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BOK Financial Corporation Reports Quarterly Earnings of $157 million or $2.32 Per Share in the Third Quarter

TULSA, Okla., Oct. 26, 2022 (GLOBE NEWSWIRE) -- BOK Financial Corporation (NASD: BOKF) - 

CEO Commentary

Stacy Kymes, president and chief executive officer, stated, “The third quarter was another very strong quarter as we sustain our momentum around top-line revenue growth. I am proud to see the hard work of our team show up in consistent loan growth, net interest margin improvement and non-interest revenue growth while our efficiency ratio has moved well below 60 percent. Although our asset quality trends remain unsustainably good, we added to our loan loss reserves this quarter in recognition of the loan growth and less certain economic forecast. While the longer-term economic outlook is less certain, we remain optimistic about our ability to grow earnings from current levels in the near-term."

Third Quarter 2022 Financial Highlights
(Unless indicated otherwise, all comparisons are to the prior quarter)

  • Net income was $156.5 million or $2.32 per diluted share for the third quarter of 2022 and $132.8 million or $1.96 per diluted share for the second quarter of 2022.
  • Net interest revenue totaled $316.3 million, an increase of $42.3 million. Net interest margin was 3.24 percent compared to 2.76 percent. In response to rising inflation, the Federal Reserve increased the federal funds rate another 150 basis points in the third quarter to a total of 300 basis points since the beginning of 2022. The resulting impact on market interest rates has increased net interest margin.
  • Fees and commissions revenue increased $19.3 million to $192.6 million. Brokerage and trading revenue increased $17.0 million, largely due to higher margins on trading activity driven by favorable market conditions and increased market volatility. Additionally, the third quarter was a record quarter for investment banking revenue.
  • The net cost of the changes in fair value of mortgage servicing rights and related economic hedges was $4.8 million for the third quarter of 2022 compared to a net benefit of $1.9 million for the second quarter of 2022, due to increased market volatility in the third quarter.
  • Operating expense increased $21.1 million to $294.8 million. Personnel expense increased $15.4 million, largely driven by higher incentive compensation expense. Non-personnel expense increased $5.7 million, primarily related to project-related professional fees and seasonal occupancy costs.
  • Period-end loans increased $499 million to $21.8 billion at September 30, 2022. Of this increase, commercial real estate loans grew $368 million, while loans to individuals increased $125 million. In addition, unfunded loan commitments grew by $1.1 billion. Average outstanding loan balances were $21.6 billion, a $542 million increase.
  • A $15.0 million provision for expected credit losses was recorded in the third quarter of 2022, primarily due to loan growth and increased uncertainty in the economic outlook, partially offset by improving credit quality metrics. No provision for expected credit losses was necessary for the second quarter of 2022. The combined allowance for credit losses totaled $298 million or 1.37 percent of outstanding loans at September 30, 2022. The combined allowance for credit losses was $283 million or 1.33 percent of outstanding loans at June 30, 2022.
  • Average deposits decreased $1.5 billion to $37.0 billion and period-end deposits decreased $2.2 billion to $36.4 billion, consistent with industry trends as customers redeploy resources following the savings trend during the height of the pandemic. Average interest-bearing deposits decreased $1.4 billion and average demand deposits were reduced by $97 million.
  • The company's common equity Tier 1 capital ratio was 11.80 percent at September 30, 2022. In addition, the company's Tier 1 capital ratio was 11.82 percent, total capital ratio was 12.81 percent, and leverage ratio was 9.76 percent at September 30, 2022. At June 30, 2022, the company's common equity Tier 1 capital ratio was 11.61 percent, Tier 1 capital ratio was 11.63 percent, total capital ratio was 12.59 percent, and leverage ratio was 9.12 percent.
  • The company repurchased 548,034 shares of common stock at an average price of $91.20 a share in the third quarter of 2022.

Third Quarter 2022 Segment Highlights

  • Commercial Banking contributed $132.9 million to net income in the third quarter of 2022, an increase of $28.1 million. Combined net interest revenue and fee revenue increased $38.6 million due to loan growth and increased spreads on deposits sold to the Funds Management unit. Net loans recovered were $976 thousand less than the prior quarter. Personnel expense increased $2.8 million, driven by incentive compensation costs associated with growth in loans. Linked quarter performance also improved due to a $5.8 million write-down of a repossessed equity interest in a midstream energy entity in the prior quarter. Average loans increased $568 million or 3 percent to $17.9 billion. Average deposits decreased $967 million or 5 percent to $18.0 billion.
  • Consumer Banking contributed $3.0 million to net income in the third quarter of 2022, an increase of $1.7 million over the prior quarter. The net cost of the changes in fair value of mortgage servicing rights and related economic hedges was $4.8 million for the third quarter of 2022 compared to a net benefit of $1.9 million for the second quarter of 2022. Combined net interest revenue and fee revenue increased $10.3 million, primarily due to an increase in the spread on deposits sold to our Funds Management unit. Fees and commissions revenue and operating expense were consistent with the prior quarter. Both average loans and average deposits were also relatively consistent with the previous quarter.
  • Wealth Management contributed $41.8 million to net income in the third quarter of 2022, an increase of $14.5 million over the second quarter of 2022. Our diverse set of investment-focused businesses, which include trading in fixed income securities and other financial instruments and providing wealth management services to institutional and private wealth clients, produced total net interest and fee revenues of $146.7 million, an increase of $22.2 million. Total revenue from trading activities increased $5.0 million, primarily due to higher margins on residential mortgage-backed securities trading activity. Investment banking revenue grew $3.2 million due to increased underwriting fees and financial advisory fees. Other revenue increased $8.3 million, largely due to higher derivative margin use fees. Operating expense increased $2.8 million, mainly due to increased volume-driven incentive compensation costs. Average loans were consistent with the prior quarter. Average deposits decreased $484 million or 6 percent to $8.0 billion. Assets under management were $95.4 billion, a decrease of $580 million.

Net Interest Revenue

Net interest revenue was $316.3 million for the third quarter of 2022 compared to $274.0 million for the second quarter of 2022. Net interest margin was 3.24 percent compared to 2.76 percent. In response to rising inflation, the Federal Reserve increased the federal funds rate 150 basis points in the third quarter bringing the year-to-date total rate increases to 300 basis points. The resulting impact on market interest rates has increased net interest margin as our earning assets, led by our significant percentage of variable-rate commercial loans, reprice at a higher rate and faster pace than our interest-bearing liabilities.

Average earning assets decreased $534 million. Average trading securities decreased $989 million in response to lower origination volumes in the residential mortgage industry driven by increases in interest rates. Average loan balances increased $542 million, largely due to growth in commercial real estate loans and loans to individuals. Average available for sale securities decreased $2.0 billion while investment securities increased $2.0 billion. Late in the second quarter, $2.4 billion in U.S. government agency mortgage-backed securities were transferred from available for sale to investment securities to limit the effect of future rate increases on the tangible common equity ratio. Average interest bearing cash and cash equivalents decreased $95 million. Average interest-bearing deposits decreased $2.2 billion as customers redeploy resources following the height of the pandemic. Average funds purchased and repurchase agreements decreased $423 million while other borrowings increased $228 million.

The yield on average earning assets was 3.71 percent, up 75 basis points. The loan portfolio yield increased 97 basis points to 4.89 percent while the yield on trading securities was up 72 basis points to 2.72 percent. The yield on the available for sale securities portfolio increased 37 basis points to 2.21 percent. The yield on investment securities decreased 93 basis points due to the transfer of securities from the available for sale portfolio to the investment portfolio. The yield on interest-bearing cash and cash equivalents increased 104 basis points.

Funding costs were 0.76 percent, a 45 basis point increase. The cost of interest-bearing deposits increased 39 basis points to 0.63 percent. The cost of other borrowings was up 132 basis points to 2.33 percent while the cost of funds purchased and repurchase agreements increased 19 basis points to 0.72 percent. The benefit to net interest margin from assets funded by non-interest liabilities was 29 basis points, an increase of 18 basis points.

Operating Revenue

Fees and commissions revenue totaled $192.6 million for the third quarter of 2022, up $19.3 million, led by a $17.0 million increase in brokerage and trading revenue. Trading revenue increased $14.5 million, largely due to higher margins on residential mortgage-backed securities trading activity driven by favorable market conditions and increased market volatility. Total investment banking revenue increased $2.4 million, primarily due to growth in the size and number of municipal bond transactions.

Mortgage banking revenue remained consistent with the prior quarter with growth in mortgage servicing revenue offsetting a reduction in mortgage production revenue. Two acquisitions of mortgage servicing rights at the end of the second quarter led to an increase in mortgage servicing revenue of $1.8 million. Mortgage production revenue decreased $1.9 million as rising mortgage interest rates and inventory constraints continue to place pressure on mortgage loan originations. Mortgage production volume decreased $76.0 million to $230.0 million. Refinance activity as percentage of total production declined to 10 percent, the lowest in recent history.

All other fee revenue was relatively consistent with the prior quarter, increasing $2.4 million in total.

Other gains and losses, net, increased $8.6 million, primarily driven by a write-down of a repossessed equity interest in a midstream entity in the prior quarter combined with a change in the value of deferred compensation investments, which are held to offset the cost of various employee benefit programs.

Operating Expense

Total operating expense was $294.8 million for the third quarter of 2022, an increase of $21.1 million compared to the second quarter of 2022.

Personnel expense increased $15.4 million. Deferred compensation expense increased $6.0 million and share-based incentive compensation expense increased $4.3 million. These expenses are influenced by market valuations and forecasted annual results compared to a peer group, both of which can be volatile. Strong sales results in our Commercial and Wealth segments led to a $4.9 million increase in cash-based incentive compensation.

Non-personnel expense was $124.4 million, up $5.7 million. Higher seasonal operating costs on leases led to a $1.8 million increase in net occupancy and equipment expense while project-related professional fees led to a $1.6 million increase in professional fees and services.

Loans, Deposits and Capital

Loans

Outstanding loans were $21.8 billion at September 30, 2022, growing $499 million over June 30, 2022, due to growth in commercial real estate loans and loans to individuals. Unfunded loan commitments also were up $1.1 billion over the second quarter.

Outstanding commercial loan balances were largely unchanged compared to the prior quarter. Growth in healthcare and general business loans were offset by a decrease in services and energy loan balances.

Healthcare sector loan balances increased $130 million, totaling $3.8 billion or 18 percent of total loans. Our healthcare sector loans primarily consist of $3.1 billion of senior housing and care facilities, including independent living, assisted living and skilled nursing. Generally, we loan to borrowers with a portfolio of multiple facilities, which serves to help diversify risks specific to a single facility.

General business loans increased $61 million to $3.1 billion or 14 percent of total loans. General business loans include $1.8 billion of wholesale/retail loans and $1.3 billion of loans from other commercial industries.

Services sector loan balances decreased $141 million to $3.3 billion or 15 percent of total loans. Services loans consist of a large number of loans to a variety of businesses, including Native American tribal and state and local municipal government entities, Native American tribal casino operations, foundations and not-for-profit organizations, educational services and specialty trade contractors.

Energy loan balances decreased $21 million to $3.4 billion or 15 percent of total loans. The majority of this portfolio is first lien, senior secured, reserve-based lending to oil and gas producers, which we believe is the lowest risk form of energy lending. Approximately 72 percent of committed production loans are secured by properties primarily producing oil. The remaining 28 percent is secured by properties primarily producing natural gas. Unfunded energy loan commitments were $3.5 billion at September 30, 2022, an increase of $107 million over June 30, 2022.

Commercial real estate loan balances grew $368 million and represent 21 percent of total loans. Loans secured by multifamily residential properties increased $248 million to 1.1 billion. Loans secured by industrial facilities increased $150 million to $1.1 billion. This growth was partially offset by a $20 million decrease in construction and land development loans and a $14 million decrease in loans secured by office buildings.

PPP loan balances decreased $23 million to $20 million, or less than 1 percent of the total loans balance.

Loans to individuals increased $125 million and represent 17 percent of total loans. Total residential mortgage loans increased $36 million while personal loans increased $90 million.

Deposits

Period-end deposits totaled $36.4 billion at September 30, 2022, a $2.2 billion decrease, consistent with industry trends as customers redeploy cash resources following the savings trend during the pandemic. Interest-bearing transaction account balances decreased $1.5 billion while demand deposits decreased $735 million. Period-end Commercial Banking deposits decreased $1.8 billion, Wealth Management deposits decreased $237 million, and Consumer Banking deposits were largely unchanged. Average deposits were $37.0 billion at September 30, 2022, a $1.5 billion decrease. Average interest-bearing transaction account balances decreased $1.5 billion and average demand deposit account balances decreased $97 million.

Capital

The company's common equity Tier 1 capital ratio was 11.80 percent at September 30, 2022. In addition, the company's Tier 1 capital ratio was 11.82 percent, total capital ratio was 12.81 percent, and leverage ratio was 9.76 percent at September 30, 2022. At the beginning of 2020, we elected to delay the regulatory capital impact of the transition of the allowance for credit losses from the incurred loss methodology to CECL for two years, followed by a three-year transition period. This election added 9 basis points to the company's common equity tier 1 capital ratio at September 30, 2022. At June 30, 2022, the company's common equity Tier 1 capital ratio was 11.61 percent, Tier 1 capital ratio was 11.63 percent, total capital ratio was 12.59 percent, and leverage ratio was 9.12 percent.

The company's tangible common equity ratio, a non-GAAP measure, was 7.96 percent at September 30, 2022 and 8.16 percent at June 30, 2022. The tangible common equity ratio is primarily based on total shareholders' equity, which includes unrealized gains and losses on available for sale securities. The company has elected to exclude unrealized gains and losses from available for sale securities from its calculation of Tier 1 capital for regulatory capital purposes, consistent with the treatment under the previous capital rules.

The company repurchased 548,034 shares of common stock at an average price of $91.20 a share in the third quarter of 2022. We view share buybacks opportunistically, but within the context of maintaining our strong capital position.

Credit Quality

Expected credit losses on assets carried at amortized cost are recognized over their projected lives based on models that measure the probability of default and loss given default over a 12-month reasonable and supportable forecast period. Our models incorporate base case, downside and upside macroeconomic variables such as real gross domestic product ("GDP") growth, civilian unemployment rates and West Texas Intermediate ("WTI") oil prices on a probability weighted basis.

A $15.0 million provision for credit losses was necessary for the third quarter of 2022, primarily related to strong loan growth in loans and unfunded commitments during the quarter. The level of uncertainty in the economic outlook of our reasonable and supportable forecast continued to increase, offset by the impact of a sustained trend of improving credit quality metrics.

Our base case reasonable and supportable forecast assumes inflation peaks in the third quarter of 2022 and begins to slowly normalize thereafter. We expect the Russian-Ukraine conflict remains isolated and conditions improve in the fourth quarter of 2022. GDP is projected to grow by 1.4 percent over the next twelve months as labor force participants will continue to re-enter the job market to help meet record job openings. Inflation pressures cause modest declines in real household income compared to pre-pandemic levels, resulting in below-trend GDP growth. Our forecasted civilian unemployment rate is 3.9 percent for the fourth quarter of 2022, increasing to 4.1 percent by the third quarter of 2023. Our base case also assumes the Federal Reserve increases federal funds rates resulting in a target range of 4.00 percent to 4.25 percent by December 2022. No additional rate increases in 2023 are anticipated. WTI oil prices are projected to generally follow the NYMEX forward curve that existed at the end of September 2022, averaging $81.86 per barrel over the next twelve months.

The probability weighting of our base case reasonable and supportable forecast decreased to 50 percent in the third quarter of 2022 compared to 55 percent in the second quarter of 2022 as the level of uncertainty in economic forecasts continued to increase. Our downside case, probability weighted at 40 percent, assumes the Russia-Ukraine conflict persists through the third quarter of 2023, but does remain isolated. Higher levels of inflation force the Federal Reserve to adopt a more aggressive monetary policy to combat the inflationary environment. This results in a federal funds target range of 4.75 percent to 5.00 percent by September 2023. The United States economy is pushed into a recession, with a contraction in economic activity and a sharp increase in the unemployment rate from 4.5 percent in the fourth quarter of 2022 to 6.4 percent in the third quarter of 2023. In this scenario, real GDP is expected to contract 1.3 percent over the next four quarters. WTI oil prices are projected to average $72.58 per barrel over the next twelve months, peaking at $92.87 in the fourth quarter of 2022 and falling 39 percent over the following three quarters.

Nonperforming assets totaled $336 million or 1.54 percent of outstanding loans and repossessed assets at September 30, 2022, compared to $333 million or 1.56 percent at June 30, 2022. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $144 million or 0.67 percent of outstanding loans and repossessed assets at September 30, 2022, compared to $118 million or 0.56 percent at June 30, 2022.

Nonaccruing loans were $131 million or 0.60 percent of outstanding loans at September 30, 2022. Nonaccruing commercial loans totaled $76 million or 0.56 percent of outstanding commercial loans. Nonaccruing commercial real estate loans totaled $8.0 million or 0.18 percent of outstanding commercial real estate loans. Nonaccruing loans to individuals totaled $47 million or 1.28 percent of outstanding loans to individuals.

Nonaccruing loans increased $17 million over June 30, 2022, primarily related to nonaccruing healthcare and services loans, partially offset by a decrease in nonaccruing energy loans. New nonaccruing loans identified in the third quarter totaled $54 million, offset by $24 million in payments received, $8.2 million in foreclosures and $1.8 million in gross charge-offs.

Potential problem loans, which are defined as performing loans that, based on known information, cause management concern as to the borrowers' ability to continue to perform, totaled $95 million at September 30, 2022, down from $131 million at June 30. Potential problem healthcare loans decreased $27 million and potential problem services loans decreased $10 million.

At September 30, 2022, the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $298 million or 1.37 percent of outstanding loans and 262 percent of nonaccruing loans. The allowance for loan losses totaled $242 million or 1.11 percent of outstanding loans and 212 percent of nonaccruing loans. At June 30, 2022, the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $283 million or 1.33 percent of outstanding loans and 295 percent of nonaccruing loans. The allowance for loan losses was $241 million or 1.13 percent of outstanding loans and 251 percent of nonaccruing loans. Allowance percentages referenced above omit residential mortgage loans guaranteed by U.S. government agencies.

Gross charge-offs were $1.8 million for the third quarter compared to $1.4 million for the second quarter of 2022. Recoveries totaled $1.3 million for the third quarter of 2022 and $2.2 million for the prior quarter. Net charge-offs were $457 thousand or 0.01 percent of average loans on an annualized basis in the third quarter compared to net recoveries of $799 thousand or (0.02) percent of average loans on an annualized basis in the second quarter. Net charge-offs were 0.02 percent of average loans over the last four quarters.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $10.0 billion at September 30, 2022, a $112 million decrease compared to June 30, 2022. At September 30, 2022, the available for sale securities portfolio consisted primarily of $4.9 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $4.0 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. At September 30, 2022, the available for sale securities portfolio had a net unrealized loss of $936 million compared to $523 million at June 30, 2022.

We hold an inventory of trading securities in support of sales to a variety of customers. At September 30, 2022, the trading securities portfolio totaled $2.2 billion compared to $2.9 billion at June 30, 2022.

The company also maintains a portfolio of residential mortgage-backed securities issued by U.S. government agencies and interest rate derivative contracts as an economic hedge of the changes in the fair value of our mortgage servicing rights. This portfolio of fair value option securities decreased $4.0 million to $34 million at September 30, 2022.

Derivative contracts are carried at fair value. At September 30, 2022, the net fair values of derivative contracts, before consideration of cash margin, reported as assets under our customer derivative programs totaled $1.5 billion compared to $2.0 billion at June 30, 2022. The aggregate net fair value of derivative contracts, before consideration of cash margin, held under these programs reported as liabilities totaled $1.5 billion at September 30, 2022 and $2.0 billion at June 30, 2022.

The net cost of the changes in the fair value of mortgage servicing rights and related economic hedges was $4.8 million during the third quarter of 2022, including a $16.6 million increase in the fair value of mortgage servicing rights, $21.4 million decrease in the fair value of securities and derivative contracts held as an economic hedge, and $29 thousand of related net interest revenue.

Conference Call and Webcast

The company will hold a conference call at 9 a.m. Central time on Wednesday, October 26, 2022 to discuss the financial results with investors. The live audio webcast and presentation slides will be available on the company’s website at www.bokf.com. The conference call can also be accessed by dialing 1-201-689-8471. A conference call and webcast replay will also be available shortly after conclusion of the live call at www.bokf.com or by dialing 1-877-407-4018 and referencing conference ID # 13733709.

About BOK Financial Corporation

BOK Financial Corporation is a $44 billion regional financial services company headquartered in Tulsa, Oklahoma with $95 billion in assets under management and administration. The company's stock is publicly traded on NASDAQ under the Global Select market listings (BOKF). BOK Financial Corporation's holdings include BOKF, NA; BOK Financial Securities, Inc., BOK Financial Private Wealth, Inc. and BOK Financial Insurance, Inc. BOKF, NA's holdings include TransFund, Cavanal Hill Investment Management, Inc. and BOK Financial Asset Management, Inc. BOKF, NA operates banking divisions across eight states as: Bank of Albuquerque; Bank of Oklahoma; Bank of Texas; and BOK Financial in Arizona, Arkansas, Colorado, Kansas and Missouri; as well as having limited purpose offices in Nebraska, Wisconsin and Connecticut. Through its subsidiaries, BOK Financial Corporation provides commercial and consumer banking, brokerage trading, investment, trust and insurance services, mortgage origination and servicing, and an electronic funds transfer network. For more information, visit www.bokf.com.

The company will continue to evaluate critical assumptions and estimates, such as the appropriateness of the allowance for credit losses and asset impairment as of September 30, 2022 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 Corporation, the financial services industry, the economy generally and the expected or potential impact of the novel coronavirus (COVID-19) pandemic, and the related responses of the government, consumers, and others, on our business, financial condition and results of operations. 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 acquisitions and 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 various forward-looking 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 government, consumer or business responses to, and ability to treat or prevent further outbreak of the COVID-19 pandemic, changes in commodity prices, interest rates and interest rate relationships, inflation, demand for products and services, the degree of competition by traditional and nontraditional competitors, changes in banking regulations, tax laws, prices, levies and assessments, the impact of technological advances, and trends in customer behavior as well as their ability to repay loans. BOK Financial Corporation 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)

 Sep. 30, 2022 June 30, 2022
ASSETS   
Cash and due from banks$804,110  $1,313,563 
Interest-bearing cash and cash equivalents 804,799   723,787 
Trading securities 2,194,618   2,859,444 
Investment securities, net of allowance 2,572,360   2,637,345 
Available for sale securities 10,040,894   10,152,663 
Fair value option securities 33,966   37,927 
Restricted equity securities 100,356   95,130 
Residential mortgage loans held for sale 148,121   182,726 
Loans:   
Commercial 13,607,686   13,578,697 
Commercial real estate 4,473,911   4,106,148 
Paycheck protection program 20,233   43,140 
Loans to individuals 3,688,627   3,563,163 
Total loans 21,790,457   21,291,148 
Allowance for loan losses (241,768)  (241,114)
Loans, net of allowance 21,548,689   21,050,034 
Premises and equipment, net 569,379   573,605 
Receivables 200,343   176,672 
Goodwill 1,044,749   1,044,749 
Intangible assets, net 79,833   83,744 
Mortgage servicing rights 283,806   270,312 
Real estate and other repossessed assets, net 29,676   22,221 
Derivative contracts, net 1,693,742   1,992,977 
Cash surrender value of bank-owned life insurance 407,722   409,937 
Receivable on unsettled securities sales 49,089   60,168 
Other assets 1,039,194   1,690,068 
TOTAL ASSETS$43,645,446  $45,377,072 
    
LIABILITIES AND EQUITY   
Deposits:   
Demand$14,985,115  $15,720,296 
Interest-bearing transaction 19,000,023   20,544,199 
Savings 971,634   984,824 
Time 1,459,143   1,369,599 
Total deposits 36,415,915   38,618,918 
Funds purchased and repurchase agreements 626,952   677,030 
Other borrowings 234,933   35,505 
Subordinated debentures 131,168   131,223 
Accrued interest, taxes and expense 212,342   211,419 
Due on unsettled securities purchases 205,388   297,352 
Derivative contracts, net 821,275   214,576 
Other liabilities 483,165   449,507 
TOTAL LIABILITIES 39,131,138   40,635,530 
Shareholders' equity:   
Capital, surplus and retained earnings 5,414,879   5,339,967 
Accumulated other comprehensive loss (904,945)  (602,628)
TOTAL SHAREHOLDERS' EQUITY 4,509,934   4,737,339 
Non-controlling interests 4,374   4,203 
TOTAL EQUITY 4,514,308   4,741,542 
TOTAL LIABILITIES AND EQUITY$43,645,446  $45,377,072 


AVERAGE BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)

 Three Months Ended
 Sep. 30, 2022 June 30, 2022 Mar. 31, 2022 Dec. 31, 2021 Sep. 30, 2021
ASSETS         
Interest-bearing cash and cash equivalents$748,263  $843,619  $1,050,409  $1,208,552  $682,788 
Trading securities 3,178,068   4,166,954   8,537,390   9,260,778   7,617,236 
Investment securities, net of allowance 2,593,989   610,983   195,198   213,188   218,117 
Available for sale securities 10,306,257   12,258,072   13,092,422   13,247,607   13,446,095 
Fair value option securities 36,846   54,832   75,539   46,458   56,307 
Restricted equity securities 173,656   167,732   164,484   137,874   245,485 
Residential mortgage loans held for sale 132,685   148,183   179,697   163,433   167,620 
Loans:         
Commercial 13,481,961   13,382,176   12,677,706   12,401,935   12,231,230 
Commercial real estate 4,434,650   4,061,129   4,059,148   3,838,336   4,218,190 
Paycheck protection program 26,364   90,312   210,110   404,261   792,728 
Loans to individuals 3,656,257   3,524,097   3,516,698   3,598,121   3,606,460 
Total loans 21,599,232   21,057,714   20,463,662   20,242,653   20,848,608 
Allowance for loan losses (241,136)  (246,064)  (254,191)  (271,794)  (306,125)
Loans, net of allowance 21,358,096   20,811,650   20,209,471   19,970,859   20,542,483 
Total earning assets 38,527,860   39,062,025   43,504,610   44,248,749   42,976,131 
Cash and due from banks 821,801   822,599   790,440   783,670   766,688 
Derivative contracts, net 2,019,905   3,051,429   2,126,282   1,441,869   1,501,736 
Cash surrender value of bank-owned life insurance 410,667   408,489   406,379   404,149   401,926 
Receivable on unsettled securities sales 219,113   457,165   375,616   585,901   632,539 
Other assets 3,119,856   3,486,691   3,357,747   3,139,718   3,220,129 
TOTAL ASSETS$45,119,202  $47,288,398  $50,561,074  $50,604,056  $49,499,149 
          
LIABILITIES AND EQUITY         
Deposits:         
Demand$15,105,305  $15,202,597  $15,062,282  $14,818,841  $13,670,656 
Interest-bearing transaction 19,556,806   21,037,294   22,763,479   22,326,401   21,435,736 
Savings 978,596   981,493   947,407   909,131   888,011 
Time 1,409,069   1,373,036   1,589,039   1,747,715   1,839,983 
Total deposits 37,049,776   38,594,420   40,362,207   39,802,088   37,834,386 
Funds purchased and repurchase agreements 800,759   1,224,134   2,004,466   2,893,128   1,448,800 
Other borrowings 1,528,887   1,301,358   1,148,440   880,837   2,546,083 
Subordinated debentures 131,199   131,219   131,228   131,224   214,654 
Derivative contracts, net 105,221   535,574   682,435   320,757   434,334 
Due on unsettled securities purchases 331,428   380,332   519,097   629,642   957,538 
Other liabilities 396,510   389,031   565,350   578,091   619,913 
TOTAL LIABILITIES 40,343,780   42,556,068   45,413,223   45,235,767   44,055,708 
Total equity 4,775,422   4,732,330   5,147,851   5,368,289   5,443,441 
TOTAL LIABILITIES AND EQUITY$45,119,202  $47,288,398  $50,561,074  $50,604,056  $49,499,149 


STATEMENTS OF EARNINGS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except per share data)

 Three Months Ended Nine Months Ended
 September 30, September 30,
  2022   2021   2022   2021 
        
Interest revenue$363,150  $293,463  $940,496  $887,595 
Interest expense 46,825   13,236   81,742   46,639 
Net interest revenue 316,325   280,227   858,754   840,956 
Provision for credit losses 15,000   (23,000)  15,000   (83,000)
Net interest revenue after provision for credit losses 301,325   303,227   843,754   923,956 
Other operating revenue:       
Brokerage and trading revenue 61,006   47,930   77,970   98,120 
Transaction card revenue 25,974   24,632   77,130   71,985 
Fiduciary and asset management revenue 50,190   45,248   146,427   131,402 
Deposit service charges and fees 28,703   27,429   84,207   77,499 
Mortgage banking revenue 11,282   26,286   39,300   84,618 
Other revenue 15,479   18,896   38,608   58,364 
Total fees and commissions 192,634   190,421   463,642   521,988 
Other gains (losses), net 979   31,091   (8,304)  57,661 
Loss on derivatives, net (17,009)  (5,760)  (77,559)  (14,590)
Loss on fair value option securities, net (4,368)  (120)  (17,790)  (3,657)
Change in fair value of mortgage servicing rights 16,570   12,945   83,165   33,778 
Gain on available for sale securities, net 892   1,255   3,017   3,152 
Total other operating revenue 189,698   229,832   446,171   598,332 
Other operating expense:       
Personnel 170,348   175,863   484,499   520,908 
Business promotion 6,127   4,939   18,965   9,837 
Charitable contributions to BOKF Foundation          4,000 
Professional fees and services 14,089   12,436   37,977   36,777 
Net occupancy and equipment 29,296   28,395   87,640   81,690 
Insurance 4,306   3,712   13,317   11,992 
Data processing and communications 41,743   38,371   122,859   112,256 
Printing, postage and supplies 4,349   3,558   11,967   11,283 
Amortization of intangible assets 3,943   4,488   11,956   13,873 
Mortgage banking costs 9,504   8,962   26,818   34,031 
Other expense 11,046   10,553   30,026   41,566 
Total other operating expense 294,751   291,277   846,024   878,213 
        
Net income before taxes 196,272   241,782   443,901   644,075 
Federal and state income taxes 39,681   54,061   92,000   144,939 
        
Net income 156,591   187,721   351,901   499,136 
Net income (loss) attributable to non-controlling interests 81   (601)  57   (1,667)
Net income attributable to BOK Financial Corporation shareholders$156,510  $188,322  $351,844  $500,803 
        
Average shares outstanding:       
Basic 67,003,199   68,359,125   67,409,789   68,768,044 
Diluted 67,004,623   68,360,871   67,411,222   68,770,663 
        
Net income per share:       
Basic$2.32  $2.74  $5.18  $7.23 
Diluted$2.32  $2.74  $5.18  $7.23 


FINANCIAL HIGHLIGHTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and share data)

 Three Months Ended
 Sep. 30, 2022 June 30, 2022 Mar. 31, 2022 Dec. 31, 2021 Sep. 30, 2021
Capital:         
Period-end shareholders' equity$4,509,934  $4,737,339  $4,849,582  $5,363,732  $5,388,973 
Risk weighted assets$36,866,994  $36,787,092  $37,160,258  $34,575,277  $33,916,456 
Risk-based capital ratios:         
Common equity tier 1 11.80%  11.61%  11.30%  12.24%  12.26%
Tier 1 11.82%  11.63%  11.31%  12.25%  12.29%
Total capital 12.81%  12.59%  12.25%  13.29%  13.38%
Leverage ratio 9.76%  9.12%  8.47%  8.55%  8.77%
Tangible common equity ratio1 7.96%  8.16%  8.13%  8.61%  9.28%
          
Common stock:         
Book value per share$67.06  $69.87  $71.21  $78.34  $78.56 
Tangible book value per share$50.34  $53.22  $54.58  $61.74  $61.93 
Market value per share:         
High$95.51  $94.76  $119.59  $110.21  $92.97 
Low$69.82  $74.03  $93.76  $89.01  $77.20 
Cash dividends paid$35,661  $35,892  $36,093  $36,256  $35,725 
Dividend payout ratio 22.79%  27.02%  57.76%  30.90%  18.97%
Shares outstanding, net 67,254,383   67,806,005   68,104,043   68,467,772   68,596,764 
Stock buy-back program:         
Shares repurchased 548,034   294,084   475,877   128,522   478,141 
Amount$49,980  $24,404  $48,074  $13,426  $40,644 
Average price per share$91.20  $82.98  $101.02  $104.46  $85.00 
          
Performance ratios (quarter annualized):
Return on average assets 1.38%  1.13%  0.50%  0.92%  1.51%
Return on average equity 13.01%  11.27%  4.93%  8.68%  13.78%
Net interest margin 3.24%  2.76%  2.44%  2.52%  2.66%
Efficiency ratio 57.35%  60.65%  75.07%  70.14%  61.23%
          
Reconciliation of non-GAAP measures:
1     Tangible common equity ratio:         
Total shareholders' equity$4,509,934  $4,737,339  $4,849,582  $5,363,732  $5,388,973 
Less: Goodwill and intangible assets, net 1,124,582   1,128,493   1,132,510   1,136,527   1,140,935 
Tangible common equity$3,385,352  $3,608,846  $3,717,072  $4,227,205  $4,248,038 
          
Total assets$43,645,446  $45,377,072  $46,826,507  $50,249,431  $46,923,409 
Less: Goodwill and intangible assets, net 1,124,582   1,128,493   1,132,510   1,136,527   1,140,935 
Tangible assets$42,520,864  $44,248,579  $45,693,997  $49,112,904  $45,782,474 
          
Tangible common equity ratio 7.96%  8.16%  8.13%  8.61%  9.28%
          
          
Pre-provision net revenue:          
Net income before taxes$196,272  $168,980  $78,649  $152,025  $241,782 
Provision for expected credit losses 15,000         (17,000)  (23,000)
Net income (loss) attributable to non-controlling interests 81   12   (36)  (129)  (601)
Pre-provision net revenue$211,191  $168,968  $78,685  $135,154  $219,383 
          
Other data:         
Tax equivalent interest$2,163  $2,040  $1,973  $2,104  $2,217 
Net unrealized gain (loss) on available for sale securities$(935,788) $(522,812) $(546,598) $93,381  $221,487 
          
Mortgage banking:         
Mortgage production revenue$(2,406) $(504) $5,055  $10,018  $15,403 
          
Mortgage loans funded for sale$260,210  $360,237  $418,866  $568,507  $652,336 
Add: current period-end outstanding commitments 75,779   106,004   160,260   171,412   239,066 
Less: prior period end outstanding commitments 106,004   160,260   171,412   239,066   276,154 
Total mortgage production volume$229,985  $305,981  $407,714  $500,853  $615,248 
          
Mortgage loan refinances to mortgage loans funded for sale 10%  19%  45%  51%  48%
Realized margin on funded mortgage loans(0.41)%  0.88%  1.64%  2.34%  2.48%
Production revenue as a percentage of production volume(1.05)% (0.16)%  1.24%  2.00%  2.50%
          
Mortgage servicing revenue$13,688  $11,872  $11,595  $11,260  $10,883 
Average outstanding principal balance of mortgage loans serviced for others 19,070,221   17,336,596   16,155,329   15,930,480   14,899,306 
Average mortgage servicing revenue rates 0.28%  0.27%  0.29%  0.28%  0.29%
          
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net$(17,027) $(13,639) $(46,694) $(4,862) $(5,829)
Gain (loss) on fair value option securities, net (4,368)  (2,221)  (11,201)  1,418   (120)
Loss on economic hedge of mortgage servicing rights (21,395)  (15,860)  (57,895)  (3,444)  (5,949)
Gain on changes in fair value of mortgage servicing rights 16,570   17,485   49,110   7,859   12,945 
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue (4,825)  1,625   (8,785)  4,415   6,996 
Net interest revenue on fair value option securities2 29   275   383   259   286 
Total economic benefit (cost) of changes in the fair value of mortgage servicing rights, net of economic hedges$(4,796) $1,900  $(8,402) $4,674  $7,282 

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


QUARTERLY EARNINGS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and per share data)

 Three Months Ended
 Sep. 30, 2022 June 30, 2022 Mar. 31, 2022 Dec. 31, 2021 Sep. 30, 2021
          
Interest revenue$363,150  $294,247  $283,099  $292,334  $293,463 
Interest expense 46,825   20,229   14,688   15,257   13,236 
Net interest revenue 316,325   274,018   268,411   277,077   280,227 
Provision for credit losses 15,000         (17,000)  (23,000)
Net interest revenue after provision for credit losses 301,325   274,018   268,411   294,077   303,227 
Other operating revenue:         
Brokerage and trading revenue 61,006   44,043   (27,079)  14,869   47,930 
Transaction card revenue 25,974   26,940   24,216   24,998   24,632 
Fiduciary and asset management revenue 50,190   49,838   46,399   46,872   45,248 
Deposit service charges and fees 28,703   28,500   27,004   26,718   27,429 
Mortgage banking revenue 11,282   11,368   16,650   21,278   26,286 
Other revenue 15,479   12,684   10,445   11,586   18,896 
Total fees and commissions 192,634   173,373   97,635   146,321   190,421 
Other gains (losses), net 979   (7,639)  (1,644)  6,081   31,091 
Loss on derivatives, net (17,009)  (13,569)  (46,981)  (4,788)  (5,760)
Gain (loss) on fair value option securities, net (4,368)  (2,221)  (11,201)  1,418   (120)
Change in fair value of mortgage servicing rights 16,570   17,485   49,110   7,859   12,945 
Gain on available for sale securities, net 892   1,188   937   552   1,255 
Total other operating revenue 189,698   168,617   87,856   157,443   229,832 
Other operating expense:         
Personnel 170,348   154,923   159,228   174,474   175,863 
Business promotion 6,127   6,325   6,513   6,452   4,939 
Charitable contributions to BOKF Foundation          5,000    
Professional fees and services 14,089   12,475   11,413   14,129   12,436 
Net occupancy and equipment 29,296   27,489   30,855   26,897   28,395 
Insurance 4,306   4,728   4,283   3,889   3,712 
Data processing and communications 41,743   41,280   39,836   39,358   38,371 
Printing, postage and supplies 4,349   3,929   3,689   2,935   3,558 
Amortization of intangible assets 3,943   4,049   3,964   4,438   4,488 
Mortgage banking costs 9,504   9,437   7,877   8,667   8,962 
Other expense 11,046   9,020   9,960   13,256   10,553 
Total other operating expense 294,751   273,655   277,618   299,495   291,277 
Net income before taxes 196,272   168,980   78,649   152,025   241,782 
Federal and state income taxes 39,681   36,122   16,197   34,836   54,061 
Net income 156,591   132,858   62,452   117,189   187,721 
Net income (loss) attributable to non-controlling interests 81   12   (36)  (129)  (601)
Net income attributable to BOK Financial Corporation shareholders$156,510  $132,846  $62,488  $117,318  $188,322 
          
Average shares outstanding:         
Basic 67,003,199   67,453,748   67,812,400   68,069,160   68,359,125 
Diluted 67,004,623   67,455,172   67,813,851   68,070,910   68,360,871 
Net income per share:         
Basic$2.32  $1.96  $0.91  $1.71  $2.74 
Diluted$2.32  $1.96  $0.91  $1.71  $2.74 


LOANS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)

  Sep. 30, 2022 June 30, 2022 Mar. 31, 2022 Dec. 31, 2021 Sep. 30, 2021
Commercial:          
Healthcare $3,826,623 $3,696,963 $3,441,732 $3,414,940 $3,347,641
Energy  3,371,588  3,393,072  3,197,667  3,006,884  2,814,059
Services  3,280,925  3,421,493  3,351,495  3,367,193  3,323,422
General business  3,128,550  3,067,169  2,892,295  2,717,448  2,690,018
Total commercial  13,607,686  13,578,697  12,883,189  12,506,465  12,175,140
           
Commercial real estate:          
Multifamily  1,126,700  878,565  867,288  786,404  875,586
Industrial  1,103,905  953,626  911,928  766,125  890,316
Office  1,086,615  1,100,115  1,097,516  1,040,963  1,030,755
Retail  635,021  637,304  667,561  679,917  766,402
Residential construction and land development  91,690  111,575  120,506  120,016  118,416
Other commercial real estate  429,980  424,963  436,157  437,900  435,417
Total commercial real estate  4,473,911  4,106,148  4,100,956  3,831,325  4,116,892
           
Paycheck protection program  20,233  43,140  137,365  276,341  536,052
           
Loans to individuals:          
Residential mortgage  1,851,836  1,784,729  1,723,506  1,722,170  1,747,243
Residential mortgages guaranteed by U.S. government agencies  262,466  293,838  322,581  354,173  376,986
Personal  1,574,325  1,484,596  1,506,832  1,515,206  1,395,623
Total loans to individuals  3,688,627  3,563,163  3,552,919  3,591,549  3,519,852
           
Total $21,790,457 $21,291,148 $20,674,429 $20,205,680 $20,347,936


LOANS MANAGED BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)

 Sep. 30, 2022 June 30, 2022 Mar. 31, 2022 Dec. 31, 2021 Sep. 30, 2021
          
Texas:         
Commercial$6,632,610 $6,631,658 $6,254,883 $6,068,700 $5,815,562
Commercial real estate 1,448,590  1,339,452  1,345,105  1,253,439  1,383,871
Paycheck protection program 12,280  14,040  31,242  81,654  115,623
Loans to individuals 970,459  934,856  957,320  942,982  901,121
Total Texas 9,063,939  8,920,006  8,588,550  8,346,775  8,216,177
          
Oklahoma:         
Commercial 3,104,037  3,125,764  2,883,663  2,633,014  2,590,887
Commercial real estate 608,856  576,458  552,310  546,021  552,184
Paycheck protection program 4,571  13,329  52,867  69,817  192,474
Loans to individuals 2,054,362  1,982,247  1,977,886  2,024,404  2,014,099
Total Oklahoma 5,771,826  5,697,798  5,466,726  5,273,256  5,349,644
          
Colorado:         
Commercial 2,115,883  2,074,455  1,977,773  1,936,149  1,874,613
Commercial real estate 565,057  473,231  480,740  470,937  526,653
Paycheck protection program 1,298  8,233  28,584  82,781  140,470
Loans to individuals 237,981  234,105  236,125  256,533  249,298
Total Colorado 2,920,219  2,790,024  2,723,222  2,746,400  2,791,034
          
Arizona:         
Commercial 1,101,917  1,080,228  1,074,551  1,130,798  1,194,801
Commercial real estate 850,319  766,767  719,970  674,309  734,174
Paycheck protection program 1,083  5,173  11,644  21,594  42,815
Loans to individuals 225,981  212,870  190,746  186,528  182,506
Total Arizona 2,179,300  2,065,038  1,996,911  2,013,229  2,154,296
          
Kansas/Missouri:         
Commercial 307,446  338,337  334,371  338,697  336,414
Commercial real estate 466,955  458,157  436,740  382,761  408,001
Paycheck protection program 10  573  2,595  4,718  6,920
Loans to individuals 125,039  125,584  121,247  110,889  100,920
Total Kansas/Missouri 899,450  922,651  894,953  837,065  852,255
          
New Mexico:         
Commercial 257,763  252,033  262,533  306,964  287,695
Commercial real estate 426,367  431,606  504,632  442,128  437,302
Paycheck protection program 991  1,792  9,713  13,510  31,444
Loans to individuals 68,095  67,026  63,299  63,930  66,651
Total New Mexico 753,216  752,457  840,177  826,532  823,092
          
Arkansas:         
Commercial 88,030  76,222  95,415  92,143  75,168
Commercial real estate 107,767  60,477  61,459  61,730  74,707
Paycheck protection program     720  2,267  6,306
Loans to individuals 6,710  6,475  6,296  6,283  5,257
Total Arkansas 202,507  143,174  163,890  162,423  161,438
          
TOTAL BOK FINANCIAL$21,790,457 $21,291,148 $20,674,429 $20,205,680 $20,347,936

Loans attributed to a principal market may not always represent the location of the borrower or the collateral.


DEPOSITS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)

 Sep. 30, 2022 June 30, 2022 Mar. 31, 2022 Dec. 31, 2021 Sep. 30, 2021
Oklahoma:         
Demand$5,143,405 $5,422,593 $5,205,806 $5,433,405 $5,080,162
Interest-bearing:         
Transaction 9,619,419  10,240,378  11,410,709  12,689,367  11,692,679
Savings 558,256  561,413  558,634  521,439  510,906
Time 776,306  678,127  817,744  978,822  1,039,866
Total interest-bearing 10,953,981  11,479,918  12,787,087  14,189,628  13,243,451
Total Oklahoma 16,097,386  16,902,511  17,992,893  19,623,033  18,323,613
          
Texas:         
Demand 4,609,255  4,670,535  4,552,001  4,552,983  3,987,503
Interest-bearing:         
Transaction 4,781,920  5,344,326  4,963,118  5,345,461  4,985,465
Savings 179,049  183,708  182,536  178,458  165,043
Time 343,015  333,038  329,931  337,559  337,389
Total interest-bearing 5,303,984  5,861,072  5,475,585  5,861,478  5,487,897
Total Texas 9,913,239  10,531,607  10,027,586  10,414,461  9,475,400
          
Colorado:         
Demand 2,510,179  2,799,798  2,673,352  2,526,855  2,158,596
Interest-bearing:         
Transaction 2,221,796  2,277,563  2,387,304  2,334,371  2,337,354
Savings 80,542  82,976  81,762  78,636  79,873
Time 151,064  160,795  165,401  174,351  184,002
Total interest-bearing 2,453,402  2,521,334  2,634,467  2,587,358  2,601,229
Total Colorado 4,963,581  5,321,132  5,307,819  5,114,213  4,759,825
          
New Mexico:         
Demand 1,296,410  1,347,600  1,271,264  1,196,057  1,222,895
Interest-bearing:         
Transaction 717,492  845,442  888,257  858,394  837,630
Savings 113,056  115,660  115,457  107,963  107,615
Time 142,856  148,532  156,140  163,871  168,879
Total interest-bearing 973,404  1,109,634  1,159,854  1,130,228  1,114,124
Total New Mexico 2,269,814  2,457,234  2,431,118  2,326,285  2,337,019
          
Arizona:         
Demand 903,296  901,543  947,775  934,282  1,110,884
Interest-bearing:         
Transaction 788,142  792,269  810,896  834,491  784,614
Savings 18,258  17,999  18,122  16,182  16,468
Time 26,704  28,774  27,259  31,274  30,862
Total interest-bearing 833,104  839,042  856,277  881,947  831,944
Total Arizona 1,736,400  1,740,585  1,804,052  1,816,229  1,942,828
          
Kansas/Missouri:         
Demand 479,459  537,143  553,345  658,342  488,595
Interest-bearing:         
Transaction 747,981  913,921  1,107,525  1,086,946  965,757
Savings 19,375  19,943  19,589  18,844  17,303
Time 13,258  13,962  11,527  12,255  13,040
Total interest-bearing 780,614  947,826  1,138,641  1,118,045  996,100
Total Kansas/Missouri 1,260,073  1,484,969  1,691,986  1,776,387  1,484,695
          
Arkansas:         
Demand 43,111  41,084  38,798  42,499  41,594
Interest-bearing:         
Transaction 123,273  130,300  122,020  119,543  149,611
Savings 3,098  3,125  3,265  3,213  3,289
Time 5,940  6,371  6,414  6,196  6,677
Total interest-bearing 132,311  139,796  131,699  128,952  159,577
Total Arkansas 175,422  180,880  170,497  171,451  201,171
          
TOTAL BOK FINANCIAL$36,415,915 $38,618,918 $39,425,951 $41,242,059 $38,524,551


NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION

 Three Months Ended
 Sep. 30, 2022 June 30, 2022 Mar. 31, 2022 Dec. 31, 2021 Sep. 30, 2021
          
TAX-EQUIVALENT ASSETS YIELDS         
Interest-bearing cash and cash equivalents1.87% 0.83% 0.18% 0.16% 0.14%
Trading securities2.72% 2.00% 1.71% 1.89% 2.04%
Investment securities, net of allowance1.42% 2.35% 5.07% 4.99% 5.02%
Available for sale securities2.21% 1.84% 1.77% 1.72% 1.80%
Fair value option securities2.98% 2.92% 2.81% 2.71% 2.62%
Restricted equity securities6.23% 3.30% 2.69% 2.98% 2.55%
Residential mortgage loans held for sale5.05% 4.22% 3.11% 3.06% 3.06%
Loans4.89% 3.92% 3.57% 3.70% 3.68%
Allowance for loan losses         
Loans, net of allowance4.94% 3.96% 3.61% 3.75% 3.73%
Total tax-equivalent yield on earning assets3.71% 2.96% 2.58% 2.66% 2.78%
          
COST OF INTEREST-BEARING LIABILITIES        
Interest-bearing deposits:         
Interest-bearing transaction0.63% 0.22% 0.10% 0.09% 0.09%
Savings0.05% 0.03% 0.03% 0.04% 0.04%
Time0.93% 0.68% 0.56% 0.53% 0.55%
Total interest-bearing deposits0.63% 0.24% 0.12% 0.12% 0.13%
Funds purchased and repurchase agreements0.72% 0.53% 0.95% 0.73% 0.20%
Other borrowings2.33% 1.01% 0.38% 0.49% 0.37%
Subordinated debt5.07% 4.50% 4.02% 4.02% 4.63%
Total cost of interest-bearing liabilities0.76% 0.31% 0.21% 0.21% 0.19%
Tax-equivalent net interest revenue spread2.95% 2.65% 2.37% 2.45% 2.59%
Effect of noninterest-bearing funding sources and other0.29% 0.11% 0.07% 0.07% 0.07%
Tax-equivalent net interest margin3.24% 2.76% 2.44% 2.52% 2.66%

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
 Sep. 30, 2022 June 30, 2022 Mar. 31, 2022 Dec. 31, 2021 Sep. 30, 2021
Nonperforming assets:         
Nonaccruing loans:         
Commercial:         
Healthcare$41,438  $14,886  $15,076  $15,762  $509 
Services 27,315   15,259   16,535   17,170   25,714 
Energy 4,164   20,924   24,976   31,091   45,500 
General business 2,753   3,539   3,750   10,081   8,951 
Total commercial 75,670   54,608   60,337   74,104   80,674 
          
Commercial real estate 7,971   10,939   15,989   14,262   21,223 
          
Loans to individuals:         
Permanent mortgage 30,066   30,460   30,757   31,574   30,674 
Permanent mortgage guaranteed by U.S. government agencies 16,957   18,000   16,992   13,861   9,188 
Personal 136   132   171   258   188 
Total loans to individuals 47,159   48,592   47,920   45,693   40,050 
          
Total nonaccruing loans$130,800  $114,139  $124,246  $134,059  $141,947 
Accruing renegotiated loans guaranteed by U.S. government agencies 176,022   196,420   204,121   210,618   178,554 
Real estate and other repossessed assets 29,676   22,221   24,492   24,589   28,770 
Total nonperforming assets$336,498  $332,780  $352,859  $369,266  $349,271 
Total nonperforming assets excluding those guaranteed by U.S. government agencies$143,519  $118,360  $131,746  $144,787  $161,529 
          
Accruing loans 90 days past due1$120  $3  $307  $313  $223 
          
Gross charge-offs$1,766  $1,368  $7,805  $6,558  $9,584 
Recoveries (1,309)  (2,167)  (1,824)  (7,272)  (1,769)
Net charge-offs (recoveries)$457  $(799) $5,981  $(714) $7,815 
          
Provision for loan losses$1,111  $(6,158) $(3,967) $(20,973) $(27,395)
Provision for credit losses from off-balance sheet unfunded loan commitments 14,060   6,005   3,268   3,738   4,952 
Provision for expected credit losses from mortgage banking activities (66)  69   621   150   (534)
Provision for credit losses related to held-to maturity (investment) securities portfolio (105)  84   78   85   (23)
Total provision for credit losses$15,000  $  $  $(17,000) $(23,000)
          
Allowance for loan losses to period end loans 1.11%  1.13%  1.19%  1.27%  1.36%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans 1.37%  1.33%  1.37%  1.43%  1.50%
Nonperforming assets to period end loans and repossessed assets 1.54%  1.56%  1.70%  1.83%  1.71%
Net charge-offs (annualized) to average loans 0.01% (0.02)%  0.12% (0.01)%  0.15%
Allowance for loan losses to nonaccruing loans1 212.37%  250.80%  229.80%  213.33%  208.41%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to nonaccruing loans1 261.83%  294.74%  263.60%  240.77%  230.43%

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


SEGMENTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratios)

  Three Months Ended 3Q22 vs 2Q22 3Q22 vs 3Q21
  Sep. 30, 2022 June 30, 2022 Sep. 30, 2021 $ change % change $ change % change
Commercial Banking              
Net interest revenue $206,904 $166,542 $134,104 $40,362  24.2% $72,800  54.3%
Fees and commissions revenue  58,147  59,881  56,452  (1,734) (2.9)%  1,695  3.0%
Combined net interest and fee revenue  265,051  226,423  190,556  38,628  17.1%  74,495  39.1%
Other operating expense  75,872  70,009  68,301  5,863  8.4%  7,571  11.1%
Corporate expense allocations  16,451  16,634  11,769  (183) (1.1)%  4,682  39.8%
Net income  132,941  104,813  102,694  28,128  26.8%  30,247  29.5%
               
Average assets  28,890,429  29,269,712  28,474,132  (379,283) (1.3)%  416,297  1.5%
Average loans  17,904,779  17,336,841  16,588,875  567,938  3.3%  1,315,904  7.9%
Average deposits  17,966,661  18,933,766  17,881,673  (967,105) (5.1)%  84,988  0.5%
               
Consumer Banking              
Net interest revenue $43,951 $33,786 $27,222 $10,165  30.1% $16,729  61.5%
Fees and commissions revenue  30,230  30,101  44,405  129  0.4%  (14,175) (31.9)%
Combined net interest and fee revenue  74,181  63,887  71,627  10,294  16.1%  2,554  3.6%
Other operating expense  53,236  52,660  49,483  576  1.1%  3,753  7.6%
Corporate expense allocations  10,792  10,120  11,516  672  6.6%  (724) (6.3)%
Net income  2,970  1,239  12,432  1,731  139.7%  (9,462) (76.1)%
               
Average assets  10,233,401  10,338,191  10,083,593  (104,790) (1.0)%  149,808  1.5%
Average loans  1,686,498  1,669,830  1,763,705  16,668  1.0%  (77,207) (4.4)%
Average deposits  8,812,884  8,876,469  8,516,942  (63,585) (0.7)%  295,942  3.5%
               
Wealth Management              
Net interest revenue $33,584 $37,747 $55,196 $(4,163) (11.0)% $(21,612) (39.2)%
Fees and commissions revenue  113,113  86,771  97,966  26,342  30.4%  15,147  15.5%
Combined net interest and fee revenue  146,697  124,518  153,162  22,179  17.8%  (6,465) (4.2)%
Other operating expense  79,151  76,393  87,498  2,758  3.6%  (8,347) (9.5)%
Corporate expense allocations  12,934  12,503  10,110  431  3.4%  2,824  27.9%
Net income  41,808  27,287  41,339  14,521  53.2%  469  1.1%
               
Average assets  13,818,299  16,902,721  19,109,704  (3,084,422) (18.2)%  (5,291,405) (27.7)%
Average loans  2,163,975  2,157,771  1,971,380  6,204  0.3%  192,595  9.8%
Average deposits  7,999,074  8,482,785  9,120,446  (483,711) (5.7)%  (1,121,372) (12.3)%
Fiduciary assets  54,714,705  55,972,584  60,497,576  (1,257,879) (2.2)%  (5,782,871) (9.6)%
Assets under management or administration  95,401,638  95,981,289  98,842,789  (579,651) (0.6)%  (3,441,151) (3.5)%

 


Contact:
Sue Hermann
Director, Corporate Communications
303-312-3488

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