TULSA, Okla., July 27, 2016 (GLOBE NEWSWIRE) — BOK Financial Corporation (NASDAQ:BOKF) reported net income of $65.8 million or $1.00 per diluted share for the second quarter of 2016. Net income was $42.6 million or $0.64 per diluted share for the first quarter of 2016 and $79.2 million or $1.15 per diluted share for the second quarter of 2015.
Steven G. Bradshaw, president and chief executive officer, stated, “It was a solid quarter for the company, with very strong loan growth and record fee and commission revenue led by brokerage and trading, fiduciary and asset management, and transaction processing. In addition, stability in the commodity price environment translated into lower credit costs for the quarter and reduced concern about spillover impact on the economies in energy states such as Oklahoma, Texas, and Colorado. We continue to see strong growth opportunities across our footprint, and reflecting our confidence, we continued with our stock buyback program during the quarter.”
Stacy Kymes, executive vice president, Corporate Banking, added, “We continue to be fully committed to the energy business and our energy customers. During the quarter we provided $172 million of new loan commitments to 20 new borrowers in the industry, and year to date we have provided $254 million of new loan commitments to 35 new borrowers. Energy lending is core to our DNA, and our experience in previous commodity cycles has shown that is a profitable business, and when approached in a consistent and disciplined manner, losses during down cycles are manageable. This long term view has served us well, and today we remain well-positioned in the industry with a complete service offering, world-class energy lending team, and enviable customer base.”
Second Quarter 2016 Highlights
- Net interest revenue totaled $182.6 million for the second quarter of 2016, unchanged compared to the first quarter of 2016. Net interest margin was 2.63 percent for the second quarter of 2016, compared to 2.65 percent for the first quarter of 2016. Average earning assets increased $246 million during the second quarter of 2016, primarily related to a $271 million increase in average loan balances.
- Fees and commissions revenue totaled $183.5 million for the second quarter of 2016, an increase of $17.9 million over the prior quarter. Brokerage and trading revenue was up $7.2 million and mortgage banking revenue grew by $3.8 million. Fiduciary and asset management revenue increased $2.8 million and transaction card revenue increased $2.6 million.
- Changes in the fair value of mortgage servicing rights, net of economic hedges, decreased pre-tax net income by $1.2 million in the second quarter of 2016 and decreased pre-tax net income $11.4 million in the first quarter of 2016. Hedge coverage was increased during the second quarter.
- Operating expense was $254.7 million for the second quarter, an increase of $9.8 million over the previous quarter. Personnel expense increased $6.6 million, primarily due to revenue-driven incentive compensation. Non-personnel expense increased $3.2 million. Mortgage banking expense, professional fees and services expense, intangible asset amortization and business promotion expense increased over the prior quarter. Non-personnel expense in the first quarter of 2016 included $6.8 million of expense related to several litigation accruals and a post-acquisition valuation adjustment.
- A $20.0 million provision for credit losses was recorded in the second quarter of 2016 compared to a $35.0 million provision in the first quarter of 2016. The decrease in the provision for credit losses was due to improving credit metric trends, largely driven by energy price stability. Net loans charged off totaled $7.5 million in the second quarter of 2016, compared to $22.5 million in the previous quarter.
- The combined allowance for credit losses totaled $252 million or 1.54 percent of outstanding loans at June 30, 2016 compared to $240 million or 1.50 percent of outstanding loans at March 31, 2016. The portion of the combined allowance attributed to the energy portfolio totaled 3.58 percent of outstanding energy loans at June 30, 2016, an increase from 3.19 percent of outstanding energy loans at March 31, 2016.
- Nonperforming assets that are not guaranteed by U.S. government agencies totaled $251 million or 1.55 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at June 30, 2016 and $252 million or 1.59 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at March 31, 2016. Nonperforming energy loans increased $8.6 million during the second quarter.
- Average loans increased by $271 million over the previous quarter, primarily due to an increase in commercial real estate loans. Period-end outstanding loan balances increased $384 million to $16.4 billion at June 30, 2016. Commercial loans increased $68.0 million as growth across most loan classes was partially offset by a $210.8 million decrease in outstanding energy loans.
- Average deposits decreased $159 million compared to the previous quarter primarily due to decreased interest-bearing transaction account balances. Growth in demand deposit balances was offset by a decrease in time deposits. Period-end deposits were $20.8 billion at June 30, 2016, an increase of $341 million from March 31, 2016.
- The common equity Tier 1 capital ratio at June 30, 2016 was 11.86 percent. Other regulatory capital ratios were Tier 1 capital ratio, 11.86 percent, total capital ratio, 13.51 percent and leverage ratio, 9.06 percent. At March 31, 2016, the common equity Tier 1 capital ratio was 12.00 percent, the Tier 1 capital ratio was 12.00 percent, total capital ratio was 13.21 percent, and leverage ratio was 9.12 percent. The total capital ratio was supported by the issuance of $150 million of 40 year, fixed rate subordinated debt during the second quarter.
- The company paid a regular quarterly cash dividend of $28 million or $0.43 per common share during the second quarter of 2016. On July 26, 2016, the board of directors approved a quarterly cash dividend of $0.43 per common share payable on or about August 26, 2016 to shareholders of record as of August 12, 2016.
- The company repurchased 305,169 common shares at an average price of $58.23 per share during the second quarter of 2016. No shares were repurchased during the first quarter of 2016.
Net Interest Revenue
Net interest revenue was $182.6 million for the second quarter of 2016, unchanged compared to the first quarter of 2016.
Net interest margin was 2.63 percent for the second quarter of 2016, a decrease of 2 basis points compared to the first quarter of 2016. The yield on average earning assets was 2.91 percent, a decrease of 1 basis point. The loan portfolio yield increased 1 basis point to 3.58 percent. The yield on the available for sale securities portfolio decreased 4 basis points to 2.04 percent. In addition, the yield on average earning assets decreased 1 basis point due to a governmental policy decision to reduce dividends paid on Federal Reserve Bank stock. Funding costs were 0.41 percent, up 1 basis point.
Average earning assets increased $246 million during the second quarter of 2016. Average loan balances increased $271 million, primarily due to growth in commercial real estate balances. Average interest-bearing deposit balances decreased $215 million compared to the first quarter of 2016. The average balance of borrowed funds increased $399 million.
Fees and Commissions Revenue
Fees and commissions revenue totaled $183.5 million for the second quarter of 2016, an increase of $17.9 million over the first quarter of 2016.
Brokerage and trading revenue increased $7.2 million. Customer hedging revenue increased $4.6 million primarily due to increased volumes of contracts with our mortgage banking and energy customers. Investment banking revenue grew by $2.9 million primarily due to growth in loan syndication fees and bond underwriting fees, which are both dependent on the timing and volume of completed transactions.
Mortgage banking revenue totaled $38.2 million for the second quarter of 2016, a $3.8 million increase over the first quarter of 2016. Revenue from mortgage loan production increased $3.4 million due to growth in the volume of mortgage loans sold and mortgage loan commitments during the quarter. Average primary mortgage interest rates were 15 basis points lower than in the first quarter of 2016. Total mortgage loans originated during the second quarter increased $575 million or 46 percent over the prior quarter. Outstanding mortgage loan commitments at June 30 increased $63 million or 7 percent over March 31.
Fiduciary and asset management revenue increased $2.8 million largely due to an annual assessment of tax preparation fees and growth in assets under management. Transaction card revenue increased $2.6 million primarily due to a seasonal increase in transaction volumes along with a customer early termination fee.
Operating Expense
Total operating expense was $254.7 million for the second quarter of 2016, an increase of $9.8 million over the first quarter of 2016.
Personnel expense increased by $6.6 million over the first quarter of 2016 primarily due to an increase in incentive compensation expense. Revenue-driven cash-based incentive compensation increased $4.5 million. Share-based compensation expense increased $1.7 million primarily due to an increase in BOKF stock price. In addition, increased regular compensation expense and employee healthcare costs were offset by a decrease in payroll tax expense.
Non-personnel expense increased $3.2 million over the first quarter of 2016. Mortgage banking expense increased $3.4 million primarily from increased prepayments of loans serviced for others due to lower mortgage interest rates. Professional fees and services expense increased $2.4 million due largely to the annual cost of wealth management customer tax preparation services and costs incurred in preparation for the mobank acquisition. Business promotion expense had a seasonal increase of $1.0 million over the prior quarter. The $1.5 million increase in intangible asset amortization expense was from an adjustment to a consolidated merchant-banking investment.
Other expense decreased $7.2 million compared to the prior quarter. The first quarter of 2016 included $4.1 million of litigation accruals and a $2.7 million post-acquisition valuation adjustment to a consolidated merchant banking investment.
Loans, Deposits and Capital
Loans
Outstanding loans were $16.4 billion at June 30, 2016, an increase of $384 million over the previous quarter, primarily due to growth in commercial real estate. Personal, commercial and residential mortgage loan balances also grew over the prior quarter.
Outstanding commercial loan balances increased $68 million over March 31, 2016. Service sector loans increased $102 million and wholesale/retail sector loans increased $81 million. Healthcare sector loans grew by $56 million and other commercial and industrial loans increased $45 million. As expected, energy loan balances decreased $211 million compared to March 31, 2016. Unfunded energy loan commitments decreased by $161 million during the second quarter to $1.9 billion.
Commercial real estate loans grew by $211 million over March 31, 2016. Loans secured by industrial facilities grew by $81 million primarily in the Oklahoma, Texas and Arizona markets. Loans secured by office buildings increased $74 million primarily in the Texas and Arizona markets. Multifamily residential loans increased $54 million. Growth in other commercial real estate balances was offset by a decrease in retail sector and residential construction and land development loan balances.
Deposits
Period-end deposits totaled $20.8 billion at June 30, 2016, an increase of $341 million over March 31, 2016. Demand deposit balances grew by $474 million, partially offset by a $94 million decrease in time deposits and a $41 million decrease in interest-bearing transaction deposit balances. Among the lines of business, Wealth Management deposits grew by $522 million over March 31, 2016. Consumer Banking deposits decreased $89 million and Commercial Banking deposits decreased $62 million. The overall decrease in Commercial Banking deposits was due to decreased balances held by our commercial and industrial customers, partially offset by increases in balances held by our energy, commercial real estate and small business customers.
Capital
The company’s common equity Tier 1 capital ratio was 11.86 percent at June 30, 2016. In addition, the company’s Tier 1 capital ratio was 11.86 percent, total capital ratio was 13.51 percent and leverage ratio was 9.06 percent at June 30, 2016. At March 31, 2016, the company’s common equity Tier 1 capital ratio was 12.00 percent, Tier 1 capital ratio was 12.00 percent, total capital ratio was 13.21 percent, and leverage ratio was 9.12 percent.
During the second quarter BOK Financial issued $150 million of 40 year, 5.375 percent fixed rate subordinated debt. The debt is callable at any time after 5 years. Proceeds of the debt increased the total capital ratio by 60 basis points.
The company’s tangible common equity ratio, a non-GAAP measure, was 9.33 percent at June 30, 2016 and 9.34 percent at March 31, 2016. The tangible common equity ratio is primarily based on total shareholders’ equity which includes unrealized gains and losses on available for sale securities. The company has elected to exclude unrealized gains and losses from available for sale securities from its calculation of Tier 1 capital for regulatory capital purposes, consistent with the treatment under the previous capital rules.
Credit Quality
Nonperforming assets totaled $350 million or 2.13 percent of outstanding loans and repossessed assets at June 30, 2016 compared to $349 million or 2.18 percent at March 31, 2016. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $251 million or 1.55 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at June 30, 2016 compared to $252 million or 1.59 percent at March 31, 2016.
Nonaccruing loans totaled $247 million or 1.51 percent of outstanding loans at June 30, 2016, compared to $242 million or 1.51 percent of outstanding loans at March 31, 2016. The increase in nonaccruing loans was primarily due to an $8.6 million increase in nonaccruing energy loans. New nonaccruing loans identified in the second quarter totaled $33 million, offset by $12 million in payments received, $8.8 million in charge-offs and $3.2 million in foreclosures and repossessions. At June 30, 2016, nonaccruing commercial loans totaled $182 million or 1.76 percent of outstanding commercial loans, nonaccruing commercial real estate loans totaled $7.8 million or 0.22 percent of outstanding commercial real estate loans and nonaccruing residential mortgage loans totaled $57 million or 3.03 percent of outstanding residential mortgage loans.
Potential problem loans, which are defined as performing loans that based on known information cause management concern as to the borrowers’ ability to continue to perform, increased to $501 million at June 30 from $460 million at March 31. The increase largely resulted from an $18 million increase in potential problem energy loans.
Net loans charged off totaled $7.5 million for the second quarter of 2016, compared to $22.5 million in the first quarter of 2016. Gross charge-offs totaled $8.8 million for the second quarter, compared to $24.0 million for the previous quarter. Charge-offs in both the second and first quarters largely came from the energy loan portfolio. Recoveries totaled $1.4 million for the second quarter of 2016 and $1.5 million for the first quarter of 2016.
After evaluating all credit factors, the company recorded a $20.0 million provision for credit losses during the second quarter of 2016. The company recorded a $35.0 million provision for credit losses in the previous quarter. The lower provision reflects improvement in credit metrics over the previous quarter, largely driven by energy price stability and decreased rates of newly identified nonaccruing and potential problem loans.
The combined allowance for credit losses totaled $252 million or 1.54 percent of outstanding loans and 111 percent of nonaccruing loans at June 30, 2016. The allowance for loan losses was $243 million and the accrual for off-balance sheet credit losses was $9.0 million.
Energy Portfolio Credit Quality
The company’s $2.8 billion energy portfolio consists of 79 percent of loans to exploration and production companies, 9 percent to energy services companies and 12 percent to midstream and other energy borrowers. Substantially all of the loans to exploration and production companies are secured by first lien positions in established energy reserves. Only $10 million of these loans are in junior lien positions. None represent higher-risk mezzanine financing or subordinated debt and none are high-yield debt.
The company completed an energy loan portfolio redetermination during the second quarter. The redetermination supported that $136 million of impaired energy loans required no allowance for credit losses based on the adequacy of collateral, including $123 million that are current on all payments due. At June 30, 2016, the portion of the combined allowance for credit losses attributed to the energy portfolio totaled $101 million or 3.58 percent of outstanding energy loans.
Marc Maun, chief credit officer, noted, “We are pleased to see energy asset quality stabilize in the second quarter. Total criticized energy loans decreased from the first quarter and charge-offs were down significantly. We recognize that macroeconomic factors may result in additional pressure on commodity prices but we are pleased with how our portfolio has performed through the extended energy downturn.”
Securities and Derivatives
The fair value of the available for sale securities portfolio totaled $8.8 billion at June 30, 2016, a $55 million decrease compared to March 31, 2016. At June 30, 2016, the available for sale portfolio consisted primarily of $5.7 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $2.9 billion of commercial mortgage-backed securities fully backed by U.S. government agencies.
At June 30, 2016, the available for sale securities portfolio had a net unrealized gain of $195 million compared to a net unrealized gain of $155 million at March 31, 2016. The increase in net unrealized gain was primarily due to changes in interest rates during the quarter. Net unrealized gains on residential mortgage-backed securities issued by U.S. government agencies at June 30, 2016 increased $19 million during the second quarter to $123 million. Commercial mortgage-backed securities had a net unrealized gain of $58 million at June 30, 2016, up from $38 million at March 31, 2016.
In the second quarter of 2016, the company recognized $5.3 million of net gains from sales of $326 million of available for sale securities. Securities were sold either because they had reached their expected maximum potential return or to move into securities that will perform better in the current rate environment. The company recognized $4.0 million of net gains from sales of $469 million of available for sale securities in the first quarter of 2016.
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. Changes in the fair value of mortgage servicing rights are highly dependent on primary mortgage interest rates offered to borrowers and other factors. Changes in the fair value of securities and interest rate derivatives are highly dependent on secondary mortgage rates, or rates required by investors. Changes in the spread between primary and secondary mortgage rates cannot be effectively hedged and can cause significant earnings volatility.
The fair value of mortgage servicing rights decreased by $16.3 million during the second quarter of 2016 as primary mortgage rates fell during the quarter. The fair value of securities and interest rate derivative contracts held as an economic hedge increased by $15.0 million during the quarter due to a decrease in average secondary mortgage and interest rate swap rates. Hedge coverage was increased during the second quarter to improve its effectiveness. The fair value of mortgage servicing rights, net of economic hedges, decreased $11.4 million in the first quarter of 2016, primarily due to falling primary residential mortgage interest rates and we narrowed the forward-looking spread between primary mortgage interest rates and yields on mortgage-backed securities.
Conference Call and Webcast
The company will hold a conference call at 9 a.m. Central time on Wednesday, July 27, 2016 to discuss the financial results with investors. The live audio webcast and presentation slides will be available on the company’s website at www.bokf.com. The conference call can also be accessed by dialing 1-412-902-6611. A conference call and webcast replay will also be available shortly after conclusion of the live call at www.bokf.com or by dialing 1-412-317-0088 and referencing conference ID # 10088478.
About BOK Financial Corporation
BOK Financial Corporation is a $32 billion regional financial services company based in Tulsa, Oklahoma. The company’s stock is publicly traded on NASDAQ under the Global Select market listings (symbol: BOKF). BOK Financial’s holdings include BOKF, NA, BOK Financial Securities, Inc. and The Milestone Group, Inc. BOKF, NA operates TransFund, Cavanal Hill Investment Management, BOK Financial Asset Management, Inc. and seven banking divisions: Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas and Colorado State Bank and Trust. Through its subsidiaries, the company provides commercial and consumer banking, investment and trust services, mortgage origination and servicing, and an electronic funds transfer network. For more information, visit www.bokf.com.
The company will continue to evaluate critical assumptions and estimates, such as the appropriateness of the allowance for credit losses and asset impairment as of June 30, 2016 through the date its financial statements are filed with the Securities and Exchange Commission and will adjust amounts reported if necessary.
This news release contains forward-looking statements that are based on management’s beliefs, assumptions, current expectations, estimates and projections about BOK Financial, the financial services industry and the economy generally. Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “plans,” “projects,” “will,” “intends,” variations of such words and similar expressions are intended to identify such forward-looking statements. Management judgments relating to and discussion of the provision and allowance for credit losses, allowance for uncertain tax positions, accruals for loss contingencies and valuation of mortgage servicing rights involve judgments as to expected events and are inherently forward-looking statements. Assessments that BOK Financial’s acquisitions and other growth endeavors will be profitable are necessary statements of belief as to the outcome of future events based in part on information provided by others which BOK Financial has not independently verified. These statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions which are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what is expected, implied or forecasted in such forward-looking statements. Internal and external factors that might cause such a difference include, but are not limited to changes in commodity prices, interest rates and interest rate relationships, demand for products and services, the degree of competition by traditional and nontraditional competitors, changes in banking regulations, tax laws, prices, levies and assessments, the impact of technological advances, and trends in customer behavior as well as their ability to repay loans. BOK Financial and its affiliates undertake no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events, or otherwise.
| BALANCE SHEETS — UNAUDITED BOK FINANCIAL CORPORATION (In thousands) |
||||||||||||
| June 30, 2016 | Mar. 31, 2016 | June 30, 2015 | ||||||||||
| ASSETS | ||||||||||||
| Cash and due from banks | $ | 498,713 | $ | 481,510 | $ | 443,577 | ||||||
| Interest-bearing cash and cash equivalents | 1,907,838 | 1,831,162 | 2,119,072 | |||||||||
| Trading securities | 211,622 | 279,539 | 158,209 | |||||||||
| Investment securities | 560,711 | 576,047 | 625,664 | |||||||||
| Available for sale securities | 8,830,689 | 8,886,036 | 9,000,117 | |||||||||
| Fair value option securities | 263,265 | 418,887 | 436,324 | |||||||||
| Restricted equity securities | 319,639 | 314,590 | 231,520 | |||||||||
| Residential mortgage loans held for sale | 430,728 | 332,040 | 502,571 | |||||||||
| Loans: | ||||||||||||
| Commercial | 10,356,437 | 10,288,425 | 9,775,721 | |||||||||
| Commercial real estate | 3,581,966 | 3,370,507 | 3,033,497 | |||||||||
| Residential mortgage | 1,880,923 | 1,869,309 | 1,884,728 | |||||||||
| Personal | 587,423 | 494,325 | 430,190 | |||||||||
| Total loans | 16,406,749 | 16,022,566 | 15,124,136 | |||||||||
| Allowance for loan losses | (243,259 | ) | (233,156 | ) | (201,087 | ) | ||||||
| Loans, net of allowance | 16,163,490 | 15,789,410 | 14,923,049 | |||||||||
| Premises and equipment, net | 315,199 | 311,161 | 284,238 | |||||||||
| Receivables | 173,638 | 167,209 | 149,629 | |||||||||
| Goodwill | 382,739 | 383,789 | 385,454 | |||||||||
| Intangible assets, net | 43,372 | 44,944 | 46,061 | |||||||||
| Mortgage servicing rights | 190,747 | 196,055 | 198,694 | |||||||||
| Real estate and other repossessed assets, net | 24,054 | 29,896 | 35,499 | |||||||||
| Derivative contracts, net | 883,673 | 790,146 | 630,435 | |||||||||
| Cash surrender value of bank-owned life insurance | 307,860 | 305,510 | 298,606 | |||||||||
| Receivable on unsettled securities sales | 142,820 | 5,640 | 8,693 | |||||||||
| Other assets | 319,653 | 270,374 | 248,151 | |||||||||
| TOTAL ASSETS | $ | 31,970,450 | $ | 31,413,945 | $ | 30,725,563 | ||||||
| LIABILITIES AND EQUITY | ||||||||||||
| Deposits: | ||||||||||||
| Demand | $ | 8,424,609 | $ | 7,950,675 | $ | 8,156,401 | ||||||
| Interest-bearing transaction | 9,668,869 | 9,709,766 | 9,899,777 | |||||||||
| Savings | 419,262 | 416,505 | 379,172 | |||||||||
| Time | 2,247,061 | 2,341,374 | 2,624,379 | |||||||||
| Total deposits | 20,759,801 | 20,418,320 | 21,059,729 | |||||||||
| Funds purchased | 56,780 | 62,755 | 64,677 | |||||||||
| Repurchase agreements | 472,683 | 630,101 | 712,033 | |||||||||
| Other borrowings | 5,830,736 | 5,633,862 | 4,332,162 | |||||||||
| Subordinated debentures | 371,812 | 226,385 | 226,278 | |||||||||
| Accrued interest, taxes and expense | 197,742 | 148,711 | 124,568 | |||||||||
| Due on unsettled securities purchases | 11,757 | 19,508 | 37,571 | |||||||||
| Derivative contracts, net | 719,159 | 705,578 | 620,277 | |||||||||
| Other liabilities | 147,242 | 212,460 | 135,435 | |||||||||
| TOTAL LIABILITIES | 28,567,712 | 28,057,680 | 27,312,730 | |||||||||
| Shareholders’ equity: | ||||||||||||
| Capital, surplus and retained earnings | 3,251,201 | 3,228,446 | 3,323,840 | |||||||||
| Accumulated other comprehensive income | 117,632 | 93,109 | 51,792 | |||||||||
| TOTAL SHAREHOLDERS’ EQUITY | 3,368,833 | 3,321,555 | 3,375,632 | |||||||||
| Non-controlling interests | 33,905 | 34,710 | 37,201 | |||||||||
| TOTAL EQUITY | 3,402,738 | 3,356,265 | 3,412,833 | |||||||||
| TOTAL LIABILITIES AND EQUITY | $ | 31,970,450 | $ | 31,413,945 | $ | 30,725,563 | ||||||
| AVERAGE BALANCE SHEETS — UNAUDITED BOK FINANCIAL CORPORATION (in thousands) |
||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| June 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sept. 30, 2015 | June 30, 2015 | ||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Interest-bearing cash and cash equivalents | $ | 2,022,028 | $ | 2,052,840 | $ | 1,995,945 | $ | 2,038,611 | $ | 2,002,456 | ||||||||||
| Trading securities | 237,808 | 188,100 | 150,402 | 179,098 | 127,391 | |||||||||||||||
| Investment securities | 562,391 | 587,465 | 602,369 | 616,091 | 628,489 | |||||||||||||||
| Available for sale securities | 8,890,112 | 8,951,435 | 8,971,090 | 8,942,261 | 9,063,006 | |||||||||||||||
| Fair value option securities | 368,434 | 450,478 | 435,449 | 429,951 | 435,294 | |||||||||||||||
| Restricted equity securities | 319,136 | 294,529 | 262,461 | 255,610 | 221,911 | |||||||||||||||
| Residential mortgage loans held for sale | 401,114 | 289,743 | 310,425 | 401,359 | 464,269 | |||||||||||||||
| Loans: | ||||||||||||||||||||
| Commercial | 10,265,782 | 10,268,793 | 10,024,756 | 9,685,768 | 9,634,306 | |||||||||||||||
| Commercial real estate | 3,550,611 | 3,364,076 | 3,186,629 | 3,198,200 | 2,989,615 | |||||||||||||||
| Residential mortgage | 1,864,458 | 1,865,742 | 1,835,195 | 1,847,696 | 1,857,464 | |||||||||||||||
| Personal | 582,281 | 493,382 | 540,418 | 460,647 | 423,967 | |||||||||||||||
| Total loans | 16,263,132 | 15,991,993 | 15,586,998 | 15,192,311 | 14,905,352 | |||||||||||||||
| Allowance for loan losses | (245,448 | ) | (234,116 | ) | (207,156 | ) | (202,829 | ) | (198,400 | ) | ||||||||||
| Total loans, net | 16,017,684 | 15,757,877 | 15,379,842 | 14,989,482 | 14,706,952 | |||||||||||||||
| Total earning assets | 28,818,707 | 28,572,467 | 28,107,983 | 27,852,463 | 27,649,768 | |||||||||||||||
| Cash and due from banks | 507,085 | 505,522 | 514,629 | 487,283 | 492,737 | |||||||||||||||
| Derivative contracts, net | 823,584 | 632,102 | 657,780 | 669,264 | 475,687 | |||||||||||||||
| Cash surrender value of bank-owned life insurance | 306,318 | 304,141 | 301,793 | 299,424 | 297,022 | |||||||||||||||
| Receivable on unsettled securities sales | 49,568 | 115,101 | 62,228 | 64,591 | 94,374 | |||||||||||||||
| Other assets | 1,480,780 | 1,379,138 | 1,435,763 | 1,396,708 | 1,454,484 | |||||||||||||||
| TOTAL ASSETS | $ | 31,986,042 | $ | 31,508,471 | $ | 31,080,176 | $ | 30,769,733 | $ | 30,464,072 | ||||||||||
| LIABILITIES AND EQUITY | ||||||||||||||||||||
| Deposits: | ||||||||||||||||||||
| Demand | $ | 8,162,134 | $ | 8,105,756 | $ | 8,312,961 | $ | 7,994,607 | $ | 7,996,717 | ||||||||||
| Interest-bearing transaction | 9,590,855 | 9,756,843 | 9,527,491 | 9,760,839 | 10,063,589 | |||||||||||||||
| Savings | 417,122 | 397,479 | 382,284 | 379,828 | 381,833 | |||||||||||||||
| Time | 2,297,621 | 2,366,543 | 2,482,714 | 2,557,874 | 2,651,820 | |||||||||||||||
| Total deposits | 20,467,732 | 20,626,621 | 20,705,450 | 20,693,148 | 21,093,959 | |||||||||||||||
| Funds purchased | 70,682 | 112,211 | 73,220 | 70,281 | 63,312 | |||||||||||||||
| Repurchase agreements | 611,264 | 662,640 | 623,921 | 672,085 | 773,977 | |||||||||||||||
| Other borrowings | 6,076,028 | 5,583,917 | 4,957,175 | 4,779,981 | 4,001,479 | |||||||||||||||
| Subordinated debentures | 232,795 | 226,368 | 226,332 | 226,296 | 307,903 | |||||||||||||||
| Derivative contracts, net | 791,313 | 544,722 | 632,699 | 597,908 | 455,431 | |||||||||||||||
| Due on unsettled securities purchases | 93,812 | 158,050 | 248,811 | 90,135 | 151,369 | |||||||||||||||
| Other liabilities | 298,170 | 268,705 | 251,953 | 240,704 | 235,173 | |||||||||||||||
| TOTAL LIABILITIES | 28,641,796 | 28,183,234 | 27,719,561 | 27,370,538 | 27,082,603 | |||||||||||||||
| Total equity | 3,344,246 | 3,325,237 | 3,360,615 | 3,399,195 | 3,381,469 | |||||||||||||||
| TOTAL LIABILITIES AND EQUITY | $ | 31,986,042 | $ | 31,508,471 | $ | 31,080,176 | $ | 30,769,733 | $ | 30,464,072 | ||||||||||
| STATEMENTS OF EARNINGS — UNAUDITED BOK FINANCIAL CORPORATION (in thousands, except per share data) |
|||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||
| June 30, | June 30, | ||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||||
| Interest revenue | $ | 202,267 | $ | 191,813 | $ | 404,063 | $ | 376,382 | |||||||||
| Interest expense | 19,655 | 16,082 | 38,879 | 32,925 | |||||||||||||
| Net interest revenue | 182,612 | 175,731 | 365,184 | 343,457 | |||||||||||||
| Provision for credit losses | 20,000 | 4,000 | 55,000 | 4,000 | |||||||||||||
| Net interest revenue after provision for credit losses | 162,612 | 171,731 | 310,184 | 339,457 | |||||||||||||
| Other operating revenue: | |||||||||||||||||
| Brokerage and trading revenue | 39,530 | 36,012 | 71,871 | 67,719 | |||||||||||||
| Transaction card revenue | 34,950 | 32,778 | 67,304 | 63,788 | |||||||||||||
| Fiduciary and asset management revenue | 34,813 | 32,712 | 66,869 | 64,181 | |||||||||||||
| Deposit service charges and fees | 22,618 | 22,328 | 45,160 | 44,012 | |||||||||||||
| Mortgage banking revenue | 38,224 | 36,846 | 72,654 | 76,166 | |||||||||||||
| Other revenue | 13,352 | 11,871 | 25,256 | 22,672 | |||||||||||||
| Total fees and commissions | 183,487 | 172,547 | 349,114 | 338,538 | |||||||||||||
| Other gains, net | 1,307 | 1,457 | 2,867 | 2,212 | |||||||||||||
| Gain (loss) on derivatives, net | 10,766 | (1,032 | ) | 17,904 | (121 | ) | |||||||||||
| Gain (loss) on fair value option securities, net | 4,279 | (8,130 | ) | 13,722 | (5,483 | ) | |||||||||||
| Change in fair value of mortgage servicing rights | (16,283 | ) | 8,010 | (44,271 | ) | (512 | ) | ||||||||||
| Gain on available for sale securities, net | 5,326 | 3,433 | 9,290 | 7,760 | |||||||||||||
| Total other-than-temporary impairment losses | — | — | — | (781 | ) | ||||||||||||
| Portion of loss recognized in other comprehensive income | — | — | — | 689 | |||||||||||||
| Net impairment losses recognized in earnings | — | — | — | (92 | ) | ||||||||||||
| Total other operating revenue | 188,882 | 176,285 | 348,626 | 342,302 | |||||||||||||
| Other operating expense: | |||||||||||||||||
| Personnel | 142,490 | 132,695 | 278,333 | 261,243 | |||||||||||||
| Business promotion | 6,703 | 7,765 | 12,399 | 13,513 | |||||||||||||
| Professional fees and services | 14,158 | 9,560 | 25,917 | 19,619 | |||||||||||||
| Net occupancy and equipment | 19,677 | 18,927 | 38,443 | 37,971 | |||||||||||||
| Insurance | 7,129 | 5,116 | 14,394 | 10,096 | |||||||||||||
| Data processing and communications | 32,802 | 30,655 | 64,819 | 60,427 | |||||||||||||
| Printing, postage and supplies | 3,889 | 3,553 | 7,796 | 7,014 | |||||||||||||
| Net losses and operating expenses of repossessed assets | 1,588 | 223 | 2,658 | 836 | |||||||||||||
| Amortization of intangible assets | 2,624 | 1,090 | 3,783 | 2,180 | |||||||||||||
| Mortgage banking costs | 15,809 | 8,227 | 28,188 | 18,394 | |||||||||||||
| Other expense | 7,856 | 9,302 | 22,895 | 16,085 | |||||||||||||
| Total other operating expense | 254,725 | 227,113 | 499,625 | 447,378 | |||||||||||||
| Net income before taxes | 96,769 | 120,903 | 159,185 | 234,381 | |||||||||||||
| Federal and state income taxes | 30,497 | 40,630 | 51,925 | 79,014 | |||||||||||||
| Net income | 66,272 | 80,273 | 107,260 | 155,367 | |||||||||||||
| Net income (loss) attributable to non-controlling interests | 471 | 1,043 | (1,105 | ) | 1,294 | ||||||||||||
| Net income attributable to BOK Financial Corporation shareholders | $ | 65,801 | $ | 79,230 | $ | 108,365 | $ | 154,073 | |||||||||
| Average shares outstanding: | |||||||||||||||||
| Basic | 65,245,887 | 68,096,341 | 65,271,214 | 68,175,327 | |||||||||||||
| Diluted | 65,302,927 | 68,210,353 | 65,317,177 | 68,277,386 | |||||||||||||
| Net income per share: | |||||||||||||||||
| Basic | $ | 1.00 | $ | 1.15 | $ | 1.64 | $ | 2.23 | |||||||||
| Diluted | $ | 1.00 | $ | 1.15 | $ | 1.64 | $ | 2.23 | |||||||||
| FINANCIAL HIGHLIGHTS — UNAUDITED BOK FINANCIAL CORPORATION (in thousands, except ratio and share data) |
||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| June 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sept. 30, 2015 | June 30, 2015 | ||||||||||||||||
| Capital: | ||||||||||||||||||||
| Period-end shareholders’ equity | $ | 3,368,833 | $ | 3,321,555 | $ | 3,230,556 | $ | 3,377,226 | $ | 3,375,632 | ||||||||||
| Risk weighted assets | $ | 24,191,016 | $ | 23,707,824 | $ | 23,429,897 | $ | 22,706,537 | $ | 22,533,295 | ||||||||||
| Risk-based capital ratios: | ||||||||||||||||||||
| Common equity tier 1 | 11.86 | % | 12.00 | % | 12.13 | % | 12.78 | % | 13.01 | % | ||||||||||
| Tier 1 | 11.86 | % | 12.00 | % | 12.13 | % | 12.78 | % | 13.01 | % | ||||||||||
| Total capital | 13.51 | % | 13.21 | % | 13.30 | % | 13.89 | % | 14.11 | % | ||||||||||
| Leverage ratio | 9.06 | % | 9.12 | % | 9.25 | % | 9.55 | % | 9.75 | % | ||||||||||
| Tangible common equity ratio1 | 9.33 | % | 9.34 | % | 9.02 | % | 9.78 | % | 9.72 | % | ||||||||||
| Common stock: | ||||||||||||||||||||
| Book value per share | $ | 51.15 | $ | 50.21 | $ | 49.03 | $ | 49.88 | $ | 48.96 | ||||||||||
| Tangible book value per share | 44.68 | 43.73 | 42.51 | 43.52 | 42.70 | |||||||||||||||
| Market value per share: | ||||||||||||||||||||
| High | $ | 65.14 | $ | 60.16 | $ | 74.73 | $ | 70.26 | $ | 71.66 | ||||||||||
| Low | $ | 51.00 | $ | 43.74 | $ | 58.25 | $ | 57.04 | $ | 59.59 | ||||||||||
| Cash dividends paid | $ | 28,241 | $ | 28,294 | $ | 28,967 | $ | 28,766 | $ | 28,841 | ||||||||||
| Dividend payout ratio | 42.92 | % | 66.47 | % | 48.60 | % | 38.41 | % | 36.40 | % | ||||||||||
| Shares outstanding, net | 65,866,317 | 66,155,103 | 65,894,032 | 67,713,031 | 68,945,139 | |||||||||||||||
| Stock buy-back program: | ||||||||||||||||||||
| Shares repurchased | 305,169 | — | 1,874,074 | 1,258,348 | — | |||||||||||||||
| Amount | $ | 17,771 | $ | — | $ | 119,780 | $ | 80,276 | $ | — | ||||||||||
| Average price per share | $ | 58.23 | $ | — | $ | 63.91 | $ | 63.79 | $ | — | ||||||||||
| Performance ratios (quarter annualized): | ||||||||||||||||||||
| Return on average assets | 0.83 | % | 0.54 | % | 0.76 | % | 0.97 | % | 1.04 | % | ||||||||||
| Return on average equity | 8.00 | % | 5.21 | % | 7.12 | % | 8.84 | % | 9.50 | % | ||||||||||
| Net interest margin | 2.63 | % | 2.65 | % | 2.64 | % | 2.61 | % | 2.61 | % | ||||||||||
| Efficiency ratio | 68.45 | % | 69.05 | % | 67.93 | % | 64.34 | % | 64.21 | % | ||||||||||
| Reconciliation of non-GAAP measures: | ||||||||||||||||||||
| 1 Tangible common equity ratio: | ||||||||||||||||||||
| Total shareholders’ equity | $ | 3,368,833 | $ | 3,321,555 | $ | 3,230,556 | $ | 3,377,226 | $ | 3,375,632 | ||||||||||
| Less: Goodwill and intangible assets, net | 426,111 | 428,733 | 429,370 | 430,460 | 431,515 | |||||||||||||||
| Tangible common equity | $ | 2,942,722 | $ | 2,892,822 | $ | 2,801,186 | $ | 2,946,766 | $ | 2,944,117 | ||||||||||
| Total assets | $ | 31,970,450 | $ | 31,413,945 | $ | 31,476,128 | $ | 30,566,905 | $ | 30,725,563 | ||||||||||
| Less: Goodwill and intangible assets, net | 426,111 | 428,733 | 429,370 | 430,460 | 431,515 | |||||||||||||||
| Tangible assets | $ | 31,544,339 | $ | 30,985,212 | $ | 31,046,758 | $ | 30,136,445 | $ | 30,294,048 | ||||||||||
| Tangible common equity ratio | 9.33 | % | 9.34 | % | 9.02 | % | 9.78 | % | 9.72 | % | ||||||||||
| Other data: | ||||||||||||||||||||
| Fiduciary assets | $ | 39,924,734 | $ | 39,113,305 | $ | 38,333,638 | $ | 37,780,669 | $ | 38,772,018 | ||||||||||
| Tax equivalent adjustment | $ | 4,372 | $ | 4,385 | $ | 3,222 | $ | 3,244 | $ | 3,035 | ||||||||||
| Net unrealized gain on available for sale securities | $ | 195,385 | $ | 155,236 | $ | 38,109 | $ | 144,884 | $ | 89,158 | ||||||||||
| Mortgage banking: | ||||||||||||||||||||
| Mortgage servicing portfolio | $ | 21,178,387 | $ | 20,294,662 | $ | 19,678,226 | $ | 18,928,726 | $ | 17,979,623 | ||||||||||
| Mortgage commitments | $ | 965,631 | $ | 902,986 | $ | 601,147 | $ | 742,742 | $ | 849,619 | ||||||||||
| Mortgage loans funded for sale | $ | 1,818,844 | $ | 1,244,015 | $ | 1,365,431 | $ | 1,614,225 | $ | 1,828,230 | ||||||||||
| Mortgage loan refinances to total fundings | 44 | % | 49 | % | 41 | % | 30 | % | 40 | % | ||||||||||
| Mortgage loans sold | $ | 1,742,582 | $ | 1,239,391 | $ | 1,424,527 | $ | 1,778,099 | $ | 1,861,968 | ||||||||||
| Net realized gains on mortgage loans sold | $ | 19,205 | $ | 10,779 | $ | 15,705 | $ | 18,968 | $ | 23,856 | ||||||||||
| Change in net unrealized gain on mortgage loans held for sale | 3,221 | 8,198 | (5,615 | ) | (251 | ) | (743 | ) | ||||||||||||
| Total production revenue | 22,426 | 18,977 | 10,090 | 18,717 | 23,113 | |||||||||||||||
| Servicing revenue | 15,798 | 15,453 | 14,949 | 14,453 | 13,733 | |||||||||||||||
| Total mortgage banking revenue | $ | 38,224 | $ | 34,430 | $ | 25,039 | $ | 33,170 | $ | 36,846 | ||||||||||
| Gain (loss) on mortgage servicing rights, net of economic hedge: | ||||||||||||||||||||
| Gain (loss) on mortgage hedge derivative contracts, net | $ | 10,766 | $ | 7,138 | $ | (732 | ) | $ | 1,460 | $ | (1,005 | ) | ||||||||
| Gain (loss) on fair value option securities, net | 4,279 | 9,443 | (4,127 | ) | 5,926 | (8,130 | ) | |||||||||||||
| Gain (loss) on economic hedge of mortgage servicing rights | 15,045 | 16,581 | (4,859 | ) | 7,386 | (9,135 | ) | |||||||||||||
| Gain (loss) on changes in fair value of mortgage servicing rights | (16,283 | ) | (27,988 | ) | 7,416 | (11,757 | ) | 8,010 | ||||||||||||
| Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges | $ | (1,238 | ) | $ | (11,407 | ) | $ | 2,557 | $ | (4,371 | ) | $ | (1,125 | ) | ||||||
| Net interest revenue on fair value option securities | $ | 1,348 | $ | 2,033 | $ | 2,137 | $ | 2,140 | $ | 1,985 | ||||||||||
| QUARTERLY EARNINGS TREND — UNAUDITED BOK FINANCIAL CORPORATION (in thousands, except ratio and per share data) |
||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| June 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sept. 30, 2015 | June 30, 2015 | ||||||||||||||||
| Interest revenue | $ | 202,267 | $ | 201,796 | $ | 196,782 | $ | 193,664 | $ | 191,813 | ||||||||||
| Interest expense | 19,655 | 19,224 | 15,521 | 15,028 | 16,082 | |||||||||||||||
| Net interest revenue | 182,612 | 182,572 | 181,261 | 178,636 | 175,731 | |||||||||||||||
| Provision for credit losses | 20,000 | 35,000 | 22,500 | 7,500 | 4,000 | |||||||||||||||
| Net interest revenue after provision for credit losses | 162,612 | 147,572 | 158,761 | 171,136 | 171,731 | |||||||||||||||
| Other operating revenue: | ||||||||||||||||||||
| Brokerage and trading revenue | 39,530 | 32,341 | 30,255 | 31,582 | 36,012 | |||||||||||||||
| Transaction card revenue | 34,950 | 32,354 | 32,319 | 32,514 | 32,778 | |||||||||||||||
| Fiduciary and asset management revenue | 34,813 | 32,056 | 31,165 | 30,807 | 32,712 | |||||||||||||||
| Deposit service charges and fees | 22,618 | 22,542 | 22,813 | 23,606 | 22,328 | |||||||||||||||
| Mortgage banking revenue | 38,224 | 34,430 | 25,039 | 33,170 | 36,846 | |||||||||||||||
| Other revenue | 13,352 | 11,904 | 14,233 | 12,978 | 11,871 | |||||||||||||||
| Total fees and commissions | 183,487 | 165,627 | 155,824 | 164,657 | 172,547 | |||||||||||||||
| Other gains, net | 1,307 | 1,560 | 2,329 | 1,161 | 1,457 | |||||||||||||||
| Gain (loss) on derivatives, net | 10,766 | 7,138 | (732 | ) | 1,283 | (1,032 | ) | |||||||||||||
| Gain (loss) on fair value option securities, net | 4,279 | 9,443 | (4,127 | ) | 5,926 | (8,130 | ) | |||||||||||||
| Change in fair value of mortgage servicing rights | (16,283 | ) | (27,988 | ) | 7,416 | (11,757 | ) | 8,010 | ||||||||||||
| Gain on available for sale securities, net | 5,326 | 3,964 | 2,132 | 2,166 | 3,433 | |||||||||||||||
| Total other-than-temporary impairment losses | — | — | (2,114 | ) | — | — | ||||||||||||||
| Portion of loss recognized in other comprehensive income | — | — | 387 | — | — | |||||||||||||||
| Net impairment losses recognized in earnings | — | — | (1,727 | ) | — | — | ||||||||||||||
| Total other operating revenue | 188,882 | 159,744 | 161,115 | 163,436 | 176,285 | |||||||||||||||
| Other operating expense: | ||||||||||||||||||||
| Personnel | 142,490 | 135,843 | 133,182 | 129,062 | 132,695 | |||||||||||||||
| Business promotion | 6,703 | 5,696 | 8,416 | 5,922 | 7,765 | |||||||||||||||
| Charitable contributions to BOKF Foundation | — | — | — | 796 | — | |||||||||||||||
| Professional fees and services | 14,158 | 11,759 | 10,357 | 10,147 | 9,560 | |||||||||||||||
| Net occupancy and equipment | 19,677 | 18,766 | 19,356 | 18,689 | 18,927 | |||||||||||||||
| Insurance | 7,129 | 7,265 | 5,415 | 4,864 | 5,116 | |||||||||||||||
| Data processing and communications | 32,802 | 32,017 | 31,248 | 30,708 | 30,655 | |||||||||||||||
| Printing, postage and supplies | 3,889 | 3,907 | 3,108 | 3,376 | 3,553 | |||||||||||||||
| Net losses and operating expenses of repossessed assets | 1,588 | 1,070 | 343 | 267 | 223 | |||||||||||||||
| Amortization of intangible assets | 2,624 | 1,159 | 1,090 | 1,089 | 1,090 | |||||||||||||||
| Mortgage banking costs | 15,809 | 12,379 | 11,496 | 9,107 | 8,227 | |||||||||||||||
| Other expense | 7,856 | 15,039 | 8,547 | 10,601 | 9,302 | |||||||||||||||
| Total other operating expense | 254,725 | 244,900 | 232,558 | 224,628 | 227,113 | |||||||||||||||
| Net income before taxes | 96,769 | 62,416 | 87,318 | 109,944 | 120,903 | |||||||||||||||
| Federal and state income taxes | 30,497 | 21,428 | 26,242 | 34,128 | 40,630 | |||||||||||||||
| Net income | 66,272 | 40,988 | 61,076 | 75,816 | 80,273 | |||||||||||||||
| Net income (loss) attributable to non-controlling interests | 471 | (1,576 | ) | 1,475 | 925 | 1,043 | ||||||||||||||
| Net income attributable to BOK Financial Corporation shareholders | $ | 65,801 | $ | 42,564 | $ | 59,601 | $ | 74,891 | $ | 79,230 | ||||||||||
| Average shares outstanding: | ||||||||||||||||||||
| Basic | 65,245,887 | 65,296,541 | 66,378,380 | 67,668,076 | 68,096,341 | |||||||||||||||
| Diluted | 65,302,927 | 65,331,428 | 66,467,729 | 67,762,483 | 68,210,353 | |||||||||||||||
| Net income per share: | ||||||||||||||||||||
| Basic | $ | 1.00 | $ | 0.64 | $ | 0.89 | $ | 1.09 | $ | 1.15 | ||||||||||
| Diluted | $ | 1.00 | $ | 0.64 | $ | 0.89 | $ | 1.09 | $ | 1.15 | ||||||||||
| LOANS TREND — UNAUDITED BOK FINANCIAL CORPORATION (In thousands) |
||||||||||||||||||||
| June 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sept. 30, 2015 | June 30, 2015 | ||||||||||||||||
| Commercial: | ||||||||||||||||||||
| Energy | $ | 2,818,656 | $ | 3,029,420 | $ | 3,097,328 | $ | 2,838,167 | $ | 2,902,143 | ||||||||||
| Services | 2,830,864 | 2,728,891 | 2,784,276 | 2,706,624 | 2,681,126 | |||||||||||||||
| Healthcare | 2,051,146 | 1,995,425 | 1,883,380 | 1,741,680 | 1,646,025 | |||||||||||||||
| Wholesale/retail | 1,532,957 | 1,451,846 | 1,422,064 | 1,461,936 | 1,533,730 | |||||||||||||||
| Manufacturing | 595,403 | 600,645 | 556,729 | 555,677 | 579,549 | |||||||||||||||
| Other commercial and industrial | 527,411 | 482,198 | 508,754 | 493,338 | 433,148 | |||||||||||||||
| Total commercial | 10,356,437 | 10,288,425 | 10,252,531 | 9,797,422 | 9,775,721 | |||||||||||||||
| Commercial real estate: | ||||||||||||||||||||
| Retail | 795,419 | 810,522 | 796,499 | 769,449 | 688,447 | |||||||||||||||
| Multifamily | 787,200 | 733,689 | 751,085 | 758,658 | 711,333 | |||||||||||||||
| Office | 769,112 | 695,552 | 637,707 | 626,151 | 563,085 | |||||||||||||||
| Industrial | 645,586 | 564,467 | 563,169 | 563,871 | 488,054 | |||||||||||||||
| Residential construction and land development | 157,576 | 171,949 | 160,426 | 153,510 | 148,574 | |||||||||||||||
| Other commercial real estate | 427,073 | 394,328 | 350,147 | 363,428 | 434,004 | |||||||||||||||
| Total commercial real estate | 3,581,966 | 3,370,507 | 3,259,033 | 3,235,067 | 3,033,497 | |||||||||||||||
| Residential mortgage: | ||||||||||||||||||||
| Permanent mortgage | 969,007 | 948,405 | 945,336 | 937,664 | 946,324 | |||||||||||||||
| Permanent mortgages guaranteed by U.S. government agencies | 192,732 | 197,350 | 196,937 | 192,712 | 190,839 | |||||||||||||||
| Home equity | 719,184 | 723,554 | 734,620 | 738,619 | 747,565 | |||||||||||||||
| Total residential mortgage | 1,880,923 | 1,869,309 | 1,876,893 | 1,868,995 | 1,884,728 | |||||||||||||||
| Personal | 587,423 | 494,325 | 552,697 | 465,957 | 430,190 | |||||||||||||||
| Total | $ | 16,406,749 | $ | 16,022,566 | $ | 15,941,154 | $ | 15,367,441 | $ | 15,124,136 | ||||||||||
| LOANS BY PRINCIPAL MARKET AREA — UNAUDITED BOK FINANCIAL CORPORATION (in thousands) |
||||||||||||||||||||
| June 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sept. 30, 2015 | June 30, 2015 | ||||||||||||||||
| Bank of Oklahoma: | ||||||||||||||||||||
| Commercial | $ | 3,698,215 | $ | 3,656,034 | $ | 3,782,687 | $ | 3,514,391 | $ | 3,529,406 | ||||||||||
| Commercial real estate | 781,458 | 747,689 | 739,829 | 677,372 | 614,995 | |||||||||||||||
| Residential mortgage | 1,415,766 | 1,411,409 | 1,409,114 | 1,405,235 | 1,413,690 | |||||||||||||||
| Personal | 246,229 | 204,158 | 255,387 | 185,463 | 190,909 | |||||||||||||||
| Total Bank of Oklahoma | 6,141,668 | 6,019,290 | 6,187,017 | 5,782,461 | 5,749,000 | |||||||||||||||
| Bank of Texas: | ||||||||||||||||||||
| Commercial | 3,901,632 | 3,936,809 | 3,908,425 | 3,752,193 | 3,738,742 | |||||||||||||||
| Commercial real estate | 1,311,408 | 1,211,978 | 1,204,202 | 1,257,741 | 1,158,056 | |||||||||||||||
| Residential mortgage | 222,548 | 217,539 | 219,126 | 222,395 | 228,683 | |||||||||||||||
| Personal | 233,304 | 210,456 | 203,496 | 194,051 | 156,260 | |||||||||||||||
| Total Bank of Texas | 5,668,892 | 5,576,782 | 5,535,249 | 5,426,380 | 5,281,741 | |||||||||||||||
| Bank of Albuquerque: | ||||||||||||||||||||
| Commercial | 398,427 | 402,082 | 375,839 | 368,027 | 392,362 | |||||||||||||||
| Commercial real estate | 322,956 | 323,059 | 313,422 | 312,953 | 291,953 | |||||||||||||||
| Residential mortgage | 114,226 | 117,655 | 120,507 | 121,232 | 123,376 | |||||||||||||||
| Personal | 10,569 | 10,823 | 11,557 | 10,477 | 11,939 | |||||||||||||||
| Total Bank of Albuquerque | 846,178 | 853,619 | 821,325 | 812,689 | 819,630 | |||||||||||||||
| Bank of Arkansas: | ||||||||||||||||||||
| Commercial | 81,227 | 79,808 | 92,359 | 76,044 | 99,086 | |||||||||||||||
| Commercial real estate | 69,235 | 66,674 | 69,320 | 82,225 | 85,997 | |||||||||||||||
| Residential mortgage | 6,874 | 7,212 | 8,169 | 8,063 | 6,999 | |||||||||||||||
| Personal | 7,025 | 918 | 819 | 4,921 | 5,189 | |||||||||||||||
| Total Bank of Arkansas | 164,361 | 154,612 | 170,667 | 171,253 | 197,271 | |||||||||||||||
| Colorado State Bank & Trust: | ||||||||||||||||||||
| Commercial | 1,076,620 | 1,030,348 | 987,076 | 1,029,694 | 1,019,454 | |||||||||||||||
| Commercial real estate | 237,569 | 219,078 | 223,946 | 229,835 | 229,721 | |||||||||||||||
| Residential mortgage | 59,425 | 52,961 | 53,782 | 50,138 | 54,135 | |||||||||||||||
| Personal | 35,064 | 24,497 | 23,384 | 30,683 | 30,373 | |||||||||||||||
| Total Colorado State Bank & Trust | 1,408,678 | 1,326,884 | 1,288,188 | 1,340,350 | 1,333,683 | |||||||||||||||
| Bank of Arizona: | ||||||||||||||||||||
| Commercial | 670,814 | 656,527 | 606,733 | 608,235 | 572,477 | |||||||||||||||
| Commercial real estate | 639,112 | 605,383 | 507,523 | 482,918 | 472,061 | |||||||||||||||
| Residential mortgage | 38,998 | 40,338 | 44,047 | 41,722 | 37,493 | |||||||||||||||
| Personal | 24,248 | 18,372 | 31,060 | 17,609 | 12,875 | |||||||||||||||
| Total Bank of Arizona | 1,373,172 | 1,320,620 | 1,189,363 | 1,150,484 | 1,094,906 | |||||||||||||||
| Bank of Kansas City: | ||||||||||||||||||||
| Commercial | 529,502 | 526,817 | 499,412 | 448,838 | 424,194 | |||||||||||||||
| Commercial real estate | 220,228 | 196,646 | 200,791 | 192,023 | 180,714 | |||||||||||||||
| Residential mortgage | 23,086 | 22,195 | 22,148 | 20,210 | 20,352 | |||||||||||||||
| Personal | 30,984 | 25,101 | 26,994 | 22,753 | 22,645 | |||||||||||||||
| Total Bank of Kansas City | 803,800 | 770,759 | 749,345 | 683,824 | 647,905 | |||||||||||||||
| TOTAL BOK FINANCIAL | $ | 16,406,749 | $ | 16,022,566 | $ | 15,941,154 | $ | 15,367,441 | $ | 15,124,136 | ||||||||||
| 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) |
||||||||||||||||||||
| June 30, 2016 | March 31, 2016 | Dec. 31, 2015 | Sept. 30, 2015 | June 30, 2015 | ||||||||||||||||
| Bank of Oklahoma: | ||||||||||||||||||||
| Demand | $ | 4,020,181 | $ | 3,813,128 | $ | 4,133,520 | $ | 3,834,145 | $ | 4,068,088 | ||||||||||
| Interest-bearing: | ||||||||||||||||||||
| Transaction | 5,741,302 | 5,706,067 | 5,971,819 | 5,783,258 | 6,018,381 | |||||||||||||||
| Savings | 247,984 | 246,122 | 226,733 | 225,580 | 225,694 | |||||||||||||||
| Time | 1,167,271 | 1,198,022 | 1,202,274 | 1,253,137 | 1,380,566 | |||||||||||||||
| Total interest-bearing | 7,156,557 | 7,150,211 | 7,400,826 | 7,261,975 | 7,624,641 | |||||||||||||||
| Total Bank of Oklahoma | 11,176,738 | 10,963,339 | 11,534,346 | 11,096,120 | 11,692,729 | |||||||||||||||
| Bank of Texas: | ||||||||||||||||||||
| Demand | 2,677,253 | 2,571,883 | 2,627,764 | 2,689,493 | 2,565,234 | |||||||||||||||
| Interest-bearing: | ||||||||||||||||||||
| Transaction | 2,035,634 | 2,106,905 | 2,132,099 | 1,996,223 | 2,020,817 | |||||||||||||||
| Savings | 83,862 | 83,263 | 77,902 | 74,674 | 74,373 | |||||||||||||||
| Time | 516,231 | 530,657 | 549,740 | 554,106 | 536,844 | |||||||||||||||
| Total interest-bearing | 2,635,727 | 2,720,825 | 2,759,741 | 2,625,003 | 2,632,034 | |||||||||||||||
| Total Bank of Texas | 5,312,980 | 5,292,708 | 5,387,505 | 5,314,496 | 5,197,268 | |||||||||||||||
| Bank of Albuquerque: | ||||||||||||||||||||
| Demand | 530,853 | 557,200 | 487,286 | 520,785 | 508,224 | |||||||||||||||
| Interest-bearing: | ||||||||||||||||||||
| Transaction | 573,690 | 560,684 | 563,723 | 529,862 | 537,156 | |||||||||||||||
| Savings | 49,200 | 47,187 | 43,672 | 41,380 | 41,802 | |||||||||||||||
| Time | 250,068 | 259,630 | 267,821 | 281,426 | 285,890 | |||||||||||||||
| Total interest-bearing | 872,958 | 867,501 | 875,216 | 852,668 | 864,848 | |||||||||||||||
| Total Bank of Albuquerque | 1,403,811 | 1,424,701 | 1,362,502 | 1,373,453 | 1,373,072 | |||||||||||||||
| Bank of Arkansas: | ||||||||||||||||||||
| Demand | 30,607 | 31,318 | 27,252 | 25,397 | 19,731 | |||||||||||||||
| Interest-bearing: | ||||||||||||||||||||
| Transaction | 278,335 | 265,803 | 202,857 | 290,728 | 284,349 | |||||||||||||||
| Savings | 1,853 | 1,929 | 1,747 | 1,573 | 1,712 | |||||||||||||||
| Time | 18,911 | 21,035 | 24,983 | 26,203 | 28,220 | |||||||||||||||
| Total interest-bearing | 299,099 | 288,767 | 229,587 | 318,504 | 314,281 | |||||||||||||||
| Total Bank of Arkansas | 329,706 | 320,085 | 256,839 | 343,901 | 334,012 | |||||||||||||||
| Colorado State Bank & Trust: | ||||||||||||||||||||
| Demand | 528,124 | 413,506 | 497,318 | 430,675 | 403,491 | |||||||||||||||
| Interest-bearing: | ||||||||||||||||||||
| Transaction | 625,240 | 610,077 | 616,697 | 655,206 | 601,741 | |||||||||||||||
| Savings | 31,509 | 33,108 | 31,927 | 31,398 | 31,285 | |||||||||||||||
| Time | 254,164 | 271,475 | 296,224 | 320,279 | 322,432 | |||||||||||||||
| Total interest-bearing | 910,913 | 914,660 | 944,848 | 1,006,883 | 955,458 | |||||||||||||||
| Total Colorado State Bank & Trust | 1,439,037 | 1,328,166 | 1,442,166 | 1,437,558 | 1,358,949 | |||||||||||||||
| Bank of Arizona: | ||||||||||||||||||||
| Demand | 396,837 | 341,828 | 326,324 | 306,425 | 352,024 | |||||||||||||||
| Interest-bearing: | ||||||||||||||||||||
| Transaction | 302,297 | 313,825 | 358,556 | 293,319 | 298,073 | |||||||||||||||
| Savings | 3,198 | 3,277 | 2,893 | 4,121 | 2,726 | |||||||||||||||
| Time | 28,681 | 29,053 | 29,498 | 26,750 | 28,165 | |||||||||||||||
| Total interest-bearing | 334,176 | 346,155 | 390,947 | 324,190 | 328,964 | |||||||||||||||
| Total Bank of Arizona | 731,013 | 687,983 | 717,271 | 630,615 | 680,988 | |||||||||||||||
| Bank of Kansas City: | ||||||||||||||||||||
| Demand | 240,754 | 221,812 | 197,424 | 234,847 | 239,609 | |||||||||||||||
| Interest-bearing: | ||||||||||||||||||||
| Transaction | 112,371 | 146,405 | 153,203 | 150,253 | 139,260 | |||||||||||||||
| Savings | 1,656 | 1,619 | 1,378 | 1,570 | 1,580 | |||||||||||||||
| Time | 11,735 | 31,502 | 35,524 | 36,630 | 42,262 | |||||||||||||||
| Total interest-bearing | 125,762 | 179,526 | 190,105 | 188,453 | 183,102 | |||||||||||||||
| Total Bank of Kansas City | 366,516 | 401,338 | 387,529 | 423,300 | 422,711 | |||||||||||||||
| TOTAL BOK FINANCIAL | $ | 20,759,801 | $ | 20,418,320 | $ | 21,088,158 | $ | 20,619,443 | $ | 21,059,729 | ||||||||||
| NET INTEREST MARGIN TREND — UNAUDITED BOK FINANCIAL CORPORATION |
|||||||||||||||
| Three Months Ended | |||||||||||||||
| June 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sept. 30, 2015 | June 30, 2015 | |||||||||||
| TAX-EQUIVALENT ASSETS YIELDS | |||||||||||||||
| Interest-bearing cash and cash equivalents | 0.51 | % | 0.53 | % | 0.29 | % | 0.28 | % | 0.25 | % | |||||
| Trading securities | 1.89 | % | 2.47 | % | 2.86 | % | 2.70 | % | 1.85 | % | |||||
| Investment securities: | |||||||||||||||
| Taxable | 5.41 | % | 5.53 | % | 5.41 | % | 5.49 | % | 5.49 | % | |||||
| Tax-exempt | 2.25 | % | 2.22 | % | 1.53 | % | 1.54 | % | 1.56 | % | |||||
| Total investment securities | 3.52 | % | 3.51 | % | 3.03 | % | 3.04 | % | 3.05 | % | |||||
| Available for sale securities: | |||||||||||||||
| Taxable | 2.01 | % | 2.06 | % | 2.02 | % | 1.99 | % | 1.92 | % | |||||
| Tax-exempt | 5.06 | % | 4.95 | % | 4.22 | % | 4.15 | % | 4.21 | % | |||||
| Total available for sale securities | 2.04 | % | 2.08 | % | 2.04 | % | 2.01 | % | 1.94 | % | |||||
| Fair value option securities | 2.19 | % | 2.38 | % | 2.32 | % | 2.30 | % | 2.17 | % | |||||
| Restricted equity securities | 4.84 | % | 5.85 | % | 5.95 | % | 5.95 | % | 5.82 | % | |||||
| Residential mortgage loans held for sale | 3.53 | % | 3.75 | % | 3.85 | % | 3.79 | % | 3.37 | % | |||||
| Loans | 3.58 | % | 3.57 | % | 3.55 | % | 3.54 | % | 3.65 | % | |||||
| Allowance for loan losses | |||||||||||||||
| Loans, net of allowance | 3.63 | % | 3.63 | % | 3.60 | % | 3.59 | % | 3.70 | % | |||||
| Total tax-equivalent yield on earning assets | 2.91 | % | 2.92 | % | 2.86 | % | 2.83 | % | 2.84 | % | |||||
| COST OF INTEREST-BEARING LIABILITIES | |||||||||||||||
| Interest-bearing deposits: | |||||||||||||||
| Interest-bearing transaction | 0.14 | % | 0.14 | % | 0.09 | % | 0.08 | % | 0.09 | % | |||||
| Savings | 0.10 | % | 0.09 | % | 0.09 | % | 0.10 | % | 0.11 | % | |||||
| Time | 1.16 | % | 1.21 | % | 1.26 | % | 1.33 | % | 1.36 | % | |||||
| Total interest-bearing deposits | 0.33 | % | 0.34 | % | 0.32 | % | 0.34 | % | 0.35 | % | |||||
| Funds purchased | 0.19 | % | 0.27 | % | 0.11 | % | 0.08 | % | 0.08 | % | |||||
| Repurchase agreements | 0.05 | % | 0.05 | % | 0.04 | % | 0.03 | % | 0.03 | % | |||||
| Other borrowings | 0.57 | % | 0.56 | % | 0.38 | % | 0.30 | % | 0.31 | % | |||||
| Subordinated debt | 1.52 | % | 1.26 | % | 1.13 | % | 1.04 | % | 2.21 | % | |||||
| Total cost of interest-bearing liabilities | 0.41 | % | 0.40 | % | 0.34 | % | 0.32 | % | 0.35 | % | |||||
| Tax-equivalent net interest revenue spread | 2.50 | % | 2.52 | % | 2.52 | % | 2.51 | % | 2.49 | % | |||||
| Effect of noninterest-bearing funding sources and other | 0.13 | % | 0.13 | % | 0.12 | % | 0.10 | % | 0.12 | % | |||||
| Tax-equivalent net interest margin | 2.63 | % | 2.65 | % | 2.64 | % | 2.61 | % | 2.61 | % | |||||
| Yield calculations are shown on a tax equivalent basis at the statutory federal and state rates for the periods presented. The yield calculations exclude security trades that have been recorded on trade date with no corresponding interest income and the unrealized gains and losses. The yield calculation also includes average loan balances for which the accrual of interest has been discontinued and are net of unearned income. Yield/rate calculations are generally based on the conventions that determine how interest income and expense is accrued. | |||||||||||||||
| CREDIT QUALITY INDICATORS — UNAUDITED BOK FINANCIAL CORPORATION (in thousands, except ratios) |
||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| June 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sept. 30, 2015 | June 30, 2015 | ||||||||||||||||
| Nonperforming assets: | ||||||||||||||||||||
| Nonaccruing loans: | ||||||||||||||||||||
| Commercial | $ | 181,989 | $ | 174,652 | $ | 76,424 | $ | 33,798 | $ | 24,233 | ||||||||||
| Commercial real estate | 7,780 | 9,270 | 9,001 | 10,956 | 20,139 | |||||||||||||||
| Residential mortgage | 57,061 | 57,577 | 61,240 | 44,099 | 45,969 | |||||||||||||||
| Personal | 354 | 331 | 463 | 494 | 550 | |||||||||||||||
| Total nonaccruing loans | 247,184 | 241,830 | 147,128 | 89,347 | 90,891 | |||||||||||||||
| Accruing renegotiated loans guaranteed by U.S. government agencies | 78,806 | 77,597 | 74,049 | 81,598 | 82,368 | |||||||||||||||
| Real estate and other repossessed assets | 24,054 | 29,896 | 30,731 | 33,116 | 35,499 | |||||||||||||||
| Total nonperforming assets | $ | 350,044 | $ | 349,323 | $ | 251,908 | $ | 204,061 | $ | 208,758 | ||||||||||
| Total nonperforming assets excluding those guaranteed by U.S. government agencies | $ | 251,497 | $ | 252,176 | $ | 155,959 | $ | 118,578 | $ | 122,673 | ||||||||||
| Nonaccruing loans by loan class: | ||||||||||||||||||||
| Commercial: | ||||||||||||||||||||
| Energy | $ | 168,145 | $ | 159,553 | $ | 61,189 | $ | 17,880 | $ | 6,841 | ||||||||||
| Services | 9,388 | 9,512 | 10,290 | 10,692 | 10,944 | |||||||||||||||
| Wholesale / retail | 2,772 | 3,685 | 2,919 | 3,058 | 4,166 | |||||||||||||||
| Manufacturing | 293 | 312 | 331 | 352 | 379 | |||||||||||||||
| Healthcare | 875 | 1,023 | 1,072 | 1,218 | 1,278 | |||||||||||||||
| Other commercial and industrial | 516 | 567 | 623 | 598 | 625 | |||||||||||||||
| Total commercial | 181,989 | 174,652 | 76,424 | 33,798 | 24,233 | |||||||||||||||
| Commercial real estate: | ||||||||||||||||||||
| Residential construction and land development | 4,261 | 4,789 | 4,409 | 4,748 | 9,367 | |||||||||||||||
| Retail | 1,265 | 1,302 | 1,319 | 1,648 | 3,826 | |||||||||||||||
| Office | 606 | 629 | 651 | 684 | 2,360 | |||||||||||||||
| Multifamily | 65 | 250 | 274 | 185 | 195 | |||||||||||||||
| Industrial | 76 | 76 | 76 | 76 | 76 | |||||||||||||||
| Other commercial real estate | 1,507 | 2,224 | 2,272 | 3,615 | 4,315 | |||||||||||||||
| Total commercial real estate | 7,780 | 9,270 | 9,001 | 10,956 | 20,139 | |||||||||||||||
| Residential mortgage: | ||||||||||||||||||||
| Permanent mortgage | 27,228 | 27,497 | 28,984 | 30,660 | 32,187 | |||||||||||||||
| Permanent mortgage guaranteed by U.S. government agencies | 19,741 | 19,550 | 21,900 | 3,885 | 3,717 | |||||||||||||||
| Home equity | 10,092 | 10,530 | 10,356 | 9,554 | 10,065 | |||||||||||||||
| Total residential mortgage | 57,061 | 57,577 | 61,240 | 44,099 | 45,969 | |||||||||||||||
| Personal | 354 | 331 | 463 | 494 | 550 | |||||||||||||||
| Total nonaccruing loans | $ | 247,184 | $ | 241,830 | $ | 147,128 | $ | 89,347 | $ | 90,891 | ||||||||||
| Performing loans 90 days past due1 | $ | 2,899 | $ | 8,019 | $ | 1,207 | $ | 101 | $ | 99 | ||||||||||
| Gross charge-offs | $ | (8,845 | ) | $ | (23,991 | ) | $ | (4,851 | ) | $ | (5,274 | ) | $ | (2,877 | ) | |||||
| Recoveries | 1,386 | 1,519 | 1,870 | 3,521 | 2,206 | |||||||||||||||
| Net charge-offs | $ | (7,459 | ) | $ | (22,472 | ) | $ | (2,981 | ) | $ | (1,753 | ) | $ | (671 | ) | |||||
| Provision for credit losses | $ | 20,000 | $ | 35,000 | $ | 22,500 | $ | 7,500 | $ | 4,000 | ||||||||||
| Allowance for loan losses to period end loans | 1.48 | % | 1.46 | % | 1.41 | % | 1.33 | % | 1.33 | % | ||||||||||
| Combined allowance for credit losses to period end loans | 1.54 | % | 1.50 | % | 1.43 | % | 1.35 | % | 1.34 | % | ||||||||||
| Nonperforming assets to period end loans and repossessed assets | 2.13 | % | 2.18 | % | 1.58 | % | 1.33 | % | 1.38 | % | ||||||||||
| Net charge-offs (annualized) to average loans | 0.18 | % | 0.56 | % | 0.08 | % | 0.05 | % | 0.02 | % | ||||||||||
| Allowance for loan losses to nonaccruing loans1 | 106.95 | % | 104.89 | % | 180.09 | % | 238.84 | % | 230.67 | % | ||||||||||
| Combined allowance for credit losses to nonaccruing loans1 | 110.93 | % | 107.87 | % | 181.46 | % | 243.05 | % | 231.68 | % | ||||||||||
| 1 Excludes residential mortgage loans guaranteed by agencies of the U.S. government. | ||||||||||||||||||||
CONTACT: For Further Information Contact: Joseph Crivelli Investor Relations (918) 595-3027 Andrea Myers Corporate Communications (918) 594-7794