BOK Financial Reports Quarterly Earnings of $75 Million

TULSA, Okla., Oct. 28, 2015 (GLOBE NEWSWIRE) — BOK Financial Corporation (NASDAQ:BOKF) reported net income of $74.9 million or $1.09 per diluted share for the third quarter of 2015. Net income was $79.2 million or $1.15 per diluted share for the second quarter of 2015 and $75.6 million or $1.09 per diluted share for the third quarter of 2014.

Steven G. Bradshaw, president and chief executive officer, stated, “BOK Financial posted solid earnings in the third quarter despite lower revenue from certain fee-generating businesses. Annualized loan growth was in the mid-single digits as expected, credit quality across our loan portfolio remained strong, and we continue to carefully manage expenses. We deployed $109 million of excess capital through dividends and share buybacks while we work to identify quality acquisition targets. To that end, our board of directors has authorized a 2.4 percent increase in our quarterly dividend and a new 5 million share buyback authorization. During the third quarter, we repurchased 1.25 million shares in the open market at a weighted average price of $63.79.”

 Highlights of third quarter of 2015 included:

  • Net interest revenue totaled $178.6 million for the third quarter of 2015, up $2.9 million over the second quarter of 2015. Net interest margin was 2.61 percent for the third quarter of 2015, unchanged compared to the second quarter of 2015. Average earning assets increased $203 million during the third quarter of 2015, primarily related to a $287 million increase in average loan balances.
  • Fees and commissions revenue totaled $164.7 million for the third quarter of 2015, a decrease of $7.9 million compared to the prior quarter. Brokerage and trading revenue decreased $4.4 million and mortgage banking revenue decreased $3.7 million.
  • Changes in the fair value of mortgage servicing rights, net of economic hedges, decreased pre-tax net income by $4.4 million in the third quarter of 2015 and $1.1 million in the second quarter of 2015.
  • Operating expense was $224.6 million for the third quarter, a decrease of $2.5 million compared to the previous quarter, primarily due to lower incentive compensation expense.
  • A $7.5 million provision for credit losses was recorded in the third quarter of 2015 compared to a $4.0 million provision in the second quarter of 2015. The additional provision was primarily due to credit migration and loan portfolio growth during the third quarter. Net loans charged off totaled $1.8 million in the third quarter of 2015, compared to $671 thousand in the previous quarter.
  • The combined allowance for credit losses totaled $208 million or 1.35 percent of outstanding loans at September 30, 2015 compared to $202 million or 1.34 percent of outstanding loans at June 30, 2015. The portion of the combined allowance attributed to the energy portfolio totaled 2.05 percent of outstanding energy loans at September 30, an increase from 1.74 percent of outstanding energy loans at June 30.
  • Nonperforming assets that are not guaranteed by U.S. government agencies totaled $119 million or 0.78 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at September 30, 2015 and $123 million or 0.82 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at June 30, 2015.
  • Average loans increased by $287 million over the previous quarter, primarily due to growth in commercial real estate loans. Commercial and personal loans also grew over the previous quarter. Period-end outstanding loan balances also increased $243 million to $15.4 billion at September 30, 2015.
  • Average deposits decreased $401 million compared to the previous quarter, primarily due to a decrease in interest-bearing transaction accounts and time deposits. Period-end deposits were $20.6 billion at September 30, 2015, a decrease of $440 million from June 30, 2015.
  • New regulatory capital rules were effective for BOK Financial on January 1, 2015 and components of these rules will phase in through January 1, 2019. The new capital rules establish a 7 percent threshold for the common equity Tier 1 capital ratio. The common equity Tier 1 capital ratio at September 30 was 12.78 percent. Other ratios measured under the new regulatory capital rules were Tier 1 capital ratio, 12.78 percent, total capital ratio, 13.89 percent and leverage ratio, 9.55 percent. At June 30, 2015, the common equity Tier 1 capital ratio was 13.01 percent, the Tier 1 capital ratio was 13.01 percent, total capital ratio was 14.11 percent, and leverage ratio was 9.75 percent.
  • The company paid a regular quarterly cash dividend of $29 million or $0.42 per common share during the third quarter of 2015. On October 27, 2015, the board of directors approved an increase in the quarterly cash dividend to $0.43 per common share payable on or about November 27, 2015 to shareholders of record as of November 13, 2015.
  • The company repurchased 1,258,348 common shares at an average price of $63.79 per share during the third quarter of 2015, completing the existing board approval for share repurchases. No shares were repurchased during the second quarter of 2015. On October 27, 2015, the board of directors authorized the Company to purchase up to five million additional common shares, subject to market conditions, securities law and other regulatory compliance limitations.

Net Interest Revenue

Net interest revenue was $178.6 million for the third quarter of 2015, up $2.9 million over the second quarter of 2015.

Net interest margin was 2.61 percent for the third quarter of 2015, unchanged compared to the second quarter of 2015. The yield on average earning assets was 2.83 percent, a decrease of 1 basis point compared to the prior quarter. The loan portfolio yield decreased 11 basis points compared to the previous quarter to 3.54 percent. The second quarter of 2015 included a 6 basis point benefit from $2.3 million of nonaccrual interest recoveries. Competitive loan pricing and low interest rates continue to impact loan yields. The yield on the available for sale securities portfolio increased 7 basis points to 2.01 percent. Funding costs were 0.32 percent, down 3 basis points compared to the prior quarter.

Average earning assets increased $203 million during the third quarter of 2015, primarily related to a $287 million increase in average loan portfolio balances. Trading securities, interest-bearing cash and cash equivalents and restricted equity securities also increased over the prior quarter, partially offset by a decrease in the average balance of loans held for sale. The average balance of the available for sale securities portfolio decreased by $121 million during the quarter. Average deposit balances decreased $401 million compared to the second quarter of 2015. The average balance of borrowed funds increased $684 million. The average balance of subordinated debentures decreased $82 million related to the impact of $122 million of fixed rate subordinated debt that matured on June 1, 2015.

Fees and Commissions Revenue

Fees and commissions revenue totaled $164.7 million for the third quarter of 2015, a decrease of $7.9 million compared to the second quarter of 2015.

Brokerage and trading revenue totaled $31.6 million, a decrease of $4.4 million compared to the prior quarter. Investment banking revenue, including loan syndication and underwriting fees, decreased $2.5 million primarily due to the timing and volume of transactions completed. Customer hedging revenue decreased $2.4 million primarily due to programs provided to our mortgage banking customers. Securities trading revenue increased $303 thousand and retail brokerage fees were up $113 thousand.

Mortgage banking revenue totaled $33.2 million for the third quarter of 2015, a decrease of $3.7 million compared to the second quarter of 2015. Revenue from mortgage loan production decreased $4.4 million. Increased average mortgage interest rates reduced mortgage production volume. Total mortgage loans originated during the third quarter decreased $214 million or 12 percent compared to the previous quarter and outstanding mortgage loan commitments at September 30 decreased $107 million or 13 percent from June 30. In addition, mortgage production revenue decreased due to a shift toward lower-margin correspondent lending.

Deposit service charges and fees grew by $1.3 million to $23.6 million for the third quarter, primarily due to increased overdraft fees. Fiduciary and asset management revenue decreased $1.9 million to $30.8 million for the third quarter, primarily due to the seasonal timing of tax service fees which were recognized in the previous quarter and a decrease in the fair value of assets under management.

Operating Expense

Total operating expense was $224.6 million for the third quarter of 2015, a decrease of $2.5 million compared to the second quarter of 2015.

Personnel costs decreased by $3.6 million compared to the second quarter of 2015. Incentive compensation expense decreased $2.7 million and payroll tax expense decreased $1.6 million. Regular compensation expense increased $1.1 million.

Non-personnel expense increased $1.1 million compared to the second quarter of 2015. Non-personnel expense included a $2.6 million charge to settle litigation and a $796 thousand contribution to the BOKF Foundation. Additionally, mortgage banking expense increased $1.2 million and business promotion expense decreased $1.8 million.

Loans, Deposits and Capital

Loans

Outstanding loans were $15.4 billion at September 30, 2015, an increase of $243 million over the previous quarter, primarily due to growth in commercial real estate balances. Personal loan balances grew over the prior quarter, partially offset by a decrease in residential mortgage loan balances.

Outstanding commercial loan balances were largely unchanged compared to June 30, 2015. Healthcare sector loans grew by $96 million, other commercial and industrial loans increased $60 million and service sector loans increased by $25 million over the prior quarter. Wholesale/retail sector loans decreased $72 million. Energy loan balances decreased $64 million compared to June 30, 2015. Unfunded energy loan commitments increased by $147 million during the third quarter to $2.7 billion. All other unfunded commercial loan commitments totaled $4.1 billion at September 30, 2015, a decrease of $80 million compared to June 30, 2015.

Commercial real estate loans grew by $202 million or 7 percent over June 30, 2015. Retail sector loan balances increased $81 million and loans secured by industrial facilities grew by $76 million. Loans secured by office buildings increased $63 million and multifamily residential loans increased $47 million. This growth was partially offset by a $71 million decrease in other commercial real estate balances. Unfunded commercial real estate loan commitments totaled $941 million at September 30, 2015, an increase of $129 million over June 30, 2015.

Norm Bagwell, executive vice president, regional banks, stated, “Loan growth in the third quarter was in line with our expectations, as economic conditions and deal flow remained solid across the footprint. Arizona and Texas continued their recent strong growth track record while our Kansas City market also posted double-digit annualized loan growth for the second consecutive quarter.”

Stacy Kymes, executive vice president, corporate banking, added, “Energy loans outstanding were lower in the third quarter, in line with our expectations; however, healthcare and commercial real estate grew at a double digit rate. Credit quality remains strong, as nonaccrual loans and nonperforming assets were both down on a sequential basis. Also as expected, we are seeing some continued credit migration in our energy book. However, we continue to believe that we are appropriately reserved for losses in the portfolio.”

Deposits

Deposits totaled $20.6 billion at September 30, 2015, a decrease of $440 million compared to June 30, 2015. Demand deposit balances decreased $115 million, interest-bearing transaction deposits decreased $201 million and time deposits decreased $126 million. Among the lines of business, Wealth Management deposits decreased $203 million and Commercial Banking deposits decreased $156 million compared to June 30. Consumer Banking deposits increased $38 million.

Capital

New regulatory capital rules were effective for BOK Financial on January 1, 2015 and established a 7 percent threshold for the common equity Tier 1 ratio. The Company’s common equity Tier 1 capital ratio was 12.78 percent at September 30, 2015. In addition, the Company’s Tier 1 capital ratio was 12.78 percent, total capital ratio was 13.89 percent and leverage ratio was 9.55 percent at September 30, 2015. At June 30, 2015, the Company’s common equity Tier 1 capital ratio was 13.01 percent, Tier 1 capital ratio was 13.01 percent, total capital ratio was 14.11 percent, and leverage ratio was 9.75 percent.

In addition, the Company’s tangible common equity ratio, a non-GAAP measure, was 9.78 percent at September 30, 2015 and 9.72 percent at June 30, 2015. 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 $204 million or 1.33 percent of outstanding loans and repossessed assets at September 30, 2015 compared to $209 million or 1.38 percent at June 30, 2015. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $119 million or 0.78 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at September 30, 2015 and $123 million or 0.82 percent at June 30, 2015, a decrease of $4.1 million.

Nonaccruing loans totaled $89 million or 0.58 percent of outstanding loans at September 30, 2015, compared to $91 million or 0.60 percent of outstanding loans at June 30, 2015. An $11 million increase in nonaccruing energy loans was largely offset by a $9.2 million decrease in nonaccruing commercial real estate loans. Overall, new nonaccruing loans identified in the third quarter totaled $23 million, offset by $12 million in payments received, $6.4 million in foreclosures and repossessions and $5.3 million in charge-offs. At September 30, 2015, nonaccruing commercial loans totaled $34 million or 0.34 percent of outstanding commercial loans, nonaccruing commercial real estate loans totaled $11 million or 0.34 percent of outstanding commercial real estate loans and nonaccruing residential mortgage loans totaled $44 million or 2.36 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, decreased to $120 million at September 30 from $181 million at June 30. The decrease largely resulted from $64 million of payments received during the third quarter. Potential problem energy loans decreased to $96 million from $124 million.

Net loans charged off totaled $1.8 million for the third quarter of 2015, compared to $671 thousand for the second quarter of 2015. Gross charge-offs totaled $5.3 million for the third quarter, compared to $2.9 million for the previous quarter. Recoveries totaled $3.5 million for the third quarter of 2015 and $2.2 million for the second quarter of 2015.

After evaluating all credit factors, the Company recorded a $7.5 million provision for credit losses during the third quarter of 2015, primarily due to credit migration in the energy portfolio and loan portfolio growth. The Company recorded a $4.0 million provision for credit losses in the previous quarter.

The combined allowance for credit losses totaled $208 million or 1.35 percent of outstanding loans and 232 percent of nonaccruing loans at September 30, 2015. The allowance for loan losses was $204 million and the accrual for off-balance sheet credit losses was $3.6 million. The portion of the combined allowance attributed to the energy portfolio totaled 2.05 percent of outstanding energy loans at September 30, an increase from 1.74 percent of outstanding energy loans at June 30.

Real estate and other repossessed assets totaled $33 million at September 30, 2015, primarily consisting of $16 million of one-to-four family residential properties and $11 million of developed commercial real estate properties.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $8.8 billion at September 30, 2015, a decrease of $199 million compared to June 30, 2015. At September 30, 2015, the available for sale portfolio consisted primarily of $5.8 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $2.7 billion of commercial mortgage-backed securities fully backed by U.S. government agencies.

At September 30, 2015 the available for sale securities portfolio had a net unrealized gain of $145 million compared to a net unrealized gain of $89 million at June 30, 2015 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 September 30, 2015 increased $26 million during the third quarter to $105 million. Commercial mortgage-backed securities had a net unrealized gain of $27 million at September 30, 2015, compared to a net unrealized loss of $4.1 million at June 30, 2015.

In the third quarter of 2015, the Company recognized a $2.2 million net gain from the sale of $451 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 $3.4 million of net gains from sales of $379 million of available for sale securities in the second quarter of 2015.

The Company also maintains a portfolio of residential mortgage-backed securities issued by U.S. government agencies and interest rate derivative contracts designated as an economic hedge of the changes in the fair value of our mortgage servicing rights. The fair value of mortgage servicing rights decreased by $11.8 million during the third quarter of 2015, primarily due to a decrease in the short-term escrow earnings rates and a decrease in the period-end 30 year mortgage interest rates at September 30 compared to June 30. The value of securities and interest rate derivative contracts held as an economic hedge increased by $7.4 million during the quarter. The fair value of mortgage servicing rights, net of economic hedges, decreased $1.1 million in the second quarter of 2015, primarily due to changes in interest rates partially offset by increased mortgage servicing costs.

Conference Call and Webcast

The Company will hold a conference call at 9 a.m. central time on Wednesday, October 28, 2015 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 # 10074072.

About BOK Financial Corporation

BOK Financial Corporation is a $31 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, BOSC, Inc. and The Milestone Group, Inc. BOKF, NA operates TransFund, Cavanal Hill Investment Management, MBM Advisors 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 September 30, 2015 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,” 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 involve judgments as to future 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 (1) the ability to fully realize expected cost savings from mergers within the expected time frames, (2) the ability of other companies on which BOK Financial relies to provide goods and services in a timely and accurate manner, (3) changes in interest rates and interest rate relationships, (4) demand for products and services, (5) the degree of competition by traditional and nontraditional competitors, (6) changes in banking regulations, tax laws, prices, levies and assessments, (7) the impact of technological advances and (8) trends in consumer 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)
    Sept. 30, 2015   June 30, 2015   Sept. 30, 2014
ASSETS            
Cash and due from banks   $ 489,268     $ 443,577     $ 557,658  
Interest-bearing cash and cash equivalents   1,830,105     2,119,072     2,007,901  
Trading securities   181,131     158,209     169,712  
Investment securities   612,384     625,664     655,091  
Available for sale securities   8,801,089     9,000,117     9,306,886  
Fair value option securities   427,760     436,324     175,761  
Restricted equity securities   263,587     231,520     189,587  
Residential mortgage loans held for sale   357,414     502,571     373,253  
Loans:            
Commercial   9,797,422     9,775,721     8,572,038  
Commercial real estate   3,235,067     3,033,497     2,724,199  
Residential mortgage   1,868,995     1,884,728     1,979,663  
Personal   465,957     430,190     407,839  
Total loans   15,367,441     15,124,136     13,683,739  
Allowance for loan losses   (204,116 )   (201,087 )   (191,244 )
Loans, net of allowance   15,163,325     14,923,049     13,492,495  
Premises and equipment, net   294,669     284,238     275,718  
Receivables   151,451     149,629     114,374  
Goodwill   385,461     385,454     377,780  
Intangible assets, net   44,999     46,061     35,476  
Mortgage servicing rights   200,049     198,694     173,286  
Real estate and other repossessed assets, net   33,116     35,499     97,871  
Derivative contracts, net   726,159     630,435     360,809  
Cash surrender value of bank-owned life insurance   300,981     298,606     291,583  
Receivable on unsettled securities sales   30,009     8,693     94,881  
Other assets   273,948     248,151     354,898  
TOTAL ASSETS   $ 30,566,905     $ 30,725,563     $ 29,105,020  
             
LIABILITIES AND EQUITY            
Deposits:            
Demand   $ 8,041,767     $ 8,156,401     $ 8,038,129  
Interest-bearing transaction   9,698,849     9,899,777     9,244,709  
Savings   380,296     379,172     341,638  
Time   2,498,531     2,624,379     2,664,580  
Total deposits   20,619,443     21,059,729     20,289,056  
Funds purchased   62,297     64,677     85,135  
Repurchase agreements   555,677     712,033     1,026,009  
Other borrowings   4,635,150     4,332,162     3,484,487  
Subordinated debentures   226,314     226,278     347,936  
Accrued interest, taxes and expense   158,048     124,568     100,664  
Due on unsettled securities purchases   98,351     37,571     8,126  
Derivative contracts, net   636,115     620,277     348,687  
Other liabilities   159,348     135,435     137,608  
TOTAL LIABILITIES   27,150,743     27,312,730     25,827,708  
Shareholders’ equity:            
Capital, surplus and retained earnings   3,291,450     3,323,840     3,219,798  
Accumulated other comprehensive income   85,776     51,792     23,295  
TOTAL SHAREHOLDERS’ EQUITY   3,377,226     3,375,632     3,243,093  
Non-controlling interests   38,936     37,201     34,219  
TOTAL EQUITY   3,416,162     3,412,833     3,277,312  
TOTAL LIABILITIES AND EQUITY   $ 30,566,905     $ 30,725,563     $ 29,105,020  

AVERAGE BALANCE SHEETS — UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
  Three Months Ended
  Sept. 30, 2015   June 30, 2015   March 31, 2015   Dec. 31, 2014   Sept. 30, 2014
ASSETS                  
Interest-bearing cash and cash equivalents $ 2,038,611     $ 2,002,456     $ 2,089,546     $ 2,090,176     $ 1,217,942  
Trading securities 179,098     127,391     140,968     164,502     107,909  
Investment securities 616,091     628,489     642,825     650,911     641,375  
Available for sale securities 8,942,261     9,063,006     9,101,464     9,161,901     9,526,727  
Fair value option securities 429,951     435,294     404,775     221,773     180,268  
Restricted equity securities 255,610     221,911     179,385     182,737     142,418  
Residential mortgage loans held for sale 401,359     464,269     348,054     321,746     310,924  
Loans:                  
Commercial 9,685,768     9,634,306     9,308,307     8,886,952     8,468,575  
Commercial real estate 3,198,200     2,989,615     2,909,565     2,665,547     2,691,318  
Residential mortgage 1,847,696     1,857,464     1,909,998     1,904,777     1,955,769  
Personal 460,647     423,967     426,712     424,729     402,916  
Total loans 15,192,311     14,905,352     14,554,582     13,882,005     13,518,578  
Allowance for loan losses (202,829 )   (198,400 )   (194,948 )   (190,787 )   (191,141 )
Total loans, net 14,989,482     14,706,952     14,359,634     13,691,218     13,327,437  
Total earning assets 27,852,463     27,649,768     27,266,651     26,484,964     25,455,000  
Cash and due from banks 487,283     492,737     513,734     528,595     493,200  
Derivative contracts, net 669,264     475,687     447,565     352,565     288,682  
Cash surrender value of bank-owned life insurance 299,424     297,022     294,803     292,411     290,044  
Receivable on unsettled securities sales 64,591     94,374     99,706     69,109     63,277  
Other assets 1,396,708     1,454,484     1,348,245     1,404,553     1,525,354  
TOTAL ASSETS $ 30,769,733     $ 30,464,072     $ 29,970,704     $ 29,132,197     $ 28,115,557  
                   
LIABILITIES AND EQUITY                  
Deposits:                  
Demand $ 7,994,607     $ 7,996,717     $ 7,885,485     $ 7,974,165     $ 7,800,350  
Interest-bearing transaction 9,760,839     10,063,589     10,338,396     9,730,564     9,473,575  
Savings 379,828     381,833     365,835     346,132     342,488  
Time 2,557,874     2,651,820     2,659,323     2,647,147     2,610,561  
Total deposits 20,693,148     21,093,959     21,249,039     20,698,008     20,226,974  
Funds purchased 70,281     63,312     69,730     71,728     320,817  
Repurchase agreements 672,085     773,977     1,000,839     996,308     1,027,206  
Other borrowings 4,779,981     4,001,479     3,084,214     3,021,094     2,333,961  
Subordinated debentures 226,296     307,903     348,007     347,960     347,914  
Derivative contracts, net 597,908     455,431     418,848     321,367     270,998  
Due on unsettled securities purchases 90,135     151,369     205,096     137,566     124,952  
Other liabilities 240,704     235,173     243,370     228,021     214,306  
TOTAL LIABILITIES 27,370,538     27,082,603     26,619,143     25,822,052     24,867,128  
Total equity 3,399,195     3,381,469     3,351,561     3,310,145     3,248,429  
TOTAL LIABILITIES AND EQUITY $ 30,769,733     $ 30,464,072     $ 29,970,704     $ 29,132,197     $ 28,115,557  

STATEMENTS OF EARNINGS — UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except per share data)
  Three Months Ended   Nine Months Ended
  Sept. 30,   Sept. 30,
  2015   2014   2015   2014
               
Interest revenue $ 193,664     $ 183,868     $ 570,046     $ 545,619  
Interest expense 15,028     17,077     47,953     50,089  
Net interest revenue 178,636     166,791     522,093     495,530  
Provision for credit losses 7,500         11,500      
Net interest revenue after provision for credit losses 171,136     166,791     510,593     495,530  
Other operating revenue:              
Brokerage and trading revenue 31,582     35,263     99,301     103,835  
Transaction card revenue 32,514     31,578     96,302     92,222  
Fiduciary and asset management revenue 30,807     29,738     94,988     85,003  
Deposit service charges and fees 23,606     22,508     67,618     68,330  
Mortgage banking revenue 33,170     26,814     109,336     78,988  
Bank-owned life insurance 2,360     2,326     6,956     6,706  
Other revenue 10,618     10,320     28,694     28,380  
Total fees and commissions 164,657     158,547     503,195     463,464  
Gain on other assets, net 1,161     1,422     3,373     2,615  
Gain (loss) on derivatives, net 1,283     (93 )   1,162     1,706  
Gain (loss) on fair value option securities, net 5,926     (332 )   443     6,504  
Change in fair value of mortgage servicing rights (11,757 )   5,281     (12,269 )   (5,624 )
Gain on available for sale securities, net 2,166     146     9,926     1,390  
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 163,436     164,971     505,738     470,055  
Other operating expense:              
Personnel 129,062     123,043     390,305     351,190  
Business promotion 5,922     6,160     19,435     19,151  
Charitable contributions to BOKF Foundation 796         796     2,420  
Professional fees and services 10,147     14,763     29,766     33,382  
Net occupancy and equipment 18,689     18,892     56,660     54,577  
Insurance 4,864     4,793     14,960     13,801  
Data processing and communications 31,228     29,971     93,311     86,177  
Printing, postage and supplies 3,376     3,380     10,390     10,350  
Net losses and operating expenses of repossessed assets 267     4,966     1,103     7,516  
Amortization of intangible assets 1,089     1,100     3,269     2,865  
Mortgage banking costs 8,587     7,734     25,325     19,328  
Other expense 10,601     7,032     26,686     20,888  
Total other operating expense 224,628     221,834     672,006     621,645  
               
Net income before taxes 109,944     109,928     344,325     343,940  
Federal and state income taxes 34,128     33,802     113,142     114,042  
               
Net income 75,816     76,126     231,183     229,898  
Net income attributable to non-controlling interests 925     494     2,219     1,781  
Net income attributable to BOK Financial Corporation shareholders $ 74,891     $ 75,632     $ 228,964     $ 228,117  
               
Average shares outstanding:              
Basic 67,668,076     68,455,866     68,004,508     68,364,549  
Diluted 67,762,483     68,609,765     68,104,017     68,520,591  
               
Net income per share:              
Basic $ 1.09     $ 1.09     $ 3.33     $ 3.30  
Diluted $ 1.09     $ 1.09     $ 3.32     $ 3.29  

FINANCIAL HIGHLIGHTS — UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and share data)
  Three Months Ended
  Sept. 30, 2015   June 30, 2015   March 31, 2015   Dec. 31, 2014   Sept. 30, 2014
Capital:                  
Period-end shareholders’ equity $ 3,377,226     $ 3,375,632     $ 3,357,161     $ 3,302,179     $ 3,243,093  
Risk weighted assets $ 22,706,537     $ 22,533,295     $ 22,053,246     $ 21,290,908     $ 20,491,089  
Risk-based capital ratios1:                  
Common equity tier 1 12.78 %   13.01 %   13.07 %   N/A   N/A
Tier 1 12.78 %   13.01 %   13.07 %   13.33 %   13.72 %
Total capital 13.89 %   14.11 %   14.39 %   14.66 %   15.11 %
Leverage ratio 9.55 %   9.75 %   9.74 %   9.96 %   10.22 %
Tangible common equity ratio2 9.78 %   9.72 %   9.86 %   10.08 %   9.86 %
                   
Common stock:                  
Book value per share $ 49.88     $ 48.96     $ 48.71     $ 47.78     $ 46.77  
Market value per share:                  
High $ 70.26     $ 71.66     $ 61.78     $ 68.69     $ 69.56  
Low $ 57.04     $ 59.59     $ 52.63     $ 56.87     $ 63.36  
Cash dividends paid $ 28,766     $ 28,841     $ 28,952     $ 29,114     $ 27,705  
Dividend payout ratio 38.41 %   36.40 %   38.68 %   45.27 %   36.63 %
Shares outstanding, net 67,713,031     68,945,139     68,922,314     69,113,736     69,344,082  
Stock buy-back program:                  
Shares repurchased 1,258,348         502,156     200,000      
Amount $ 80,276     $     $ 29,484     $ 12,337     $  
Average price per share $ 63.79     $     $ 58.71     $ 61.68     $  
                   
Performance ratios (quarter annualized):
Return on average assets 0.97 %   1.04 %   1.01 %   0.88 %   1.07 %
Return on average equity 8.84 %   9.50 %   9.15 %   7.79 %   9.34 %
Net interest margin 2.61 %   2.61 %   2.55 %   2.61 %   2.67 %
Efficiency ratio 64.34 %   64.21 %   64.91 %   67.95 %   67.18 %
                   
1     Risk-based capital ratios March 31, 2015 and thereafter calculated under revised regulatory capital rules issued July 2013 and effective for the Company January 1, 2015. Previous risk-based capital ratios presented are calculated in accordance with then current regulatory capital rules.
                   
Reconciliation of non-GAAP measures:
2     Tangible common equity ratio:                  
Total shareholders’ equity $ 3,377,226     $ 3,375,632     $ 3,357,161     $ 3,302,179     $ 3,243,093  
Less: Goodwill and intangible assets, net 430,460     431,515     411,066     412,156     413,256  
Tangible common equity $ 2,946,766     $ 2,944,117     $ 2,946,095     $ 2,890,023     $ 2,829,837  
                   
Total assets $ 30,566,905     $ 30,725,563     $ 30,299,978     $ 29,089,698     $ 29,105,020  
Less: Goodwill and intangible assets, net 430,460     431,515     411,066     412,156     413,256  
Tangible assets $ 30,136,445     $ 30,294,048     $ 29,888,912     $ 28,677,542     $ 28,691,764  
                   
Tangible common equity ratio 9.78 %   9.72 %   9.86 %   10.08 %   9.86 %
                   
Other data:                  
Fiduciary assets $ 37,780,669     $ 38,772,018     $ 37,511,746     $ 35,997,877     $ 34,020,442  
Tax equivalent adjustment $ 3,244     $ 3,035     $ 2,956     $ 2,859     $ 2,739  
Net unrealized gain on available for sale securities $ 144,884     $ 89,158     $ 152,107     $ 96,955     $ 42,935  
                   
                   
FINANCIAL HIGHLIGHTS — UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and share data)
  Three Months Ended
  Sept. 30, 2015   June 30, 2015   March 31, 2015   Dec. 31, 2014   Sept. 30, 2014
                   
Mortgage banking:                  
Mortgage servicing portfolio $ 18,928,726     $ 17,979,623     $ 16,937,128     $ 16,162,887     $ 15,499,653  
Mortgage commitments $ 742,742     $ 849,619     $ 824,036     $ 627,505     $ 638,925  
Mortgage loans funded for sale $ 1,614,225     $ 1,828,230     $ 1,565,016     $ 1,264,269     $ 1,394,211  
Mortgage loan refinances to total fundings 30 %   40 %   56 %   37 %   26 %
Mortgage loans sold $ 1,778,099     $ 1,861,968     $ 1,382,042     $ 1,350,529     $ 1,369,295  
                   
Net realized gains on mortgage loans sold $ 18,968     $ 23,856     $ 17,251     $ 17,671     $ 17,100  
Change in net unrealized gain on mortgage loans held for sale (251 )   (743 )   8,789     (482 )   (2,407 )
Total production revenue 18,717     23,113     26,040     17,189     14,693  
Servicing revenue 14,453     13,733     13,280     12,916     12,121  
Total mortgage banking revenue $ 33,170     $ 36,846     $ 39,320     $ 30,105     $ 26,814  
                   
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net $ 1,460     $ (1,005 )   $ 911     $ 1,070     $ (93 )
Gain (loss) on fair value option securities, net 5,926     (8,130 )   2,647     3,685     (341 )
Gain (loss) on economic hedge of mortgage servicing rights 7,386     (9,135 )   3,558     4,755     (434 )
Gain (loss) on changes in fair value of mortgage servicing rights (11,757 )   8,010     (8,522 )   (10,821 )   5,281  
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges $ (4,371 )   $ (1,125 )   $ (4,964 )   $ (6,066 )   $ 4,847  
                   
Net interest revenue on fair value option securities $ 2,140     $ 1,985     $ 1,739     $ 912     $ 830  

QUARTERLY EARNINGS TREND — UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and per share data)
  Three Months Ended
  Sept. 30, 2015   June 30, 2015   March 31, 2015   Dec. 31, 2014   Sept. 30, 2014
                   
Interest revenue $ 193,664     $ 191,813     $ 184,569     $ 186,620     $ 183,868  
Interest expense 15,028     16,082     16,843     16,956     17,077  
Net interest revenue 178,636     175,731     167,726     169,664     166,791  
Provision for credit losses 7,500     4,000              
Net interest revenue after provision for credit losses 171,136     171,731     167,726     169,664     166,791  
Other operating revenue:                  
Brokerage and trading revenue 31,582     36,012     31,707     30,602     35,263  
Transaction card revenue 32,514     32,778     31,010     31,467     31,578  
Fiduciary and asset management revenue 30,807     32,712     31,469     30,649     29,738  
Deposit service charges and fees 23,606     22,328     21,684     22,581     22,508  
Mortgage banking revenue 33,170     36,846     39,320     30,105     26,814  
Bank-owned life insurance 2,360     2,398     2,198     2,380     2,326  
Other revenue 10,618     9,473     8,603     10,071     10,320  
Total fees and commissions 164,657     172,547     165,991     157,855     158,547  
Gain on other assets, net 1,161     1,457     755     338     1,422  
Gain (loss) on derivatives, net 1,283     (1,032 )   911     1,070     (93 )
Gain (loss) on fair value option securities, net 5,926     (8,130 )   2,647     3,685     (332 )
Change in fair value of mortgage servicing rights (11,757 )   8,010     (8,522 )   (10,821 )   5,281  
Gain on available for sale securities, net 2,166     3,433     4,327     149     146  
Total other-than-temporary impairment losses         (781 )   (373 )    
Portion of loss recognized in other comprehensive income         689          
Net impairment losses recognized in earnings         (92 )   (373 )    
Total other operating revenue 163,436     176,285     166,017     151,903     164,971  
Other operating expense:                  
Personnel 129,062     132,695     128,548     125,741     123,043  
Business promotion 5,922     7,765     5,748     7,498     6,160  
Charitable contributions to BOKF Foundation 796             1,847      
Professional fees and services 10,147     9,560     10,059     11,058     14,763  
Net occupancy and equipment 18,689     18,927     19,044     22,655     18,892  
Insurance 4,864     5,116     4,980     4,777     4,793  
Data processing and communications 31,228     31,463     30,620     30,872     29,971  
Printing, postage and supplies 3,376     3,553     3,461     3,168     3,380  
Net losses (gains) and operating expenses of repossessed assets 267     223     613     (1,497 )   4,966  
Amortization of intangible assets 1,089     1,090     1,090     1,100     1,100  
Mortgage banking costs 8,587     7,419     9,319     10,553     7,734  
Other expense 10,601     9,302     6,783     8,105     7,032  
Total other operating expense 224,628     227,113     220,265     225,877     221,834  
Net income before taxes 109,944     120,903     113,478     95,690     109,928  
Federal and state income taxes 34,128     40,630     38,384     30,109     33,802  
Net income 75,816     80,273     75,094     65,581     76,126  
Net income attributable to non-controlling interests 925     1,043     251     1,263     494  
Net income attributable to BOK Financial Corporation shareholders $ 74,891     $ 79,230     $ 74,843     $ 64,318     $ 75,632  
                   
Average shares outstanding:                  
Basic 67,668,076     68,096,341     68,254,780     68,481,630     68,455,866  
Diluted 67,762,483     68,210,353     68,344,886     68,615,808     68,609,765  
Net income per share:                  
Basic $ 1.09     $ 1.15     $ 1.08     $ 0.93     $ 1.09  
Diluted $ 1.09     $ 1.15     $ 1.08     $ 0.93     $ 1.09  

LOANS TREND — UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
    Sept. 30, 2015   June 30, 2015   March 31, 2015   Dec. 31, 2014   Sept. 30, 2014
Commercial:                    
Energy   $ 2,838,167     $ 2,902,143     $ 2,902,994     $ 2,860,428     $ 2,551,699  
Services   2,706,624     2,681,126     2,592,876     2,391,530     2,339,951  
Wholesale/retail   1,461,936     1,533,730     1,405,800     1,440,015     1,421,107  
Manufacturing   555,677     579,549     560,925     532,594     479,543  
Healthcare   1,741,680     1,646,025     1,511,177     1,454,969     1,382,399  
Other commercial and industrial   493,338     433,148     417,391     416,134     397,339  
Total commercial   9,797,422     9,775,721     9,391,163     9,095,670     8,572,038  
                     
Commercial real estate:                    
Residential construction and land development   153,510     148,574     139,152     143,591     175,228  
Retail   769,449     688,447     658,860     666,889     611,265  
Office   626,151     563,085     513,862     415,544     438,909  
Multifamily   758,658     711,333     749,986     704,298     739,757  
Industrial   563,871     488,054     478,584     428,817     371,426  
Other commercial real estate   363,428     434,004     395,020     369,011     387,614  
Total commercial real estate   3,235,067     3,033,497     2,935,464     2,728,150     2,724,199  
                     
Residential mortgage:                    
Permanent mortgage   937,664     946,324     964,264     969,951     991,107  
Permanent mortgages guaranteed by U.S. government agencies   192,712     190,839     200,179     205,950     198,488  
Home equity   738,619     747,565     762,556     773,611     790,068  
Total residential mortgage   1,868,995     1,884,728     1,926,999     1,949,512     1,979,663  
                     
Personal   465,957     430,190     430,510     434,705     407,839  
                     
Total   $ 15,367,441     $ 15,124,136     $ 14,684,136     $ 14,208,037     $ 13,683,739  
 
Certain commercial loans previously classified as Services in the prior periods have been reclassified to Wholesale / Retail to conform with current classification guidelines.

LOANS BY PRINCIPAL MARKET AREA — UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
  Sept. 30, 2015   June 30, 2015   March 31, 2015   Dec. 31, 2014   Sept. 30, 2014
                   
Bank of Oklahoma:                  
Commercial $ 3,514,391     $ 3,529,406     $ 3,276,553     $ 3,142,689     $ 3,106,264  
Commercial real estate 677,372     614,995     612,639     603,610     592,865  
Residential mortgage 1,405,235     1,413,690     1,442,340     1,467,096     1,481,264  
Personal 185,463     190,909     205,496     206,115     193,207  
Total Bank of Oklahoma 5,782,461     5,749,000     5,537,028     5,419,510     5,373,600  
                   
Bank of Texas:                  
Commercial 3,752,193     3,738,742     3,709,467     3,549,128     3,169,458  
Commercial real estate 1,257,741     1,158,056     1,130,973     1,027,817     1,046,322  
Residential mortgage 222,395     228,683     237,985     235,948     247,117  
Personal 194,051     156,260     149,827     154,363     148,965  
Total Bank of Texas 5,426,380     5,281,741     5,228,252     4,967,256     4,611,862  
                   
Bank of Albuquerque:                  
Commercial 368,027     392,362     388,005     383,439     378,663  
Commercial real estate 312,953     291,953     296,696     296,358     313,905  
Residential mortgage 121,232     123,376     127,326     127,999     130,045  
Personal 10,477     11,939     12,095     10,899     11,714  
Total Bank of Albuquerque 812,689     819,630     824,122     818,695     834,327  
                   
Bank of Arkansas:                  
Commercial 76,044     99,086     91,485     95,510     74,866  
Commercial real estate 82,225     85,997     87,034     88,301     96,874  
Residential mortgage 8,063     6,999     6,807     7,261     7,492  
Personal 4,921     5,189     5,114     5,169     5,508  
Total Bank of Arkansas 171,253     197,271     190,440     196,241     184,740  
                   
Colorado State Bank & Trust:                  
Commercial 1,029,694     1,019,454     1,008,316     977,961     957,917  
Commercial real estate 229,835     229,721     209,272     194,553     190,812  
Residential mortgage 50,138     54,135     55,925     57,119     56,705  
Personal 30,683     30,373     27,792     27,918     24,812  
Total Colorado State Bank & Trust 1,340,350     1,333,683     1,301,305     1,257,551     1,230,246  
                   
Bank of Arizona:                  
Commercial 608,235     572,477     519,767     547,524     500,208  
Commercial real estate 482,918     472,061     432,269     355,140     316,698  
Residential mortgage 41,722     37,493     36,161     35,872     39,256  
Personal 17,609     12,875     12,394     12,883     11,201  
Total Bank of Arizona 1,150,484     1,094,906     1,000,591     951,419     867,363  
                   
Bank of Kansas City:                  
Commercial 448,838     424,194     397,570     399,419     384,662  
Commercial real estate 192,023     180,714     166,581     162,371     166,723  
Residential mortgage 20,210     20,352     20,455     18,217     17,784  
Personal 22,753     22,645     17,792     17,358     12,432  
Total Bank of Kansas City 683,824     647,905     602,398     597,365     581,601  
                   
TOTAL BOK FINANCIAL $ 15,367,441     $ 15,124,136     $ 14,684,136     $ 14,208,037     $ 13,683,739  
 
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, 2015   June 30, 2015   March 31, 2015   Dec. 31, 2014   Sept. 30, 2014
Bank of Oklahoma:                  
Demand $ 3,834,145     $ 4,068,088     $ 3,982,534     $ 3,828,819     $ 3,915,560  
Interest-bearing:                  
Transaction 5,783,258     6,018,381     6,199,468     6,117,886     5,450,692  
Savings 225,580     225,694     227,855     206,357     201,690  
Time 1,253,137     1,380,566     1,372,250     1,301,194     1,292,738  
Total interest-bearing 7,261,975     7,624,641     7,799,573     7,625,437     6,945,120  
Total Bank of Oklahoma 11,096,120     11,692,729     11,782,107     11,454,256     10,860,680  
                   
Bank of Texas:                  
Demand 2,689,493     2,565,234     2,511,032     2,639,732     2,636,713  
Interest-bearing:                  
Transaction 1,996,223     2,020,817     2,062,063     2,065,723     2,020,737  
Savings 74,674     74,373     76,128     72,037     66,798  
Time 554,106     536,844     547,371     547,316     569,929  
Total interest-bearing 2,625,003     2,632,034     2,685,562     2,685,076     2,657,464  
Total Bank of Texas 5,314,496     5,197,268     5,196,594     5,324,808     5,294,177  
                   
Bank of Albuquerque:                  
Demand 520,785     508,224     537,466     487,819     480,023  
Interest-bearing:                  
Transaction 529,862     537,156     535,791     519,544     502,787  
Savings 41,380     41,802     42,088     37,471     36,127  
Time 281,426     285,890     290,706     295,798     303,074  
Total interest-bearing 852,668     864,848     868,585     852,813     841,988  
Total Bank of Albuquerque 1,373,453     1,373,072     1,406,051     1,340,632     1,322,011  
                   
Bank of Arkansas:                  
Demand 25,397     19,731     31,002     35,996     35,075  
Interest-bearing:                  
Transaction 290,728     284,349     253,691     158,115     234,063  
Savings 1,573     1,712     1,677     1,936     2,222  
Time 26,203     28,220     28,277     28,520     38,811  
Total interest-bearing 318,504     314,281     283,645     188,571     275,096  
Total Bank of Arkansas 343,901     334,012     314,647     224,567     310,171  
                   
Colorado State Bank & Trust:                  
Demand 430,675     403,491     412,532     445,755     422,044  
Interest-bearing:                  
Transaction 655,206     601,741     604,665     631,874     571,807  
Savings 31,398     31,285     31,524     29,811     29,768  
Time 320,279     322,432     340,006     353,998     372,401  
Total interest-bearing 1,006,883     955,458     976,195     1,015,683     973,976  
Total Colorado State Bank & Trust 1,437,558     1,358,949     1,388,727     1,461,438     1,396,020  
                   
                   
DEPOSITS BY PRINCIPAL MARKET AREA — UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
  Sept. 30, 2015   June 30, 2015   March 31, 2015   Dec. 31, 2014   Sept. 30, 2014
Bank of Arizona:                  
Demand 306,425     352,024     271,091     369,115     279,811  
Interest-bearing:                  
Transaction 293,319     298,073     295,480     347,214     336,584  
Savings 4,121     2,726     2,900     2,545     3,718  
Time 26,750     28,165     28,086     36,680     38,842  
Total interest-bearing 324,190     328,964     326,466     386,439     379,144  
Total Bank of Arizona 630,615     680,988     597,557     755,554     658,955  
                   
Bank of Kansas City:                  
Demand 234,847     239,609     263,920     259,121     268,903  
Interest-bearing:                  
Transaction 150,253     139,260     157,044     273,999     128,039  
Savings 1,570     1,580     1,618     1,274     1,315  
Time 36,630     42,262     45,082     45,210     48,785  
Total interest-bearing 188,453     183,102     203,744     320,483     178,139  
Total Bank of Kansas City 423,300     422,711     467,664     579,604     447,042  
                   
TOTAL BOK FINANCIAL $ 20,619,443     $ 21,059,729     $ 21,153,347     $ 21,140,859     $ 20,289,056  

NET INTEREST MARGIN TREND — UNAUDITED
BOK FINANCIAL CORPORATION
  Three Months Ended
  Sept. 30, 2015   June 30, 2015   March 31, 2015   Dec. 31, 2014   Sept. 30, 2014
                   
TAX-EQUIVALENT ASSETS YIELDS                  
Interest-bearing cash and cash equivalents 0.28 %   0.25 %   0.27 %   0.28 %   0.20 %
Trading securities 2.70 %   1.85 %   2.55 %   2.48 %   2.67 %
Investment securities:                  
Taxable 5.49 %   5.49 %   5.51 %   5.68 %   5.66 %
Tax-exempt 1.54 %   1.56 %   1.56 %   1.56 %   1.56 %
Total investment securities 3.04 %   3.05 %   3.04 %   3.11 %   3.03 %
Available for sale securities:                  
Taxable 1.99 %   1.92 %   1.95 %   1.97 %   1.94 %
Tax-exempt 4.15 %   4.21 %   4.40 %   4.23 %   3.14 %
Total available for sale securities 2.01 %   1.94 %   1.98 %   1.99 %   1.95 %
Fair value option securities 2.30 %   2.17 %   2.28 %   2.18 %   2.05 %
Restricted equity securities 5.95 %   5.82 %   5.79 %   5.77 %   5.99 %
Residential mortgage loans held for sale 3.79 %   3.37 %   3.41 %   3.87 %   3.79 %
Loans 3.54 %   3.65 %   3.59 %   3.73 %   3.78 %
Allowance for loan losses                  
Loans, net of allowance 3.59 %   3.70 %   3.64 %   3.78 %   3.83 %
Total tax-equivalent yield on earning assets 2.83 %   2.84 %   2.80 %   2.86 %   2.93 %
                   
COST OF INTEREST-BEARING LIABILITIES                  
Interest-bearing deposits:                  
Interest-bearing transaction 0.08 %   0.09 %   0.10 %   0.09 %   0.10 %
Savings 0.10 %   0.11 %   0.10 %   0.11 %   0.12 %
Time 1.33 %   1.36 %   1.46 %   1.47 %   1.56 %
Total interest-bearing deposits 0.34 %   0.35 %   0.37 %   0.38 %   0.41 %
Funds purchased 0.08 %   0.08 %   0.09 %   0.08 %   0.07 %
Repurchase agreements 0.03 %   0.03 %   0.04 %   0.04 %   0.05 %
Other borrowings 0.30 %   0.31 %   0.32 %   0.32 %   0.34 %
Subordinated debt 1.04 %   2.21 %   2.52 %   2.50 %   2.46 %
Total cost of interest-bearing liabilities 0.32 %   0.35 %   0.38 %   0.39 %   0.41 %
Tax-equivalent net interest revenue spread 2.51 %   2.49 %   2.42 %   2.47 %   2.52 %
Effect of noninterest-bearing funding sources and other 0.10 %   0.12 %   0.13 %   0.14 %   0.15 %
Tax-equivalent net interest margin 2.61 %   2.61 %   2.55 %   2.61 %   2.67 %
 
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, 2015   June 30, 2015   March 31, 2015   Dec. 31, 2014   Sept. 30, 2014
Nonperforming assets:                  
Nonaccruing loans:                  
Commercial $ 33,798     $ 24,233     $ 13,880     $ 13,527     $ 16,404  
Commercial real estate 10,956     20,139     19,902     18,557     30,660  
Residential mortgage 44,099     45,969     46,487     48,121     48,907  
Personal 494     550     464     566     580  
Total nonaccruing loans 89,347     90,891     80,733     80,771     96,551  
Accruing renegotiated loans guaranteed by U.S. government agencies 81,598     82,368     80,287     73,985     70,459  
Real estate and other repossessed assets:                  
Guaranteed by U.S. government agencies2             49,898     46,809  
Other 33,116     35,499     45,551     51,963     51,062  
Total real estate and other repossessed assets 33,116     35,499     45,551     101,861     97,871  
Total nonperforming assets $ 204,061     $ 208,758     $ 206,571     $ 256,617     $ 264,881  
Total nonperforming assets excluding those guaranteed by U.S. government agencies $ 118,578     $ 122,673     $ 123,028     $ 129,022     $ 143,778  
                   
Nonaccruing loans by loan class:                  
Commercial:                  
Energy $ 17,880     $ 6,841     $ 1,875     $ 1,416     $ 1,508  
Services 10,692     10,944     4,744     5,201     3,584  
Wholesale / retail 3,058     4,166     4,401     4,149     5,502  
Manufacturing 352     379     417     450     3,482  
Healthcare 1,218     1,278     1,558     1,380     1,417  
Other commercial and industrial 598     625     885     931     911  
Total commercial 33,798     24,233     13,880     13,527     16,404  
Commercial real estate:                  
Residential construction and land development 4,748     9,367     9,598     5,299     14,634  
Retail 1,648     3,826     3,857     3,926     4,009  
Office 684     2,360     2,410     3,420     3,499  
Multifamily 185     195              
Industrial 76     76     76          
Other commercial real estate 3,615     4,315     3,961     5,912     8,518  
Total commercial real estate 10,956     20,139     19,902     18,557     30,660  
Residential mortgage:                  
Permanent mortgage 30,660     32,187     33,365     34,845     35,137  
Permanent mortgage guaranteed by U.S. government agencies 3,885     3,717     3,256     3,712     3,835  
Home equity 9,554     10,065     9,866     9,564     9,935  
Total residential mortgage 44,099     45,969     46,487     48,121     48,907  
Personal 494     550     464     566     580  
Total nonaccruing loans $ 89,347     $ 90,891     $ 80,733     $ 80,771     $ 96,551  
                   
                   
CREDIT QUALITY INDICATORS — UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratios) 
  Three Months Ended
  Sept. 30, 2015   June 30, 2015   March 31, 2015   Dec. 31, 2014   Sept. 30, 2014
Performing loans 90 days past due1 $ 101     $ 99     $ 523     $ 125     $ 25  
                   
Gross charge-offs $ (5,274 )   $ (2,877 )   $ (2,169 )   $ (7,224 )   $ (2,638 )
Recoveries 3,521     2,206     10,523     5,036     3,114  
Net recoveries (charge-offs) $ (1,753 )   $ (671 )   $ 8,354     $ (2,188 )   $ 476  
                   
Provision for credit losses $ 7,500     $ 4,000     $     $     $  
                   
Allowance for loan losses to period end loans 1.33 %   1.33 %   1.35 %   1.33 %   1.40 %
Combined allowance for credit losses to period end loans 1.35 %   1.34 %   1.35 %   1.34 %   1.41 %
Nonperforming assets to period end loans and repossessed assets 1.33 %   1.38 %   1.40 %   1.79 %   1.92 %
Net charge-offs (annualized) to average loans 0.05 %   0.02 %   (0.23 )%   0.06 %   (0.01 )%
Allowance for loan losses to nonaccruing loans 228.45 %   221.24 %   244.86 %   234.06 %   198.08 %
Combined allowance for credit losses to nonaccruing loans 232.48 %   222.21 %   246.05 %   235.59 %   199.35 %
1  Excludes residential mortgage loans guaranteed by agencies of the U.S. government.
2  Approximately $50 million was reclassified from Real estate and other repossessed assets to Receivables on the balance sheet on January 1, 2015 with the adoption of Financial Accounting Standards Board Update No. 2014-14, Classification of Certain Government-Guaranteed Mortgage Loans Upon Foreclosure (“ASU 2014-14”). Upon foreclosure of loans for which the loan balance is expected to be recovered from the guarantee by a U.S. government agency, the loan balance will be directly reclassified to other receivables without including such foreclosed assets in real estate and other repossessed assets.

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

Andrea Myers
Corporate Communications
(918) 594-7794