GlobeNewswire
TULSA, Okla., April 21, 2021 (GLOBE NEWSWIRE) -- BOK Financial (NASDAQ: BOKF) today reported net earnings applicable to common shareholders for the first quarter of 2021 of $146.1 million, or $2.10 per diluted common share. CEO Commentary Steven G. Bradshaw, president and chief executive officer stated, "Not since the energy downturn in 2016 have we had an opportunity to demonstrate how valuable our organization's differentiated credit culture is to shareholder outcomes. Exceptional credit outcomes coupled with improving economic metrics led us to release $25 million in reserves in the quarter. This is a testament not only to how well we've managed the ongoing crisis, but more importantly, our ability to remain disciplined with credit decisions in more favorable parts of the cycle."Bradshaw continued, "While loan growth remains challenged industry-wide during a time of unprecedented liquidity and heightened uncertainty, BOK Financial Corporation remains focused on the long-term. We have a longstanding track record of loan growth outpacing U.S. GDP growth, and with the economic recovery underway, we see a clear path to growing loans this year. With substantial capital levels, a strong competitive position and a favorable footprint, we remain confident in our ability to serve both our clients and our shareholders well in 2021.As always, we are closely monitoring our expense levels, striving for balance between expense reductions and containment while keeping our level of long term investments in people and technology a top priority. We believe the company is extremely well positioned to attract and expand new relationships as the economy expands and further opens in 2021." First Quarter 2021 Financial Highlights Net income was $146.1 million or $2.10 per diluted share for the first quarter of 2021 and $154.2 million or $2.21 per diluted share for the fourth quarter of 2020.Net interest revenue totaled $280.4 million, a decrease of $16.8 million. Net interest margin was 2.62 percent compared to 2.72 percent in the fourth quarter of 2020. A reduction in average outstanding loan balances and the timing of certain loan fees, combined with reinvestment of cash flows from our available for sale securities portfolio at current rates, led to lower net interest revenue and compressed net interest margin in the first quarter.Fees and commissions revenue totaled $162.2 million, a decrease of $18.9 million. Brokerage and trading revenue decreased $18.7 million, largely due to a decrease in trading volume and margin compression. While still strong, mortgage banking revenue decreased $2.2 million, primarily the result of increasing mortgage interest rates coupled with margin compression.Operating expense decreased $18.0 million to $282.6 million. Personnel expense decreased $3.2 million, primarily due to lower incentive compensation, partially offset by a seasonal increase in employee benefits expense. Non-personnel expense decreased $14.8 million primarily due to a gain on sale of repossessed oil and gas assets. Decreases in professional fees, business promotion, occupancy and equipment expense and other expenses were partially offset by an increase in data processing and communications expense.Period-end loans decreased $474 million to $22.5 billion at March 31, 2021, primarily due to paydowns of commercial loans and commercial real estate loans. Period-end Paycheck Protection Program ("PPP") loans increased $166 million to $1.8 billion. Average loans were $22.8 billion, a $691 million decrease compared to the fourth quarter of 2020.Forecasts for improving macroeconomic factors as the pace of COVID-19 vaccinations accelerates and energy prices stabilize resulted in a $25.0 million negative provision for expected credit losses in the first quarter of 2021. A $6.5 million negative provision for expected credit losses was recorded in the prior quarter. The allowance for loan losses totaled $352 million or 1.70 percent of outstanding loans, excluding PPP loans, at March 31, 2021. The allowance for loan losses was $389 million or 1.82 percent of outstanding loans, excluding PPP loans, at December 31, 2020.Average deposits increased $1.0 billion to $36.5 billion and period-end deposits increased $1.7 billion to $37.9 billion, largely due to growth in commercial balances. Clients across all of our business segments continued to maintain higher deposit balances during this period of economic uncertainty, supplemented by inflows from government stimulus payments.The company's common equity Tier 1 capital ratio was 12.14 percent at March 31, 2021. In addition, the company's Tier 1 capital ratio was 12.21 percent, total capital ratio was 13.98 percent, and leverage ratio was 8.51 percent at March 31, 2021. At December 31, 2020, the company's common equity Tier 1 capital ratio was 11.95 percent, Tier 1 capital ratio was 11.95 percent, total capital ratio was 13.82 percent, and leverage ratio was 8.28 percent.The company repurchased 260,000 shares of common stock at an average price of $77.20 a share in the first quarter of 2021.Commercial Banking contributed $69.7 million to net income, a decrease of $5.3 million compared to the fourth quarter of 2020. Combined net interest revenue and fee revenue decreased $11.2 million. Net interest revenue decreased $12.0 million, primarily due to a reduction in outstanding loan balances, timing of certain loan fees, and lower yields on deposits sold to our Funds Management unit. Average Commercial Banking loans decreased $578 million due to purposeful deleveraging by our customers. Average Commercial deposits grew 5 percent to $16.1 billion in the first quarter.Consumer Banking contributed $6.8 million to net income in the first quarter of 2021, a decrease of $7.9 million compared to the fourth quarter of 2020. Combined net interest revenue and fee revenue decreased $12.7 million. Net interest revenue decreased $9.7 million, mainly due to lower yields on deposits sold to our Funds Management unit. Fees and commissions revenue decreased $3.0 million, largely due to reduced mortgage gain on sale margins. While mortgage production revenue decreased, mortgage production volumes remained strong in the first quarter.Wealth Management contributed $19.4 million to net income in the first quarter of 2021, a decrease of $9.1 million compared to the fourth quarter of 2020. Combined net interest revenue and fee revenue decreased $17.4 million. Net interest revenue was relatively consistent with the previous quarter. However, brokerage and trading revenue decreased $15.0 million due to narrowing margins and a reduction in trading volumes. While our agency residential mortgage trading activity has slowed from the record levels in 2020, combined net interest revenue and fee revenue has grown compared to the first quarter of 2020. Operating expense decreased $5.4 million, primarily due to incentive compensation costs related to decreased trading activity. Average Wealth Management loans grew by $78.3 million compared to the prior quarter while average deposits increased $116 million. Assets under management or administration totaled $92.0 billion compared to $91.6 billion in the prior quarter. Net Interest Revenue Net interest revenue was $280.4 million for the first quarter of 2021, a $16.8 million decrease compared to the fourth quarter of 2020. The decrease in net interest revenue was primarily driven by lower average outstanding loan balances. Net interest margin was 2.62 percent compared to 2.72 percent in the fourth quarter of 2020. Reinvestment of cash flows from our available for sale securities portfolio to current interest rates and timing of PPP and other loan fees also contributed to a decrease in net interest revenue and net interest margin in the first quarter. Average earning assets decreased $178 million compared to the fourth quarter of 2020. Average loan balances decreased $691 million, primarily from commercial and commercial real estate loan paydowns. Available for sale securities increased $484 million. Average interest-bearing deposits grew by $823 million, primarily due to higher interest-bearing transaction deposits in the wake of the most recent government stimulus program. Other borrowings decreased $1.8 billion while funds purchased and repurchase agreements increased $677 million. The yield on average earning assets was 2.78 percent, a 14 basis point decrease from the prior quarter. The yield on the available for sale securities portfolio decreased 14 basis points to 1.84 percent. Cash flows received from these securities are currently being reinvested at 95 - 105 basis points. The loan portfolio yield decreased 13 basis points to 3.55 percent, largely due to the timing of certain loan fees, including Paycheck Protection Program loans. Funding costs were 0.24 percent, down 4 basis points. The cost of other borrowed funds was down 8 basis points to 0.30 percent. The cost of interest-bearing deposits decreased 2 basis points to 0.17 percent. The benefit to net interest margin from assets funded by non-interest liabilities was 8 basis points for the first quarter of 2021, consistent with the prior quarter. Fees and Commissions Revenue Fees and commissions revenue totaled $162.2 million for the first quarter of 2021, a decrease of $18.9 million compared to the fourth quarter of 2020. Brokerage and trading revenue decreased $18.7 million to $20.8 million, including a $15.4 million reduction in trading revenue. Agency residential mortgage trading volumes have slowed from record levels in 2020 and margins compressed due to market conditions during the first quarter of 2021. In addition, customer hedging revenue decreased $2.1 million, primarily due to decreased energy customer hedging activities. Investment banking revenue decreased $2.1 million, mainly due to timing of loan syndication activity. Mortgage banking revenue decreased $2.2 million compared to the prior quarter, down to a level comparable to the first quarter of 2020. While mortgage production volumes remained consistent with the prior quarter, mortgage interest rates began to increase and margins compressed. The gain on sale margin decreased 28 basis points to 2.98 percent. Other revenue increased $2.1 million, primarily due to production revenue from repossessed oil and gas properties. Operating Expense Total operating expense was $282.6 million for the first quarter of 2021, a decrease of $18.0 million compared to the fourth quarter of 2020. Personnel expense decreased $3.2 million, led by a $10.3 million decrease in incentive compensation expense, partially offset by a $6.4 million seasonal increase in payroll taxes and retirement plan costs. Cash based incentive compensation expense decreased $8.2 million, primarily in relation to decreased trading revenue. Deferred compensation expense, which is largely offset by a decrease in the value of related investments included in Other gains (losses), net, decreased $3.4 million. Non-personnel expense decreased $14.8 million compared to the fourth quarter of 2020. Net losses and expenses on repossessed assets decreased $7.8 million, largely due to $14.1 million gain on the sale of an equity interest received as part of the workout of a defaulted energy loan. Smaller reductions in expenses in professional fees and services, business promotion, and occupancy and equipment also supplemented the overall decrease in non-personnel expense. These were partially offset by a $2.4 million increase in data processing and communications expense as we continue to invest in technology. We made a charitable contribution of $4.0 million in the first quarter and a contribution of $6.0 million in the prior quarter to the BOKF Foundation as we continue to focus on the communities we serve and the extreme needs created by the pandemic. Loans, Deposits and Capital Loans Outstanding loans were $22.5 billion at March 31, 2021, a $474 million decrease compared to December 31, 2020, primarily due to payoffs of commercial and commercial real estate loans. Outstanding commercial loan balances decreased $420 million or 3 percent compared to December 31, 2020. Borrowers continue to reduce leverage in this challenging economic environment. Although the primary source of repayment of our commercial loan portfolio is the on-going cash flow from operations of the customer's business, loans are generally governed by a borrowing base and secured by the customer’s assets. Energy loan balances decreased $267 million to $3.2 billion or 14 percent of total loans. While commodity prices have continued to improve and stabilize, sourcing new loans sufficient to offset paydowns remains a challenge. 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 66 percent of committed production loans are secured by properties primarily producing oil. The remaining 34 percent is secured by properties primarily producing natural gas. Unfunded energy loan commitments were $2.4 billion at March 31, 2021, consistent with December 31, 2020. Healthcare sector loan balances were largely unchanged compared to the prior quarter, totaling $3.3 billion or 15 percent of total loans. Our healthcare sector loans primarily consist of $2.6 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 that serves to help diversify risks specific to a single facility. The most recent stimulus bill, like the CARES Act, has multiple revenue enhancement measures for both hospitals and skilled nursing facilities as they manage through the risks of the virus. General business loans decreased $51 million to $2.7 billion or 12 percent of total loans. General business loans include $1.5 billion of wholesale/retail loans and $1.2 billion of loans from other commercial industries. Services loan balances decreased $87 million to $3.4 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. Commercial real estate loan balances decreased $195 million compared to December 31, 2020 and represent 20 percent of total loans at March 31, 2021. Multifamily residential loans, our largest exposure in commercial real estate, decreased $100 million to $1.2 billion at March 31, 2021. Loans secured by other commercial real estate properties decreased $74 million to $485 million. Loans secured by industrial facilities decreased $21 million to $789 million. Loans secured by retail facilities and office buildings were largely unchanged compared to December 31, 2020. PPP loan balances increased $166 million to $1.8 billion or 8 percent of total loans. We originated $544 million of new PPP loans during the first quarter of 2021, maintaining our strategy of focusing on our existing client base to timely support our existing client needs. Growth from new originations was partially offset by paydowns from the first round of loans. Loans to individuals decreased $25 million and represent 16 percent of total loans at March 31, 2021. Residential mortgage loans decreased $66 million. Personal loans were up $29 million and residential mortgage loans guaranteed by U.S. government agencies increased $11 million. The Company may repurchase loans previously sold into GNMA mortgage pools when certain defined delinquency criteria are met. Because of this repurchase right, we have regained effective control over these loans and must include them on the Consolidated Balance Sheet. Deposits Period-end deposits totaled $37.9 billion at March 31, 2021, a $1.7 billion increase over December 31, 2020. Continued deposit growth was due primarily to customers retaining higher balances in the current economic environment supplemented by the most recent government stimulus program. Demand deposit account balances grew by $837 million and interest-bearing transaction account balances grew by $732 million. Period-end commercial deposits grew by $1.0 billion, consumer deposits increased $474 million and wealth management deposits were up $566 million. Average deposits were $36.5 billion at March 31, 2021, a $1.0 billion increase compared to December 31, 2020. Interest-bearing transaction deposits increased $715 million. Capital The company's common equity Tier 1 capital ratio was 12.14 percent at March 31, 2021. In addition, the company's Tier 1 capital ratio was 12.21 percent, total capital ratio was 13.98 percent, and leverage ratio was 8.51 percent at March 31, 2021. We have 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, which added 23 basis points to the company's common equity tier 1 capital ratio at March 31. At December 31, 2020, the company's common equity Tier 1 capital ratio was 11.95 percent, Tier 1 capital ratio was 11.95 percent, total capital ratio was 13.82 percent, and leverage ratio was 8.28 percent. The company's tangible common equity ratio, a non-GAAP measure, was 8.82 percent at March 31, 2021 and 9.02 percent at December 31, 2020. 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 260,000 shares of common stock at an average price of $77.20 a share in the first quarter of 2021. 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 expected 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 rate and West Texas Intermediate ("WTI") oil prices on a probability weighted basis. We recorded a $25.0 million negative provision for credit losses in the first quarter of 2021. Changes in our reasonable and supportable forecasts of macroeconomic variables, primarily due to an improved economic outlook related to the anticipated impact of the on-going COVID-19 pandemic, resulted in a $31.1 million decrease in the allowance for credit losses from lending activities. Changes in the loan portfolio characteristics, including specific impairment and losses, risk grading and loan balances resulted in a $5.2 million increase in the allowance for credit losses from lending activities. Our base case reasonable and supportable forecast assumes that the COVID-19 pandemic continues to improve as virus immunity becomes increasingly more widespread and vaccines prove to be effective against new virus strains. This scenario assumes vaccine distribution continues to accelerate through the first half of 2021, with a large share of the U.S. population vaccinated by the end of the third quarter of 2021. Continued easing of restrictions and the release of pent-up consumer demand results in GDP growth above historical averages, with GDP recovering to pre-COVID levels in the second quarter of 2021. We expect a 5.6 percent increase in GDP over the next twelve months. Our forecasted civilian unemployment rate is 6.0 percent for the second quarter of 2021, improving to 5.0 percent by the first quarter of 2022. WTI oil prices are projected to generally follow the NYMEX forward curve that existed at the end of March 2021, averaging $57.87 per barrel over the next twelve months. The probability weighting of our base case reasonable and supportable forecast was unchanged compared to the fourth quarter of 2020 as there continues to be a high level of uncertainty in the current economic outlook. Our downside case assumes additional waves and hotspots emerge stemming from new virus strains throughout the second and third quarter of 2021 and more constrained distribution of vaccines not reaching widespread distribution until the end of 2021. This results in no GDP growth over the next twelve months and unemployment rates remaining elevated through the first quarter of 2022. The allowance for loan losses totaled $352 million or 1.56 percent of outstanding loans and 170 percent of nonaccruing loans at March 31, 2021, excluding residential mortgage loans guaranteed by U.S. government agencies. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $385 million or 1.71 percent of outstanding loans and 186 percent of nonaccruing loans at March 31, 2021. The combined allowance for credit losses attributed to energy was 3.29 percent of outstanding energy loans at March 31 compared to 3.61 at December 31. Excluding PPP loans, the allowance for loan losses was 1.70 percent of outstanding loans and the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was 1.86 percent. At December 31, 2020, the allowance for loan losses was $389 million or 1.69 percent of outstanding loans and 171 percent of nonaccruing loans, excluding loans guaranteed by U.S. government agencies. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $426 million or 1.85 percent of outstanding loans and 188 percent of nonaccruing loans. Nonperforming assets totaled $442 million or 1.95 percent of outstanding loans and repossessed assets at March 31, 2021, down from $477 million or 2.07 percent at December 31, 2020. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $278 million or 1.37 percent of outstanding loans and repossessed assets at March 31, 2021, compared to $317 million or 1.51 percent at December 31, 2020. The decrease in nonperforming assets was primarily related to a decrease in nonaccruing energy loans and sales of energy-related repossessed assets during the first quarter of 2021. Nonaccruing loans were $216 million or 1.04 percent of outstanding loans, excluding PPP loans, at March 31, 2021. Nonaccruing commercial loans totaled $147 million or 1.16 percent of outstanding commercial loans. Nonaccruing commercial real estate loans totaled $27 million or 0.60 percent of outstanding commercial real estate loans. Nonaccruing loans to individuals totaled $42 million or 1.18 percent of outstanding loans to individuals. Nonaccruing loans decreased $19 million compared to December 31, 2020, primarily due to a decrease in nonaccruing energy loans. New nonaccruing loans identified in the first quarter totaled $25 million, offset by $26 million in payments received and $17 million in charge-offs. Potential problem loans, which are defined as performing loans that, based on known information, cause management concern as to the borrowers' ability to continue to perform, totaled $422 million at March 31, down from $478 million at December 31. Lower energy and services potential problem loans, were partially offset by an increase in potential problem healthcare loans. Net charge-offs were $14.5 million or 0.28 percent of average loans on an annualized basis for the first quarter of 2021, excluding PPP loans. Net charge-offs were 0.31 percent of average loans over the last four quarters. Net charge-offs were $16.7 million or 0.31 percent of average loans on an annualized basis for the fourth quarter of 2020, excluding PPP loans. Gross charge-offs were $16.9 million for the first quarter compared to $18.3 million for the previous quarter. Recoveries totaled $2.4 million for the first quarter of 2021 and $1.6 million for the fourth quarter of 2020. Securities and Derivatives The fair value of the available for sale securities portfolio totaled $13.4 billion at March 31, 2021, a $359 million increase compared to December 31, 2020. At March 31, 2021, the available for sale securities portfolio consisted primarily of $9.7 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $3.4 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. At March 31, 2021, the available for sale securities portfolio had a net unrealized gain of $290 million compared to $441 million at December 31, 2020. 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 $42 million to $72 million at March 31, 2021. The net economic benefit of the changes in the fair value of mortgage servicing rights and related economic hedges was $4.7 million during the first quarter of 2021, including a $33.9 million increase in the fair value of mortgage servicing rights, $29.6 million decrease in the fair value of securities and derivative contracts held as an economic hedge, and $393 thousand of related net interest revenue. Conference Call and Webcast The company will hold a conference call at 9 a.m. Central time on April 21, 2021 to discuss the financial results with investors. The live audio webcast and presentation slides will be available on the company’s website at www.bokf.com. The conference call can also be accessed by dialing 1-201-689-8471. A conference call and webcast replay will also be available shortly after conclusion of the live call at www.bokf.com or by dialing 1-412-317-6671 and referencing conference ID # 13718312. About BOK Financial Corporation BOK Financial Corporation is a $47 billion regional financial services company headquartered in Tulsa, Oklahoma with $92 billion in assets under management and administration. The company's stock is publicly traded on NASDAQ under the Global Select market listings (BOKF). BOK Financial Corporation's holdings include BOKF, NA; BOK Financial Securities, Inc., BOK Financial Private Wealth, Inc. and BOK Financial Insurance, Inc. BOKF, NA operates TransFund, Cavanal Hill Investment Management and BOK Financial Asset Management, Inc. BOKF, NA operates banking divisions across eight states as: Bank of Albuquerque; Bank of Oklahoma; Bank of Texas; and BOK Financial in Arizona, Arkansas, Colorado, Kansas and Missouri; as well as having limited purpose offices in Nebraska, 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 March 31, 2021 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 -- UNAUDITEDBOK FINANCIAL CORPORATION(In thousands) Mar. 31, 2021 Dec. 31, 2020ASSETS Cash and due from banks$723,983 $798,757 Interest-bearing cash and cash equivalents695,213 381,816 Trading securities5,085,949 4,707,975 Investment securities, net of allowance226,121 244,843 Available for sale securities13,410,057 13,050,665 Fair value option securities72,498 114,982 Restricted equity securities139,614 171,391 Residential mortgage loans held for sale284,447 252,316 Loans: Commercial12,657,784 13,077,535 Commercial real estate4,503,347 4,698,538 Paycheck protection program1,848,550 1,682,310 Loans to individuals3,524,166 3,549,137 Total loans22,533,847 23,007,520 Allowance for loan losses(352,402) (388,640) Loans, net of allowance22,181,445 22,618,880 Premises and equipment, net555,455 551,308 Receivables250,852 245,880 Goodwill1,048,091 1,048,091 Intangible assets, net110,585 113,436 Mortgage servicing rights132,915 101,172 Real estate and other repossessed assets, net70,911 90,526 Derivative contracts, net1,289,156 810,688 Cash surrender value of bank-owned life insurance401,320 398,758 Receivable on unsettled securities sales67,759 62,386 Other assets696,142 907,218 TOTAL ASSETS$47,442,513 $46,671,088 LIABILITIES AND EQUITY Deposits: Demand$13,103,170 $12,266,338 Interest-bearing transaction21,890,874 21,158,422 Savings854,226 751,992 Time2,004,356 1,967,128 Total deposits37,852,626 36,143,880 Funds purchased and repurchase agreements795,161 1,662,386 Other borrowings1,708,517 1,882,970 Subordinated debentures276,024 276,005 Accrued interest, taxes and expense290,328 323,667 Due on unsettled securities purchases106,835 257,627 Derivative contracts, net719,556 405,779 Other liabilities431,122 427,213 TOTAL LIABILITIES42,180,169 41,379,527 Shareholders' equity: Capital, surplus and retained earnings5,018,053 4,930,398 Accumulated other comprehensive gain221,409 335,868 TOTAL SHAREHOLDERS' EQUITY5,239,462 5,266,266 Non-controlling interests22,882 25,295 TOTAL EQUITY5,262,344 5,291,561 TOTAL LIABILITIES AND EQUITY$47,442,513 $46,671,088 AVERAGE BALANCE SHEETS -- UNAUDITEDBOK FINANCIAL CORPORATION(in thousands) Three Months Ended Mar. 31, 2021 Dec. 31, 2020 Sept. 30, 2020 June 30, 2020 Mar. 31, 2020ASSETS Interest-bearing cash and cash equivalents$711,047 $643,926 $553,070 $619,737 $721,659 Trading securities6,963,617 6,888,189 1,834,160 1,871,647 1,690,104 Investment securities, net of allowance237,313 251,863 258,965 268,947 282,265 Available for sale securities13,433,767 12,949,702 12,580,850 12,480,065 11,664,521 Fair value option securities104,662 122,329 387,784 786,757 1,793,480 Restricted equity securities189,921 280,428 144,415 273,922 429,133 Residential mortgage loans held for sale207,013 229,631 213,125 288,588 129,708 Loans: Commercial12,908,461 13,113,449 13,772,217 14,502,652 14,452,851 Commercial real estate4,547,945 4,788,393 4,754,269 4,543,511 4,346,886 Paycheck protection program1,741,534 1,928,665 2,092,933 1,699,369 — Loans to individuals3,559,067 3,617,011 3,491,044 3,353,960 3,143,286 Total loans22,757,007 23,447,518 24,110,463 24,099,492 21,943,023 Allowance for loan losses(382,734) (414,225) (441,831) (367,583) (250,338) Loans, net of allowance22,374,273 23,033,293 23,668,632 23,731,909 21,692,685 Total earning assets44,221,613 44,399,361 39,641,001 40,321,572 38,403,555 Cash and due from banks760,691 742,432 723,826 678,878 669,369 Derivative contracts, net873,712 553,779 581,839 642,969 376,621 Cash surrender value of bank-owned life insurance399,830 397,354 394,680 391,951 390,009 Receivable on unsettled securities sales735,482 1,094,198 4,563,301 4,626,307 3,046,111 Other assets3,319,305 3,200,040 3,027,108 3,095,354 2,834,953 TOTAL ASSETS$50,310,633 $50,387,164 $48,931,755 $49,757,031 $45,720,618 LIABILITIES AND EQUITY Deposits: Demand$12,312,629 $12,136,071 $11,929,694 $11,489,322 $9,232,859 Interest-bearing transaction21,433,406 20,718,390 19,752,106 18,040,170 16,159,654 Savings789,656 737,360 707,121 656,669 563,821 Time1,986,425 1,930,808 2,251,012 2,464,793 2,239,234 Total deposits36,522,116 35,522,629 34,639,933 32,650,954 28,195,568 Funds purchased and repurchase agreements2,830,378 2,153,254 2,782,150 5,816,484 3,815,941 Other borrowings3,392,346 5,193,656 3,382,688 3,527,303 6,542,325 Subordinated debentures276,015 275,998 275,980 275,949 275,932 Derivative contracts, net428,488 399,476 458,390 836,667 379,342 Due on unsettled securities purchases915,410 957,642 1,516,880 887,973 960,780 Other liabilities671,715 656,147 712,674 690,087 642,764 TOTAL LIABILITIES45,036,468 45,158,802 43,768,695 44,685,417 40,812,652 Total equity5,274,165 5,228,362 5,163,060 5,071,614 4,907,966 TOTAL LIABILITIES AND EQUITY$50,310,633 $50,387,164 $48,931,755 $49,757,031 $45,720,618 STATEMENTS OF EARNINGS -- UNAUDITEDBOK FINANCIAL CORPORATION(in thousands, except per share data) Three Months Ended March 31, 2021 2020 Interest revenue$298,239 $348,937 Interest expense17,819 87,577 Net interest revenue280,420 261,360 Provision for credit losses(25,000) 93,771 Net interest revenue after provision for credit losses305,420 167,589 Other operating revenue: Brokerage and trading revenue20,782 50,779 Transaction card revenue22,430 21,881 Fiduciary and asset management revenue41,322 44,458 Deposit service charges and fees24,209 26,130 Mortgage banking revenue37,113 37,167 Other revenue16,296 12,309 Total fees and commissions162,152 192,724 Other gains (losses), net(3,036) (10,741) Gain (loss) on derivatives, net(27,650) 18,420 Gain (loss) on fair value option securities, net(1,910) 68,393 Change in fair value of mortgage servicing rights33,874 (88,480) Gain on available for sale securities, net467 3 Total other operating revenue163,897 180,319 Other operating expense: Personnel173,010 156,181 Business promotion2,154 6,215 Charitable contributions to BOKF Foundation4,000 — Professional fees and services11,980 12,948 Net occupancy and equipment26,662 26,061 Insurance4,620 4,980 Data processing and communications37,467 32,743 Printing, postage and supplies3,440 4,272 Net losses (gains) and operating expenses of repossessed assets(6,588) 1,531 Amortization of intangible assets4,807 5,094 Mortgage banking costs13,943 10,545 Other expense7,132 8,054 Total other operating expense282,627 268,624 Net income before taxes186,690 79,284 Federal and state income taxes42,382 17,300 Net income144,308 61,984 Net loss attributable to non-controlling interests(1,752) (95) Net income attributable to BOK Financial Corporation shareholders$146,060 $62,079 Average shares outstanding: Basic69,137,375 70,123,685 Diluted69,141,710 70,130,166 Net income per share: Basic$2.10 $0.88 Diluted$2.10 $0.88 FINANCIAL HIGHLIGHTS -- UNAUDITEDBOK FINANCIAL CORPORATION(in thousands, except ratio and share data) Three Months Ended Mar. 31, 2021 Dec. 31, 2020 Sept. 30, 2020 June 30, 2020 Mar. 31, 2020Capital: Period-end shareholders' equity$5,239,462 $5,266,266 $5,218,787 $5,096,995 $5,026,248 Risk weighted assets$32,623,108 $32,492,277 $31,529,826 $32,180,602 $32,973,242 Risk-based capital ratios: Common equity tier 112.14% 11.95% 12.07% 11.44% 10.98% Tier 112.21% 11.95% 12.07% 11.44% 10.98% Total capital13.98% 13.82% 14.05% 13.43% 12.65% Leverage ratio8.51% 8.28% 8.39% 7.74% 8.15% Tangible common equity ratio18.82% 9.02% 9.02% 8.79% 8.39% Common stock: Book value per share$75.33 $75.62 $74.23 $72.50 $71.49 Tangible book value per share$58.67 $58.94 $57.64 $55.83 $54.85 Market value per share: High$98.95 $73.07 $62.86 $67.62 $87.40 Low$67.57 $50.09 $48.41 $37.80 $34.57 Cash dividends paid$36,038 $36,219 $35,799 $35,769 $35,949 Dividend payout ratio24.67 % 23.48 % 23.24 % 55.29 % 57.91 % Shares outstanding, net69,557,873 69,637,600 70,305,833 70,306,690 70,308,532 Stock buy-back program: Shares repurchased260,000 665,100 — — 442,000 Amount$20,071 $42,450 $— $— $33,380 Average price per share$77.20 $63.82 $— $— $75.52 Performance ratios (quarter annualized):Return on average assets1.18% 1.22% 1.25% 0.52% 0.55% Return on average equity11.28% 11.75% 11.89% 5.14% 5.10% Net interest margin2.62% 2.72% 2.81% 2.83% 2.80% Efficiency ratio63.32% 62.36% 60.41% 59.57% 58.62% Reconciliation of non-GAAP measures:1 Tangible common equity ratio: Total shareholders' equity$5,239,462 $5,266,266 $5,218,787 $5,096,995 $5,026,248 Less: Goodwill and intangible assets, net1,158,676 1,161,527 1,166,615 1,171,686 1,169,898 Tangible common equity$4,080,786 $4,104,739 $4,052,172 $3,925,309 $3,856,350 Total assets$47,442,513 $46,671,088 $46,067,224 $45,819,874 $47,119,162 Less: Goodwill and intangible assets, net1,158,676 1,161,527 1,166,615 1,171,686 1,169,898 Tangible assets$46,283,837 $45,509,561 $44,900,609 $44,648,188 $45,949,264 Tangible common equity ratio8.82% 9.02% 9.02% 8.79% 8.39% Pre-provision net revenue: Net income before taxes$186,690 $199,847 $204,644 $80,089 $79,284 Provision for expected credit losses(25,000) (6,500) — 135,321 93,771 Net income (loss) attributable to non-controlling interests(1,752) 485 58 (407) (95) Pre-provision net revenue$163,442 $192,862 $204,586 $215,817 $173,150 Other data: Tax equivalent interest$2,301 $2,414 $2,457 $2,630 $2,715 Net unrealized gain on available for sale securities$290,217 $440,814 $480,563 $487,334 $435,989 Mortgage banking: Mortgage production revenue$25,287 $26,662 $38,431 $39,185 $21,570 Mortgage loans funded for sale$843,053 $998,435 $1,032,472 $1,184,249 $548,956 Add: current period-end outstanding commitments387,465 380,637 560,493 546,304 657,570 Less: prior period end outstanding commitments380,637 560,493 546,304 657,570 158,460 Total mortgage production volume$849,881 $818,579 $1,046,661 $1,072,983 $1,048,066 Mortgage loan refinances to mortgage loans funded for sale65% 58% 54% 71% 57% Gain on sale margin2.98% 3.26% 3.67% 3.65% 2.06% Mortgage servicing revenue$11,826 $12,636 $13,528 $14,751 $15,597 Average outstanding principal balance of mortgage loans serviced for others15,723,231 16,518,208 17,434,215 19,319,872 20,416,546 Average mortgage servicing revenue rates0.31% 0.30% 0.31% 0.31% 0.31% Gain (loss) on mortgage servicing rights, net of economic hedge:Gain (loss) on mortgage hedge derivative contracts, net$(27,705) $(385) $2,295 $21,815 $18,371 Gain (loss) on fair value option securities, net(1,910) 68 (754) (14,459) 68,393 Gain (loss) on economic hedge of mortgage servicing rights(29,615) (317) 1,541 7,356 86,764 Gain (loss) on changes in fair value of mortgage servicing rights33,874 6,276 3,441 (761) (88,480) Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue4,259 5,959 4,982 6,595 (1,716) Net interest revenue on fair value option securities2393 550 1,565 2,702 4,268 Total economic benefit of changes in the fair value of mortgage servicing rights, net of economic hedges$4,652 $6,509 $6,547 $9,297 $2,552 2 Actual interest earned on fair value option securities less internal transfer-priced cost of funds. QUARTERLY EARNINGS TREND -- UNAUDITEDBOK FINANCIAL CORPORATION(in thousands, except ratio and per share data) Three Months Ended Mar. 31, 2021 Dec. 31, 2020 Sept. 30, 2020 June 30, 2020 Mar. 31, 2020 Interest revenue$298,239 $319,020 $294,659 $306,384 $348,937 Interest expense17,819 21,790 22,909 28,280 87,577 Net interest revenue280,420 297,230 271,750 278,104 261,360 Provision for credit losses(25,000) (6,500) — 135,321 93,771 Net interest revenue after provision for credit losses305,420 303,730 271,750 142,783 167,589 Other operating revenue: Brokerage and trading revenue20,782 39,506 69,526 62,022 50,779 Transaction card revenue22,430 21,896 23,465 22,940 21,881 Fiduciary and asset management revenue41,322 41,799 39,931 41,257 44,458 Deposit service charges and fees24,209 24,343 24,286 22,046 26,130 Mortgage banking revenue37,113 39,298 51,959 53,936 37,167 Other revenue16,296 14,209 13,698 11,479 12,309 Total fees and commissions162,152 181,051 222,865 213,680 192,724 Other gains (losses), net(3,036) 5,383 6,265 6,768 (10,741) Gain (loss) on derivatives, net(27,650) (339) 2,354 21,885 18,420 Gain (loss) on fair value option securities, net(1,910) 68 (754) (14,459) 68,393 Change in fair value of mortgage servicing rights33,874 6,276 3,441 (761) (88,480) Gain (loss) on available for sale securities, net467 4,339 (12) 5,580 3 Total other operating revenue163,897 196,778 234,159 232,693 180,319 Other operating expense: Personnel173,010 176,198 179,860 176,235 156,181 Business promotion2,154 3,728 2,633 1,935 6,215 Charitable contributions to BOKF Foundation4,000 6,000 — 3,000 — Professional fees and services11,980 14,254 14,074 12,161 12,948 Net occupancy and equipment26,662 27,875 28,111 30,675 26,061 Insurance4,620 4,006 5,848 5,156 4,980 Data processing and communications37,467 35,061 34,751 32,942 32,743 Printing, postage and supplies3,440 3,805 3,482 3,502 4,272 Net losses (gains) and operating expenses of repossessed assets(6,588) 1,168 6,244 1,766 1,531 Amortization of intangible assets4,807 5,088 5,071 5,190 5,094 Mortgage banking costs13,943 14,765 15,803 15,598 10,545 Other expense7,132 8,713 5,388 7,227 8,054 Total other operating expense282,627 300,661 301,265 295,387 268,624 Net income before taxes186,690 199,847 204,644 80,089 79,284 Federal and state income taxes42,382 45,138 50,552 15,803 17,300 Net income144,308 154,709 154,092 64,286 61,984 Net income (loss) attributable to non-controlling interests(1,752) 485 58 (407) (95) Net income attributable to BOK Financial Corporation shareholders$146,060 $154,224 $154,034 $64,693 $62,079 Average shares outstanding: Basic69,137,375 69,489,597 69,877,866 69,876,043 70,123,685 Diluted69,141,710 69,493,050 69,879,290 69,877,467 70,130,166 Net income per share: Basic$2.10 $2.21 $2.19 $0.92 $0.88 Diluted$2.10 $2.21 $2.19 $0.92 $0.88 LOANS TREND -- UNAUDITEDBOK FINANCIAL CORPORATION(In thousands) Mar. 31, 2021 Dec. 31, 2020 Sept. 30, 2020 June 30, 2020 Mar. 31, 2020Commercial: Services $3,421,948 $3,508,583 $3,545,825 $3,779,881 $3,955,748 Energy 3,202,488 3,469,194 3,717,101 3,974,174 4,111,676 Healthcare 3,290,758 3,305,990 3,325,790 3,289,343 3,165,096 General business 2,742,590 2,793,768 2,976,990 3,115,112 3,563,455 Total commercial 12,657,784 13,077,535 13,565,706 14,158,510 14,795,975 Commercial real estate: Multifamily 1,227,915 1,328,045 1,387,461 1,407,107 1,282,457 Office 1,094,060 1,085,257 1,099,563 973,995 962,004 Industrial 789,437 810,510 792,389 723,005 728,026 Retail 787,648 796,223 786,211 780,467 774,198 Residential construction and land development 119,079 119,394 121,258 136,911 138,958 Other commercial real estate 485,208 559,109 506,818 532,659 564,442 Total commercial real estate 4,503,347 4,698,538 4,693,700 4,554,144 4,450,085 Paycheck protection program 1,848,550 1,682,310 2,097,325 2,081,428 — Loans to individuals: Residential mortgage 1,797,478 1,863,003 1,849,144 1,813,442 1,844,555 Residential mortgages guaranteed by U.S. government agencies 420,051 408,687 384,247 322,269 197,889 Personal 1,306,637 1,277,447 1,213,178 1,226,097 1,175,466 Total loans to individuals 3,524,166 3,549,137 3,446,569 3,361,808 3,217,910 Total $22,533,847 $23,007,520 $23,803,300 $24,155,890 $22,463,970 LOANS MANAGED BY PRINCIPAL MARKET AREA -- UNAUDITEDBOK FINANCIAL CORPORATION(in thousands) Mar. 31, 2021 Dec. 31, 2020 Sept. 30, 2020 June 30, 2020 Mar. 31, 2020 Texas: Commercial$5,748,345 $5,926,534 $6,135,471 $6,359,206 $6,350,690 Commercial real estate1,511,714 1,519,217 1,523,226 1,413,108 1,296,266 Paycheck protection program537,899 501,079 614,970 612,133 — Loans to individuals848,194 855,410 794,055 749,531 756,634 Total Texas8,646,152 8,802,240 9,067,722 9,133,978 8,403,590 Oklahoma: Commercial2,975,477 3,144,782 3,332,244 3,489,259 3,886,086 Commercial real estate597,840 597,733 608,448 596,419 593,473 Paycheck protection program468,002 413,108 487,247 442,518 — Loans to individuals2,043,705 2,052,784 2,034,576 1,966,032 1,788,518 Total Oklahoma6,085,024 6,208,407 6,462,515 6,494,228 6,268,077 Colorado: Commercial1,910,826 1,929,320 1,993,364 2,085,294 2,181,309 Commercial real estate777,786 879,648 893,626 940,622 955,608 Paycheck protection program436,540 377,111 494,910 488,279 — Loans to individuals264,759 264,295 257,832 265,359 268,674 Total Colorado3,389,911 3,450,374 3,639,732 3,779,554 3,405,591 Arizona: Commercial1,207,089 1,219,072 1,218,769 1,346,037 1,396,582 Commercial real estate667,766 726,111 702,291 698,818 714,161 Paycheck protection program208,481 211,725 272,114 318,961 — Loans to individuals179,031 177,948 166,203 177,155 181,821 Total Arizona2,262,367 2,334,856 2,359,377 2,540,971 2,292,564 Kansas/Missouri: Commercial421,974 455,914 493,606 481,162 556,255 Commercial real estate395,590 366,821 352,663 314,926 310,799 Paycheck protection program60,741 56,011 80,230 76,724 — Loans to individuals104,954 105,995 96,598 102,577 116,734 Total Kansas/Missouri983,259 984,741 1,023,097 975,389 983,788 New Mexico: Commercial307,395 303,833 288,374 308,090 327,164 Commercial real estate448,298 473,204 473,697 458,230 434,150 Paycheck protection program124,059 109,881 133,244 128,058 — Loans to individuals70,491 75,665 79,890 83,470 87,110 Total New Mexico950,243 962,583 975,205 977,848 848,424 Arkansas: Commercial86,678 98,080 103,878 89,462 97,889 Commercial real estate104,353 135,804 139,749 132,021 145,628 Paycheck protection program12,828 13,395 14,610 14,755 — Loans to individuals13,032 17,040 17,415 17,684 18,419 Total Arkansas216,891 264,319 275,652 253,922 261,936 TOTAL BOK FINANCIAL$22,533,847 $23,007,520 $23,803,300 $24,155,890 $22,463,970 Loans attributed to a principal market may not always represent the location of the borrower or the collateral. DEPOSITS BY PRINCIPAL MARKET AREA -- UNAUDITEDBOK FINANCIAL CORPORATION(in thousands) Mar. 31, 2021 Dec. 31, 2020 Sept. 30, 2020 June 30, 2020 Mar. 31, 2020Oklahoma: Demand$4,822,895 $4,328,619 $4,493,691 $4,378,559 $3,669,558 Interest-bearing: Transaction12,827,914 12,603,603 12,586,401 11,438,489 9,955,697 Savings487,862 420,996 401,062 387,557 329,631 Time1,197,517 1,134,453 1,081,176 1,330,619 1,137,802 Total interest-bearing14,513,293 14,159,052 14,068,639 13,156,665 11,423,130 Total Oklahoma19,336,188 18,487,671 18,562,330 17,535,224 15,092,688 Texas: Demand3,593,510 3,450,468 3,152,393 3,070,955 2,767,399 Interest-bearing: Transaction4,257,390 3,800,482 3,482,603 3,358,090 2,874,362 Savings154,406 139,173 136,787 128,892 115,039 Time368,086 383,062 438,337 476,867 505,565 Total interest-bearing4,779,882 4,322,717 4,057,727 3,963,849 3,494,966 Total Texas8,373,392 7,773,185 7,210,120 7,034,804 6,262,365 Colorado: Demand2,115,354 2,168,404 2,057,603 2,096,075 1,579,764 Interest-bearing: Transaction2,100,135 2,170,485 1,861,763 1,816,604 1,759,384 Savings73,446 69,384 68,230 67,477 58,000 Time204,973 208,778 226,780 254,845 279,105 Total interest-bearing2,378,554 2,448,647 2,156,773 2,138,926 2,096,489 Total Colorado4,493,908 4,617,051 4,214,376 4,235,001 3,676,253 New Mexico: Demand1,131,713 941,074 964,908 965,877 750,052 Interest-bearing: Transaction736,923 733,007 713,418 752,565 563,891 Savings103,591 91,646 85,463 80,242 67,553 Time181,863 186,307 200,525 222,370 235,778 Total interest-bearing1,022,377 1,010,960 999,406 1,055,177 867,222 Total New Mexico2,154,090 1,952,034 1,964,314 2,021,054 1,617,274 Arizona: Demand915,439 905,201 928,671 985,757 665,396 Interest-bearing: Transaction835,795 768,220 771,319 780,500 729,603 Savings13,235 12,174 11,498 15,669 8,832 Time30,997 32,721 36,929 42,318 47,081 Total interest-bearing880,027 813,115 819,746 838,487 785,516 Total Arizona1,795,466 1,718,316 1,748,417 1,824,244 1,450,912 Kansas/Missouri: Demand478,370 426,738 405,360 427,795 318,985 Interest-bearing: Transaction991,510 960,237 616,797 526,635 537,552 Savings18,686 16,286 15,520 15,033 12,888 Time13,898 14,610 16,430 17,746 19,137 Total interest-bearing1,024,094 991,133 648,747 559,414 569,577 Total Kansas/Missouri1,502,464 1,417,871 1,054,107 987,209 888,562 Arkansas: Demand45,889 45,834 44,712 67,147 70,428 Interest-bearing: Transaction141,207 122,388 164,439 177,535 175,803 Savings3,000 2,333 2,389 2,101 1,862 Time7,022 7,197 7,796 7,995 8,005 Total interest-bearing151,229 131,918 174,624 187,631 185,670 Total Arkansas197,118 177,752 219,336 254,778 256,098 TOTAL BOK FINANCIAL$37,852,626 $36,143,880 $34,973,000 $33,892,314 $29,244,152 NET INTEREST MARGIN TREND -- UNAUDITEDBOK FINANCIAL CORPORATION Three Months Ended Mar. 31, 2021 Dec. 31, 2020 Sept. 30, 2020 June 30, 2020 Mar. 31, 2020 TAX-EQUIVALENT ASSETS YIELDS Interest-bearing cash and cash equivalents0.10 % 0.10 % 0.12 % 0.07 % 1.33 %Trading securities2.06 % 2.02 % 1.92 % 2.46 % 2.89 %Investment securities, net of allowance4.88 % 4.88 % 4.85 % 4.77 % 4.73 %Available for sale securities1.84 % 1.98 % 2.11 % 2.29 % 2.48 %Fair value option securities1.95 % 2.27 % 1.92 % 2.00 % 2.67 %Restricted equity securities2.86 % 3.25 % 2.53 % 2.75 % 5.49 %Residential mortgage loans held for sale2.71 % 2.75 % 3.01 % 3.10 % 3.50 %Loans3.55 % 3.68 % 3.60 % 3.63 % 4.50 %Allowance for loan losses Loans, net of allowance3.62 % 3.75 % 3.67 % 3.69 % 4.55 %Total tax-equivalent yield on earning assets2.78 % 2.92 % 3.04 % 3.12 % 3.73 % COST OF INTEREST-BEARING LIABILITIES Interest-bearing deposits: Interest-bearing transaction0.12 % 0.14 % 0.17 % 0.21 % 0.89 %Savings0.04 % 0.05 % 0.05 % 0.05 % 0.09 %Time0.70 % 0.89 % 1.13 % 1.36 % 1.83 %Total interest-bearing deposits0.17 % 0.19 % 0.26 % 0.34 % 0.98 %Funds purchased and repurchase agreements0.19 % 0.28 % 0.17 % 0.14 % 1.14 %Other borrowings0.39 % 0.42 % 0.43 % 0.56 % 1.66 %Subordinated debt4.92 % 4.87 % 4.89 % 5.16 % 5.30 %Total cost of interest-bearing liabilities0.24 % 0.28 % 0.31 % 0.37 % 1.19 %Tax-equivalent net interest revenue spread2.54 % 2.64 % 2.73 % 2.75 % 2.54 %Effect of noninterest-bearing funding sources and other0.08 % 0.08 % 0.08 % 0.08 % 0.26 %Tax-equivalent net interest margin2.62 % 2.72 % 2.81 % 2.83 % 2.80 % 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 -- UNAUDITEDBOK FINANCIAL CORPORATION(in thousands, except ratios) Three Months Ended Mar. 31, 2021 Dec. 31, 2020 Sept. 30, 2020 June 30, 2020 Mar. 31, 2020Nonperforming assets: Nonaccruing loans: Commercial: Energy$101,800 $125,059 $126,816 $162,989 $96,448 Services28,033 25,598 25,817 21,032 8,425 Healthcare3,187 3,645 3,645 3,645 4,070 General business14,053 12,857 13,675 14,333 9,681 Total commercial147,073 167,159 169,953 201,999 118,624 Commercial real estate27,243 27,246 12,952 13,956 8,545 Loans to individuals: Permanent mortgage32,884 32,228 31,599 33,098 30,721 Permanent mortgage guaranteed by U.S. government agencies8,564 7,741 6,397 6,110 5,005 Personal255 319 252 233 277 Total loans to individuals41,703 40,288 38,248 39,441 36,003 Total nonaccruing loans$216,019 $234,693 $221,153 $255,396 $163,172 Accruing renegotiated loans guaranteed by U.S. government agencies154,591 151,775 142,770 114,571 91,757 Real estate and other repossessed assets70,911 90,526 52,847 35,330 36,744 Total nonperforming assets$441,521 $476,994 $416,770 $405,297 $291,673 Total nonperforming assets excluding those guaranteed by U.S. government agencies$278,366 $317,478 $267,603 $284,616 $194,911 Accruing loans 90 days past due1$395 $10,369 $7,684 $10,992 $3,706 Gross charge-offs$16,905 $18,251 $26,661 $15,570 $18,917 Recoveries(2,437) (1,592) (4,232) (1,491) (1,696) Net charge-offs$14,468 $16,659 $22,429 $14,079 $17,221 Provision for loan losses$(21,770) $(14,478) $6,609 $134,365 $95,964 Provision for credit losses from off-balance sheet unfunded loan commitments(4,044) 8,952 (4,950) 4,405 3,377 Provision for expected credit losses from mortgage banking activities885 (923) (770) (3,575) (6,020) Provision for credit losses related to held-to maturity (investment) securities portfolio(71) (51) (889) 126 450 Total provision for credit losses$(25,000) $(6,500) $— $135,321 $93,771 Allowance for loan losses to period end loans1.56% 1.69% 1.76% 1.80% 1.40% Allowance for loan losses to period end loans excluding PPP loans21.70% 1.82% 1.93% 1.97% 1.40% Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans1.71% 1.85% 1.88% 1.94% 1.53% Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans excluding PPP loans21.86% 2.00% 2.06% 2.12% 1.53% Nonperforming assets to period end loans and repossessed assets1.95% 2.07% 1.75% 1.68% 1.30% Net charge-offs (annualized) to average loans0.25% 0.28% 0.37% 0.23% 0.31% Net charge-offs (annualized) to average loans excluding PPP loans20.28% 0.31% 0.41% 0.25% 0.31% Allowance for loan losses to nonaccruing loans1169.87% 171.24% 195.47% 174.74% 199.35% Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to nonaccruing loans1185.72% 187.51% 208.49% 187.94% 217.38% 1 Excludes residential mortgage loans guaranteed by agencies of the U.S. government.2 Metric meaningful due to the unique characteristics and short-term nature of the PPP loans. LINE OF BUSINESS HIGHLIGHTS -- UNAUDITEDBOK FINANCIAL CORPORATION(in thousands, except ratios) Three Months Ended 1Q21 vs 4Q20 1Q21 vs 1Q20 Mar. 31, 2021 Dec. 31, 2020 Mar. 31, 2020 $ change % change $ change % changeCommercial Banking Net interest revenue $130,005 $142,026 $151,407 $(12,021) (8.5)% $(21,402) (14.1)% Fees and commissions revenue 49,847 49,060 41,459 787 1.6% 8,388 20.2% Combined net interest and fee revenue 179,852 191,086 192,866 (11,234) (5.9)% (13,014) (6.7)% Other operating expense 66,979 68,372 60,752 (1,393) (2.0)% 6,227 10.2% Corporate expense allocations 12,734 5,348 8,905 7,386 138.1% 3,829 43.0% Net income 69,673 74,941 74,975 (5,268) (7.0)% (5,302) (7.1)% Average assets 28,047,052 27,693,742 24,687,976 353,310 1.3% 3,359,076 13.6% Average loans 17,522,520 18,100,333 18,812,015 (577,813) (3.2)% (1,289,495) (6.9)% Average deposits 16,130,168 15,373,673 11,907,386 756,495 4.9% 4,222,782 35.5% Consumer Banking Net interest revenue $20,974 $30,672 $43,932 $(9,698) (31.6)% $(22,958) (52.3)% Fees and commissions revenue 52,300 55,326 55,062 (3,026) (5.5)% (2,762) (5.0)% Combined net interest and fee revenue 73,274 85,998 98,994 (12,724) (14.8)% (25,720) (26.0)% Other operating expense 55,743 59,306 53,844 (3,563) (6.0)% 1,899 3.5% Corporate expense allocations 11,487 10,428 10,389 1,059 10.2% 1,098 10.6% Net income 6,849 14,768 23,701 (7,919) (53.6)% (16,852) (71.1)% Average assets 9,755,539 9,700,428 9,850,853 55,111 0.6% (95,314) (1.0)% Average loans 1,823,732 1,840,492 1,711,703 (16,760) (0.9)% 112,029 6.5% Average deposits 8,082,443 7,993,971 6,869,481 88,472 1.1% 1,212,962 17.7% Wealth Management Net interest revenue $48,354 $48,521 $18,904 $(167) (0.3)% $29,450 155.8% Fees and commissions revenue 65,684 82,936 97,881 (17,252) (20.8)% (32,197) (32.9)% Combined net interest and fee revenue 114,038 131,457 116,785 (17,419) (13.3)% (2,747) (2.4)% Other operating expense 78,565 84,000 78,192 (5,435) (6.5)% 373 0.5% Corporate expense allocations 9,887 9,465 8,265 422 4.5% 1,622 19.6% Net income 19,382 28,435 22,573 (9,053) (31.8)% (3,191) (14.1)% Average assets 18,645,865 18,101,182 12,723,412 544,683 3.0% 5,922,453 46.5% Average loans 1,917,973 1,839,695 1,705,735 78,278 4.3% 212,238 12.4% Average deposits 9,706,295 9,589,814 7,623,986 116,481 1.2% 2,082,309 27.3% Fiduciary assets 56,227,268 55,486,492 43,688,036 740,776 1.3% 12,539,232 28.7% Assets under management or administration 91,956,188 91,592,247 75,783,829 363,941 0.4% 16,172,359 21.3% Contact: Cody McAlesterVice President, Investor Relations918-595-3030
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