BOK Financial Reports Record Quarterly Earnings of $114 million or $1.75 Per Share; Results Driven by Strong Loan Growth, Net Interest Margin Expansion, and Continued Expense Control; Quarterly Dividend Increased 11.1 percent to 50 Cents Per Share
TULSA, Okla., July 25, 2018 (GLOBE NEWSWIRE) -- BOK Financial Corporation (NASDAQ:BOKF) reported net income of $114.4 million or $1.75 per diluted share for the second quarter of 2018. Net income was $105.6 million or $1.61 per diluted share for the first quarter of 2018 and $88.1 million or $1.35 per diluted share for the second quarter of 2017.
Steven G. Bradshaw, president and chief executive officer, stated, “This was a record quarter for BOK Financial, with the highest level of pre–tax, pre–provision income in our company’s history. In addition, we saw sustainable momentum across all of our lending businesses, with a record $665 million of new loan production in the quarter and 3.8 percent sequential growth in period end loans outstanding. With continued loan growth and net interest margin expansion, a stable credit environment, and ongoing expense management as we move toward our 60 percent efficiency ratio goal, we see earnings leverage continuing for the foreseeable future. Accordingly, our Board of Directors approved an 11 percent increase in our regular quarterly dividend to 50 cents per share.”
Bradshaw continued, “We look forward to closing our acquisition of CoBiz Financial later this year, which we believe will further enhance our growth profile. We believe the combination of CoBiz and BOK Financial will create the premier commercial bank in Colorado and Arizona. In addition, the financial metrics of the deal are highly compelling, as we expect it to be accretive to earnings per share, return on average assets, return on tangible common equity, net interest margin, and efficiency ratio.”
Second Quarter 2018 Highlights
Net interest revenue totaled $238.6 million for the second quarter of 2018, growing $18.8 million over the first quarter of 2018. Net interest margin increased to 3.17 percent for the second quarter of 2018 from 2.99 percent for the first quarter of 2018. Recoveries of foregone interest on nonaccruing loans added $5.3 million or 7 basis points to net interest margin in the second quarter. Average earning assets grew by $423 million over the prior quarter.
Fees and commissions revenue totaled $157.9 million for the second quarter of 2018, largely unchanged compared to the first quarter of 2018. Modest changes in other revenue lines were offset by decreased brokerage and trading revenue.
Operating expense was $246.5 million for the second quarter of 2018, a $2.0 million increase compared to the first quarter of 2018. Personnel expense decreased $1.0 million, primarily due to decreased incentive compensation expense. Non-personnel expense increased $3.0 million including $1.0 million of professional fees associated with the pending CoBiz acquisition.
The Company recorded no provision for credit losses in the second quarter of 2018. A $5.0 million negative provision for credit losses was recorded in the first quarter of 2018. The company had net charge-offs of $10.5 million or 0.24 percent of average loans on an annualized basis for second quarter of 2018, compared to net charge-offs of $1.3 million or 0.03 percent of average loans on an annualized basis for the first quarter of 2018. Net charge-offs totaled $26.9 million or 0.16 percent of average loans over the last four quarters.
The combined allowance for credit losses totaled $218 million or 1.21 percent of outstanding loans at June 30, 2018, compared to $228 million or 1.32 percent of outstanding loans at March 31, 2018.
Nonperforming assets that are not guaranteed by U.S. government agencies totaled $186 million or 1.04 percent of outstanding loans and repossessed assets at June 30, 2018 and $195 million or 1.13 percent of outstanding loans and repossessed assets at March 31, 2018. In addition, potential problem loans decreased $82 million to $140 million at June 30, 2018.
Average loan balances grew by $490 million over the previous quarter, primarily due to growth in commercial and commercial real estate loan balances. Period-end outstanding loan balances increased more than $665 million to $18.0 billion at June 30, 2018.
Average deposits were largely unchanged compared to the previous quarter. Average interest-bearing transaction deposit balances decreased $155 million, partially offset by an increase in demand deposit balances of $72 million. Period-end deposits were $22.2 billion at June 30, 2018, a $36 million decrease compared to March 31, 2018.
The common equity Tier 1 capital ratio at June 30, 2018 was 11.92 percent. Other regulatory capital ratios were Tier 1 capital ratio, 11.92 percent, total capital ratio, 13.26 percent, and leverage ratio, 9.57 percent. At March 31, 2018, the common equity Tier 1 capital ratio was 12.06 percent, the Tier 1 capital ratio was 12.06 percent, total capital ratio was 13.49 percent, and leverage ratio was 9.40 percent.
The Company's Board of Directors declared a dividend on the Company's common stock of 50 cents per share. This is an increase of 11.1 percent from 45 cents per share previously. The dividend will be payable on or about August 27, 2018, to shareholders of record on August 13.
Net Interest Revenue
Net interest revenue was $238.6 million for the second quarter of 2018, an $18.8 million increase over the first quarter of 2018.
Net interest margin was 3.17 percent for the second quarter of 2018, an increase of 18 basis points over the first quarter of 2018. Recoveries of foregone interest on nonaccruing loans added $5.3 million or 7 basis points to net interest margin in the second quarter. Excluding the impact of interest recoveries in the second quarter, the yield on average earning assets was 3.84 percent, a 23 basis point increase over the prior quarter. The loan portfolio yield also increased 23 basis points to 4.68 percent. The yield on the available for sale securities portfolio increased 7 basis points to 2.30 percent. The yield on interest-bearing cash and cash equivalents increased 29 basis points. Funding costs were 1.11 percent, up 18 basis points. The cost of interest-bearing deposits increased 9 basis points to 0.66 percent. The cost of other borrowed funds was up 34 basis points to 1.84 percent. The benefit to net interest margin from assets funded by non-interest liabilities increased to 37 basis points from 31 basis points in the first quarter of 2018.
Average earning assets increased $423 million over the second quarter of 2018. Trading securities balances increased $549 million. Average loan balances grew by $490 million. Average interest-bearing cash and cash equivalents balances decreased $386 million. Average fair value option securities held as an economic hedge of our mortgage servicing rights decreased $139 million. Average available for sale securities decreased $74 million. Average interest-bearing deposit balances decreased $144 million compared to the first quarter of 2018. The average balance of borrowed funds increased $231 million.
Fees and Commissions Revenue
Fees and commissions revenue totaled $157.9 million for the second quarter of 2018, consistent with the results from the first quarter of 2018.
Brokerage and trading revenue decreased $4.2 million compared to the first quarter of 2018. Rising mortgage interest rates narrowed trading margins and slowed turnover of our trading inventory. However, the longer average hold time of trading securities increased net interest revenue by $3.1 million.
Other revenue increased $2.2 million compared to the first quarter of 2018 primarily due to appreciation in assets related to the deferred compensation plan. This is primarily offset by an increase in deferred compensation expense. Mortgage banking revenue was relatively consistent with the previous quarter. A 2 percent decrease in mortgage production volume was offset by an increase in the gain on sale margin.
Operating Expense
Total operating expense was $246.5 million for the second quarter of 2018, largely unchanged compared to the first quarter of 2018.
Personnel expense decreased $1.0 million. Incentive compensation expense decreased $1.0 million. Changes in assumptions for performance-based awards decreased equity compensation expense by $4.3 million. This was partially offset by an increase of $2.4 million in cash based incentive compensation. Employee benefits expense decreased $1.2 million primarily due to a seasonal decrease in payroll taxes partially offset by an overall increase in employee healthcare costs. Regular compensation increased $1.2 million as merit increases were effective for most employees in March 2018.
Non-personnel expense increased $3.0 million. Professional fees and services expense increased $4.8 million mainly due to $1.8 million in project costs, $1.0 million in costs related to the pending CoBiz acquisition and $953 thousand in seasonal tax preparation charges from trust operations. Mortgage banking costs increased $2.7 million primarily due to a $1.9 million increase in accruals related to default servicing and loss mitigation costs on loans serviced for others.
Net losses and operating expenses of repossessed assets decreased $5.0 million, primarily due to a $5.0 million write-down on a set of repossessed oil and gas properties in the first quarter of 2018.
Loans, Deposits and Capital
Loans
Outstanding loans were $18.0 billion at June 30, 2018, up more than $665 million or 3.8 percent over March 31, 2018. Loan growth can generally be attributed to tax reform changes and regulatory easing resulting in a better overall business environment. Specifically, growth in energy loans is consistent with our ongoing support and commitment to the oil and gas industry.
Outstanding commercial loan balances grew by $429 million or 3.9 percent over March 31, 2018. Energy loan balances were up $178 million. Unfunded energy loan commitments increased $80 million over March 31, 2018 to $3.0 billion at June 30, 2018. Wholesale/retail sector loan balances grew by $168 million. Manufacturing sector loan balances were up $88 million. Service sector loans increased $16 million, mostly offset by a $14 million decrease in other commercial and industrial loans.
Commercial real estate loan balances grew by $205 million or 5.9 percent over March 31, 2018. Loans secured by office buildings increased $83 million. Multifamily residential loan balances were up $48 million. Loans secured by industrial properties grew by $40 million. Loans secured by retail facilities and other commercial real estate loans increased $18 million and $15 million, respectively.
Deposits
Period-end deposits totaled $22.2 billion at June 30, 2018, a $36 million decrease compared to March 31, 2018. Interest-bearing transaction account balances decreased $63 million and time deposit balances decreased by $39 million. These decreases were partially offset by a $68 million increase in demand deposit balances. Consumer Banking deposits were down $71 million and Commercial Banking deposits decreased $41 million, partially offset by a $7.3 million increase in Wealth Management deposits.
Capital
The company's common equity Tier 1 capital ratio was 11.92 percent at June 30, 2018. In addition, the company's Tier 1 capital ratio was 11.92 percent, total capital ratio was 13.26 percent, and leverage ratio was 9.57 percent at June 30, 2018. At March 31, 2018, the company's common equity Tier 1 capital ratio was 12.06 percent, Tier 1 capital ratio was 12.06 percent, total capital ratio was 13.49 percent, and leverage ratio was 9.40 percent.
The decrease in regulatory capital ratios was due in part to introduction of the market risk capital rules. The company exceeded the $1 billion regulatory capital rules threshold for trading assets and liabilities at March 31. This subjects the company to the market risk rule, which imposed additional modeling, systems, oversight and reporting requirements beginning in the second quarter of 2018 and resulted in an increase in risk weighted assets associated with our trading activities.
The company's tangible common equity ratio, a non-GAAP measure, was 9.21 percent at June 30, 2018 and 9.18 percent at March 31, 2018. The tangible common equity ratio is primarily based on total shareholders' equity, which includes unrealized gains and losses on available for sale securities. The company has elected to exclude unrealized gains and losses from available for sale securities from its calculation of Tier 1 capital for regulatory capital purposes, consistent with the treatment under the previous capital rules.
Credit Quality
Nonperforming assets totaled $269 million or 1.49 percent of outstanding loans and repossessed assets at June 30, 2018, down from $278 million or 1.60 percent at March 31, 2018. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $186 million or 1.04 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at June 30, 2018, compared to $195 million or 1.13 percent at March 31, 2018.
Nonaccruing loans were $166 million or 0.92 percent of outstanding loans at June 30, 2018, compared to $180 million or 1.04 percent of outstanding loans at March 31, 2018. The decrease in nonaccruing loans was primarily due to a $24 million decrease in energy loans, partially offset by a $12 million increase in wholesale/retail sector loans. New nonaccruing loans identified in the second quarter totaled $42 million, offset by $31 million in payments received, $15 million in charge-offs and $8.2 million in foreclosures and repossessions. At June 30, 2018, nonaccruing commercial loans totaled $121 million or 1.07 percent of outstanding commercial loans, nonaccruing commercial real estate loans totaled $2.0 million or 0.05 percent of outstanding commercial real estate loans and nonaccruing residential mortgage loans totaled $42 million or 2.18 percent of outstanding residential mortgage loans.
Potential problem loans, which are defined as performing loans that, based on known information, cause management concern as to the borrowers' ability to continue to perform, totaled $140 million at June 30, down from $222 million at March 31. The decrease largely resulted from energy, services, and wholesale/retail sector loans.
The company had net charge-offs of $10.5 million or 0.24 percent of average loans on an annualized basis for second quarter of 2018, compared to net charge-offs of $1.3 million or 0.03 percent of average loans on an annualized basis for the first quarter of 2018. Net charge-offs were 0.16 percent of average loans over the last four quarters. Over half of the second quarter net charge-offs was from one energy loan that had previously been identified as impaired and appropriately reserved. Gross charge-offs were $15.1 million for the second quarter compared to $2.9 million for the previous quarter. Recoveries totaled $4.6 million for the second quarter of 2018 and $1.6 million for the first quarter of 2018.
Based on an evaluation of all credit factors, including overall loan portfolio growth, changes in nonaccruing and potential problem loans and net charge-offs, the company determined that no provision for credit losses was appropriate for the second quarter of 2018. The company had a $5.0 million negative provision for credit losses in the first quarter of 2018.
The combined allowance for credit losses totaled $218 million or 1.21 percent of outstanding loans and 138 percent of nonaccruing loans at June 30, 2018, excluding residential mortgage loans guaranteed by U.S. government agencies. The allowance for loan losses was $215 million and the accrual for off-balance sheet credit losses was $2.4 million. At March 31, 2018, the combined allowance for credit losses was $228 million or 1.32 percent of outstanding loans and 133 percent of nonaccruing loans, excluding loans guaranteed by U.S. government agencies. The allowance for loan losses was $224 million and the accrual for off-balance sheet credit losses was $4.1 million.
Securities and Derivatives
The fair value of the available for sale securities portfolio totaled $8.2 billion at June 30, 2018, an $87 million decrease compared to March 31, 2018. At June 30, 2018, the available for sale portfolio consisted primarily of $5.3 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $2.7 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. At June 30, 2018, the available for sale securities portfolio had a net unrealized loss of $181 million compared to a $148 million net unrealized loss at March 31, 2018.
Trading securities increased $617 million to $1.9 billion during the second quarter of 2018 as a result of expanded relationships with mortgage loan originator clients along with slower inventory turnover rates. The company holds an inventory of trading securities in support of sales to a variety of customers, including banks, corporations, insurance companies, money managers, and others.
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.
The net economic cost of the changes in fair value of mortgage servicing rights and related economic hedges was $3.5 million during the second quarter of 2018, including a $1.7 million increase in the fair value of mortgage servicing rights, a $6.4 million decrease in the fair value of securities and derivative contracts held as an economic hedge, and $1.2 million of related net interest revenue.
The fair value of mortgage servicing rights increased by $21.2 million during the first quarter of 2018. The fair value of securities and interest rate derivative contracts held as an economic hedge of mortgage servicing rights decreased by $23.3 million. Related net interest revenue was $1.8 million during the first quarter of 2018.
Conference Call and Webcast
The company will hold a conference call at 9 a.m. Central time on Wednesday, July 25, 2018 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 # 13681367.
About BOK Financial Corporation
BOK Financial Corporation is a $34 billion regional financial services company based in Tulsa, Oklahoma. The company's stock is publicly traded on NASDAQ under the Global Select market listings (symbol: BOKF). BOK Financial's holdings include BOKF, NA, BOK Financial Securities, Inc. and The Milestone Group, Inc. BOKF, NA operates TransFund, Cavanal Hill Investment Management, BOK Financial Asset Management, Inc. and seven banking divisions: Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Mobank, Bank of Oklahoma, Bank of Texas and Colorado State Bank and Trust. Through its subsidiaries, the company provides commercial and consumer banking, investment and trust services, mortgage origination and servicing, and an electronic funds transfer network. For more information, visit www.bokf.com.
The company will continue to evaluate critical assumptions and estimates, such as the appropriateness of the allowance for credit losses and asset impairment as of June 30, 2018 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 within the meaning of the Private Securities Litigation Reform Act of 1995 including, but not limited to, CoBiz Financial Inc.’s and BOK Financial Corporation’s expectations or predictions of future financial or business performance or conditions. Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “target,” “estimate,” “continue,” “positions,” “plan,” “predict,” “project,” “forecast,” “guidance,” “goal,” “objective,” “prospects,” “possible” or “potential,” by future conditional verbs such as “assume,” “will,” “would,” “should,” “could” or “may”, or by variations of such words or by similar expressions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made and we assume no duty to update forward-looking statements. Actual results may differ materially from current projections.
In addition to factors previously disclosed in CoBiz Financial Inc.’s and BOK Financial Corporation’s reports filed with the SEC and those identified elsewhere in this communication, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: the ability to obtain regulatory approvals and meet other closing conditions to the merger, including approval by CoBiz Financial Inc.’s shareholders on the expected terms and schedule, including the risk that regulatory approvals required for the merger are not obtained or are obtained subject to conditions that are not anticipated; delay in closing the merger; difficulties and delays in integrating CoBiz Financial Inc.’s business or fully realizing cost savings and other benefits; business disruption following the merger; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer acceptance of BOK Financial Corporation’s products and services; customer borrowing, repayment, investment and deposit practices; customer disintermediation; the introduction, withdrawal, success and timing of business initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with mergers, acquisitions and divestitures; economic conditions; and the impact, extent and timing of technological changes, capital management activities, and other actions of the Federal Reserve Board and legislative and regulatory actions and reforms.
Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.
In this news release we may sometimes use non-GAAP Financial information. Please note that although non-GAAP financial measures provide useful insight to analysts, investors and regulators, they should not be considered in isolation or relied upon as a substitute for analysis using GAAP measures. If applicable, we provide GAAP reconciliations for non-GAAP financial measures.
IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT
In connection with the proposed merger, BOK Financial Corporation has filed with the SEC a Registration Statement on Form S-4 that will include the Proxy Statement of CoBiz Financial Inc. and a Prospectus of BOK Financial Corporation, as well as other relevant documents concerning the proposed transaction. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. INVESTORS AND SHAREHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER E AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
A free copy of the Proxy Statement/Prospectus, as well as other filings containing information about BOK Financial Corporation and CoBiz Financial Inc., may be obtained at the SEC’s Internet site (http://www.sec.gov). You will also be able to obtain these documents, free of charge, from CoBiz Financial Inc. at ir.cobizfinancial.com or from BOK Financial Corporation by accessing BOK Financial Corporation’s website at www.bokf.com. Copies of the Proxy Statement/Prospectus can also be obtained, free of charge, by directing a request to CoBiz Financial Inc. Investor Relations at CoBiz Financial Inc. Investor Relations, 1401 Lawrence Street, Suite 1200, Denver, CO, by calling (303) 312-3412, or by sending an e-mail to info@cobizfinancial.com or to BOK Financial Corporation Investor Relations at Bank of Oklahoma Tower, Boston Avenue at Second Street, Tulsa, Oklahoma, by calling (918) 588-6000 or by sending an e-mail to investorrelations@bokf.com.
CoBiz Financial Inc. and BOK Financial Corporation and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of CoBiz Financial Inc. in respect of the transaction described in the Proxy Statement/Prospectus. Information regarding CoBiz Financial Inc.’s directors and executive officers is contained in CoBiz Financial Inc.’s Annual Report on Form 10-K for the year ended December 31, 2017 and its Proxy Statement on Schedule 14A, dated March 9, 2018, which are filed with the SEC. Information regarding BOK Financial Corporation’s directors and executive officers is contained in BOK Financial Corporation’s Annual Report on Form 10-K for the year ended December 31, 2017 and its Proxy Statement on Schedule 14A, dated March 15, 2018, which are filed with the SEC. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the Proxy Statement/Prospectus regarding the proposed merger when it becomes available. Free copies of this document may be obtained as described in the preceding paragraph.
BALANCE SHEETS -- UNAUDITED BOK FINANCIAL CORPORATION (In thousands)
June 30, 2018
Mar. 31, 2018
June 30, 2017
ASSETS
Cash and due from banks
$
585,801
$
544,534
$
561,587
Interest-bearing cash and cash equivalents
872,999
2,054,899
2,078,831
Trading securities
1,909,615
1,292,432
441,414
Investment securities
392,013
416,672
490,426
Available for sale debt securities
8,162,866
8,249,432
8,341,041
Fair value option securities
482,227
513,668
445,169
Restricted equity securities
347,721
338,552
311,033
Residential mortgage loans held for sale
223,301
225,190
287,259
Loans:
Commercial
11,349,039
10,919,667
10,637,955
Commercial real estate
3,712,220
3,506,782
3,688,592
Residential mortgage
1,942,250
1,945,769
1,939,198
Personal
1,000,187
965,632
917,900
Total loans
18,003,696
17,337,850
17,183,645
Allowance for loan losses
(215,142
)
(223,967
)
(250,061
)
Loans, net of allowance
17,788,554
17,113,883
16,933,584
Premises and equipment, net
320,810
314,347
321,038
Receivables
212,893
206,577
170,094
Goodwill
453,093
447,430
446,697
Intangible assets, net
28,273
29,658
40,755
Mortgage servicing rights
278,719
274,978
245,239
Real estate and other repossessed assets, net
27,891
23,652
39,436
Derivative contracts, net
373,373
286,687
280,289
Cash surrender value of bank-owned life insurance
321,024
318,661
312,774
Receivable on unsettled securities sales
604,552
275,088
158,125
Other assets
447,382
435,152
358,741
TOTAL ASSETS
$
33,833,107
$
33,361,492
$
32,263,532
LIABILITIES AND EQUITY
Deposits:
Demand
$
9,373,959
$
9,306,023
$
9,568,895
Interest-bearing transaction
10,164,099
10,226,971
10,087,139
Savings
503,474
505,952
464,318
Time
2,127,732
2,166,254
2,196,122
Total deposits
22,169,264
22,205,200
22,316,474
Funds purchased and repurchase agreements
880,027
546,324
464,323
Other borrowings
5,929,445
5,727,025
5,232,343
Subordinated debentures
144,697
144,687
144,658
Accrued interest, taxes and expense
160,568
156,146
133,198
Due on unsettled securities purchases
571,034
553,840
31,214
Derivative contracts, net
234,856
233,202
285,819
Other liabilities
167,171
277,726
205,958
TOTAL LIABILITIES
30,257,062
29,844,150
28,813,987
Shareholders' equity:
Capital, surplus and retained earnings
3,688,736
3,606,220
3,414,505
Accumulated other comprehensive gain (loss)
(135,305
)
(111,191
)
7,964
TOTAL SHAREHOLDERS' EQUITY
3,553,431
3,495,029
3,422,469
Non-controlling interests
22,614
22,313
27,076
TOTAL EQUITY
3,576,045
3,517,342
3,449,545
TOTAL LIABILITIES AND EQUITY
$
33,833,107
$
33,361,492
$
32,263,532
AVERAGE BALANCE SHEETS -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands)
Three Months Ended
June 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sept. 30, 2017
June 30, 2017
ASSETS
Interest-bearing cash and cash equivalents
$
1,673,387
$
2,059,517
$
1,976,395
$
1,965,645
$
2,007,746
Trading securities
1,482,302
933,404
560,321
491,613
456,028
Investment securities
399,088
441,207
462,869
475,705
499,372
Available for sale debt securities
8,163,142
8,236,938
8,435,916
8,428,353
8,384,057
Fair value option securities
487,192
626,251
792,647
684,571
476,102
Restricted equity securities
348,546
349,176
337,673
328,677
295,743
Residential mortgage loans held for sale
218,600
199,380
257,927
256,343
245,401
Loans:
Commercial
11,189,899
10,871,569
10,751,235
10,827,198
10,604,456
Commercial real estate
3,660,166
3,491,335
3,485,583
3,528,330
3,676,976
Residential mortgage
1,915,015
1,937,198
1,976,860
1,951,385
1,933,091
Personal
986,162
961,379
967,329
949,750
915,010
Total loans
17,751,242
17,261,481
17,181,007
17,256,663
17,129,533
Allowance for loan losses
(222,856
)
(228,996
)
(246,143
)
(250,590
)
(251,632
)
Total loans, net
17,528,386
17,032,485
16,934,864
17,006,073
16,877,901
Total earning assets
30,300,643
29,878,358
29,758,612
29,636,980
29,242,350
Cash and due from banks
571,333
564,585
576,737
546,653
530,352
Derivative contracts, net
318,375
278,694
292,961
238,583
248,168
Cash surrender value of bank-owned life insurance
319,507
317,334
315,034
313,079
311,310
Receivable on unsettled securities sales
618,240
998,803
821,275
608,412
372,894
Other assets
1,777,937
1,687,178
1,687,496
1,664,463
1,663,497
TOTAL ASSETS
$
33,906,035
$
33,724,952
$
33,452,115
$
33,008,170
$
32,368,571
LIABILITIES AND EQUITY
Deposits:
Demand
$
9,223,327
$
9,151,272
$
9,417,351
$
9,389,849
$
9,338,683
Interest-bearing transaction
10,189,354
10,344,469
10,142,744
10,088,522
10,087,640
Savings
503,671
480,110
466,496
464,130
461,586
Time
2,138,880
2,151,044
2,134,469
2,176,820
2,204,422
Total deposits
22,055,232
22,126,895
22,161,060
22,119,321
22,092,331
Funds purchased and repurchase agreements
593,250
532,412
488,330
411,286
490,616
Other borrowings
6,497,020
6,326,967
6,209,903
6,162,641
5,572,031
Subordinated debentures
144,692
144,682
144,673
144,663
144,654
Derivative contracts, net
235,543
223,373
288,408
221,371
178,695
Due on unsettled securities purchases
527,804
558,898
332,155
145,977
162,348
Other liabilities
340,322
333,151
312,196
318,270
318,463
TOTAL LIABILITIES
30,393,863
30,246,378
29,936,725
29,523,529
28,959,138
Total equity
3,512,172
3,478,574
3,515,390
3,484,641
3,409,433
TOTAL LIABILITIES AND EQUITY
$
33,906,035
$
33,724,952
$
33,452,115
$
33,008,170
$
32,368,571
STATEMENTS OF EARNINGS -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands, except per share data)
Three Months Ended
Six Months Ended
June 30,
June 30,
2018
2017
2018
2017
Interest revenue
$
294,180
$
235,181
$
559,587
$
461,571
Interest expense
55,618
29,977
101,289
55,185
Net interest revenue
238,562
205,204
458,298
406,386
Provision for credit losses
—
—
(5,000
)
—
Net interest revenue after provision for credit losses
238,562
205,204
463,298
406,386
Other operating revenue:
Brokerage and trading revenue
26,488
31,764
57,136
65,387
Transaction card revenue1
20,975
20,009
41,965
38,186
Fiduciary and asset management revenue
41,699
41,808
83,531
80,439
Deposit service charges and fees
27,827
28,422
54,988
56,199
Mortgage banking revenue
26,346
30,276
52,371
55,467
Other revenue
14,518
14,984
26,848
26,736
Total fees and commissions
157,853
167,263
316,839
322,414
Other gains, net
3,983
6,108
3,319
9,735
Gain (loss) on derivatives, net
(3,057
)
3,241
(8,742
)
2,791
Gain (loss) on fair value option securities, net
(3,341
)
1,984
(20,905
)
844
Change in fair value of mortgage servicing rights
1,723
(6,943
)
22,929
(5,087
)
Gain (loss) on available for sale securities, net
(762
)
380
(1,052
)
2,429
Total other operating revenue
156,399
172,033
312,388
333,126
Other operating expense:
Personnel
138,947
143,744
278,894
280,169
Business promotion
7,686
7,738
13,696
14,455
Professional fees and services
14,978
12,419
25,178
23,836
Net occupancy and equipment
22,761
21,125
46,807
42,749
Insurance
6,245
689
12,838
7,093
Data processing and communications1
27,739
26,111
55,556
51,810
Printing, postage and supplies
4,011
4,140
8,100
7,991
Net losses and operating expenses of repossessed assets
2,722
2,267
10,427
3,276
Amortization of intangible assets
1,386
1,803
2,686
3,605
Mortgage banking costs
12,890
12,072
23,039
25,075
Other expense
7,111
8,558
13,685
16,115
Total other operating expense
246,476
240,666
490,906
476,174
Net income before taxes
148,485
136,571
284,780
263,338
Federal and state income taxes
33,330
47,705
64,278
85,808
Net income
115,155
88,866
220,502
177,530
Net income attributable to non-controlling interests
783
719
568
1,027
Net income attributable to BOK Financial Corporation shareholders
$
114,372
$
88,147
$
219,934
$
176,503
Average shares outstanding:
Basic
64,901,975
64,729,752
64,874,567
64,722,744
Diluted
64,937,226
64,793,134
64,912,552
64,788,322
Net income per share:
Basic
$
1.75
$
1.35
$
3.36
$
2.70
Diluted
$
1.75
$
1.35
$
3.36
$
2.69
1 Non-GAAP measure to net interchange charges for periods prior to 2018 between transaction card revenue and data processing and communications expense. This measure has no effect on net income or earnings per share.
FINANCIAL HIGHLIGHTS -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands, except ratio and share data)
Three Months Ended
June 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sept. 30, 2017
June 30, 2017
Capital:
Period-end shareholders' equity
$
3,553,431
$
3,495,029
$
3,495,367
$
3,488,814
$
3,422,469
Risk weighted assets
$
27,004,559
$
26,025,660
$
25,733,711
$
25,409,728
$
25,130,802
Risk-based capital ratios:
Common equity tier 1
11.92
%
12.06
%
12.05
%
11.90
%
11.76
%
Tier 1
11.92
%
12.06
%
12.05
%
11.90
%
11.76
%
Total capital
13.26
%
13.49
%
13.54
%
13.47
%
13.36
%
Leverage ratio
9.57
%
9.40
%
9.31
%
9.30
%
9.27
%
Tangible common equity ratio1
9.21
%
9.18
%
9.50
%
9.23
%
9.24
%
Common stock:
Book value per share
$
54.30
$
53.39
$
53.45
$
53.30
$
52.32
Tangible book value per share
46.95
46.10
46.17
45.88
44.87
Market value per share:
High
$
106.65
$
107.00
$
93.97
$
90.69
$
88.31
Low
$
92.39
$
89.82
$
79.67
$
77.10
$
74.09
Cash dividends paid
$
29,340
$
29,342
$
29,328
$
28,655
$
28,652
Dividend payout ratio
25.65
%
27.80
%
40.46
%
33.46
%
32.50
%
Shares outstanding, net
65,439,090
65,459,505
65,394,937
65,456,786
65,416,403
Stock buy-back program:
Shares repurchased
8,257
82,583
80,000
—
—
Amount
$
824
$
7,584
$
7,403
$
—
$
—
Average price per share
$
99.84
$
91.83
$
92.54
$
—
$
—
Performance ratios (quarter annualized):
Return on average assets
1.35
%
1.27
%
0.86
%
1.03
%
1.09
%
Return on average equity
13.14
%
12.39
%
8.24
%
9.83
%
10.46
%
Net interest margin
3.17
%
2.99
%
2.97
%
3.01
%
2.89
%
Efficiency ratio3
61.68
%
65.09
%
66.07
%
65.92
%
63.66
%
Reconciliation of non-GAAP measures:
1 Tangible common equity ratio:
Total shareholders' equity
$
3,553,431
$
3,495,029
$
3,495,367
$
3,488,814
$
3,422,469
Less: Goodwill and intangible assets, net
481,366
477,088
476,088
485,710
487,452
Tangible common equity
$
3,072,065
$
3,017,941
$
3,019,279
$
3,003,104
$
2,935,017
Total assets
$
33,833,107
$
33,361,492
$
32,272,160
$
33,005,515
$
32,263,532
Less: Goodwill and intangible assets, net
481,366
477,088
476,088
485,710
487,452
Tangible assets
$
33,351,741
$
32,884,404
$
31,796,072
$
32,519,805
$
31,776,080
Tangible common equity ratio
9.21
%
9.18
%
9.50
%
9.23
%
9.24
%
Other data:
Fiduciary assets
$
46,531,900
$
46,648,290
$
48,761,477
$
45,177,185
$
45,089,153
Tax equivalent interest
$
1,983
$
2,010
$
4,131
$
4,314
$
4,330
Net unrealized gain (loss) on available for sale securities
$
(180,602
)
$
(148,247
)
$
(47,497
)
$
14,061
$
16,041
Mortgage banking:
Mortgage production revenue
$
9,915
$
9,452
$
7,786
$
8,329
$
13,840
Mortgage loans funded for sale
$
773,910
$
664,958
$
840,080
$
832,796
$
902,978
Add: current period-end outstanding commitments
251,231
298,318
222,919
334,337
362,088
Less: prior period end outstanding commitments
298,318
222,919
334,337
362,088
381,732
Total mortgage production volume
$
726,823
$
740,357
$
728,662
$
805,045
$
883,334
Mortgage loan refinances to mortgage loans funded for sale
22
%
42
%
47
%
38
%
33
%
Gain on sale margin
1.36
%
1.28
%
1.07
%
1.03
%
1.57
%
Mortgage servicing revenue
$
16,431
$
16,573
$
16,576
$
16,561
$
16,436
Average outstanding principal balance of mortgage loans serviced for others
21,986,065
22,027,726
22,054,877
22,079,177
22,055,127
Average mortgage servicing revenue rates
0.30
%
0.31
%
0.30
%
0.30
%
0.30
%
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net
$
(3,070
)
$
(5,698
)
$
(3,057
)
$
1,025
$
3,241
Gain (loss) on fair value option securities, net
(3,341
)
(17,564
)
(4,238
)
661
1,984
Gain (loss) on economic hedge of mortgage servicing rights
(6,411
)
(23,262
)
(7,295
)
1,686
5,225
Gain (loss) on changes in fair value of mortgage servicing rights
1,723
21,206
5,898
(639
)
(6,943
)
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue
(4,688
)
(2,056
)
(1,397
)
1,047
(1,718
)
Net interest revenue on fair value option securities2
1,203
1,800
2,656
2,543
1,965
Total economic benefit (cost) of changes in the fair value of mortgage servicing rights, net of economic hedges
$
(3,485
)
$
(256
)
$
1,259
$
3,590
$
247
2 Actual interest earned on fair value option securities less internal transfer-priced cost of funds. 3 Periods prior to 2018 are shown on a comparable basis to net interchange charges between transaction card revenue and data processing and communications expense.
QUARTERLY EARNINGS TREND -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands, except ratio and per share data)
Three Months Ended
June 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sept. 30, 2017
June 30, 2017
Interest revenue
$
294,180
$
265,407
$
255,767
$
255,413
$
235,181
Interest expense
55,618
45,671
38,904
36,961
29,977
Net interest revenue
238,562
219,736
216,863
218,452
205,204
Provision for credit losses
—
(5,000
)
(7,000
)
—
—
Net interest revenue after provision for credit losses
238,562
224,736
223,863
218,452
205,204
Other operating revenue:
Brokerage and trading revenue
26,488
30,648
33,045
33,169
31,764
Transaction card revenue1
20,975
20,990
20,028
22,929
20,009
Fiduciary and asset management revenue
41,699
41,832
41,767
40,687
41,808
Deposit service charges and fees
27,827
27,161
27,685
28,191
28,422
Mortgage banking revenue
26,346
26,025
24,362
24,890
30,276
Other revenue
14,518
12,330
11,762
13,670
14,984
Total fees and commissions
157,853
158,986
158,649
163,536
167,263
Other gains (losses), net
3,983
(664
)
552
(1,283
)
6,108
Gain (loss) on derivatives, net
(3,057
)
(5,685
)
(3,045
)
1,033
3,241
Gain (loss) on fair value option securities, net
(3,341
)
(17,564
)
(4,238
)
661
1,984
Change in fair value of mortgage servicing rights
1,723
21,206
5,898
(639
)
(6,943
)
Gain (loss) on available for sale securities, net
(762
)
(290
)
(488
)
2,487
380
Total other operating revenue
156,399
155,989
157,328
165,795
172,033
Other operating expense:
Personnel
138,947
139,947
145,329
147,910
143,744
Business promotion
7,686
6,010
7,317
7,105
7,738
Charitable contributions to BOKF Foundation
—
—
2,000
—
—
Professional fees and services
14,978
10,200
15,344
11,887
12,419
Net occupancy and equipment
22,761
24,046
22,403
21,325
21,125
Insurance
6,245
6,593
6,555
6,005
689
Data processing and communications1
27,739
27,817
28,903
27,412
26,111
Printing, postage and supplies
4,011
4,089
3,781
3,917
4,140
Net losses (gains) and operating expenses of repossessed assets
2,722
7,705
340
6,071
2,267
Amortization of intangible assets
1,386
1,300
1,430
1,744
1,803
Mortgage banking costs
12,890
10,149
14,331
13,450
12,072
Other expense
7,111
6,574
6,746
9,193
8,558
Total other operating expense
246,476
244,430
254,479
256,019
240,666
Net income before taxes
148,485
136,295
126,712
128,228
136,571
Federal and state income taxes
33,330
30,948
54,347
42,438
47,705
Net income
115,155
105,347
72,365
85,790
88,866
Net income (loss) attributable to non-controlling interests
783
(215
)
(127
)
141
719
Net income attributable to BOK Financial Corporation shareholders
$
114,372
$
105,562
$
72,492
$
85,649
$
88,147
Average shares outstanding:
Basic
64,901,975
64,847,334
64,793,005
64,742,822
64,729,752
Diluted
64,937,226
64,888,033
64,843,179
64,805,172
64,793,134
Net income per share:
Basic
$
1.75
$
1.61
$
1.11
$
1.31
$
1.35
Diluted
$
1.75
$
1.61
$
1.11
$
1.31
$
1.35
1 Non-GAAP measure to net interchange charges for periods prior to 2018 between transaction card revenue and data processing and communications expense. This measure has no effect on net income or earnings per share.
LOANS TREND -- UNAUDITED BOK FINANCIAL CORPORATION (In thousands)
June 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sept. 30, 2017
June 30, 2017
Commercial:
Energy
$
3,147,219
$
2,969,618
$
2,930,156
$
2,867,981
$
2,847,240
Services
2,944,499
2,928,294
2,986,949
2,967,513
2,958,827
Healthcare
2,353,722
2,359,928
2,314,753
2,239,451
2,221,518
Wholesale/retail
1,699,554
1,531,576
1,471,256
1,658,098
1,543,695
Manufacturing
647,816
559,695
496,774
519,446
546,137
Other commercial and industrial
556,229
570,556
534,087
543,445
520,538
Total commercial
11,349,039
10,919,667
10,733,975
10,795,934
10,637,955
Commercial real estate:
Multifamily
1,056,984
1,008,903
980,017
999,009
952,380
Office
820,127
737,144
831,770
797,089
862,973
Retail
768,024
750,396
691,532
725,865
722,805
Industrial
653,384
613,608
573,014
591,080
693,635
Residential construction and land development
118,999
117,458
117,245
112,102
141,592
Other commercial real estate
294,702
279,273
286,409
292,997
315,207
Total commercial real estate
3,712,220
3,506,782
3,479,987
3,518,142
3,688,592
Residential mortgage:
Permanent mortgage
1,068,412
1,047,785
1,043,435
1,013,965
989,040
Permanent mortgages guaranteed by U.S. government agencies
169,653
177,880
197,506
187,370
191,729
Home equity
704,185
720,104
732,745
744,415
758,429
Total residential mortgage
1,942,250
1,945,769
1,973,686
1,945,750
1,939,198
Personal
1,000,187
965,632
965,776
947,008
917,900
Total
$
18,003,696
$
17,337,850
$
17,153,424
$
17,206,834
$
17,183,645
LOANS BY PRINCIPAL MARKET AREA -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands)
June 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sept. 30, 2017
June 30, 2017
Bank of Oklahoma:
Commercial
$
3,465,407
$
3,265,013
$
3,238,720
$
3,408,973
$
3,369,967
Commercial real estate
662,665
668,031
682,037
712,915
667,932
Residential mortgage
1,403,658
1,419,281
1,435,432
1,405,900
1,398,021
Personal
362,846
353,128
342,212
322,320
318,016
Total Bank of Oklahoma
5,894,576
5,705,453
5,698,401
5,850,108
5,753,936
Bank of Texas:
Commercial
4,922,451
4,715,841
4,520,401
4,434,595
4,339,634
Commercial real estate
1,336,101
1,254,421
1,261,864
1,236,702
1,360,164
Residential mortgage
243,400
229,761
233,675
229,993
232,074
Personal
394,021
363,608
375,084
375,173
354,222
Total Bank of Texas
6,895,973
6,563,631
6,391,024
6,276,463
6,286,094
Bank of Albuquerque:
Commercial
305,167
315,701
343,296
367,747
369,370
Commercial real estate
386,878
348,485
341,282
319,208
324,405
Residential mortgage
90,581
93,490
98,018
101,983
103,849
Personal
11,107
11,667
11,721
12,953
12,439
Total Bank of Albuquerque
793,733
769,343
794,317
801,891
810,063
Bank of Arkansas:
Commercial
93,217
94,430
95,644
91,051
85,020
Commercial real estate
90,807
88,700
87,393
80,917
73,943
Residential mortgage
6,927
7,033
6,596
6,318
6,395
Personal
12,331
9,916
9,992
10,388
11,993
Total Bank of Arkansas
203,282
200,079
199,625
188,674
177,351
Colorado State Bank & Trust:
Commercial
1,165,721
1,180,655
1,130,714
1,124,200
1,065,780
Commercial real estate
267,065
210,801
174,201
186,427
255,379
Residential mortgage
64,839
64,530
63,350
63,734
63,346
Personal
60,504
63,118
63,115
60,513
56,187
Total Colorado State Bank & Trust
1,558,129
1,519,104
1,431,380
1,434,874
1,440,692
Bank of Arizona:
Commercial
681,852
624,106
687,792
634,809
617,759
Commercial real estate
710,784
672,319
660,094
706,188
705,858
Residential mortgage
47,010
39,227
41,771
40,730
37,034
Personal
65,541
57,023
57,140
55,050
55,528
Total Bank of Arizona
1,505,187
1,392,675
1,446,797
1,436,777
1,416,179
Mobank (Kansas City):
Commercial
715,224
723,921
717,408
734,559
790,425
Commercial real estate
257,920
264,025
273,116
275,785
300,911
Residential mortgage
85,835
92,447
94,844
97,092
98,479
Personal
93,837
107,172
106,512
110,611
109,515
Total Mobank (Kansas City)
1,152,816
1,187,565
1,191,880
1,218,047
1,299,330
TOTAL BOK FINANCIAL
$
18,003,696
$
17,337,850
$
17,153,424
$
17,206,834
$
17,183,645
Loans attributed to a geographical region may not always represent the location of the borrower or the collateral.
DEPOSITS BY PRINCIPAL MARKET AREA -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands)
June 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sept. 30, 2017
June 30, 2017
Bank of Oklahoma:
Demand
$
3,867,933
$
4,201,842
$
3,885,008
$
4,061,612
$
4,353,421
Interest-bearing:
Transaction
5,968,460
6,051,302
5,901,293
5,909,259
5,998,787
Savings
289,202
289,351
265,870
265,023
263,664
Time
1,207,471
1,203,534
1,092,133
1,131,547
1,170,014
Total interest-bearing
7,465,133
7,544,187
7,259,296
7,305,829
7,432,465
Total Bank of Oklahoma
11,333,066
11,746,029
11,144,304
11,367,441
11,785,886
Bank of Texas:
Demand
3,317,656
3,015,869
3,239,098
3,094,184
3,121,890
Interest-bearing:
Transaction
2,168,488
2,208,480
2,397,071
2,272,987
2,272,185
Savings
97,809
98,852
93,620
93,400
91,491
Time
445,500
475,967
502,879
521,072
502,128
Total interest-bearing
2,711,797
2,783,299
2,993,570
2,887,459
2,865,804
Total Bank of Texas
6,029,453
5,799,168
6,232,668
5,981,643
5,987,694
Bank of Albuquerque:
Demand
770,974
695,060
663,353
659,793
612,117
Interest-bearing:
Transaction
586,593
555,414
552,393
551,884
558,523
Savings
59,415
60,596
55,647
53,532
54,136
Time
212,689
216,306
216,743
224,773
229,616
Total interest-bearing
858,697
832,316
824,783
830,189
842,275
Total Bank of Albuquerque
1,629,671
1,527,376
1,488,136
1,489,982
1,454,392
Bank of Arkansas:
Demand
39,896
35,291
30,384
31,442
40,511
Interest-bearing:
Transaction
143,298
94,206
85,095
126,746
129,848
Savings
1,885
1,960
1,881
1,876
2,135
Time
10,771
11,878
14,045
14,434
14,876
Total interest-bearing
155,954
108,044
101,021
143,056
146,859
Total Bank of Arkansas
195,850
143,335
131,405
174,498
187,370
Colorado State Bank & Trust:
Demand
529,912
521,963
633,714
540,300
577,617
Interest-bearing:
Transaction
701,362
687,785
657,629
628,807
626,343
Savings
38,176
37,232
35,223
34,776
35,651
Time
208,049
215,330
224,962
231,927
228,458
Total interest-bearing
947,587
940,347
917,814
895,510
890,452
Total Colorado State Bank & Trust
1,477,499
1,462,310
1,551,528
1,435,810
1,468,069
Bank of Arizona:
Demand
387,952
330,196
334,701
335,740
366,866
Interest-bearing:
Transaction
194,353
248,337
274,846
174,010
154,457
Savings
3,935
4,116
3,343
4,105
3,638
Time
22,447
21,009
20,394
20,831
19,911
Total interest-bearing
220,735
273,462
298,583
198,946
178,006
Total Bank of Arizona
608,687
603,658
633,284
534,686
544,872
Mobank (Kansas City):
Demand
459,636
505,802
457,080
462,410
496,473
Interest-bearing:
Transaction
401,545
381,447
382,066
361,391
346,996
Savings
13,052
13,845
13,574
12,513
13,603
Time
20,805
22,230
27,260
27,705
31,119
Total interest-bearing
435,402
417,522
422,900
401,609
391,718
Total Mobank (Kansas City)
895,038
923,324
879,980
864,019
888,191
TOTAL BOK FINANCIAL
$
22,169,264
$
22,205,200
$
22,061,305
$
21,848,079
$
22,316,474
NET INTEREST MARGIN TREND -- UNAUDITED BOK FINANCIAL CORPORATION
Three Months Ended
June 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sept. 30, 2017
June 30, 2017
TAX-EQUIVALENT ASSETS YIELDS
Interest-bearing cash and cash equivalents
1.86
%
1.57
%
1.27
%
1.29
%
1.04
%
Trading securities
3.63
%
3.40
%
3.38
%
3.47
%
3.23
%
Investment securities:
Taxable
5.23
%
5.21
%
5.31
%
5.31
%
5.34
%
Tax-exempt
2.42
%
2.25
%
2.69
%
2.60
%
2.51
%
Total investment securities
3.95
%
3.78
%
3.98
%
3.86
%
3.76
%
Available for sale securities:
Taxable
2.29
%
2.22
%
2.19
%
2.16
%
2.09
%
Tax-exempt
3.26
%
3.26
%
5.41
%
5.27
%
6.09
%
Total available for sale securities
2.30
%
2.23
%
2.21
%
2.17
%
2.11
%
Fair value option securities
3.16
%
2.95
%
2.90
%
2.97
%
2.92
%
Restricted equity securities
6.21
%
5.86
%
5.87
%
5.87
%
5.95
%
Residential mortgage loans held for sale
4.28
%
3.71
%
3.72
%
3.36
%
3.92
%
Loans
4.80
%
4.45
%
4.29
%
4.31
%
4.03
%
Allowance for loan losses
Loans, net of allowance
4.86
%
4.51
%
4.35
%
4.38
%
4.09
%
Total tax-equivalent yield on earning assets
3.91
%
3.61
%
3.49
%
3.50
%
3.30
%
COST OF INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest-bearing transaction
0.55
%
0.45
%
0.35
%
0.32
%
0.26
%
Savings
0.08
%
0.07
%
0.07
%
0.08
%
0.08
%
Time
1.29
%
1.25
%
1.17
%
1.16
%
1.11
%
Total interest-bearing deposits
0.66
%
0.57
%
0.48
%
0.45
%
0.40
%
Funds purchased and repurchase agreements
0.53
%
0.40
%
0.28
%
0.25
%
0.13
%
Other borrowings
1.96
%
1.60
%
1.36
%
1.29
%
1.09
%
Subordinated debt
5.67
%
5.61
%
5.55
%
5.68
%
5.55
%
Total cost of interest-bearing liabilities
1.11
%
0.93
%
0.79
%
0.75
%
0.63
%
Tax-equivalent net interest revenue spread
2.80
%
2.68
%
2.70
%
2.75
%
2.67
%
Effect of noninterest-bearing funding sources and other
0.37
%
0.31
%
0.27
%
0.26
%
0.22
%
Tax-equivalent net interest margin
3.17
%
2.99
%
2.97
%
3.01
%
2.89
%
Yield calculations are shown on a tax equivalent basis at the statutory federal and state rates for the periods presented. The yield calculations exclude security trades that have been recorded on trade date with no corresponding interest income and the unrealized gains and losses. The yield calculation also includes average loan balances for which the accrual of interest has been discontinued and are net of unearned income. Yield/rate calculations are generally based on the conventions that determine how interest income and expense is accrued.
CREDIT QUALITY INDICATORS -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands, except ratios)
Three Months Ended
June 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sept. 30, 2017
June 30, 2017
Nonperforming assets:
Nonaccruing loans:
Commercial
$
120,978
$
131,460
$
137,303
$
176,900
$
197,157
Commercial real estate
1,996
2,470
2,855
2,975
3,775
Residential mortgage
42,343
45,794
47,447
45,506
44,235
Personal
340
340
269
255
272
Total nonaccruing loans
165,657
180,064
187,874
225,636
245,439
Accruing renegotiated loans guaranteed by U.S. government agencies
75,374
74,418
73,994
69,440
80,624
Real estate and other repossessed assets
27,891
23,652
28,437
32,535
39,436
Total nonperforming assets
$
268,922
$
278,134
$
290,305
$
327,611
$
365,499
Total nonperforming assets excluding those guaranteed by U.S. government agencies
$
185,981
$
194,833
$
207,132
$
249,280
$
275,823
Nonaccruing loans by loan class:
Commercial:
Energy
$
65,597
$
89,942
$
92,284
$
110,683
$
123,992
Services
4,377
2,109
2,620
1,174
7,754
Healthcare
16,125
15,342
14,765
24,446
24,505
Wholesale/retail
14,095
2,564
2,574
1,893
10,620
Manufacturing
2,991
3,002
5,962
9,059
9,656
Other commercial and industrial
17,793
18,501
19,098
29,645
20,630
Total commercial
120,978
131,460
137,303
176,900
197,157
Commercial real estate:
Multifamily
—
—
—
—
10
Office
275
275
275
275
396
Retail
1,068
264
276
289
301
Industrial
—
—
—
—
—
Residential construction and land development
350
1,613
1,832
1,924
2,051
Other commercial real estate
303
318
472
487
1,017
Total commercial real estate
1,996
2,470
2,855
2,975
3,775
Residential mortgage:
Permanent mortgage
23,105
24,578
25,193
24,623
23,415
Permanent mortgage guaranteed by U.S. government agencies
7,567
8,883
9,179
8,891
9,052
Home equity
11,671
12,333
13,075
11,992
11,768
Total residential mortgage
42,343
45,794
47,447
45,506
44,235
Personal
340
340
269
255
272
Total nonaccruing loans
$
165,657
$
180,064
$
187,874
$
225,636
$
245,439
Performing loans 90 days past due1
$
879
$
90
$
633
$
253
$
1,414
Gross charge-offs
$
(15,105
)
$
(2,890
)
$
(14,749
)
$
(5,825
)
$
(2,872
)
Recoveries
4,578
1,576
3,061
2,437
1,214
Net charge-offs
$
(10,527
)
$
(1,314
)
$
(11,688
)
$
(3,388
)
$
(1,658
)
Provision for credit losses
$
—
$
(5,000
)
$
(7,000
)
$
—
$
—
Allowance for loan losses to period end loans
1.19
%
1.29
%
1.34
%
1.44
%
1.46
%
Combined allowance for credit losses to period end loans
1.21
%
1.32
%
1.37
%
1.47
%
1.49
%
Nonperforming assets to period end loans and repossessed assets
1.49
%
1.60
%
1.69
%
1.90
%
2.12
%
Net charge-offs (annualized) to average loans
0.24
%
0.03
%
0.27
%
0.08
%
0.04
%
Allowance for loan losses to nonaccruing loans1
136.09
%
130.84
%
129.09
%
114.28
%
105.78
%
Combined allowance for credit losses to nonaccruing loans1
137.63
%
133.25
%
131.18
%
116.78
%
108.51
%
1 Excludes residential mortgage loans guaranteed by agencies of the U.S. government.
For Further Information Contact: Joseph Crivelli Investor Relations (918) 595-3030
Source: GlobeNewswire
(July 25, 2018 - 7:55 AM EDT)