Exhibit 99 (a)
NASD: BOKF
For Further Information Contact:
Joseph Crivelli
Investor Relations
(918) 595-3027
BOK Financial Reports 2017 Fourth Quarter and Full Year Results
TULSA, Okla. (Wednesday, January 24, 2018) - BOK Financial Corporation reported net income of $334.6 million or $5.11 per diluted share for the year ended December 31, 2017. Net income for the year ended December 31, 2016 was $232.7 million or $3.53 per diluted share.
Net income for fourth quarter of 2017 totaled $72.5 million or $1.11 per diluted share compared to $85.6 million or $1.31 per diluted share for the third quarter of 2017 and $50.0 million or $0.76 per diluted share for the fourth quarter of 2016.
The Tax Cuts and Jobs Act ("the Act") signed into law on December 22, 2017 resulted in an $11.7 million or $0.18 per share reduction in net income for the fourth quarter. A decrease in the federal corporate tax rate from 35% to 21% required us to revalue deferred tax assets and liabilities. Provisions of the Act also limit the deductibility of certain other expenses.
Steven G. Bradshaw, president and chief executive officer, stated, “The fourth quarter wrapped up a very strong year for BOK Financial, in which we delivered our strongest earnings performance in the past five years. While we benefited from a healthy interest rate environment, the key to earnings leverage was maintaining expense discipline throughout the year. In addition, the benign credit environment combined with our strong underwriting minimized credit costs during the year. Finally, our wealth management business delivered record financial results in 2017 and surpassed $80 billion of assets under management and administration for the first time in company history, leading our diverse set of fee based businesses.”
Bradshaw continued, “Now that we have clarity on tax reform and healthcare, we believe the stage is set for stronger loan growth in 2018. In the fourth quarter our healthcare business grew at its strongest pace in over a year, and we are already seeing an increase in client loan demand in our commercial and industrial business. In addition, energy banking continues to benefit from the company’s long-term commitment to our energy borrowers, and our private banking division remains among our fastest-growing lending segments.”
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“The write-down of our deferred tax asset was necessitated by expected lower future tax rates and negatively impacted fourth quarter earnings. However, we believe the passage of tax reform will be beneficial to economic growth across our footprint, drive increased loan demand in many of our businesses, and provide a material benefit to future profitability,” Bradshaw concluded.
Fourth Quarter 2017 Highlights
| • | Net interest revenue totaled $216.9 million for the fourth quarter of 2017, compared to $218.5 million for the third quarter of 2017. Net interest margin was 2.97 percent, compared to 3.01 percent in the third quarter of 2017. Recoveries of foregone interest on nonaccruing loans added $4.7 million and 6 basis points to net interest margin in the third quarter. Average earning assets increased $122 million over the prior quarter. |
| • | Fees and commissions revenue totaled $168.2 million for the fourth quarter of 2017, compared to $173.5 million for the third quarter of 2017. Transaction card revenue decreased $3.3 million and other revenue decreased $1.9 million. Fiduciary and asset management revenue grew $1.1 million. |
| • | Operating expense was $264.0 million for the fourth quarter, a $1.9 million decrease compared to the prior quarter. Personnel costs decreased $2.6 million, partially offset by a $634 thousand increase in non-personnel expense. |
| • | The Company recorded a $7.0 million negative provision for credit losses in the fourth quarter, due to continued improvement in credit metric trends. No provision for credit losses was recorded in the third quarter of 2017. The company had net charge-offs of $11.7 million or 27 basis points of average loans on an annualized basis in the fourth quarter of 2017, compared to net charge-offs of $3.4 million or 8 basis points of average loans on annualized basis in the third quarter. For the full year, net charge-offs were $16.0 million or 9 basis points of average loans in 2017 and $34.8 million or 21 basis points of average loans in 2016. |
| • | The combined allowance for credit losses totaled $234 million or 1.37 percent of outstanding loans at December 31, 2017, compared to $253 million or 1.47 percent of outstanding loans at September 30, 2017. |
| • | Nonperforming assets that are not guaranteed by U.S. government agencies totaled $207 million or 1.22 percent of outstanding loans and repossessed assets at December 31, 2017 compared to $249 million or 1.46 percent of outstanding loans and repossessed assets at September 30, 2017. The decrease in nonperforming assets was primarily due to nonaccruing energy, other commercial and industrial and healthcare sector loans. |
| • | Average loan balances were largely unchanged compared to the previous quarter. Growth in residential mortgage and personal loans was offset by decreased commercial and commercial real estate loan balances. Period-end outstanding loan balances were $17.2 billion at December 31, 2017, a $53 million decrease compared to September 30, 2017. |
| • | Average deposits were largely unchanged compared to the previous quarter. Growth in interest-bearing transaction and demand deposit account balances was partially offset by a decrease in time deposits. Period end deposits increased $213 million over September 30, 2017 to $22.1 billion at December 31, 2017. |
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| • | The common equity Tier 1 capital ratio was 11.95 percent at December 31. In addition, the Company's Tier 1 capital ratio was 11.95 percent, total capital ratio was 13.43 percent and leverage ratio was 9.31 percent. At September 30, 2017, the common equity Tier 1 capital ratio was 11.90 percent, the Tier 1 capital ratio was 11.90 percent, total capital ratio was 13.47 percent and leverage ratio was 9.30 percent. |
| • | The company repurchased 80,000 common shares at an average price of $92.54 per share during the fourth quarter of 2017. No shares were repurchased during the third quarter of 2017. |
Tax Cuts and Jobs Act
Fourth quarter and full year 2017 earnings included an $11.7 million or $0.18 per diluted share charge as a result of the Tax Cuts and Jobs Act which was signed into law on December 22, 2017. The write-down of net deferred tax assets from a federal and state statutory tax rate of 38.9 percent to 25.5 percent totaled $9.5 million, including $6.4 million of deferred tax assets related to unrealized losses on available for sale securities. In addition, the charge included $2.2 million to write-off deferred tax assets related to the compensation of certain executive officers that will no longer be deductible.
We currently expect that the federal and state effective tax rate for 2018 will be between 22 percent and 23 percent, compared to 33.8 percent for 2017, excluding the tax effects of equity compensation arrangements and similar discrete items.
Net Interest Revenue
Net interest revenue was $216.9 million for the fourth quarter of 2017, a decrease of $1.6 million compared to the third quarter of 2017.
Net interest margin was 2.97 percent for the fourth quarter of 2017, compared to 3.01 percent for the third quarter of 2017. Recoveries of foregone interest primarily related to nonaccruing energy loans added $4.7 million to net interest revenue and 6 basis points to net interest margin for the third quarter. Excluding the impact of interest recoveries in the third quarter, the yield on average earning assets was 3.49 percent, a 5 basis point increase over the prior quarter and the yield on the loan portfolio increased 9 basis points to 4.29 percent. The yield on the available for sale securities portfolio increased 4 basis points to 2.21 percent. Funding costs were 0.79 percent, up 4 basis points. The cost of interest-bearing deposits increased 3 basis points to 0.48 percent as market pricing pressure remained relatively subdued. The cost of other borrowed funds was up 5 basis points to 1.28 percent.
Average earning assets increased $122 million during the fourth quarter of 2017. Fair value option securities held as an economic hedge of our mortgage servicing rights increased $108 million. Average trading securities balances increased $69 million. This growth was partially offset by a $76 million decrease in average loan balances primarily due to lower commercial and commercial real estate balances, partially offset by growth in residential mortgage and personal loans. Average interest-bearing deposits increased $14 million over the third quarter of 2017. The average balance of borrowed funds increased $124 million.
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Fees and Commissions Revenue
Fees and commissions revenue totaled $168.2 million for the fourth quarter of 2017, a $5.3 million decrease compared to the third quarter of 2017.
Fiduciary and asset management revenue grew $1.1 million or 3 percent over the third quarter of 2017. Total assets under management or in custody totaled $81.8 billion, up 5 percent since September 30 due to a combination of net cash inflows and higher asset valuation.
Mortgage banking revenue totaled $24.4 million, unchanged from the previous quarter. Production volume was down 9 percent from the previous quarter due primarily to the effect of higher interest rates. The impact of decreased production volume on revenue was offset by improved pricing margin.
Transaction card revenue decreased $3.3 million compared to the third quarter of 2017 primarily due to a customer early termination fee received in the third quarter. Additionally, other revenue decreased $1.9 million primarily as a result of the sale of a consolidated merchant banking investment. Other expense also decreased as a result of the sale.
Operating Expenses
Total operating expenses were $264.0 million for the fourth quarter of 2017, a decrease of $1.9 million compared to the third quarter of 2017.
Personnel costs decreased $2.6 million compared to the previous quarter. Employee benefits expense decreased $1.8 million primarily due to lower pension costs. Regular salary expense decreased $798 thousand while incentive compensation expense remained relatively flat.
Non-personnel expense increased $634 thousand over the third quarter of 2017. Professional fees increased $3.1 million primarily due to project costs related to the new online account opening product. The fourth quarter also included a $2.0 million contribution to the BOKF Foundation. Net losses and operating expenses of repossessed assets decreased $5.7 million. A $4.7 million write-down of a set of oil and gas properties was recognized in the third quarter.
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Loans, Deposits and Capital
Loans
Outstanding loans were $17.2 billion at December 31, 2017, a $53 million decrease compared to September 30. Decreased commercial and commercial real estate loan balances were partially offset by growth in residential mortgage and personal loans.
Outstanding commercial loan balances decreased $62 million compared to September 30, 2017. Wholesale/retail sector loan balances decreased $187 million and manufacturing sector loan balances decreased $23 million. Healthcare sector loans grew by $75 million over the prior quarter and energy sector loans were up $62 million over September 30, 2017.
Unfunded energy loan commitments grew by $182 million in the fourth quarter to $2.9 billion. All other unfunded commercial loan commitments totaled $4.8 billion at December 31, 2017, largely unchanged compared to September 30, 2017.
Commercial real estate loans decreased by $38 million compared to September 30, 2017 due primarily to continued pay-down activity as borrowers took advantage of favorable long-term rates and refinanced into the permanent market. Retail sector loans decreased by $34 million, multifamily residential loans decreased by $19 million and loans secured by industrial facilities decreased by $18 million. Loans secured by office buildings increased $35 million. Unfunded commercial real estate loan commitments totaled $1.2 billion at December 31, 2017, a $112 million increase over September 30, 2017.
Residential mortgage loans grew by $28 million and personal loans were up $19 million over the prior quarter.
Deposits
Period-end deposits totaled $22.1 billion at December 31, 2017, a $213 million increase over September 30, 2017. Interest-bearing transaction account balances grew by $225 million and demand deposit balances increased $58 million, partially offset by a $74 million decrease in time deposits. Among the lines of business, Commercial Banking deposits increased $220 million and Wealth Management deposits increased $163 million, partially offset by a $147 million decrease in Consumer Banking deposits.
Capital
The company's common equity Tier 1 capital ratio was 11.95 percent at December 31, 2017. In addition, the Company's Tier 1 capital ratio was 11.95 percent, total capital ratio was 13.43 percent and leverage ratio was 9.31 percent at December 31, 2017. At September 30, 2017, the Company's common equity Tier 1 capital ratio was 11.90 percent, Tier 1 capital ratio was 11.90 percent, total capital ratio was 13.47 percent and leverage ratio was 9.30 percent.
The company's tangible common equity ratio, a non-GAAP measure, was 9.50 percent at December 31, 2017 and 9.23 percent at September 30, 2017. 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.
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Credit Quality
Nonperforming assets totaled $290 million or 1.69 percent of outstanding loans and repossessed assets at December 31, 2017, down from $328 million or 1.90 percent of outstanding loans and repossessed assets at September 30, 2017. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $207 million or 1.22 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at December 31, 2017 and $249 million or 1.46 percent at September 30, 2017.
Nonaccruing loans totaled $188 million or 1.10 percent of outstanding loans at December 31, 2017, compared to $226 million or 1.31 percent of outstanding loans at September 30, 2017. New nonaccruing loans identified in the fourth quarter totaled $33 million, offset by $53 million in payments received, $14.7 million in charge-offs and $1.9 million in foreclosures and repossessions. At December 31, 2017, nonaccruing commercial loans totaled $137 million or 1.28 percent of outstanding commercial loans. Nonaccruing commercial real estate loans were only $2.9 million or 0.08 percent of outstanding commercial real estate loans. Nonaccruing residential mortgage loans not guaranteed by U.S. government agencies totaled $38 million or 2.15 percent of outstanding residential mortgage loans.
At December 31, 2017, approximately $51 million of nonaccruing loans required a specific allowance of $8.8 million. No specific allowance was necessary for the remaining $137 million of nonaccruing loans based on estimated cash flows or collateral value. At September 30, 2017, $90 million of nonaccruing loans required a specific allowance of $13 million and no specific allowance was necessary on the remaining $136 million of nonaccruing loans.
Potential problem loans, which are defined as performing loans that, based on known information, cause management concern as to the borrowers' ability to continue to perform, decreased to $241 million at December 31, 2017 from $285 million at September 30, 2017. This decrease largely resulted from energy loans, partially offset by an increase in services and healthcare sector loans.
The company had net charge-offs of $11.7 million or 27 basis points of average loans on an annualized basis for the fourth quarter of 2017, compared to net charge-offs of $3.4 million or 8 basis points of average loans on annualized basis for the third quarter of 2017. Gross charge-offs totaled $14.7 million for the fourth quarter, compared to $5.8 million for the previous quarter. Recoveries totaled $3.1 million for the fourth quarter of 2017 and $2.4 million for the third quarter of 2017.
After evaluating all credit factors, including continued improvement in nonaccruing and potential problem loans, the company determined that a $7.0 million negative provision for credit losses was appropriate during the fourth quarter of 2017. No provision for credit losses was recorded in the third quarter of 2017.
The combined allowance for credit losses totaled $234 million or 1.37 percent of outstanding loans and 131 percent of nonaccruing loans, excluding loans guaranteed by U.S. government agencies, at December 31, 2017. The allowance for loan losses was $231 million and the accrual for off-balance sheet credit losses was $3.7 million. At September 30, 2017, the combined allowance for credit losses was $253 million or 1.47 percent of outstanding loans and 117 percent of nonaccruing loans, excluding loans guaranteed by U.S. government agencies. The allowance for loan losses was $248 million and the accrual for off-balance sheet credit losses was $5.4 million.
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Securities and Derivatives
The fair value of the available for sale securities portfolio totaled $8.3 billion at December 31, 2017 and $8.4 billion at September 30, 2017. At December 31, 2017, the available for sale portfolio consisted primarily of $5.3 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $2.8 billion of commercial mortgage-backed securities fully backed by U.S. government agencies.
The available for sale securities portfolio had a net unrealized loss of $47 million at December 31, 2017, compared to a net unrealized gain of $14 million at September 30, 2017. The increase in net unrealized loss was primarily due to an increase in interest rates during the fourth quarter.
The Company also maintains a portfolio of financial instruments consisting primarily of residential mortgage-backed securities issued by U.S. government agencies and interest rate derivative contracts held as an economic hedge of the changes in the fair value of our mortgage servicing rights.
The net economic benefit of the changes in fair value of mortgage servicing rights and related economic hedges was $1.3 million during the fourth quarter of 2017, including a $5.9 million increase in the fair value of mortgage servicing rights, a $7.3 million decrease in the fair value of securities and derivative contracts held as an economic hedge and $2.7 million of related net interest revenue.
The fair value of mortgage servicing rights, net of economic hedge, increased by $1.0 million in the third quarter. The fair value of securities and interest rate derivative contracts held as an economic hedge of mortgage servicing rights increased by $1.7 million. Related net interest revenue was $2.5 million during the third quarter of 2017.
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Conference Call and Webcast
The Company will hold a conference call at 9 a.m. Central time on Wednesday, January 24, 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 replay PIN number 13675236.
About BOK Financial Corporation
BOK Financial is a $32 billion regional financial services company based in Tulsa, Oklahoma. The Company's stock is publicly traded on NASDAQ under the Global Select market listings (symbol: BOKF). BOK Financial's holdings include BOKF, NA, BOK Financial Securities, Inc. and The Milestone Group, Inc. BOKF, NA operates TransFund, Cavanal Hill Investment Management, BOK Financial Asset Management, Inc. and seven banking divisions: Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, 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 December 31, 2017 through the date its financial statements are filed with the Securities and Exchange Commission and will adjust amounts reported if necessary.
This news release contains forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about BOK Financial, the financial services industry and the economy generally. Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “plans,” “projects,” “will,” “intends,” variations of such words and similar expressions are intended to identify such forward-looking statements. Management judgments relating to and discussion of the provision and allowance for credit losses, allowance for uncertain tax positions, accruals for loss contingencies and valuation of mortgage servicing rights involve judgments as to expected events and are inherently forward-looking statements. Assessments that BOK Financial's acquisitions and other growth endeavors will be profitable are necessary statements of belief as to the outcome of future events based in part on information provided by others which BOK Financial has not independently verified. These statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions which are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what is expected, implied or forecasted in such forward-looking statements. Internal and external factors that might cause such a difference include, but are not limited to changes in commodity prices, interest rates, interest rate relationships, demand for products and services, the degree of competition by traditional and nontraditional competitors, changes in banking regulations, tax laws, prices, levies and assessments, the impact of technological advances, and trends in customer behavior as well as their ability to repay loans. BOK Financial and its affiliates undertake no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events, or otherwise.
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Exhibit 99 (b)
BALANCE SHEETS -- UNAUDITED BOK FINANCIAL CORPORATION (In thousands) | ||||||||||||
| Dec. 31, 2017 | Sept. 30, 2017 | Dec. 31, 2016 | ||||||||||
| ASSETS | ||||||||||||
| Cash and due from banks | $ | 602,510 | $ | 547,203 | $ | 620,846 | ||||||
| Interest-bearing cash and cash equivalents | 1,714,544 | 1,926,779 | 1,916,651 | |||||||||
| Trading securities | 462,676 | 614,117 | 337,628 | |||||||||
| Investment securities | 461,793 | 466,562 | 546,145 | |||||||||
| Available for sale securities | 8,321,578 | 8,383,199 | 8,676,829 | |||||||||
| Fair value option securities | 755,054 | 819,531 | 77,046 | |||||||||
| Restricted equity securities | 320,189 | 347,542 | 307,240 | |||||||||
| Residential mortgage loans held for sale | 221,378 | 275,643 | 301,897 | |||||||||
| Loans: | ||||||||||||
| Commercial | 10,733,975 | 10,795,934 | 10,390,824 | |||||||||
| Commercial real estate | 3,479,987 | 3,518,142 | 3,809,046 | |||||||||
| Residential mortgage | 1,973,686 | 1,945,750 | 1,949,832 | |||||||||
| Personal | 965,776 | 947,008 | 839,958 | |||||||||
| Total loans | 17,153,424 | 17,206,834 | 16,989,660 | |||||||||
| Allowance for loan losses | (230,682 | ) | (247,703 | ) | (246,159 | ) | ||||||
| Loans, net of allowance | 16,922,742 | 16,959,131 | 16,743,501 | |||||||||
| Premises and equipment, net | 317,335 | 320,060 | 325,849 | |||||||||
| Receivables | 442,897 | 314,251 | 772,952 | |||||||||
| Goodwill | 447,430 | 446,697 | 448,899 | |||||||||
| Intangible assets, net | 28,658 | 39,013 | 46,931 | |||||||||
| Mortgage servicing rights, net | 252,867 | 245,858 | 247,073 | |||||||||
| Real estate and other repossessed assets, net | 28,437 | 32,535 | 44,287 | |||||||||
| Derivative contracts, net | 220,502 | 352,559 | 689,872 | |||||||||
| Cash surrender value of bank-owned life insurance | 316,498 | 314,201 | 308,430 | |||||||||
| Receivable on unsettled securities sales | 75,980 | 230,225 | 7,188 | |||||||||
| Other assets | 359,092 | 370,409 | 353,017 | |||||||||
| TOTAL ASSETS | $ | 32,272,160 | $ | 33,005,515 | $ | 32,772,281 | ||||||
| LIABILITIES AND EQUITY | ||||||||||||
| Deposits: | ||||||||||||
| Demand | $ | 9,243,338 | $ | 9,185,481 | $ | 9,235,720 | ||||||
| Interest-bearing transaction | 10,250,393 | 10,025,084 | 10,865,105 | |||||||||
| Savings | 469,158 | 465,225 | 425,470 | |||||||||
| Time | 2,098,416 | 2,172,289 | 2,221,800 | |||||||||
| Total deposits | 22,061,305 | 21,848,079 | 22,748,095 | |||||||||
| Funds purchased | 58,628 | 62,356 | 57,929 | |||||||||
| Repurchase agreements | 516,335 | 328,189 | 668,661 | |||||||||
| Other borrowings | 5,134,897 | 6,241,275 | 4,846,072 | |||||||||
| Subordinated debentures | 144,677 | 144,668 | 144,640 | |||||||||
| Accrued interest, taxes, and expense | 164,895 | 152,029 | 146,704 | |||||||||
| Due on unsettled securities purchases | 151,198 | 160,781 | 6,508 | |||||||||
| Derivative contracts, net | 171,963 | 336,327 | 664,531 | |||||||||
| Other liabilities | 349,928 | 217,372 | 182,784 | |||||||||
| TOTAL LIABILITIES | 28,753,826 | 29,491,076 | 29,465,924 | |||||||||
| Shareholders' equity: | ||||||||||||
| Capital, surplus and retained earnings | 3,524,991 | 3,482,057 | 3,285,821 | |||||||||
| Accumulated other comprehensive income (loss) | (29,624 | ) | 6,757 | (10,967 | ) | |||||||
| TOTAL SHAREHOLDERS' EQUITY | 3,495,367 | 3,488,814 | 3,274,854 | |||||||||
| Non-controlling interests | 22,967 | 25,625 | 31,503 | |||||||||
| TOTAL EQUITY | 3,518,334 | 3,514,439 | 3,306,357 | |||||||||
| TOTAL LIABILITIES AND EQUITY | $ | 32,272,160 | $ | 33,005,515 | $ | 32,772,281 | ||||||
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AVERAGE BALANCE SHEETS -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands) | |||||||||||||||||||
| Three Months Ended | |||||||||||||||||||
| Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |||||||||||||||
| ASSETS | |||||||||||||||||||
| Interest-bearing cash and cash equivalents | $ | 1,976,395 | $ | 1,965,645 | $ | 2,007,746 | $ | 2,087,964 | $ | 2,032,785 | |||||||||
| Trading securities | 560,321 | 491,613 | 456,028 | 579,549 | 476,498 | ||||||||||||||
| Investment securities | 462,869 | 475,705 | 499,372 | 530,936 | 542,869 | ||||||||||||||
| Available for sale securities | 8,435,916 | 8,428,353 | 8,384,057 | 8,567,049 | 8,766,555 | ||||||||||||||
| Fair value option securities | 792,647 | 684,571 | 476,102 | 416,524 | 210,733 | ||||||||||||||
| Restricted equity securities | 337,673 | 328,677 | 295,743 | 312,498 | 334,114 | ||||||||||||||
| Residential mortgage loans held for sale | 257,927 | 256,343 | 245,401 | 220,325 | 345,066 | ||||||||||||||
| Loans: | |||||||||||||||||||
| Commercial | 10,751,235 | 10,827,198 | 10,604,456 | 10,414,579 | 10,228,095 | ||||||||||||||
| Commercial real estate | 3,485,583 | 3,528,330 | 3,676,976 | 3,903,850 | 3,749,393 | ||||||||||||||
| Residential mortgage | 1,976,860 | 1,951,385 | 1,933,091 | 1,962,759 | 1,919,296 | ||||||||||||||
| Personal | 967,329 | 949,750 | 915,010 | 854,637 | 826,804 | ||||||||||||||
| Total loans | 17,181,007 | 17,256,663 | 17,129,533 | 17,135,825 | 16,723,588 | ||||||||||||||
| Allowance for loan losses | (246,143 | ) | (250,590 | ) | (251,632 | ) | (249,379 | ) | (246,977 | ) | |||||||||
| Total loans, net | 16,934,864 | 17,006,073 | 16,877,901 | 16,886,446 | 16,476,611 | ||||||||||||||
| Total earning assets | 29,758,612 | 29,636,980 | 29,242,350 | 29,601,291 | 29,185,231 | ||||||||||||||
| Cash and due from banks | 576,737 | 546,653 | 530,352 | 547,104 | 578,694 | ||||||||||||||
| Derivative contracts, net | 292,961 | 238,583 | 248,168 | 401,886 | 681,455 | ||||||||||||||
| Cash surrender value of bank-owned life insurance | 315,034 | 313,079 | 311,310 | 309,223 | 309,532 | ||||||||||||||
| Receivable on unsettled securities sales | 49,219 | 76,622 | 79,248 | 62,641 | 33,813 | ||||||||||||||
| Other assets | 2,459,552 | 2,196,253 | 1,957,143 | 2,032,844 | 2,172,351 | ||||||||||||||
| TOTAL ASSETS | $ | 33,452,115 | $ | 33,008,170 | $ | 32,368,571 | $ | 32,954,989 | $ | 32,961,076 | |||||||||
| LIABILITIES AND EQUITY | |||||||||||||||||||
| Deposits: | |||||||||||||||||||
| Demand | $ | 9,417,351 | $ | 9,389,849 | $ | 9,338,683 | $ | 9,101,763 | $ | 9,124,595 | |||||||||
| Interest-bearing transaction | 10,142,744 | 10,088,522 | 10,087,640 | 10,567,475 | 9,980,132 | ||||||||||||||
| Savings | 466,496 | 464,130 | 461,586 | 441,254 | 421,654 | ||||||||||||||
| Time | 2,134,469 | 2,176,820 | 2,204,422 | 2,258,930 | 2,177,035 | ||||||||||||||
| Total deposits | 22,161,060 | 22,119,321 | 22,092,331 | 22,369,422 | 21,703,416 | ||||||||||||||
| Funds purchased | 63,713 | 49,774 | 63,263 | 55,508 | 62,004 | ||||||||||||||
| Repurchase agreements | 424,617 | 361,512 | 427,353 | 523,561 | 560,891 | ||||||||||||||
| Other borrowings | 6,209,903 | 6,162,641 | 5,572,031 | 5,737,955 | 6,072,150 | ||||||||||||||
| Subordinated debentures | 144,673 | 144,663 | 144,654 | 144,644 | 144,635 | ||||||||||||||
| Derivative contracts, net | 288,408 | 221,371 | 178,695 | 405,444 | 682,808 | ||||||||||||||
| Due on unsettled securities purchases | 218,684 | 145,155 | 157,438 | 91,529 | 77,575 | ||||||||||||||
| Other liabilities | 425,667 | 319,092 | 323,373 | 299,534 | 321,404 | ||||||||||||||
| TOTAL LIABILITIES | 29,936,725 | 29,523,529 | 28,959,138 | 29,627,597 | 29,624,883 | ||||||||||||||
| Total equity | 3,515,390 | 3,484,641 | 3,409,433 | 3,327,392 | 3,336,193 | ||||||||||||||
| TOTAL LIABILITIES AND EQUITY | $ | 33,452,115 | $ | 33,008,170 | $ | 32,368,571 | $ | 32,954,989 | $ | 32,961,076 | |||||||||
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STATEMENTS OF EARNINGS -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands, except per share data) | |||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||
| Dec. 31, | Dec. 31, | ||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||
| Interest revenue | $ | 255,767 | $ | 215,737 | $ | 972,751 | $ | 829,117 | |||||||
| Interest expense | 38,904 | 21,539 | 131,050 | 81,889 | |||||||||||
| Net interest revenue | 216,863 | 194,198 | 841,701 | 747,228 | |||||||||||
| Provision for credit losses | (7,000 | ) | — | (7,000 | ) | 65,000 | |||||||||
| Net interest revenue after provision for credit losses | 223,863 | 194,198 | 848,701 | 682,228 | |||||||||||
| Other operating revenue: | |||||||||||||||
| Brokerage and trading revenue | 33,045 | 28,500 | 131,601 | 138,377 | |||||||||||
Transaction card revenue1 | 29,536 | 29,682 | 119,988 | 116,452 | |||||||||||
| Fiduciary and asset management revenue | 41,767 | 34,535 | 162,893 | 135,477 | |||||||||||
Deposit service charges and fees1 | 27,685 | 28,204 | 112,075 | 111,499 | |||||||||||
| Mortgage banking revenue | 24,362 | 28,414 | 104,719 | 133,914 | |||||||||||
| Other revenue | 11,762 | 12,693 | 52,168 | 51,029 | |||||||||||
| Total fees and commissions | 168,157 | 162,028 | 683,444 | 686,748 | |||||||||||
| Other gains (losses), net | 552 | (1,279 | ) | 9,004 | 4,030 | ||||||||||
| Gain (loss) on derivatives, net | (3,045 | ) | (35,815 | ) | 779 | (15,685 | ) | ||||||||
| Loss on fair value option securities, net | (4,238 | ) | (20,922 | ) | (2,733 | ) | (10,555 | ) | |||||||
| Change in fair value of mortgage servicing rights | 5,898 | 39,751 | 172 | (2,193 | ) | ||||||||||
| Gain (loss) on available for sale securities, net | (488 | ) | (9 | ) | 4,428 | 11,675 | |||||||||
| Total other operating revenue | 166,836 | 143,754 | 695,094 | 674,020 | |||||||||||
| Other operating expense: | |||||||||||||||
| Personnel | 145,329 | 141,132 | 573,408 | 553,119 | |||||||||||
| Business promotion | 7,317 | 7,344 | 28,877 | 26,582 | |||||||||||
| Charitable contributions to BOKF Foundation | 2,000 | 2,000 | 2,000 | 2,000 | |||||||||||
| Professional fees and services | 15,344 | 16,828 | 51,067 | 56,783 | |||||||||||
| Net occupancy and equipment | 22,403 | 21,470 | 86,477 | 80,024 | |||||||||||
| Insurance | 6,555 | 8,705 | 19,653 | 32,489 | |||||||||||
| Data processing and communications | 38,411 | 33,691 | 146,970 | 131,841 | |||||||||||
| Printing, postage and supplies | 3,781 | 3,998 | 15,689 | 15,584 | |||||||||||
| Net losses and operating expenses of repossessed assets | 340 | 1,627 | 9,687 | 3,359 | |||||||||||
| Amortization of intangible assets | 1,430 | 1,558 | 6,779 | 6,862 | |||||||||||
| Mortgage banking costs | 14,331 | 17,348 | 52,856 | 61,387 | |||||||||||
| Other expense | 6,746 | 9,846 | 32,054 | 47,560 | |||||||||||
| Total other operating expense | 263,987 | 265,547 | 1,025,517 | 1,017,590 | |||||||||||
| Net income before taxes | 126,712 | 72,405 | 518,278 | 338,658 | |||||||||||
| Federal and state income taxes | 54,347 | 22,496 | 182,593 | 106,377 | |||||||||||
| Net income | 72,365 | 49,909 | 335,685 | 232,281 | |||||||||||
| Net income (loss) attributable to non-controlling interests | (127 | ) | (117 | ) | 1,041 | (387 | ) | ||||||||
| Net income attributable to BOK Financial Corporation shareholders | $ | 72,492 | $ | 50,026 | $ | 334,644 | $ | 232,668 | |||||||
| Average shares outstanding: | |||||||||||||||
| Basic | 64,793,005 | 64,719,018 | 64,745,364 | 65,085,627 | |||||||||||
| Diluted | 64,843,179 | 64,787,728 | 64,806,284 | 65,143,898 | |||||||||||
| Net income per share: | |||||||||||||||
| Basic | $ | 1.11 | 2 | $ | 0.76 | $ | 5.11 | 2.00 | $ | 3.53 | |||||
| Diluted | $ | 1.11 | 2 | $ | 0.76 | $ | 5.11 | 2.00 | $ | 3.53 | |||||
1 | Checkcard revenue was reclassified from transaction card revenue to deposit service charges and fees. |
2 | EPS decreased $0.18 due to tax reform. |
11
FINANCIAL HIGHLIGHTS -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands, except ratio and share data) | |||||||||||||||||||
| Three Months Ended | |||||||||||||||||||
| Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |||||||||||||||
| Capital: | |||||||||||||||||||
| Period-end shareholders' equity | $ | 3,495,367 | $ | 3,488,814 | $ | 3,422,469 | $ | 3,341,744 | $ | 3,274,854 | |||||||||
| Risk weighted assets | $ | 25,733,711 | $ | 25,409,728 | $ | 25,130,802 | $ | 24,901,019 | $ | 25,274,848 | |||||||||
| Risk-based capital ratios: | |||||||||||||||||||
| Common equity tier 1 | 11.95 | % | 11.90 | % | 11.76 | % | 11.59 | % | 11.21 | % | |||||||||
| Tier 1 | 11.95 | % | 11.90 | % | 11.76 | % | 11.59 | % | 11.21 | % | |||||||||
| Total capital | 13.43 | % | 13.47 | % | 13.36 | % | 13.25 | % | 12.81 | % | |||||||||
| Leverage ratio | 9.31 | % | 9.30 | % | 9.27 | % | 8.89 | % | 8.72 | % | |||||||||
Tangible common equity ratio1 | 9.50 | % | 9.23 | % | 9.24 | % | 8.88 | % | 8.61 | % | |||||||||
| Common stock: | |||||||||||||||||||
| Book value per share | $ | 53.45 | $ | 53.30 | $ | 52.32 | $ | 51.09 | $ | 50.12 | |||||||||
| Tangible book value per share | 46.17 | 45.88 | 44.87 | 43.63 | 42.53 | ||||||||||||||
| Market value per share: | |||||||||||||||||||
| High | $ | 93.97 | $ | 90.69 | $ | 88.31 | $ | 85.25 | $ | 85.00 | |||||||||
| Low | $ | 79.67 | $ | 77.10 | $ | 74.09 | $ | 73.44 | $ | 67.11 | |||||||||
| Cash dividends paid | $ | 29,328 | $ | 28,655 | $ | 28,652 | $ | 28,646 | $ | 28,860 | |||||||||
| Dividend payout ratio | 40.46 | % | 33.46 | % | 32.50 | % | 32.42 | % | 57.69 | % | |||||||||
| Shares outstanding, net | 65,394,937 | 65,456,786 | 65,416,403 | 65,408,019 | 65,337,432 | ||||||||||||||
| Stock buy-back program: | |||||||||||||||||||
| Shares repurchased | 80,000 | — | — | — | 700,000 | ||||||||||||||
| Amount | $ | 7,403 | $ | — | $ | — | $ | — | $ | 49,021 | |||||||||
| Average price per share | $ | 92.54 | $ | — | $ | — | $ | — | $ | 70.03 | |||||||||
| Performance ratios (quarter annualized): | |||||||||||||||||||
| Return on average assets | 0.86 | % | 1.03 | % | 1.09 | % | 1.09 | % | 0.60 | % | |||||||||
| Return on average equity | 8.24 | % | 9.83 | % | 10.46 | % | 10.86 | % | 6.03 | % | |||||||||
| Net interest margin | 2.97 | % | 3.01 | % | 2.89 | % | 2.81 | % | 2.69 | % | |||||||||
| Efficiency ratio | 66.89 | % | 66.77 | % | 64.61 | % | 65.77 | % | 72.93 | % | |||||||||
| Reconciliation of non-GAAP measures: | |||||||||||||||||||
1 Tangible common equity ratio: | |||||||||||||||||||
| Total shareholders' equity | $ | 3,495,367 | $ | 3,488,814 | $ | 3,422,469 | $ | 3,341,744 | $ | 3,274,854 | |||||||||
| Less: Goodwill and intangible assets, net | 476,088 | 485,710 | 487,452 | 488,294 | 495,830 | ||||||||||||||
| Tangible common equity | $ | 3,019,279 | $ | 3,003,104 | $ | 2,935,017 | $ | 2,853,450 | $ | 2,779,024 | |||||||||
| Total assets | $ | 32,272,160 | $ | 33,005,515 | $ | 32,263,532 | $ | 32,628,932 | $ | 32,772,281 | |||||||||
| Less: Goodwill and intangible assets, net | 476,088 | 485,710 | 487,452 | 488,294 | 495,830 | ||||||||||||||
| Tangible assets | $ | 31,796,072 | $ | 32,519,805 | $ | 31,776,080 | $ | 32,140,638 | $ | 32,276,451 | |||||||||
| Tangible common equity ratio | 9.50 | % | 9.23 | % | 9.24 | % | 8.88 | % | 8.61 | % | |||||||||
12
FINANCIAL HIGHLIGHTS -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands, except ratio and share data) | |||||||||||||||||||
| Three Months Ended | |||||||||||||||||||
| Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |||||||||||||||
| Other data: | |||||||||||||||||||
| Fiduciary assets | $ | 48,761,477 | $ | 45,177,185 | $ | 45,089,153 | $ | 44,992,920 | $ | 42,378,053 | |||||||||
| Tax equivalent adjustment | $ | 4,131 | $ | 4,314 | $ | 4,330 | $ | 4,428 | $ | 4,389 | |||||||||
| Net unrealized gain (loss) on available for sale securities | $ | (47,497 | ) | $ | 14,061 | $ | 16,041 | $ | (5,537 | ) | $ | (14,899 | ) | ||||||
| Mortgage banking: | |||||||||||||||||||
| Mortgage production revenue | $ | 7,786 | $ | 8,329 | $ | 13,840 | $ | 8,543 | $ | 11,937 | |||||||||
| Mortgage loans funded for sale | $ | 840,080 | $ | 832,796 | $ | 902,978 | $ | 711,019 | $ | 1,189,975 | |||||||||
| Add: current period-end outstanding commitments | 222,919 | 334,337 | 362,088 | 381,732 | 318,359 | ||||||||||||||
| Less: prior period end outstanding commitments | 334,337 | 362,088 | 381,732 | 318,359 | 630,804 | ||||||||||||||
| Total mortgage production volume | $ | 728,662 | $ | 805,045 | $ | 883,334 | $ | 774,392 | $ | 877,530 | |||||||||
| Mortgage loan refinances to mortgage loans funded for sale | 47 | % | 38 | % | 33 | % | 44 | % | 63 | % | |||||||||
| Gain on sale margin | 1.07 | % | 1.03 | % | 1.57 | % | 1.10 | % | 1.36 | % | |||||||||
| Mortgage servicing revenue | $ | 16,576 | $ | 16,561 | $ | 16,436 | $ | 16,648 | $ | 16,477 | |||||||||
| Average outstanding principal balance of mortgage loans serviced for others | 22,054,877 | 22,079,177 | 22,055,127 | 22,006,295 | 21,924,552 | ||||||||||||||
| Average mortgage servicing revenue rates | 0.30 | % | 0.30 | % | 0.30 | % | 0.31 | % | 0.30 | % | |||||||||
| Gain (loss) on mortgage servicing rights, net of economic hedge: | |||||||||||||||||||
| Gain (loss) on mortgage hedge derivative contracts, net | $ | (3,057 | ) | $ | 1,025 | $ | 3,241 | $ | (528 | ) | $ | (35,868 | ) | ||||||
| Gain (loss) on fair value option securities, net | (4,238 | ) | 661 | 1,984 | (1,140 | ) | (20,922 | ) | |||||||||||
| Gain (loss) on economic hedge of mortgage servicing rights | (7,295 | ) | 1,686 | 5,225 | (1,668 | ) | (56,790 | ) | |||||||||||
| Gain (loss) on changes in fair value of mortgage servicing rights | 5,898 | (639 | ) | (6,943 | ) | 1,856 | 39,751 | ||||||||||||
| Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue | (1,397 | ) | 1,047 | (1,718 | ) | 188 | (17,039 | ) | |||||||||||
Net interest revenue on fair value option securities2 | 2,656 | 2,543 | 1,965 | 1,271 | 114 | ||||||||||||||
| Total economic benefit (cost) of changes in the fair value of mortgage servicing rights, net of economic hedges | $ | 1,259 | $ | 3,590 | $ | 247 | $ | 1,459 | $ | (16,925 | ) | ||||||||
2Actual interest earned on fair value option securities less internal transfer-priced cost of funds.
13
QUARTERLY EARNINGS TREND -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands, except ratio and per share data) | |||||||||||||||||||
| Three Months Ended | |||||||||||||||||||
| Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |||||||||||||||
| Interest revenue | $ | 255,767 | $ | 255,413 | $ | 235,181 | $ | 226,390 | $ | 215,737 | |||||||||
| Interest expense | 38,904 | 36,961 | 29,977 | 25,208 | 21,539 | ||||||||||||||
| Net interest revenue | 216,863 | 218,452 | 205,204 | 201,182 | 194,198 | ||||||||||||||
| Provision for credit losses | (7,000 | ) | — | — | — | — | |||||||||||||
| Net interest revenue after provision for credit losses | 223,863 | 218,452 | 205,204 | 201,182 | 194,198 | ||||||||||||||
| Other operating revenue: | |||||||||||||||||||
| Brokerage and trading revenue | 33,045 | 33,169 | 31,764 | 33,623 | 28,500 | ||||||||||||||
Transaction card revenue1 | 29,536 | 32,844 | 30,228 | 27,380 | 29,682 | ||||||||||||||
| Fiduciary and asset management revenue | 41,767 | 40,687 | 41,808 | 38,631 | 34,535 | ||||||||||||||
Deposit service charges and fees1 | 27,685 | 28,191 | 28,422 | 27,777 | 28,204 | ||||||||||||||
| Mortgage banking revenue | 24,362 | 24,890 | 30,276 | 25,191 | 28,414 | ||||||||||||||
| Other revenue | 11,762 | 13,670 | 14,984 | 11,752 | 12,693 | ||||||||||||||
| Total fees and commissions | 168,157 | 173,451 | 177,482 | 164,354 | 162,028 | ||||||||||||||
| Other gains (losses), net | 552 | (1,283 | ) | 6,108 | 3,627 | (1,279 | ) | ||||||||||||
| Gain (loss) on derivatives, net | (3,045 | ) | 1,033 | 3,241 | (450 | ) | (35,815 | ) | |||||||||||
| Gain (loss) on fair value option securities, net | (4,238 | ) | 661 | 1,984 | (1,140 | ) | (20,922 | ) | |||||||||||
| Change in fair value of mortgage servicing rights | 5,898 | (639 | ) | (6,943 | ) | 1,856 | 39,751 | ||||||||||||
| Gain (loss) on available for sale securities, net | (488 | ) | 2,487 | 380 | 2,049 | (9 | ) | ||||||||||||
| Total other operating revenue | 166,836 | 175,710 | 182,252 | 170,296 | 143,754 | ||||||||||||||
| Other operating expense: | |||||||||||||||||||
| Personnel | 145,329 | 147,910 | 143,744 | 136,425 | 141,132 | ||||||||||||||
| Business promotion | 7,317 | 7,105 | 7,738 | 6,717 | 7,344 | ||||||||||||||
| Contribution to BOKF Foundation | 2,000 | — | — | — | 2,000 | ||||||||||||||
| Professional fees and services | 15,344 | 11,887 | 12,419 | 11,417 | 16,828 | ||||||||||||||
| Net occupancy and equipment | 22,403 | 21,325 | 21,125 | 21,624 | 21,470 | ||||||||||||||
| Insurance | 6,555 | 6,005 | 689 | 6,404 | 8,705 | ||||||||||||||
| Data processing and communications | 38,411 | 37,327 | 36,330 | 34,902 | 33,691 | ||||||||||||||
| Printing, postage and supplies | 3,781 | 3,917 | 4,140 | 3,851 | 3,998 | ||||||||||||||
| Net losses and operating expenses of repossessed assets | 340 | 6,071 | 2,267 | 1,009 | 1,627 | ||||||||||||||
| Amortization of intangible assets | 1,430 | 1,744 | 1,803 | 1,802 | 1,558 | ||||||||||||||
| Mortgage banking costs | 14,331 | 13,450 | 12,072 | 13,003 | 17,348 | ||||||||||||||
| Other expense | 6,746 | 9,193 | 8,558 | 7,557 | 9,846 | ||||||||||||||
| Total other operating expense | 263,987 | 265,934 | 250,885 | 244,711 | 265,547 | ||||||||||||||
| Net income before taxes | 126,712 | 128,228 | 136,571 | 126,767 | 72,405 | ||||||||||||||
| Federal and state income taxes | 54,347 | 42,438 | 47,705 | 38,103 | 22,496 | ||||||||||||||
| Net income | 72,365 | 85,790 | 88,866 | 88,664 | 49,909 | ||||||||||||||
| Net income (loss) attributable to non-controlling interests | (127 | ) | 141 | 719 | 308 | (117 | ) | ||||||||||||
| Net income attributable to BOK Financial Corporation shareholders | $ | 72,492 | $ | 85,649 | $ | 88,147 | $ | 88,356 | $ | 50,026 | |||||||||
| Average shares outstanding: | |||||||||||||||||||
| Basic | 64,793,005 | 64,742,822 | 64,729,752 | 64,715,964 | 64,719,018 | ||||||||||||||
| Diluted | 64,843,179 | 64,805,172 | 64,793,134 | 64,783,737 | 64,787,728 | ||||||||||||||
| Net income per share: | |||||||||||||||||||
| Basic | $ | 1.11 | 2.00 | $ | 1.31 | $ | 1.35 | $ | 1.35 | $ | 0.76 | ||||||||
| Diluted | $ | 1.11 | 2.00 | $ | 1.31 | $ | 1.35 | $ | 1.35 | $ | 0.76 | ||||||||
1 | Checkcard revenue was reclassified from transaction card revenue to deposit service charges and fees. |
2 | EPS decreased $0.18 due to tax reform. |
14
LOANS TREND -- UNAUDITED BOK FINANCIAL CORPORATION (In thousands) | ||||||||||||||||||||
| Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | ||||||||||||||||
| Commercial: | ||||||||||||||||||||
| Services | $ | 2,986,949 | $ | 2,967,513 | $ | 2,958,827 | $ | 3,013,375 | $ | 3,108,990 | ||||||||||
| Energy | 2,930,156 | 2,867,981 | 2,847,240 | $ | 2,537,112 | 2,497,868 | ||||||||||||||
| Healthcare | 2,314,753 | 2,239,451 | 2,221,518 | 2,265,604 | 2,201,916 | |||||||||||||||
| Wholesale/retail | 1,471,256 | 1,658,098 | 1,543,695 | 1,506,243 | 1,576,818 | |||||||||||||||
| Manufacturing | 496,774 | 519,446 | 546,137 | 543,430 | 514,975 | |||||||||||||||
| Other commercial and industrial | 534,087 | 543,445 | 520,538 | 461,346 | 490,257 | |||||||||||||||
| Total commercial | 10,733,975 | 10,795,934 | 10,637,955 | 10,327,110 | 10,390,824 | |||||||||||||||
| Commercial real estate: | ||||||||||||||||||||
| Multifamily | 980,017 | 999,009 | 952,380 | 922,991 | 903,272 | |||||||||||||||
| Office | 831,770 | 797,089 | 862,973 | 860,889 | 798,888 | |||||||||||||||
| Retail | 691,532 | 725,865 | 722,805 | 745,046 | 761,888 | |||||||||||||||
| Industrial | 573,014 | 591,080 | 693,635 | 871,463 | 871,749 | |||||||||||||||
| Residential construction and land development | 117,245 | 112,102 | 141,592 | 135,994 | 135,533 | |||||||||||||||
| Other real estate | 286,409 | 292,997 | 315,207 | 334,680 | 337,716 | |||||||||||||||
| Total commercial real estate | 3,479,987 | 3,518,142 | 3,688,592 | 3,871,063 | 3,809,046 | |||||||||||||||
| Residential mortgage: | ||||||||||||||||||||
| Permanent mortgage | 1,043,435 | 1,013,965 | 989,040 | 977,743 | 1,006,820 | |||||||||||||||
| Permanent mortgages guaranteed by U.S. government agencies | 197,506 | 187,370 | 191,729 | 204,181 | 199,387 | |||||||||||||||
| Home equity | 732,745 | 744,415 | 758,429 | 764,350 | 743,625 | |||||||||||||||
| Total residential mortgage | 1,973,686 | 1,945,750 | 1,939,198 | 1,946,274 | 1,949,832 | |||||||||||||||
| Personal | 965,776 | 947,008 | 917,900 | 847,459 | 839,958 | |||||||||||||||
| Total | $ | 17,153,424 | $ | 17,206,834 | $ | 17,183,645 | $ | 16,991,906 | $ | 16,989,660 | ||||||||||
15
LOANS BY PRINCIPAL MARKET AREA -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands) | |||||||||||||||||||
| Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |||||||||||||||
| Bank of Oklahoma: | |||||||||||||||||||
| Commercial | $ | 3,238,720 | $ | 3,408,973 | $ | 3,369,967 | $ | 3,189,183 | $ | 3,370,259 | |||||||||
| Commercial real estate | 682,037 | 712,915 | 667,932 | 691,332 | 684,381 | ||||||||||||||
| Residential mortgage | 1,435,432 | 1,405,900 | 1,398,021 | 1,404,054 | 1,407,197 | ||||||||||||||
| Personal | 342,212 | 322,320 | 318,016 | 310,708 | 303,823 | ||||||||||||||
| Total Bank of Oklahoma | 5,698,401 | 5,850,108 | 5,753,936 | 5,595,277 | 5,765,660 | ||||||||||||||
| Bank of Texas: | |||||||||||||||||||
| Commercial | 4,520,401 | 4,434,595 | 4,339,634 | 4,148,316 | 4,022,455 | ||||||||||||||
| Commercial real estate | 1,261,864 | 1,236,702 | 1,360,164 | 1,452,988 | 1,415,011 | ||||||||||||||
| Residential mortgage | 233,675 | 229,993 | 232,074 | 231,647 | 233,981 | ||||||||||||||
| Personal | 375,084 | 375,173 | 354,222 | 312,092 | 306,748 | ||||||||||||||
| Total Bank of Texas | 6,391,024 | 6,276,463 | 6,286,094 | 6,145,043 | 5,978,195 | ||||||||||||||
| Bank of Albuquerque: | |||||||||||||||||||
| Commercial | 343,296 | 367,747 | 369,370 | 407,403 | 399,256 | ||||||||||||||
| Commercial real estate | 341,282 | 319,208 | 324,405 | 307,927 | 284,603 | ||||||||||||||
| Residential mortgage | 98,018 | 101,983 | 103,849 | 106,432 | 108,058 | ||||||||||||||
| Personal | 11,721 | 12,953 | 12,439 | 11,305 | 11,483 | ||||||||||||||
| Total Bank of Albuquerque | 794,317 | 801,891 | 810,063 | 833,067 | 803,400 | ||||||||||||||
| Bank of Arkansas: | |||||||||||||||||||
| Commercial | 95,644 | 91,051 | 85,020 | 88,010 | 86,577 | ||||||||||||||
| Commercial real estate | 87,393 | 80,917 | 73,943 | 74,469 | 73,616 | ||||||||||||||
| Residential mortgage | 6,596 | 6,318 | 6,395 | 6,829 | 7,015 | ||||||||||||||
| Personal | 9,992 | 10,388 | 11,993 | 6,279 | 6,524 | ||||||||||||||
| Total Bank of Arkansas | 199,625 | 188,674 | 177,351 | 175,587 | 173,732 | ||||||||||||||
| Colorado State Bank & Trust: | |||||||||||||||||||
| Commercial | 1,130,714 | 1,124,200 | 1,065,780 | 998,216 | 1,018,208 | ||||||||||||||
| Commercial real estate | 174,201 | 186,427 | 255,379 | 266,218 | 265,264 | ||||||||||||||
| Residential mortgage | 63,350 | 63,734 | 63,346 | 62,313 | 59,631 | ||||||||||||||
| Personal | 63,115 | 60,513 | 56,187 | 49,523 | 50,372 | ||||||||||||||
| Total Colorado State Bank & Trust | 1,431,380 | 1,434,874 | 1,440,692 | 1,376,270 | 1,393,475 | ||||||||||||||
| Bank of Arizona: | |||||||||||||||||||
| Commercial | 687,792 | 634,809 | 617,759 | 643,222 | 686,253 | ||||||||||||||
| Commercial real estate | 660,094 | 706,188 | 705,858 | 737,088 | 747,409 | ||||||||||||||
| Residential mortgage | 41,771 | 40,730 | 37,034 | 36,737 | 36,265 | ||||||||||||||
| Personal | 57,140 | 55,050 | 55,528 | 51,386 | 52,553 | ||||||||||||||
| Total Bank of Arizona | 1,446,797 | 1,436,777 | 1,416,179 | 1,468,433 | 1,522,480 | ||||||||||||||
| Mobank (Kansas City): | |||||||||||||||||||
| Commercial | 717,408 | 734,559 | 790,425 | 852,760 | 807,816 | ||||||||||||||
| Commercial real estate | 273,116 | 275,785 | 300,911 | 341,041 | 338,762 | ||||||||||||||
| Residential mortgage | 94,844 | 97,092 | 98,479 | 98,262 | 97,685 | ||||||||||||||
| Personal | 106,512 | 110,611 | 109,515 | 106,166 | 108,455 | ||||||||||||||
| Total Mobank (Kansas City) | 1,191,880 | 1,218,047 | 1,299,330 | 1,398,229 | 1,352,718 | ||||||||||||||
| TOTAL BOK FINANCIAL | $ | 17,153,424 | $ | 17,206,834 | $ | 17,183,645 | $ | 16,991,906 | $ | 16,989,660 | |||||||||
Loans attributed to a geographical region may not always represent the location of the borrower or the collateral.
16
DEPOSITS BY PRINCIPAL MARKET AREA -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands) | |||||||||||||||||||
| Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |||||||||||||||
| Bank of Oklahoma: | |||||||||||||||||||
| Demand | $ | 3,885,008 | $ | 4,061,612 | $ | 4,353,421 | $ | 4,320,666 | $ | 3,993,170 | |||||||||
| Interest-bearing: | |||||||||||||||||||
| Transaction | 5,901,293 | 5,909,259 | 5,998,787 | 6,114,288 | 6,345,536 | ||||||||||||||
| Savings | 265,870 | 265,023 | 263,664 | 265,014 | 241,696 | ||||||||||||||
| Time | 1,092,133 | 1,131,547 | 1,170,014 | 1,189,144 | 1,118,355 | ||||||||||||||
| Total interest-bearing | 7,259,296 | 7,305,829 | 7,432,465 | 7,568,446 | 7,705,587 | ||||||||||||||
| Total Bank of Oklahoma | 11,144,304 | 11,367,441 | 11,785,886 | 11,889,112 | 11,698,757 | ||||||||||||||
| Bank of Texas: | |||||||||||||||||||
| Demand | 3,239,098 | 3,094,184 | 3,121,890 | 3,091,258 | 3,137,009 | ||||||||||||||
| Interest-bearing: | |||||||||||||||||||
| Transaction | 2,397,071 | 2,272,987 | 2,272,185 | 2,317,576 | 2,388,812 | ||||||||||||||
| Savings | 93,620 | 93,400 | 91,491 | 89,640 | 83,101 | ||||||||||||||
| Time | 502,879 | 521,072 | 502,128 | 511,037 | 535,642 | ||||||||||||||
| Total interest-bearing | 2,993,570 | 2,887,459 | 2,865,804 | 2,918,253 | 3,007,555 | ||||||||||||||
| Total Bank of Texas | 6,232,668 | 5,981,643 | 5,987,694 | 6,009,511 | 6,144,564 | ||||||||||||||
| Bank of Albuquerque: | |||||||||||||||||||
| Demand | 663,353 | 659,793 | 612,117 | 593,117 | 627,979 | ||||||||||||||
| Interest-bearing: | |||||||||||||||||||
| Transaction | 552,393 | 551,884 | 558,523 | 623,677 | 590,571 | ||||||||||||||
| Savings | 55,647 | 53,532 | 54,136 | 53,683 | 49,963 | ||||||||||||||
| Time | 216,743 | 224,773 | 229,616 | 233,506 | 238,408 | ||||||||||||||
| Total interest-bearing | 824,783 | 830,189 | 842,275 | 910,866 | 878,942 | ||||||||||||||
| Total Bank of Albuquerque | 1,488,136 | 1,489,982 | 1,454,392 | 1,503,983 | 1,506,921 | ||||||||||||||
| Bank of Arkansas: | |||||||||||||||||||
| Demand | 30,384 | 31,442 | 40,511 | 42,622 | 26,389 | ||||||||||||||
| Interest-bearing: | |||||||||||||||||||
| Transaction | 85,095 | 126,746 | 129,848 | 106,804 | 105,232 | ||||||||||||||
| Savings | 1,881 | 1,876 | 2,135 | 2,304 | 2,192 | ||||||||||||||
| Time | 14,045 | 14,434 | 14,876 | 15,067 | 16,696 | ||||||||||||||
| Total interest-bearing | 101,021 | 143,056 | 146,859 | 124,175 | 124,120 | ||||||||||||||
| Total Bank of Arkansas | 131,405 | 174,498 | 187,370 | 166,797 | 150,509 | ||||||||||||||
| Colorado State Bank & Trust: | |||||||||||||||||||
| Demand | 633,714 | 540,300 | 577,617 | 601,778 | 576,000 | ||||||||||||||
| Interest-bearing: | |||||||||||||||||||
| Transaction | 657,629 | 628,807 | 626,343 | 610,510 | 616,679 | ||||||||||||||
| Savings | 35,223 | 34,776 | 35,651 | 37,801 | 32,866 | ||||||||||||||
| Time | 224,962 | 231,927 | 228,458 | 234,740 | 242,782 | ||||||||||||||
| Total interest-bearing | 917,814 | 895,510 | 890,452 | 883,051 | 892,327 | ||||||||||||||
| Total Colorado State Bank & Trust | 1,551,528 | 1,435,810 | 1,468,069 | 1,484,829 | 1,468,327 | ||||||||||||||
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DEPOSITS BY PRINCIPAL MARKET AREA -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands) | |||||||||||||||||||
| Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |||||||||||||||
| Bank of Arizona: | |||||||||||||||||||
| Demand | 334,701 | 335,740 | 366,866 | 342,854 | 366,755 | ||||||||||||||
| Interest-bearing: | |||||||||||||||||||
| Transaction | 274,846 | 174,010 | 154,457 | 180,254 | 305,099 | ||||||||||||||
| Savings | 3,343 | 4,105 | 3,638 | 3,858 | 2,973 | ||||||||||||||
| Time | 20,394 | 20,831 | 19,911 | 26,112 | 27,765 | ||||||||||||||
| Total interest-bearing | 298,583 | 198,946 | 178,006 | 210,224 | 335,837 | ||||||||||||||
| Total Bank of Arizona | 633,284 | 534,686 | 544,872 | 553,078 | 702,592 | ||||||||||||||
| Mobank (Kansas City): | |||||||||||||||||||
| Demand | 457,080 | 462,410 | 496,473 | 514,278 | 508,418 | ||||||||||||||
| Interest-bearing: | |||||||||||||||||||
| Transaction | 382,066 | 361,391 | 346,996 | 406,105 | 513,176 | ||||||||||||||
| Savings | 13,574 | 12,513 | 13,603 | 13,424 | 12,679 | ||||||||||||||
| Time | 27,260 | 27,705 | 31,119 | 34,242 | 42,152 | ||||||||||||||
| Total interest-bearing | 422,900 | 401,609 | 391,718 | 453,771 | 568,007 | ||||||||||||||
| Total Mobank (Kansas City) | 879,980 | 864,019 | 888,191 | 968,049 | 1,076,425 | ||||||||||||||
| TOTAL BOK FINANCIAL | $ | 22,061,305 | $ | 21,848,079 | $ | 22,316,474 | $ | 22,575,359 | $ | 22,748,095 | |||||||||
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NET INTEREST MARGIN TREND -- UNAUDITED BOK FINANCIAL CORPORATION | ||||||||||||||
| Three Months Ended | ||||||||||||||
| Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | ||||||||||
| TAX-EQUIVALENT ASSETS YIELDS | ||||||||||||||
| Interest-bearing cash and cash equivalents | 1.27 | % | 1.29 | % | 1.04 | % | 0.82 | % | 0.55 | % | ||||
| Trading securities | 3.38 | % | 3.47 | % | 3.23 | % | 3.87 | % | 3.91 | % | ||||
| Investment securities: | ||||||||||||||
| Taxable | 5.31 | % | 5.31 | % | 5.34 | % | 5.44 | % | 5.39 | % | ||||
| Tax-exempt | 2.69 | % | 2.60 | % | 2.51 | % | 2.45 | % | 2.33 | % | ||||
| Total investment securities | 3.98 | % | 3.86 | % | 3.76 | % | 3.70 | % | 3.60 | % | ||||
| Available for sale securities: | ||||||||||||||
| Taxable | 2.19 | % | 2.16 | % | 2.09 | % | 2.02 | % | 1.98 | % | ||||
| Tax-exempt | 5.41 | % | 5.27 | % | 6.09 | % | 5.37 | % | 5.27 | % | ||||
| Total available for sale securities | 2.21 | % | 2.17 | % | 2.11 | % | 2.05 | % | 2.00 | % | ||||
| Fair value option securities | 2.90 | % | 2.97 | % | 2.92 | % | 2.27 | % | 0.99 | % | ||||
| Restricted equity securities | 5.87 | % | 5.87 | % | 5.95 | % | 5.52 | % | 5.45 | % | ||||
| Residential mortgage loans held for sale | 3.72 | % | 3.36 | % | 3.92 | % | 3.35 | % | 3.31 | % | ||||
| Loans | 4.29 | % | 4.31 | % | 4.03 | % | 3.88 | % | 3.67 | % | ||||
| Allowance for loan losses | ||||||||||||||
| Loans, net of allowance | 4.35 | % | 4.38 | % | 4.09 | % | 3.94 | % | 3.72 | % | ||||
| Total tax-equivalent yield on earning assets | 3.49 | % | 3.50 | % | 3.30 | % | 3.15 | % | 2.98 | % | ||||
| COST OF INTEREST-BEARING LIABILITIES | ||||||||||||||
| Interest-bearing deposits: | ||||||||||||||
| Interest-bearing transaction | 0.35 | % | 0.32 | % | 0.26 | % | 0.20 | % | 0.16 | % | ||||
| Savings | 0.07 | % | 0.08 | % | 0.08 | % | 0.08 | % | 0.09 | % | ||||
| Time | 1.17 | % | 1.16 | % | 1.11 | % | 1.09 | % | 1.12 | % | ||||
| Total interest-bearing deposits | 0.48 | % | 0.45 | % | 0.40 | % | 0.35 | % | 0.32 | % | ||||
| Funds purchased | 0.90 | % | 0.92 | % | 0.61 | % | 0.47 | % | 0.28 | % | ||||
| Repurchase agreements | 0.18 | % | 0.15 | % | 0.06 | % | 0.02 | % | 0.02 | % | ||||
| Other borrowings | 1.36 | % | 1.29 | % | 1.09 | % | 0.83 | % | 0.61 | % | ||||
| Subordinated debt | 5.55 | % | 5.68 | % | 5.55 | % | 5.68 | % | 5.51 | % | ||||
| Total cost of interest-bearing liabilities | 0.79 | % | 0.75 | % | 0.63 | % | 0.52 | % | 0.44 | % | ||||
| Tax-equivalent net interest revenue spread | 2.70 | % | 2.75 | % | 2.67 | % | 2.63 | % | 2.54 | % | ||||
| Effect of noninterest-bearing funding sources and other | 0.27 | % | 0.26 | % | 0.22 | % | 0.18 | % | 0.15 | % | ||||
| Tax-equivalent net interest margin | 2.97 | % | 3.01 | % | 2.89 | % | 2.81 | % | 2.69 | % | ||||
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.
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CREDIT QUALITY INDICATORS BOK FINANCIAL CORPORATION (in thousands, except ratios) | |||||||||||||||||||
| Three Months Ended | |||||||||||||||||||
| Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |||||||||||||||
| Nonperforming assets: | |||||||||||||||||||
| Nonaccruing loans: | |||||||||||||||||||
| Commercial | $ | 137,303 | $ | 176,900 | $ | 197,157 | $ | 156,825 | $ | 178,953 | |||||||||
| Commercial real estate | 2,855 | 2,975 | 3,775 | 4,475 | 5,521 | ||||||||||||||
| Residential mortgage | 47,447 | 45,506 | 44,235 | 46,081 | 46,220 | ||||||||||||||
| Personal | 269 | 255 | 272 | 235 | 290 | ||||||||||||||
| Total nonaccruing loans | 187,874 | 225,636 | 245,439 | 207,616 | 230,984 | ||||||||||||||
| Accruing renegotiated loans guaranteed by U.S. government agencies | 73,994 | 69,440 | 80,624 | 83,577 | 81,370 | ||||||||||||||
| Real estate and other repossessed assets: | 28,437 | 32,535 | 39,436 | 42,726 | 44,287 | ||||||||||||||
| Total nonperforming assets | $ | 290,305 | $ | 327,611 | $ | 365,499 | $ | 333,919 | $ | 356,641 | |||||||||
| Total nonperforming assets excluding those guaranteed by U.S. government agencies | $ | 207,132 | $ | 249,280 | $ | 275,823 | $ | 240,234 | $ | 263,425 | |||||||||
| Nonaccruing loans by loan portfolio sector: | |||||||||||||||||||
| Commercial: | |||||||||||||||||||
| Energy | $ | 92,284 | $ | 110,683 | $ | 123,992 | $ | 110,425 | $ | 132,499 | |||||||||
| Services | 2,620 | 1,174 | 7,754 | 7,713 | 8,173 | ||||||||||||||
| Healthcare | 14,765 | 24,446 | 24,505 | 909 | 825 | ||||||||||||||
| Wholesale/retail | 2,574 | 1,893 | 10,620 | 11,090 | 11,407 | ||||||||||||||
| Manufacturing | 5,962 | 9,059 | 9,656 | 5,907 | 4,931 | ||||||||||||||
| Other commercial and industrial | 19,098 | 29,645 | 20,630 | 20,781 | 21,118 | ||||||||||||||
| Total commercial | 137,303 | 176,900 | 197,157 | 156,825 | 178,953 | ||||||||||||||
| Commercial real estate: | |||||||||||||||||||
| Construction and land development | 1,832 | 1,924 | 2,051 | 2,616 | 3,433 | ||||||||||||||
| Retail | 276 | 289 | 301 | 314 | 326 | ||||||||||||||
| Office | 275 | 275 | 396 | 413 | 426 | ||||||||||||||
| Multifamily | — | — | 10 | 24 | 38 | ||||||||||||||
| Industrial | — | — | — | 76 | 76 | ||||||||||||||
| Other commercial real estate | 472 | 487 | 1,017 | 1,032 | 1,222 | ||||||||||||||
| Total commercial real estate | 2,855 | 2,975 | 3,775 | 4,475 | 5,521 | ||||||||||||||
| Residential mortgage: | |||||||||||||||||||
| Permanent mortgage | 25,193 | 24,623 | 23,415 | 24,188 | 22,855 | ||||||||||||||
| Permanent mortgage guaranteed by U.S. government agencies | 9,179 | 8,891 | 9,052 | 10,108 | 11,846 | ||||||||||||||
| Home equity | 13,075 | 11,992 | 11,768 | 11,785 | 11,519 | ||||||||||||||
| Total residential mortgage | 47,447 | 45,506 | 44,235 | 46,081 | 46,220 | ||||||||||||||
| Personal | 269 | 255 | 272 | 235 | 290 | ||||||||||||||
| Total nonaccruing loans | $ | 187,874 | $ | 225,636 | $ | 245,439 | $ | 207,616 | $ | 230,984 | |||||||||
20
CREDIT QUALITY INDICATORS BOK FINANCIAL CORPORATION (in thousands, except ratios) | |||||||||||||||||||
| Three Months Ended | |||||||||||||||||||
| Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |||||||||||||||
Performing loans 90 days past due1 | $ | 633 | $ | 253 | $ | 1,414 | $ | 95 | $ | 5 | |||||||||
| Gross charge-offs | $ | (14,749 | ) | $ | (5,825 | ) | $ | (2,872 | ) | $ | (2,153 | ) | $ | (1,651 | ) | ||||
| Recoveries | 3,061 | 2,437 | 1,214 | 2,900 | 2,813 | ||||||||||||||
| Net recoveries (charge-offs) | $ | (11,688 | ) | $ | (3,388 | ) | $ | (1,658 | ) | $ | 747 | $ | 1,162 | ||||||
| Provision for credit losses | $ | (7,000 | ) | $ | — | $ | — | $ | — | $ | — | ||||||||
| Allowance for loan losses to period end loans | 1.34 | % | 1.44 | % | 1.46 | % | 1.46 | % | 1.45 | % | |||||||||
| Combined allowance for credit losses to period end loans | 1.37 | % | 1.47 | % | 1.49 | % | 1.52 | % | 1.52 | % | |||||||||
| Nonperforming assets to period end loans and repossessed assets | 1.69 | % | 1.90 | % | 2.12 | % | 1.96 | % | 2.09 | % | |||||||||
| Net charge-offs (annualized) to average loans | 0.27 | % | 0.08 | % | 0.04 | % | (0.02 | )% | (0.03 | )% | |||||||||
Allowance for loan losses to nonaccruing loans1 | 129.09 | % | 114.28 | % | 105.78 | % | 125.92 | % | 112.33 | % | |||||||||
Combined allowance for credit losses to nonaccruing loans1 | 131.18 | % | 116.78 | % | 108.51 | % | 130.70 | % | 117.46 | % | |||||||||
1 Excludes residential mortgage loans guaranteed by agencies of the U.S. government. | |||||||||||||||||||
21