5     250     1,110     (802 )
Total other operating revenue 186,450     167,941     515,785     480,329  
Other operating expense:              
Personnel 162,573     143,531     492,143     422,425  
Business promotion 8,859     7,620     26,875     21,316  
Charitable contributions to BOKF Foundation         1,000      
Professional fees and services 12,312     13,209     41,453     38,387  
Net occupancy and equipment 27,558     23,394     83,959     70,201  
Insurance 4,220     6,232     15,513     19,070  
Data processing and communications 31,915     31,665     93,099     87,221  
Printing, postage and supplies 3,825     3,837     12,817     11,937  
Net losses and operating expenses of repossessed assets 1,728     4,044     4,304     14,471  
Amortization of intangible assets 5,064     1,603     15,393     4,289  
Mortgage banking costs 14,975     11,741     36,426     34,780  
Other expense 6,263     5,741     20,604     19,426  
Total other operating expense 279,292     252,617     843,586     743,523  
               
Net income before taxes 174,254     152,207     489,829     436,987  
Federal and state income taxes 32,396     34,662     99,926     98,940  
               
Net income 141,858     117,545     389,903     338,047  
Net income (loss) attributable to non-controlling interests (373 )   289     (503 )   857  
Net income attributable to BOK Financial Corporation shareholders $ 142,231     $ 117,256     $ 390,406     $ 337,190  
               
Average shares outstanding:              
Basic 70,596,307     64,901,095     70,953,544     64,883,319  
Diluted 70,609,924     64,934,351     70,968,845     64,919,728  
               
Net income per share:              
Basic $ 2.00     $ 1.79     $ 5.47     $ 5.15  
Diluted $ 2.00     $ 1.79     $ 5.47     $ 5.15  


FINANCIAL HIGHLIGHTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and share data)
  Three Months Ended
  Sept. 30, 2019   June 30, 2019   Mar. 31, 2019   Dec. 31, 2018   Sept. 30, 2018
Capital:                  
Period-end shareholders' equity $ 4,829,016     $ 4,709,438     $ 4,522,873     $ 4,432,109     $ 3,615,032  
Risk weighted assets $ 32,159,139     $ 32,040,741     $ 31,601,558     $ 30,742,295     $ 27,398,072  
Risk-based capital ratios:                  
Common equity tier 1 11.06 %   10.84 %   10.71 %   10.92 %   12.07 %
Tier 1 11.06 %   10.84 %   10.71 %   10.92 %   12.07 %
Total capital 12.56 %   12.34 %   12.24 %   12.50 %   13.37 %
Leverage ratio 8.41 %   8.75 %   8.76 %   8.96 %   9.90 %
Tangible common equity ratio1 8.72 %   8.69 %   8.64 %   8.82 %   9.55 %
                   
Common stock:                  
Book value per share $ 68.15     $ 66.15     $ 63.30     $ 61.45     $ 55.25  
Tangible book value per share 51.60     49.68     46.82     45.03     47.90  
Market value per share:                  
High $ 84.35     $ 88.17     $ 93.72     $ 98.29     $ 105.22  
Low $ 72.96     $ 72.60     $ 72.11     $ 69.96     $ 92.40  
Cash dividends paid $ 35,472     $ 35,631     $ 35,885     $ 35,977     $ 32,591  
Dividend payout ratio 24.94 %   25.90 %   32.44 %   33.17 %   27.79 %
Shares outstanding, net 70,858,010     71,193,770     71,449,982     72,122,932     65,434,258  
Stock buy-back program:                  
Shares repurchased 336,713     250,000     705,609     525,000      
Amount $ 25,937     $ 20,125     $ 60,577     $ 45,057     $  
Average price per share $ 77.03     $ 80.50     $ 85.85     $ 85.82     $  
                   
Performance ratios (quarter annualized):
Return on average assets 1.29 %   1.35 %   1.13 %   1.12 %   1.38 %
Return on average equity 11.83 %   12.02 %   10.04 %   9.93 %   12.95 %
Net interest margin 3.01 %   3.30 %   3.30 %   3.40 %   3.21 %
Efficiency ratio 59.31 %   59.51 %   64.80 %   63.25 %   61.60 %
                   
Reconciliation of non-GAAP measures:
1  Tangible common equity ratio:                  
Total shareholders' equity $ 4,829,016     $ 4,709,438     $ 4,522,873     $ 4,432,109     $ 3,615,032  
Less: Goodwill and intangible assets, net 1,172,411     1,172,564     1,177,573     1,184,112     480,800  
Tangible common equity $ 3,656,605     $ 3,536,874     $ 3,345,300     $ 3,247,997     $ 3,134,232  
                   
Total assets $ 43,127,205     $ 41,893,073     $ 39,882,962     $ 38,020,504     $ 33,289,864  
Less: Goodwill and intangible assets, net 1,172,411     1,172,564     1,177,573     1,184,112     480,800  
Tangible assets $ 41,954,794     $ 40,720,509     $ 38,705,389     $ 36,836,392     $ 32,809,064  
                   
Tangible common equity ratio 8.72 %   8.69 %   8.64 %   8.82 %   9.55 %
                   
Other data:                  
Tax equivalent interest $ 2,936     $ 3,481     $ 2,529     $ 3,067     $ 1,894  
Net unrealized gain (loss) on available for sale securities $ 178,060     $ 131,780     $ (2,609 )   $ (95,271 )   $ (216,793 )
                   
Mortgage banking:                  
Mortgage production revenue $ 13,814     $ 11,869     $ 7,868     $ 5,073     $ 7,250  
                   
Mortgage loans funded for sale $ 877,280     $ 729,841     $ 510,527     $ 497,353     $ 651,076  
Add: current period-end outstanding commitments 379,377     344,087     263,434     160,848     197,752  
Less: prior period end outstanding commitments 344,087     263,434     160,848     197,752     251,231  
Total mortgage production volume $ 912,570     $ 810,494     $ 613,113     $ 460,449     $ 597,597  
                   
Mortgage loan refinances to mortgage loans funded for sale 56 %   31 %   30 %   23 %   23 %
Gain on sale margin 1.51 %   1.46 %   1.28 %   1.10 %   1.21 %
                   
Mortgage servicing revenue $ 16,366     $ 16,262     $ 15,966     $ 16,807     $ 16,286  
Average outstanding principal balance of mortgage loans serviced for others 21,172,874     21,418,690     21,581,835     21,706,541     21,895,041  
Average mortgage servicing revenue rates 0.31 %   0.30 %   0.30 %   0.31 %   0.30 %
                   
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net $ 3,742     $ 11,128     $ 4,432     $ 12,162     $ (2,843 )
Gain (loss) on fair value option securities, net 4,597     9,853     9,665     (282 )   (4,385 )
Gain (loss) on economic hedge of mortgage servicing rights 8,339     20,981     14,097     11,880     (7,228 )
Gain (loss) on changes in fair value of mortgage servicing rights (12,593 )   (29,555 )   (20,666 )   (24,233 )   5,972  
Loss on changes in fair value of mortgage servicing rights, net of economic hedges,
 included in other operating revenue
(4,254 )   (8,574 )   (6,569 )   (12,353 )   (1,256 )
Net interest revenue on fair value option securities2 1,245     1,296     1,129     695     1,100  
Total economic cost of changes in the fair value of mortgage servicing rights,
 net of economic hedges
$ (3,009 )   $ (7,278 )   $ (5,440 )   $ (11,658 )   $ (156 )

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


QUARTERLY EARNINGS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and per share data)
  Three Months Ended
  Sept. 30, 2019   June 30, 2019   Mar. 31, 2019   Dec. 31, 2018   Sept. 30, 2018
                   
Interest revenue $ 395,207     $ 390,820     $ 376,074     $ 365,592     $ 303,247  
Interest expense 116,111     105,388     97,972     79,906     62,364  
Net interest revenue 279,096     285,432     278,102     285,686     240,883  
Provision for credit losses 12,000     5,000     8,000     9,000     4,000  
Net interest revenue after provision for credit losses 267,096     280,432     270,102     276,686     236,883  
Other operating revenue:                  
Brokerage and trading revenue 43,840     40,526     31,617     28,101     23,086  
Transaction card revenue 22,015     21,915     20,738     20,664     21,396  
Fiduciary and asset management revenue 43,621     45,025     43,358     43,665     57,514  
Deposit service charges and fees 28,837     28,074     28,243     29,393     27,765  
Mortgage banking revenue 30,180     28,131     23,834     21,880     23,536  
Other revenue 17,626     12,437     12,762     16,404     12,900  
Total fees and commissions 186,119     176,108     160,552     160,107     166,197  
Other gains (losses), net 4,544     3,480     2,976     (8,305 )   2,754  
Gain (loss) on derivatives, net 3,778     11,150     4,667     11,167     (2,847 )
Gain (loss) on fair value option securities, net 4,597     9,853     9,665     (282 )   (4,385 )
Change in fair value of mortgage servicing rights (12,593 )   (29,555 )   (20,666 )   (24,233 )   5,972  
Gain (loss) on available for sale securities, net 5     1,029     76     (1,999 )   250  
Total other operating revenue 186,450     172,065     157,270     136,455     167,941  
Other operating expense:                  
Personnel 162,573     160,342     169,228     160,706     143,531  
Business promotion 8,859     10,142     7,874     9,207     7,620  
Charitable contributions to BOKF Foundation     1,000         2,846      
Professional fees and services 12,312     13,002     16,139     20,712     13,209  
Net occupancy and equipment 27,558     26,880     29,521     27,780     23,394  
Insurance 4,220     6,454     4,839     4,248     6,232  
Data processing and communications 31,915     29,735     31,449     27,575     31,665  
Printing, postage and supplies 3,825     4,107     4,885     5,232     3,837  
Net losses and operating expenses of repossessed assets 1,728     580     1,996     2,581     4,044  
Amortization of intangible assets 5,064     5,138     5,191     5,331     1,603  
Mortgage banking costs 14,975     11,545     9,906     11,518     11,741  
Other expense 6,263     8,212     6,129     6,907     5,741  
Total other operating expense 279,292     277,137     287,157     284,643     252,617  
Net income before taxes 174,254     175,360     140,215     128,498     152,207  
Federal and state income taxes 32,396     37,580     29,950     20,121     34,662  
Net income 141,858     137,780     110,265     108,377     117,545  
Net income (loss) attributable to non-controlling interests (373 )   217     (347 )   (79 )   289  
Net income attributable to BOK Financial Corporation shareholders $ 142,231     $ 137,563     $ 110,612     $ 108,456     $ 117,256  
                   
Average shares outstanding:                  
Basic 70,596,307     70,887,063     71,387,070     71,808,029     64,901,095  
Diluted 70,609,924     70,902,033     71,404,388     71,833,334     64,934,351  
Net income per share:                  
Basic $ 2.00     $ 1.93     $ 1.54     $ 1.50     $ 1.79  
Diluted $ 2.00     $ 1.93     $ 1.54     $ 1.50     $ 1.79  


LOANS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
    Sept. 30, 2019   June 30, 2019   Mar. 31, 2019   Dec. 31, 2018   Sept. 30, 2018
Commercial:                    
Energy   $ 4,114,269     $ 3,921,353     $ 3,705,099     $ 3,590,333     $ 3,294,867  
Services   3,266,249     3,309,458     3,287,563     3,258,192     2,603,862  
Healthcare   3,032,968     2,926,510     2,915,885     2,799,277     2,437,323  
Wholesale/retail   1,848,617     1,793,118     1,706,900     1,621,158     1,650,729  
Public finance   744,840     795,659     803,083     804,550     418,578  
Manufacturing   698,408     761,357     742,374     730,521     660,582  
Other commercial and industrial   719,274     829,453     801,071     832,047     510,160  
Total commercial   14,424,625     14,336,908     13,961,975     13,636,078     11,576,101  
                     
Commercial real estate:                    
Multifamily   1,324,839     1,300,372     1,210,358     1,288,065     1,120,166  
Office   1,014,275     1,056,306     1,033,158     1,072,920     824,829  
Retail   799,169     825,399     890,685     919,082     759,423  
Industrial   873,536     828,569     767,757     778,106     696,774  
Residential construction and land development   135,361     141,509     149,686     148,584     101,872  
Other commercial real estate   478,877     557,878     549,007     558,056     301,611  
Total commercial real estate   4,626,057     4,710,033     4,600,651     4,764,813     3,804,675  
                     
Residential mortgage:                    
Permanent mortgage   1,066,460     1,088,370     1,098,481     1,122,610     1,094,926  
Permanent mortgages guaranteed by U.S. government agencies   191,764     195,373     193,308     190,866     180,718  
Home equity   859,079     887,079     900,831     916,557     696,098  
Total residential mortgage   2,117,303     2,170,822     2,192,620     2,230,033     1,971,742  
                     
Personal   1,117,382     1,037,889     1,003,734     1,025,806     996,941  
                     
Total   $ 22,285,367     $ 22,255,652     $ 21,758,980     $ 21,656,730     $ 18,349,459  


LOANS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
  Sept. 30, 2019   June 30, 2019   Mar. 31, 2019   Dec. 31, 2018   Sept. 30, 2018
                   
Oklahoma:                  
Commercial $ 3,690,100     $ 3,762,234     $ 3,551,054     $ 3,491,117     $ 3,609,109  
Commercial real estate 679,786     717,970     665,190     700,756     651,315  
Residential mortgage 1,370,452     1,403,398     1,417,381     1,440,566     1,429,843  
Personal 383,246     382,764     374,807     375,543     376,201  
Total Oklahoma 6,123,584     6,266,366     6,008,432     6,007,982     6,066,468  
                   
Texas:                  
Commercial 6,220,227     5,877,265     5,754,018     5,438,133     5,115,646  
Commercial real estate 1,292,116     1,341,609     1,344,810     1,341,783     1,354,679  
Residential mortgage 273,931     272,878     265,927     266,805     253,265  
Personal 475,430     400,585     396,794     394,743     381,452  
Total Texas 8,261,704     7,892,337     7,761,549     7,441,464     7,105,042  
                   
New Mexico:                  
Commercial 335,409     350,520     342,915     340,489     325,048  
Commercial real estate 374,331     385,058     371,416     383,670     392,494  
Residential mortgage 81,383     82,390     85,326     87,346     88,110  
Personal 10,887     10,236     11,065     10,662     11,659  
Total New Mexico 802,010     828,204     810,722     822,167     817,311  
                   
Arkansas:                  
Commercial 87,588     87,896     79,286     111,338     102,237  
Commercial real estate 158,538     149,300     142,551     141,898     106,701  
Residential mortgage 7,509     7,463     7,731     7,537     7,278  
Personal 10,905     11,208     11,550     11,955     12,126  
Total Arkansas 264,540     255,867     241,118     272,728     228,342  
                   
Colorado:                  
Commercial 2,247,798     2,325,742     2,231,703     2,275,069     1,132,500  
Commercial real estate 975,066     1,023,410     957,348     963,575     354,543  
Residential mortgage 224,872     241,780     241,722     251,849     68,694  
Personal 78,733     72,537     65,812     72,916     56,999  
Total Colorado 3,526,469     3,663,469     3,496,585     3,563,409     1,612,736  
                   
Arizona:                  
Commercial 1,276,534     1,330,415     1,335,140     1,320,139     621,658  
Commercial real estate 771,425     761,243     791,466     889,903     666,562  
Residential mortgage 92,121     91,684     98,973     97,959     44,659  
Personal 78,694     76,335     61,875     68,546     67,280  
Total Arizona 2,218,774     2,259,677     2,287,454     2,376,547     1,400,159  
                   
Kansas/Missouri:                  
Commercial 566,969     602,836     667,859     659,793     669,903  
Commercial real estate 374,795     331,443     327,870     343,228     278,381  
Residential mortgage 67,035     71,229     75,560     77,971     79,893  
Personal 79,487     84,224     81,831     91,441     91,224  
Total Kansas/Missouri 1,088,286     1,089,732     1,153,120     1,172,433     1,119,401  
                   
TOTAL BOK FINANCIAL $ 22,285,367     $ 22,255,652     $ 21,758,980     $ 21,656,730     $ 18,349,459  

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


DEPOSITS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
  Sept. 30, 2019   June 30, 2019   Mar. 31, 2019   Dec. 31, 2018   Sept. 30, 2018
Oklahoma:                  
  Demand $ 3,515,312     $ 3,279,359     $ 3,432,239     $ 3,610,593     $ 3,564,307  
  Interest-bearing:                  
  Transaction 7,447,799     7,020,484     6,542,548     6,445,831     6,010,972  
  Savings 308,103     307,785     309,875     288,210     288,080  
  Time 1,198,170     1,253,804     1,217,371     1,118,643     1,128,810  
  Total interest-bearing 8,954,072     8,582,073     8,069,794     7,852,684     7,427,862  
Total Oklahoma 12,469,384     11,861,432     11,502,033     11,463,277     10,992,169  
                   
Texas:                  
  Demand 2,870,429     2,974,005     2,966,743     3,291,433     3,357,669  
  Interest-bearing:                  
  Transaction 2,589,511     2,453,619     2,385,305     2,295,169     2,182,114  
  Savings 100,597     103,125     101,849     99,624     97,909  
  Time 464,264     425,253     419,269     423,880     453,119  
  Total interest-bearing 3,154,372     2,981,997     2,906,423     2,818,673     2,733,142  
Total Texas 6,024,801     5,956,002     5,873,166     6,110,106     6,090,811  
                   
New Mexico:                  
  Demand 645,698     630,861     662,362     691,692     722,188  
  Interest-bearing:                  
  Transaction 539,260     557,881     573,203     571,347     593,760  
  Savings 62,863     62,636     61,497     58,194     57,794  
  Time 236,135     232,569     228,212     224,515     221,513  
  Total interest-bearing 838,258     853,086     862,912     854,056     873,067  
Total New Mexico 1,483,956     1,483,947     1,525,274     1,545,748     1,595,255  
                   
Arkansas:                  
  Demand 39,513     29,176     31,624     36,800     36,579  
  Interest-bearing:                  
  Transaction 149,506     148,485     147,964     91,593     128,001  
  Savings 1,747     1,783     1,785     1,632     1,826  
  Time 7,877     7,810     8,321     8,726     10,214  
  Total interest-bearing 159,130     158,078     158,070     101,951     140,041  
Total Arkansas 198,643     187,254     189,694     138,751     176,620  
                   
Colorado:                  
  Demand 1,694,044     1,621,820     1,897,547     1,658,473     593,442  
  Interest-bearing:                  
  Transaction 1,910,874     1,800,271     1,844,632     1,899,203     622,520  
  Savings 60,107     57,263     58,919     57,289     40,308  
  Time 273,622     246,198     261,235     274,877     217,628  
  Total interest-bearing 2,244,603     2,103,732     2,164,786     2,231,369     880,456  
Total Colorado 3,938,647     3,725,552     4,062,333     3,889,842     1,473,898  
                   
                   
                   
Arizona:                  
  Demand 703,381     700,480     695,238     707,402     365,878  
  Interest-bearing:                  
  Transaction 599,655     560,429     621,735     575,567     130,105  
  Savings 12,487     11,966     12,144     10,545     3,559  
  Time 44,347     43,099     44,004     43,051     23,927  
  Total interest-bearing 656,489     615,494     677,883     629,163     157,591  
Total Arizona 1,359,870     1,315,974     1,373,121     1,336,565     523,469  
                   
Kansas/Missouri:                  
  Demand 376,020     431,856     410,799     418,199     423,560  
  Interest-bearing:                  
  Transaction 284,940     310,774     361,590     327,866     322,747  
  Savings 11,689     13,125     13,815     13,721     13,125  
  Time 19,126     19,205     19,977     19,688     20,635  
  Total interest-bearing 315,755     343,104     395,382     361,275     356,507  
Total Kansas/Missouri 691,775     774,960     806,181     779,474     780,067  
                   
TOTAL BOK FINANCIAL $ 26,167,076     $ 25,305,121     $ 25,331,802     $ 25,263,763     $ 21,632,289  



NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
  Three Months Ended
  Sept. 30, 2019   June 30, 2019   Mar. 31, 2019   Dec. 31, 2018   Sept. 30, 2018
                   
TAX-EQUIVALENT ASSETS YIELDS                  
Interest-bearing cash and cash equivalents 2.42 %   2.57 %   2.56 %   2.23 %   1.98 %
Trading securities 3.49 %   3.59 %   3.88 %   4.10 %   3.98 %
Investment securities 4.46 %   4.41 %   4.50 %   4.26 %   4.06 %
Available for sale securities 2.60 %   2.63 %   2.57 %   2.51 %   2.37 %
Fair value option securities 2.79 %   3.34 %   3.62 %   3.56 %   3.25 %
Restricted equity securities 6.34 %   6.30 %   6.42 %   6.39 %   6.36 %
Residential mortgage loans held for sale 3.73 %   3.65 %   4.58 %   4.00 %   4.27 %
Loans 5.12 %   5.39 %   5.26 %   5.09 %   4.80 %
Allowance for loan losses                  
Loans, net of allowance 5.17 %   5.45 %   5.31 %   5.14 %   4.86 %
Total tax-equivalent yield on earning assets 4.25 %   4.51 %   4.46 %   4.33 %   4.04 %
                   
COST OF INTEREST-BEARING LIABILITIES                
Interest-bearing deposits:                  
  Interest-bearing transaction 1.08 %   1.04 %   0.94 %   0.79 %   0.67 %
  Savings 0.14 %   0.12 %   0.12 %   0.11 %   0.09 %
  Time 1.94 %   1.90 %   1.80 %   1.54 %   1.40 %
Total interest-bearing deposits 1.17 %   1.13 %   1.04 %   0.87 %   0.77 %
Funds purchased and repurchase agreements 2.01 %   2.08 %   2.07 %   1.36 %   1.25 %
Other borrowings 2.42 %   2.67 %   2.68 %   2.51 %   2.20 %
Subordinated debt 5.48 %   5.53 %   5.51 %   5.38 %   5.55 %
Total cost of interest-bearing liabilities 1.68 %   1.70 %   1.66 %   1.42 %   1.25 %
Tax-equivalent net interest revenue spread 2.57 %   2.81 %   2.80 %   2.91 %   2.79 %
Effect of noninterest-bearing funding sources and other 0.44 %   0.49 %   0.50 %   0.49 %   0.42 %
Tax-equivalent net interest margin 3.01 %   3.30 %   3.30 %   3.40 %   3.21 %

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.

CREDIT QUALITY INDICATORS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratios)
  Three Months Ended
  Sept. 30, 2019   June 30, 2019   Mar. 31, 2019   Dec. 31, 2018   Sept. 30, 2018
Nonperforming assets:                  
Nonaccruing loans:                  
Commercial $ 111,706     $ 123,395     $ 90,358     $ 99,841     $ 109,490  
Commercial real estate 23,185     21,670     21,508     21,621     1,316  
Residential mortgage 37,304     38,477     40,409     41,555     41,917  
Personal 271     237     302     230     269  
Total nonaccruing loans 172,466     183,779     152,577     163,247     152,992  
Accruing renegotiated loans guaranteed by U.S. government agencies 92,718     95,989     91,787     86,428     83,347  
Real estate and other repossessed assets 21,026     16,940     17,139     17,487     24,515  
Total nonperforming assets $ 286,210     $ 296,708     $ 261,503     $ 267,162     $ 260,854  
Total nonperforming assets excluding those guaranteed by U.S. government agencies $ 187,160     $ 193,976     $ 162,770     $ 173,602     $ 169,717  
                   
Nonaccruing loans by loan class:                  
Commercial:                  
Energy $ 88,894     $ 71,632     $ 35,332     $ 47,494     $ 54,033  
Services 6,119     10,087     9,555     8,567     4,097  
Healthcare 5,978     16,148     18,768     16,538     15,704  
Manufacturing 8,741     8,613     9,548     8,919     9,202  
Wholesale/retail 1,504     1,390     1,425     1,316     9,249  
Public finance                  
Other commercial and industrial 470     15,525     15,730     17,007     17,205  
Total commercial 111,706     123,395     90,358     99,841     109,490  
Commercial real estate:                  
Retail 20,132     20,057     20,159     20,279     777  
Residential construction and land development 350     350     350     350     350  
Multifamily 286     275         301      
Office 855     855     855          
Industrial 909                  
Other commercial real estate 653     133     144     691     189  
Total commercial real estate 23,185     21,670     21,508     21,621     1,316  
Residential mortgage:                  
Permanent mortgage 20,165     21,803     22,937     23,951     22,855  
Permanent mortgage guaranteed by U.S. government agencies 6,332     6,743     6,946     7,132     7,790  
Home equity 10,807     9,931     10,526     10,472     11,272  
Total residential mortgage 37,304     38,477     40,409     41,555     41,917  
Personal 271     237     302     230     269  
Total nonaccruing loans $ 172,466     $ 183,779     $ 152,577     $ 163,247     $ 152,992  
                   
Performing loans 90 days past due1 $ 1,541     $ 2,698     $ 610     $ 1,338     $ 518  
                   
Gross charge-offs $ 11,707     $ 13,227     $ 11,775     $ 14,515     $ 11,073  
Recoveries (1,066 )   (5,503 )   (1,689 )   (2,168 )   (2,092 )
Net charge-offs $ 10,641     $ 7,724     $ 10,086     $ 12,347     $ 8,981  
                   
Provision for credit losses $ 12,000     $ 5,000     $ 8,000     $ 9,000     $ 4,000  
                   
Allowance for loan losses to period end loans 0.92 %   0.91 %   0.94 %   0.96 %   1.15 %
Combined allowance for credit losses to period end loans 0.92 %   0.92 %   0.95 %   0.97 %   1.16 %
Nonperforming assets to period end loans and repossessed assets 1.28 %   1.33 %   1.20 %   1.23 %   1.42 %
Net charge-offs (annualized) to average loans 0.19 %   0.14 %   0.19 %   0.23 %   0.20 %
Allowance for loan losses to nonaccruing loans1 123.05 %   114.40 %   141.00 %   132.89 %   145.02 %
Combined allowance for credit losses to nonaccruing loans1 123.87 %   115.48 %   142.25 %   134.03 %   146.41 %

1 Excludes residential mortgage loans guaranteed by agencies of the U.S. government.


SEGMENTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratios)
    Three Months Ended   Change
Commercial Banking   Sept. 30, 2019   June 30, 2019   Sept. 30, 2018   3Q19 vs 2Q19   3Q19 vs 3Q18
Net interest revenue   $ 180,147     $ 185,614     $ 145,147     (2.9 )%   24.1 %
Fees and commissions revenue   46,159     41,105     39,391     12.3 %   17.2 %
Other operating expense   68,685     62,947     51,039     9.1 %   34.6 %
Corporate expense allocations   12,613     11,385     9,124     10.8 %   38.2 %
Net income   101,573     106,935     84,964     (5.0 )%   19.5 %
                     
Average assets   23,973,067     22,910,071     18,499,979     4.6 %   29.6 %
Average loans   19,226,347     18,812,800     15,321,600     2.2 %   25.5 %
Average deposits   10,833,057     10,724,206     8,633,204     1.0 %   25.5 %
                     
Consumer Banking                    
Net interest revenue   $ 48,462     $ 52,715     $ 39,044     (8.1 )%   24.1 %
Fees and commissions revenue   51,460     48,830     44,039     5.4 %   16.9 %
Other operating expense   59,699     57,694     58,482     3.5 %   2.1 %
Corporate expense allocations   11,776     11,695     11,037     0.7 %   6.7 %
Net income   16,640     16,342     8,015     1.8 %   107.6 %
                     
Average assets   9,827,130     9,212,667     8,323,543     6.7 %   18.1 %
Average loans   1,773,831     1,796,823     1,719,679     (1.3 )%   3.1 %
Average deposits   6,983,018     6,998,677     6,580,395     (0.2 )%   6.1 %
                     
Wealth Management                    
Net interest revenue   $ 23,066     $ 26,941     $ 28,776     (14.4 )%   (19.8 )%
Fees and commissions revenue   89,422     85,925     83,562     4.1 %   7.0 %
Other operating expense   71,619     69,452     62,256     3.1 %   15.0 %
Corporate expense allocations   9,416     9,168     11,127     2.7 %   (15.4 )%
Net income   23,206     25,544     28,866     (9.2 )%   (19.6 )%
                     
Average assets   10,392,988     9,849,396     8,498,363     5.5 %   22.3 %
Average loans   1,671,102     1,647,680     1,439,774     1.4 %   16.1 %
Average deposits   6,590,332     6,220,848     5,492,048     5.9 %   20.0 %
Fiduciary assets   49,259,697     49,296,896     45,560,107     (0.1 )%   8.1 %
Assets under management or administration   80,796,949     81,774,602     77,628,015     (1.2 )%   4.1 %

Acquired assets and liabilities were allocated to segments in the second quarter of 2019.

 

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