BOKF - Earnings call transcript Q1 2020 | BOK Financial Corporation

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Operator

Greetings, and welcome to the BOK Financial First Quarter 2020 Earnings Call. At this time, all participants are in the listen-only mode. A question-and-answer session will follow the formal presentation [Operator Instruction].

As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Mr. Officer Financial. Financial Chief Nell, of BOK Steven Thank you sir.

may begin. You

Steven Nell

hear thanks Good operate, Today, to across for given and company. we several the the you we us. which joining morning, leaders in unprecedented wanted from environment

opening our First, comments. will Steve Bradshaw, CEO, provide

Grunst, Risk Officer, operations our resiliency an on will our Chief Marty to the provide related business coronavirus Next, update pandemic.

across the discuss Executive Regional Banking You'll efforts our our to loans also paycheck of response hear under including Vice protection from President our customer to provide program. needs Norm significant who will region, Bagwell, the Division,

Banking, Stacy real cover impact of Kymes, credit Executive Maun, will Vice President implementation. And discuss CECL portfolios. our us energy, of our commercial our Corporate other and join and Credit portfolios, Officer, will also metrics healthcare the Marc Chief our estate to loan

press Lastly, a details I'll income, it release sheet call. as margin, bokf.com. the X fee net Slide available site overall and expenses the net presentation forward-looking the we liquidity disclaimers position on of make you capital at interest interest balance our We statements during provide and PDFs slide our refer Web quarter revenues, to from regarding to quarter first and standpoint. any pertains first on are

Steve turn the call I'll now over Bradshaw. to

Steve Bradshaw

morning than morning. This is depend our Good by and communities pandemic. ever. event clients coronavirus those region this of that to saying Thanks more go XXXX our our to our us the by recognize our first our now discuss all on the begin that parallel We impacted an without for us to nation. financial company, call for quarter joining want results. I out thoughts and

footprint, we time. economies firsthand a in made the troubled we and committed impact on helping companies, this individuals that vital of were through company clients this of serves the has crisis see to our As and the role our

of amount the time while And we'll today spend detail significant results, impact our this environment company. on call quarter our new a of will our economic discussing first

into As and lineup outlook we to big relative insight response our have provide should Steven our mentioned, a today that COVID-XX.

falling BOK shift of diluted the With a quarter $X.XX. dramatically quarter, impacted economic from of drove in the earnings detail respect were outlook Earnings first in recorded million bit provision standards, newly the to and that about in prices loan talk which $XX.X later. this oil loss increase net CECL per and Maun our significant adopted Financial share will under Marc accounting income a

solid. on if first the losses the net Not quarters, to focus versus revenue revenue $XXX.X business and was $XXX our we $XXX.X this million mix expected diversified results were of minimize Pre-provision credit really pre-provision year, showcasing for previous the of last contribution but million net comparison revenues. to in last quarter, million quarter quarter

position large further the this in margin. declined of the cuts and emergency quarter. million XXXX, with to revenue combined deposit of latter has XXX talk of remained interest later and XXXX $XXX.X to actions we've the rate Steve preserved multiple LIBOR deposit This about in relatively will of decrease balance portion million a costs cuts has our elevated. rate $X.X to half Net our down. taken costs ability sheet Despite drive basis points March

strong X% while momentum, and commissions mortgage Our from Fees was outperform volumes. the brokerage quarter mortgage year's revenues basis. previous and mortgage to trading grew banking XX% revenues over on on trading banking a building and last continued and production quarter, mortgage on securities linked loan revenue over backed up

excellent with quarters. last compared Expense accelerated as management last area in in this to in X% this growth the expenses and leader be and quarter a first the imagine, the in month will well continue can quarter, quarter. was likely you As to down coming

delay quarter, and for the in we deferred discretionary levels which the decreased open was expense and spending help year. related detailed remainder positions driver this this call, in to the later should compensation took the affiliate steps of main While also reducing several

Turning to period-end Slide up over last X, loans billion, XX% quarter. from were $XX.X

than the was in overall, our demonstrated to was as quickly due we the portfolio up over significant XXXX. a rates portion company paid X.XX% were costs interest deposits, draws, able positive deposit we continuation we in industrial price deposits to of to a our particularly bearing nearly more fourth linked increased this exception quarter significant to While the commercial this commercial from in growth on able much Period-end year-over-year, portfolio. down for the X.XX% XX% and in strength overall quarter X% expected. bring up in this were with Even adjust and were of quarter deposits

were in weighed as management broad custody assets under off. market or said, equity down of understandably quarter our to for diversification That on client's us prudent the asset Assets sell prices. relatively the helped outperform markets

able back Grunst, In I'll addition, in continuity also results per business share safety business respond quarter Marty? instrumental market. response Officer, quickly, making and team coronavirus I'll the in the remarks, to Chief additional to it on our we maintaining resiliency at Risk Marty saw perspective to throughout turn employee in pandemic. his Marty shares we were footprint. invest over as bought XXX,XXX our this the to BOKF the while prepared now opportunity but provide an our sure we and to our cover were further $XX.XX after open company

Marty Grunst

of performed you, an for like XX% the remotely, ensuring Steve. At business since Resources our shifts the then a work base and employee Human those accomplish using for for separating doors, of assigning steps have strategies further array distancing separation be safety teams. exit different dual in break rooms the summarize and an includes including multiple Chief service. whose mandate split will from can activating entry jobs and continuity of which office, of I implemented home to maximizing teams taken working We Thank actions goals, and I among dedicated Officer plan. established array locations, of social work those and we our our and outset, continuity developed the employee

locations hours We in enable mortgage migrated appointment increased call on banking cleaning banking bit demand volumes high repositioned and to subsequently lendings. to banking address rotation. all in more both closed other implemented have through have shift all across and SBA to our a firm reduce temporarily W those increased into departments and format drive and temporarily and some our center demand centers procedures areas. Enhanced a and from centers employees centers been the only

rolled off, for for incremental up need pay employee five capability the childcare, premium office. remain to and support most initiatives paid support an employee the in of of our array who to co-pays additional financial staff. usage waiving time of These certain non-exempt importantly, employees And our environment include we in of changing for out for recognition telemedicine days

ready is support in team Our whatever operations environment to find we in. ourselves

past to are offer tirelessly each many thanks our have communities. these customers ensure Lastly, I we to who would employees weeks there for the like worked several to my other, our and

to I'll call our to needs. Norm Norm? customer to Bagwell now the response cover turn over

Norm Bagwell

markets. spillover businesses the The COVID-XX necessary and effects were Marty. efforts size on our social but felt Thanks the is impactful across impact gatherings, only reliance of not distancing on a are being nations high throughout with to mid small The unprecedented. many businesses

renewals. bankers effective and engaged of focus the more working than most on clients coordinating We've us bridge for management of Our payment clients our transitioned portfolio business, along on and clients from been request have as our the ever deferrals of on with to the home. deep discussions so through rely state to now an focused our has the building managing

deposits We're the with rates as has credit also working clients shifted. interest earnings interest rightsize environment rate costs interest on by to adjusting rate and

We advantage and of of forwards where swaps the have clients reintroduced take We're rate on having rate active low rate interest interest also but our appropriate. occurring, some discussions environment.

being well. actively items have this pull as the is able been booked grading business through we're portfolio through to cycle. All New our as the during time risk we pipeline while

We've out times of also management stand incredibly a Active with Financial’s client recently, been these peers. touch favor BOK but why us out is to space. like expertise management our allow management clients in amongst wealth have proactive wealth service been demonstrate high

employees balance clients helping thousands providing advising clients to ranging markets weather on trying of have their We corporate from with how to assets guidance reposition sheets. to individuals personal

primarily asset and new by also technology higher the a clients at rate. been facilitated phone seeing e-mail, utilize service we are our has Our

X.X% Our wealth institutional private wealth respectively, and log-ins digital and seen were month-over-month we've our and transactions XX% increase in retail XX% up brokerage in digital participants offerings. by

management Our upwards seeing usage March. with with digital increase wealth in XX% dramatic Difficulty] count of increase seen performance areas compared modern capabilities performance [Technical some of while as the in have well,

Cares the paycheck loans of discussions provide administration’s and recently, this protection businesses economic factors a real with nearly all to have broader on clients digital the small or the Most billion our communication continuous of been play client aimed our its business has small centered $XXX via at program been and on key. PPP. adoption, With to rapid Act,

As open Friday, clients. to certified typical funding their working BOKF that in SBA of banking live business take Xrd. a the applications and and consumer lender, on day redeployed their April from PPP went employees for banking, our roles program were for was Hundreds reserve commercial tirelessly

completed it clients has Financial peers. time helping our of bridge as our BOK economic $X.X this incredibly PPP to and and Feedback received positive I'm to by uncertainty. serve been from and to processed communities respond applications, our SBA’s ability X,XXX billion approximately our versus our clearly approvals. efforts relates differentiated clients has proud them very we've in of

it were successfully characterized met bit short we XX-day its our but actions challenges. presented on funding that success, for was standard. window quick clients’ operation a The While have of burden, an without we not

credit applications share a to time least team and our team challenging but of short the the in flexibility services has resiliency the Additionally, our proved volume such for was say of out. credit

it Stacy accuracy cover real In checks the of that, With estate Stacy? healthcare energy, and to portfolios. commercial were in at our ensure time place fact, our I'll viability and over put turn control enhanced applications. quality to

Stacy Kymes

Norm. Thanks

period-end As loans X% can XX, for on more were you than quarter. Slide $XX.X billion, the see up

this business, had estate in responses general, from growth pandemic. the previous the real quarter, In Our seasonal the combination that was primarily a and energy healthcare COVID-XX factors both and general commercial flat C&I of expanded to quarter. over portfolios. C&I X% customer portfolio largely traditional was the

very deposited credit base. cases, the draw borrowing banks. the There of in and the leveled relatively unchanged specialized to at secured These or were governed of generally of March. by response billion of the in revolving credit loans. are limited lines of current in were are Line outstanding the $X.X into And totaled lines customer business macro total loans quarter and of end Energy the requests draws XX% draws back the environment. first have since off many end

Our energy for a energy over the industry has stock price. century. the exposure has supporting company The our of created volatility a been on hallmark

of oil to led majority not the and believe been production this is the committed for Plus On our lending. of properties first OPEC The impacted gas that which significantly of remaining senior has by producing in you the conflict producers, portfolio The Slide risk XX, lending loans form are recent the producing are demand based reserve lowest properties spot to energy in primarily related the the natural events. prices. primarily production decline gas, secured oil oil. pandemic lean to with Approximately XX% can current coupled XX% the by by COVID-XX has and declines see future secured secured which energy we is

oil a have gas. clients Most mix natural of and production

than more of drivers during significant As a meaning have declines months, impactful this in the is term, are that level believe is factor customer portfolio factor company. we of the duration the XX place. price prices. past, hedges to stated If the are in decline of downturn the will much short less the we overly favor be is this performance in expected in affecting more our One losses then than our that not oil

of have of the and which XX% this range, all of previous positions customer disciplined energy have loans downturns. those of XX% we and customers outstanding, underwriting production downturn many stress in XX them some will that level carrying combination test, the range. work approach customers Of hedging believe weather We we XX our hedging makes into month of up to month the as

specific can Our senior see $X.X billion healthcare increased $X.X million of loans our billion sector or total consisted loan loans. healthcare of XX% of balances sector On XX you housing $XXX that assisted primarily to Slide a skilled diversify multiple borrowers to with including facilities, to living nursing. risk we independent living, lend facilities Generally, single and serves facility. care portfolio of help that the a our and

to had a this any operators few point. but our We up a the COVID-XX instances handful of have of response our facilities, on impact has significant of mitigated healthcare

of multiple in elective health the comprised for protective and both been those providing to the that more out growth balance impacted should ensure nursing portfolio skilled healthcare for to of and equipment virus as and has who migrate acute have other Act hospitals space the remaining for measures procedures of confident to medical pointed our was It through The be We revenue ventilators in once adequate a providers, also expected also by service patients. and be deferral the facilities remain a continue care the conditions to hospitals the leader and of normal risks they long-term economic enhancement manage state. a virus. outlook Cares

loan unchanged the loans. from representing last estate were XX% largely real of Commercial balances quarter, total

our $XXX offset industrial was were properties totaling million XX, the this at at little estate secured segment total Slide by segment on billion quarter increased a Loans this decrease buildings This largely million of loans of increase by by a into end. secured deeper secured loans $XXX and Multifamily Looking loan of commercial by of other office facilities retail residential $X.X March real million are largest facilities. lending, XXst. $XXX quarter.

about estate broadly, we we downturn relatively real well-positioned. As entered more this think

Clearly, stay in portfolio construction, to XXX% CRE was by that at Tier split limits capital vulnerable this sublimits is our XX, sublimits. is This most legacy state. category, At have commercial of real portion and the home March X and of portfolio sustain, and shelter goods our services. portfolio tenant traditionally between place We and retail roughly estate limited all directives. under with the

average retail almost times. a average had weighted the CRE weighted X.X service XX%, value to As segment end XXXX, of loan a regulatory of debt at coverage and the of

various As in adjustments lifted. closely behavior retail orders the with oil, will correlated duration and the loss these and content orders be consumer governmental of with after the are

of help impact segments believe strong will time. will in-migration While office us the footprint in our we in the and these here, geographic because multifamily over see long-term

all financial We be the macro-economic will issues avoid able credit not to impacting impacts the of institutions.

be We underwriters cycle. standards cycle proven we our will well that to have remain demonstrated historically and last that The current the credit. of disciplined perform confident certainly in

I'll discuss over CECL impact metrics the to to implementation. call other Marc? portfolios, turn Maun credit of and the loan Marc

Marc Maun

Thanks Stacy.

consider We've a more the Slide to measures of by driven compiled Turning place the XX. coronavirus. to social we'd exposed combat the economic list distancing loan segments in slowdown, to

X.X% average social higher dependent is retail, are airline, hotels, see, travel profitable exposure to for gatherings roughly This can group loans the size with remain of entertainment to less of XXX portfolio. you As recreation, that churches, than our and education $X on an over of loan total large is highly diversified loans million.

Some clients monitoring be provide feeling. that to month. of coming will program relief they these be participate these may in paycheck in that stress measure will the protection the exposures obviously of We'll closely some

seat Stacy as a on Just my from portfolio words Chief that few energy Officer above. Credit the described

the second redetermination season during reserves of borrowing value On customers’ the engineering underway, energy quarter. the we base spring is the and be our will side,

of criticized also most their by credit test than lines takes more a of loans XX% energy customer resulted us helps deck on price potential with which in issues. funding borrowers discounted stress into We which conduct stress all XX%, the in hedges consideration, surprises. recent no our using test, identify The quarterly

problem potential quality non-accrual see our On Slide see to to this current economic migration of credit has the is loans and XX, can But intact expectation environment. remained point. you well given

of loans they regarding on days of the loan for another March are current requests been regulatory are guidance, that debt principal as modification have XX at interest in restructures possibly basis. days. Additionally, X, generally a we troubled Based re-evaluation have and XXXX. recent status these considered action if taken not with period case-by-case for a of on Requests XX end

decreased to million loans primarily estate this Non-accruing $XX.X commercial due non-accruing million loans. real quarter, $XX decrease in

first However, loans in non-accruing energy the increased $X.X million quarter.

New to million recent comes borrowers. certain loans largely additional from at million totaled through impairments. Potential quarter and lead to first by problem identified needs, $XX coupled $X million, oil the $XXX some may XXst, as the weighed the non-accruing on markets from some their This million payments requiring totaled customers portfolio energy December This offset loans charge-off. capital non-accruals the up in situation with work environment, in March XXst. energy declines, $XXX $XX in billion increase at and price liquidity received

of his of in our to company the Slide comments, and credit one and noted HTM million. additional as losses that adjustments and total increase last total $XX.X mortgage quarter adopted million the an shows reserves Steve and The $XX.X opening for January an what banking is $XX earnings ACL one allowance for CECL day As XXXX, shows by of for quarter includes The million this X, drivers have adjustment $XXX.X we increased capital, total a the which XX/XX. not XX under CECL. of day million, reserves in provision amount securities increase we impacted disclosed activities since

two the oil two provision economic most the upside pandemic first calculations. product, outlook degrading was credit company COVID-XX CECL The unemployment key to case, CECL quarter base A calculations, macro quarter. the downside and for losses indicators, as first used the with economic decline million related for prices. In domestic $XX.X during the impacting economic scenarios, price gross including under day those oil and such factors the and

of of used prices. Other used $XX quarter total X% first portfolio. XX-Q XXXX. represent and relates economic factors A shifts improved provided home for oil GDP, million mix, the spreads, in factors loan to vacancy balances, agent changes the the and support include rates. of our economy XXXX XX% as to of to range view credit of over indexes the XX% impact Portfolio Assumptions scenarios forward from will well $XX quarters modestly $XX in price credit unemployment XX% the quarter models our as the it the in quality adding analysis sensitivity as almost ACL. for to to detail these second negative for negative More be to remaining for in

First activity. included quarter net provision to off related million expense charge $XX.X also

losses for after unfunded first recorded another allowance provision Our totaled cover million one quarter other commitments. two loan to in loan million day and liabilities plus $XXX day $XX.X

is reserve in million losses available Although, portfolio. $XXX loan losses to for cover entire attributed any is the to our outstanding energy portfolio,

over turn now Steven? the call I'll Steven to Nell.

Steven Nell

Thanks Mark.

$XXX from points interest basis the X noted million million, As was quarter. $X.X margin fourth net XX, quarter from down the was interest quarter. revenue only X.XX%, down on Slide for previous Net the

relative LIBOR to market interest other As portion historic of has interest ability our to bearing This remained relationship elevated basis short-term us move preserve large a with margin. to points allowed has its our coupled to down deposit XX costs rates.

of The While the net revenue have cuts margin, on interest XXX in be impact the both is and most significant interest we given basis zero net net operate. working balances, to effect interest fed can but in net component which the second price realized we influence environment deposit points secure depositors appropriately rate with interest margin revenue maintain and the We're quarter. almost by most an of rate the and of interest March did full costs. our that will closely

can our declined costs month the lower our to points, March, believe we we coming XX basis costs the interest continue months. over of and In deposit to bearing

first record by to in and the $XX.X $XX MBS, activity commissions with increase mortgage businesses. quarter majority linked quarter trading derived and quarter fees was and eclipsing brokerage quarter XXX% this be same quarter year We a XX, The derivative trading from revenues XX% trading trading businesses quarterly Slide million, total of in our increase a ago. from revenues over of our and and year-over-year, TBA with million, of continuing $XXX strength revenue related fueled from and XX% X.X% brokerage trading increase were On primarily and generated million. this an last mortgage

backed fair are trading securities muted rates of more partially decrease impressive While asset value the this here impressive, growth municipal in spreads. was and was revenue to due widening from mortgage by that even the a increased activity

management portfolios. higher rate and supporting job our volatility the of lower done phenomenal in the our has their markets, clients’ investment and hedging a repositioning and traders mortgage Given

ago. XX% saw banking almost relative growing increased XX% billion a last mortgage quarter, quarter a refinances this production Total over production $XX.X in revenue XX% volume significant that of Mortgage same or over representing year surge quarter, and to with volume. from $X million to the

on quarter. to our last we gain margins basis Additionally, compared increased sale XX by points

success rights. mortgage of servicing the relates hedging of Another the to story quarter our

million decline Given and quarter. servicing the the value in first our speed $XX.X mortgage in of rates, of magnitude fair mortgage the rights the declined

However, interest The as contracts revenue our also net securities of held and hedges with held million an hedge yielded $XX.X $X.X securities million. offset decline. economic of that derivative

net So this activity the for results MSR impressive outcome benefit $X.X environment. this an in million quarter,

Strong sensitivity added this which revenue equities management was X% are given again sales of diversity outperformance. asset cycle. proved might our of these surprise quarter, to about a has. businesses today, once efforts, In reality, and revenue our and fee down over perceived significance the through third the this relative resiliency coupled exposed of great are prudent with out to start a company that which the just only Fiduciary year diversification, this assets this segment. of some be a highlight to clearly has the Many with market off

down quarter, compensation Personnel in expense combination than and XX. from million. a million this quarter. more of a Turning $X.X regular $XX.X the deferred X% expenses of operating to largely fourth decreased decreased compensation Slide both to $XX the Total little million, decrease due

recur. included of quarter not $X in fourth that the to Additionally, personnel million realignment did due approximately severance costs

Business promotion advertising as with $X.X employee increased and partially well, of down expense. in increase million million seasonal million benefits decreased Non-personnel reduced $X.X to decreased MSR reduction largely healthcare expense current to $X.X as decrease a the Employee seasonal in offset costs. compared due expenses combined decreased the pandemic. quarter. costs, due decreased payroll the expense taxes in costs result with planned Mortgage the fourth costs was banking the retirement million, $X.X by amortization as travel

Foundation, quarter. In charitable recur to this included fourth contribution addition, BOK not quarter the did million the which $X

lower for alluded remainder steps the earlier, levels taken have maintain to to of XXXX. Steve help As expense we

planned to First, a hold a put that recruit all on positions become have and we are challenging all before we staff open adds replacement.

consulting achieve less business all delay than Second, fees of other favourable we occupancy environment. IT amount projects lastly, from home work we environment. special current to and savings in promotion, and essential expenses operating related this And will decided the in and

continue support to critical on enhance that the initiatives to facing pace less important support client becomes until the Prioritizing picture and overall We’ll customers’ our other is clear. experience slowing prudent projects economic and infrastructure. projects of

tracking home remains and liquidity analyzing federal we've given monitoring among the things. bank on window optimizing the to precautionary our markets, at by strong, While our extraordinary increasing other borrowing federal including collateral by impact enhanced loan measures customer, of the number our deposit it capital liquidity inflows so, to capacity of a and ensure the segment, of reserve remain pandemic daily taken outflows advances loan by discount our

As and mentioned positive earlier, our additional ability have deposit strong. remained balances deposits gather to

capacity support billion of Slide on $X borrowing capacity company. liquidity over of unsecured contingent to $XX over and liquidity noted billion we the secured the have and XX, As of needs

Additionally, we in billion to now loans, reserve PPP via facility. PPP $X.X federal totaling a the fund position are liquidity

position also strong. Our capital remains

regulatory liquidity Tier well range ratio it in fact, its holding points and that XXX full in shape. source In we recently BOKF X are our by noted and common above minimums, XX.X% S&P of a Moody's. had of equity basis minimum good a reaffirmed operating was primary internal ahead a of reason A-rating company With a

CECL advantage We capital for plan of will implementation. phase OCC’s in the also take

in we and the guidance. impact that be word a and given with we've to uncertainty of opportunities deals in no healthcare the C&I and on the date a for from be future. due portfolios. We'll the million not pandemic lastly, more leave are economy, present little generally and growth Apart its of Due the the PPP thoughts billion, to loan guidance the at broader pandemic CRE hold and formal be will advances we you helpful. $X.X likely will the will few the $XXX done duration severity on past. might activity on to the of current not Energy foreseeable loan around And our provide fundings expect prices,

originate portfolio. a continue ending permanent very to will amount We limited at loans with our mortgage up

to ensuring context flows in from have environment, significantly appropriately our needs. near rate extension pre-invest cash spreads continue costs, portfolio been will and widening the anticipated first in of reduce we with in of overall flows available securities and We resume anticipated sale given security funding all quarter the spreads priced, spreads. mortgage prepayment cash for dramatic deposits advantage zero advantageous characteristics. at appropriate of We deposit our of the those the After backed are took to months realized, will control mortgage several reinvesting

Our diverse should being pressure fee felt mitigating earnings impact to spread some overall revenue stream continue provide the to in businesses.

continue. approach Our to personnel controlling costs non-personnel will disciplined and

client experience technology entered no to will to improvements products. the existing position continue in we pay. have threat projects, we'll provide We infrastructure. We with dividend and do to strong funding not for plans cut or capabilities in the a this a And capital although, we downturn slow less see critical

maintaining opportunistically view position. but we buybacks stock of always, As our context within strong capital the

Bradshaw I'll the back for to commentary. call closing turn Steve

Steve Bradshaw

Steven. Thanks,

some in That for contain with namely can't growth opportunity results. to businesses every self institutions bright there of expect operating that we so the all we yet rate what and the our several to virus subsequent The spots spread will doubt a to positive in fully management two described, in spend will That businesses specifically to financial at CECL combat outperform provision mortgage coupled weigh day at XXXX. near BOKF, first going this we meaningful quarters economic induced have was XXXX. point and this hold. said, year, are a the as zero We've spread dampen to in a No slowdown wealth environment full quarter, forward. our quarter predict on

are As approach taking we measured all always, decisions. a to

of cost much best in alternatives looking asset going the funding rates, absorbing the forward. lower for impact We are while

We and capital. have liquidity strong

where So we well In the definite curtailing thoughtful opportunities manage other continue measures until will. it have projects changes we as work in environment growth as growth, hold expenses meantime, inhibit the luxury possible, will demand. on we a this personnel when and putting some our see to of as corrects inevitably making that won't to improvement

we uncharted that of the we since on end, understand meaningful what accordingly the the times quarter even is end we are that some waters as future return perform everything quarter customers unemployment and say than road confident rate modeled us economic of more extreme will we've can severe remain GDP of to envision economy. near-term ahead would can respond so economic seek We our of but negative built to at we I do of these activity. we've added in that in the quarter a for decline second regardless to bias we company to for our the stress. the of them all behalf And assist long

a leadership others. this have which gives have team, very We as navigate to countless in confidence our me ability equal experienced challenge we

fully horizon Our challenge. us bit a most the Financial, expect always time economic longer of to this than on I is and is BOK written when shine history

are questions. [pleased] Operator? that, With take we your to

Operator

conducting [Operator this At we’ll you. be a Instructions]. question-and-answer session time, Thank

of Our question. your Stanley. Ken Zerbe Morgan comes first line question with from with the Please proceed

Ken Zerbe

some you your just with level that said might I of of XX% though customers start know I hedging. we have energy. off

Thanks. just that more have hedging XX% like know is we the that’s not either of you part the to So hedged, that on any could that or of their credit the real that talk But or much much borrowers question all at the of production either at how loans is, hedging. about risk? would part even hopefully, energy don't quality

Stacy Kymes

XX% commitments is the of in an $XX. speak I'll three are at least hedge Over hedging. of This in price Stacy, quarters low XXXX average excess our customer weighted current to at

to about that. of And very ourselves the into this, good mitigants the a that But who we most time about you the base. within for feel very certain hedging in of manageable the being the think really feel we're cycle the And our level the horizon we the the price into customers that absolute to as shape good came we position go we going is So into have with look level a We that going than horizon, I we downside that's as commodity. we good and a had certain of to one of why us. customer for Clearly, that risk very we be time had extraordinary point relatively the at weakness. of bigger book. as continue cycle, as

remind awfully XXXX, $XX to oil focused we the time. get a another of relatively on $XXX and in because short time. 'XX, price price a a barrel short Just $XX barrel to 'XX spot barrel the collapse from in period ticker. Oil to a collapsed barrel $XXX on from In we everybody, happening in prices what's a saw daily

gas was a During of under also of that period natural time, significant amount pressure.

length the good last don't year cumulative five the know We the the ending done of this a over In five historically million. our collapse end was a losses know but from year of do of underwriting at of duration job period energy we XXXX, period that $XX cycle credits. we've

But long-term our this. pricing we of work to over the will very more perform short-term so our and not because manage confident customers through our on time. how we believe focus indicative that's is And curve, but on in feel ability

Marc Maun

need Marc Maun. its keep curve, is that. just to it's looking highly to that steep. at contango we going thing Ken, add in forward to I'm mind quick this very one the Even today this

look So, $XX into and reaching at are this even even if if couple barrel. later $XX a looking are days, year last at you 'XX, prices that customers, even the seeing you or after over of

opportunity work they flow us that have them way. who we look that and with those by working in to is opportunities their taking their quality of So on a with overall there enhance cash identify at hedging ways to opportunity customers not that hedged can for were them

Ken Zerbe

prime LIBOR why the just versus you example? does been normalize to Obviously, mentioned the relative much just question. name's second is has your maybe as how means help start up Thanks. fund. much is of to Can LIBOR driver LBIOR margin? as How big a like How for and If your exposed it us that meaningful then you fed to to has. And it quantify held when portfolio? much for

Steven Nell

actually have a has would or will points that impact the XX% position. We point know, Nell. narrowing some to from it back over spread. I overtime. roughly and some specific if about historic relationships. XX will XX in of the to this It's forward, points is about And Ken, historical last base relative Yes, we margin XX variable. you point LIBOR going that is reverts week. to it come majority dollar say Steven held impact, it as more think is so somewhat because basis gotten advantage And XX advantage a on our do giving basis without of or have book our come LIBOR its amount in That's percentage basis meaningful, basis loan

Stacy Kymes

fall our that. thing this down is to add rate The It's middle that have us one of certainly call billion slow deposit moved time the the deposits, We've benefited we is look the from focus in Stacy. points deposits through and about since in higher of $X If the And were really April. base February higher end at, through price might on over what so of LIBOR. of I we kind given rates managing standard we there that exception we of pricing. XX basis

help counterbalance So time our the which it's size where from forward. But think there. on benefited we LIBOR. given kind Clearly, to fall, as base, deposit slow to as right about it's a there's think not as that the it's we've going to equation we of us us sides been pricing margin multiple will broader

Operator

you. Thank

Please line Our proceed Wells Jared next with with Fargo question Securities. your comes from Shaw the of question.

Jared Shaw

as of this Can classified in portfolios, sort the first. that share us the, had with energy, CRE TDRs healthcare, COVID in credit with umbrella are risk level Maybe at of specifically activity at that under point. you aren't stickking what deferral necessarily the you've

Marc Maun

you zero that Maun, This deferrals commercial the space. X.X% I can in side, the around mean is energy I we've is our is had higher on And on side actually level with healthcare point Marc give deferral of overall the time. in that. this at

to-date. X.X% outstanding. these dollars total on are of of being deferred that peer surveys commercial running running dollars about estate all side, real lower across categories groups, On are dollars we of percentage the our end it's the at those of And as the looked I've

Jared Shaw

just that looking And forecast first a of at I as just the you XX-month as back reserves? when I'm going CECL? broader X.X%. guess on current side. the at I be So you're now the this determining move quarter to on for impact And how well up guess energy mostly prices your confused you little looking What's could maybe allowance prices? the specifically oil the period. XXXX, are the given as then Where out lower get allowance was oil pass

Marc Maun

April of with April reducing sufficient the don't of pretty month focus consistent on We couple published follow this during is in day month. to We spot a that our on we price in will based recent then that most exception justify time, the days the for we regular our Well, forward on. comments the which for the point We on basis. At the deck the at price, changes price price deck on price that. for first curve or each with deck deck deck of this the first curve that at we as and the throw beyond morning. month deck our recent price the is forward deck is are the declines during price out focused forecast. price, month and is look at consistent price the price price price beginning for said whether on, first, five preceding And the assess month, what that the the

still then kind by and we're and year XXXX. around about it of running looking $XX at to there from $XX opening the So growing first

second part for size your was the more of question energy. The on reserve

Plus what build a that favorably say what million. as watch with our of reserves, million we three our be same than time. little happens happens forward today, the makes in midstream customers up energy or $XXX But based opportunities base, to in two of move and in with knew time, prices weeks won't has and the won't reserves bigger at we're in little XXst there general. reserve market, what At charge-off peaked happens is were a and past years. the bit net noted, million on second we're to that post the in Our And reserve five on it is comfortable history, forward going as It's our April XXXX. on compares It allocation at And as as doing made for lower changes, appropriate evaluate the XX/XX. we we did sense bit with $XXX today. OPEC this expectations during that we’ll our make piece based the and $XX which very it Stacy I reserve quarter. performance up it the based XXXX and the it March that of information at

Steve Bradshaw

And occurring. we When it energy, our a as couple pay peaked there. percent, because pretty add a in had might of dramatic things really we for I reserve downs peaked energy

weren't extent So we coming we it it. and we for we that million the $XXX down had had to over the allowance, using did provided

up, the that to So that that a is that absolute comparison denominator there rose of fair was kind dollar Marc effect percentage amount that perspective. I from more really alluded think a

But to evaluate difficult continue really clearly particularly a portfolios time. any the thing this. on to but touched Marc think to very do, I energy trying over and future around we'll of peg anticipated losses is

mix fee is I understand material have key level we the impacting think the revenue we of and at reserve high pretty continue very to a a for the extraordinarily us to capital. pre-provision levels we have such that of flexibility revenue, without pre-tax to to have strong add ever

continue ensure And so, things remains future for but provision we're the well will we to adequate. that as our changed positioned evaluate

Jared Shaw

an capital? you first comfortable I But I then point long me return help been levels. last capital talked I for there's any with just total elevated Obviously, you a changes in about grow capital dramatic on before build quarter. guess ratio options how worry finally capital quarter, to this to feel do guess other capital the at had we, desire about

Steven Nell

Steven is this Yes, Nell.

common of at X You our equity know, the comfortable X.XX%. I'm Tier very level that with

you If peers, well compare ahead. that many it's to

capital got So good we've think I flexibility.

of that on today context but optimistic don't mentioned all the stay position. I say I the want like feel capital buybacks, strong at to in point think any to I any the in and this stay threat I we'll As there's comments, in don't opportunistic. dividend time want we'll I suspend

go net here occurs. comments. what see good or tremendous got let diversity. with agree generation. some revenue revenue and We've by got So We've let's time I Stacy's pre-provision

adequate and very we've position. reserve power. earnings So of strong a strength got very a in got of terms plenty capital We've

think, there on paying go and as opportunistic be I So to we've good dividends buybacks. we forward got opportunity continue

Operator

you. Thank

Please Our line next the question James. comes of proceed with Raymond Michael Rose your question. from with

Michael Rose

at I downside that to is we your now now, month today. Maybe based what energy back if hearing stands portfolio. the the say case, I strip on it above just circle look XX I I'm wanted as you what on think actually know it's

quarter Is saying that going assuming and based So borrowing for and on base think the and obviously going we build come that energy way second would borrowing you with that to is the quarter. think you the expect reserve should another hear about redeterminations have with levels these book is what I I the it, Marc? down, in to

Marc Maun

borrowing XX% the down. to-date, completed bring spring about a through reserve look and we have appropriate of is to borrowing in what But the once the think it's determination hedge get base Well, We've have on we're so using, forward likely to curve too level season deck see the certainly will curve, component we bases based and going be part season. take we'll price be redetermination we factor as and right book. hedging I now that that then forward we’ll the substantial

Michael Rose

the what's that XX% that gotten borrowing average through? the you've And base reduction of in

Marc Maun

the this to in we're I time, in point At think XX% XX% range.

Michael Rose

just this then capital And to from in go E&Ps given and and round to very versus bank lines. liquidity would this access side of constraints a is that the outside What would different, if energy seem to downturn just maybe that outside It up. at the on little more risk 'XX ‘XX period? looking the out period round ‘XX energy be on

time? takes Thanks. So maybe if you the can this puts what's just give and different on

Steve Bradshaw

we've the about that how of drilling, as level, around in hedging wells thing decisions biggest making that it the some shut this base. borrowing seen has is pretty time think but for the quickly quickly see quarter significant. take of will buoy historically. have it that more production, through. pretty it's that around And this much to hedging, much will to more level a that's to effect at, impressive the mentioned customers different help some level I time supply and Well, big these, at is play Marc than we been a see we've looked And And of time even

When really economy Clearly, oil get began point, are here. a the does the of demand at think, When fuel? equation. this impact through the which from COVID-XX does wildcard do we to this users When a rebound? demand to is the in large planes is jet return? supply demand air, equation me the than I less

to is supply back. the and wild that the relatively to comes it's come going quickly think how down I come down quickly. card question my going is But demand from perspective the

'XX, as had broader the from well issues the You 'XX decline recession. price demand in

and how and period in activity. time that to we of continue primary that see at time. and around can be as the you of responded it XX month has which get and here think the But see that day, today. Generally impact equilibrium, for kind to have of it -- look the really done that once forward that resumption as business opposed supply think we we XX what absolute the And some on imbalances a that have through. focus risk it the we to why recover but we but kind do the think takes we to market appropriately markets is historically demand quickly has find of the so you'll some end worked I was And demand to

Operator

Thank you.

of Winter your proceed Securities. question comes with Please the with questions. next line Wedbush Our from Peter

Peter Winter

businesses? I to mortgage. was brokerage sustainable and second going other mean and some the great you quarter if quarter wondering color just income on fee some And some and about of wondering, Steven, talk could on outlook had level just you of could in you be that businesses? provide I the I'm the trading is

Steven Nell

really sustainable, environment. I Yes, I Peter. can mean Whether environment do odd the it's an that is

So to it's say. hard

mortgage of net feel guidance streams to what help we'll additive think brokerage the in said supportive and feel and that clearly interest limited on that of I is business to some margin. net pressure revenue do and kind income the I I the be like that interest trading we gave offset and will

So our believe margins of our up opportunity and think the activity trading on to be of did position is today volatile. The basis continue. does really mortgage points, is will investment the help to to my that business, strong. a XX as side job, strong. their in I environment hedges I continues stay very position they’ll We expectation clients nice improving Certainly, us provide It mortgage portfolios. very,

they'll the they I quarter So were in very second in be supportive the first as think quarter.

won't be what supportive. certainly think level, there. very they'd Now to -- not I But I'm go

Peter Winter

just And the some payments wealth the management? of business like other, and

Steven Nell

trends the on businesses. on answer Stacy let payment I’ll

Stacy Kymes

you If think go and I as payments debit about the ATM we April, certainly in saw decline into business, activity business. we a that related think to

in seen in I it you'll recently good have impact think dramatic the business I on a payment side consumer the we awfully We also our in slower it's slowdown but as I checks have a on think pickup times look think activity of relative more is a in basis, second a bad forward. payments the as That is quarter those stable business. arrived. times. the see of slowdown, stimulus business spending But don't broadly modest and

Steve Bradshaw

this Steve Bradshaw. Peter, is And

flow there. current businesses corporate some will side, are environment. to our we improving I think expect There grow management wealth in of trust see we this on like the that think some would

inflows We that cases. in reached the many there equity bottom seeing a been is that also has people side seeing as are you're on feeling

of today we're big So equity see driver quarter. that reposition seeing here in the that that out side abated as on that first a and fixed suggest of lot has we seeing in anything sit cash some obviously any. we're was the income don't flow would I a the

So, I grow point, have continue, some to even environment. would and in to challenging expect be that Steven's to opportunities to strong area to this

Peter Winter

COVID terms credit a impact credit I'm you're seeing little a from with standpoint? the on the front wondering on you senior just quality deeper bit And dig housing. health in then the down care, what particularly if of just could

Stacy Kymes

Stacy. Sure handle this glad Peter, I'm that. to is

footprint on Hospitals very could the three impact are a be an space. the impacted and in hospitals that's rural sectors you under into to you. our going focus of Rural of where particularly the opted that area been have there's space been has most that portfolio Act. business think Care our have healthcare us. today, hospital it don't largely hospitals pressure not rural development for in -- this are already be Affordable devastating not I We if significant is to have

they elective The hospital the utilizing frankly multiple fact as to expect of We securities liquidity been unlikely well group because are systems they being which people to endowment that as hospital not are Those fear very them, sale able high-end delay needs their more of procedures, see really systems. margin people there waver as be by business will COVID contracting They facilities we are environment. and they that. endowments that and health when higher positive large have for systems as pricing have do to want that. fully out who need depressed have things, health the from in in to a of is impacted of

use to going of like lines won't So and more be likely they're to that. credit things --

increases some health expect portfolio material we at but all see in So risk don't that credit from that really systems we group.

strong area most are been practices and they request. healthcare that that physicians large in request impacted we’ve practice robust really procedures. for the because and had amount specialty deferral group. CoBiz, And deferral the larger style of And a really medical elective acquired by these is that's We the seen of that have

that generally corporate entity. who so is temporary. in doctors expect the the our facility to And addition to have guys relatively are doctors, guaranteeing view be And these would we specific that

today. overtime And as so or some of I get as risk maybe maybe we classification see that there. a don't timing some financial significant loss statements

long have to we certainly Although, of that change. access facilities types those of if without a could time period

certainly most risk risk In have credit senior around housing focused the people and space, of loss. been where that's

nursing have are in portfolio. that XXX of alluded the diversification. our of earlier our we to multiple We prefer we facility facilities operators, I part in that skilled because think important excess of that it's understand comments

of nursing have least We one skilled of at our COVID. have X% facilities around reported case

Medicare, terms of the and will broader Medicaid there small. support into, government to for the health But cetera. scale well. as help So the both around in funding systems is lot funds of enhancements, additional is holding skilled in a inflection that go That of funding protective up additional of relatively with as enhanced well portfolio control these purchase and equipment et nursing

to a It take they're today our we're will what take We're time. impact how That's portfolio exactly is. having I portfolio the not with know like going time. X% the facilities conversations what going case. obviously our But borrowers, impacted they're that said, some in have doing. a understanding roughly reported and of It's

nursing we pretty It there. change to began things about concern perfect, stabilize, as but skilled certainly overtime. lot confident of that So understand I have could a I be won't feel But the portfolio.

Operator

Thank you.

your from comes proceed the question. question next Please with of with line KBW. Our Gailey Brady

Brady Gailey

energy there not supposed so via other they're to you market way means? go if contracts they that hedging. had was your to the the and impact basis working The I'm if hedges some of this squarely if I wondering to or companies those May acted that week if price forward all hedge just energy the is has a sure risks and hedges on an hedge at have. there's the use they I X not question that saw the negative. contracts energy

Stacy Kymes

able to oil on Texas of I The closing do pools been works think for in able around and up days borrowers, prior noise watching the a would comes spot price. the do that's Stacy. is to that kind to I If hedging mean we swimming XX be daily part get Oklahoma everybody really This the to trading with filled to that. that, average the basis of contract. everybody paid had have the their

not to of to the May So these but was not lot contract, actual a the the particularly around, hedges. headline noise saw hedging, and creates of really with impactful is certainly anomaly the and meaningful of that we closing settlement

Brady Gailey

from the related of you say the of the down on did moves comp I side, then mean compensation how fees comp? out. second nature kind you in a help And will decrease that comp for had onetime decent just benefit - a that of size Is into down think kinds to that and some maybe is or was good look that quarter, do well heard line as how trend? run went the much together your And it really we you those incentive XQ of the a comp. expenses, expense and rate I've normally step

Steven Nell

Brady, was compensation that down $X I And is related to roughly through deferred say that step I that this million would that item. line of Steven. expect would recur. to runs not

our a in good. down pretty I So We little and regular think first is else, our that's But reduction quarter salary. a part bit time stepped that won't everything recur. personnel, the on

costs positions on replacement I down think of we're and a project and some that with will and the of bit. our that some open continue little efforts positions taking of as the slowing certainly staff

$X one would million would consider item to something looking that regard to about I with think forward I of that So, not be recur.

Brady Gailey

for me it magnitude down think the the do net on X we're could going then X impact you quarter. point basis interest points. into How until of think see in Any margin second And how just XQ? margin. -- much the XQ the could full much was be saying idea lastly to not down Steven, the just I you're basis or decline

Steven Nell

there's you've to got think COVID. book, parts. your related advances loan moving I many I on significant too mean, partially Well,

the now. that PPP are got loans You've on sheet balance

that. related to got funding You've costs

Stacy And said I'll our really significant hard. you do $X very, control you moved what deposit the can what NIM tell look deposits. But reiterate billion gave that He exact very inflows and that you an we magnitude the costs. The working like. impossible of significantly. got will of down thing to tell biggest price have I'll earlier. You've of we example accession about is are of we deposits It's

that over March to basis expect and our XX the points, I deposit think migrate I coming costs quarter. are interest significantly lower bearing

And to margin. huge the that there's on we interest lot have in of the to is kind with rates to early NIM. saw decline But net and going that's decline be March, just an consider. support So mid of a to benefit clearly, to a impact nice help and of part going parts moving

going points, not lower out step I'm So to X XXX that number you it's be say of the it first to going basis will but be quarter. and than the saw in

Operator

Thank you.

of Our next Jennifer your Please comes question Demba from proceed with the line SunTrust. question. with

Jennifer Demba

one help to their us is investors versus line, could that yesterday your comparison just the frame X.X%, noted that [Comerica] maybe at looking is that reported energy X.X%. XX% energy and today you reserve Back that about and

you talk stress also could And in of us? for energy up tested about that you book for lower frame you duration can oil So longer this Thanks. how specifically a just terms demand? the

Marc Maun

Maun. is this Marc Jennifer,

against this don't their me And Let portfolio. know on I touch be honest, to framing Comerica.

portfolio our the banks on with So can't numbers. their lower our from what assess to are banks reserves process. that we be significant will stepped saw number the other in looking 'XX energy really what very in energy I at end out energy we particular downturn, some of we're base the But early engineering. they're reserve We how tended terms that are, characteristics assess can of space. with of based in with say up structure to at the We coming a in their active that the XXXX on that

of XX not a so be of analysis are, part production price are feel deck only doing wells and the the process. as how what very staff but completed those we will have we engineering what We well on impacts engineers of and exactly strong performance techs understanding that

current helps back then has that not what deck price And at the is. that a to the concept is that protection also we just price come us continually hedging look

evaluate history reserves, reserves. that of as energy our continue, cycles will all We've to losses. we we throughout things those think see have we cover we And So and we've evaluate on too. been we and together sufficient reserves take the ongoing past ultimate an said appropriate before, we've to more based consistent that our had than basis sufficient to on

price the regards up which XX said we about to at our I in from kind gas basis. XX%, them that about With of stress crude less stress topping out around is period. $X.XX test, then to to That earlier, on on over ran oil XXXX test run on deck, XX, hedging is early side year as discount the in done existing tend growing and without little natural $X.XX, or to five to

that It's what below reflective said right today. where the it’s is curve at what the roughly test the is. still I As now is of well forward earlier, of stress forward XX% below curve still the,

are. small hedging have we're had determine our we so highest the take we've not with. number with sufficient working risks take identified. loans The those that, the individual identified criticized are a and that look associated and we customers the a continue at at a already hedging of that’s And We very customers, to rest, had as where ones look

at how distress are it the that So increase wasn't that's a the substantial we we risk. in think test. of number looked higher customers And

Steve Bradshaw

entity, to And I but other want a just speak specific to broadly speaking.

XX% syndicating work work We as agent, of kind of to lead and I that whether through our may that bank helps the the the really control help navigate this are for this through we maybe in single as come think environment. energy relationships, us seat in issues up the any facility. But

Jennifer Demba

sensitive pointed hotels, of rate from out deferral What in casinos, industries, industries side? more When you you restaurants, et pandemics seeing kind the that are cetera.

Marc Maun

are that down. I almost I in I that because total X.X% would completely about have had industry. specific running We're have deferrals of go know they the it those by portfolio. know the that broken are, down on shut some casinos, dollars. are Actually, our C&I don't fact to requests we back for I that all

a those almost is of cases reasons have are liquidity one which And modification. of them, in substantial lot all However, the they're for that casinos, and asking tribal their pretty reserves. employment of are mostly maintaining that

have airlines restaurant sizeable yet. is, up that that really specialty in significance is colleges to the stores, universities, portion we The any some or seen and the had We hotels, franchisee of finance. speak store, haven't convenience side,

very However, brands. brands, very large we’re well-known with

they're And longer through term or franchise XX%, And able to this lot drive still carry and by brand are of know that and while names should being sales we're so hearing supported XX% curbside the to support are down out delivery. do in farther. provide a to cases we the

Steve Bradshaw

types we've know, a that BOK time of you Financial. harder these a a these of through businesses as long period are, Jennifer, time have ones at types These And areas downturn. of over are sustaining materially very underweighted

have we not so And in significant a space. lender historically been this

been leverage our area done The a in repayment. of through we really lending. good have is of that large a credit any kind managing as source have cash have job only flow and kind of team we his underweighted that level Marc other significantly of where

the pretty relates of high more as segments feel to good those we spectrum. it So risk

Jennifer Demba

the and about Can and how the just works you portfolio for talk severe of of unique those losses could casino recourse be, how aspects credits? that types

Marc Maun

to I'll on nations and ways tribes. way immunity the I take cash individual you talk this the all sovereign mortgages I be an the We are nation status. they're casino. Well, recourse they're direct, casinos, of structured. because casino the generally, for way operations have mean about mean on the the cannot takeover they if we they'll know, associated would work the as with But flow

casinos shutdown said, I these for now. are As

cash have they balances. substantial However, have and liquidity strong

of they assess It's would period. a well. facilities So the reopen. long the portfolio reasonable reopen the large supported vast a that got reopens majority economy when as depends expect of -- risk how comfortable cash we this We're don't were before as that most on we through that again will see they've significant loss closure these reserves to on hard

Steve Bradshaw

our Jennifer, of as well. debit that saw in uptick gaming seamless large fact interesting card payments roll on we is a began the as our to segment out,

These assess, So it's them. gaming offset strong going tribes operations to are there. are hard is there in some very behind that be to

should be very it good portfolio. a So

Operator

Thank you.

the next comes your of Olney Our Stephens. Please from Matt proceed question question. line with with

Matt Olney

I frame. some around much just give that you how us move declines? time want production hedge once Can energy we beyond back more hedges. to on discussion or idea go clarity the XX-months to just And that an

Marc Maun

is Mark. This

XX% bit have average hedge base, the customer price their $XX about little a couple what portfolio We XXXX. at that still into note more average more XXXX. of have a is Well, of the price XXX. than weighted like I about our especially we still is a of our hedged oil their hedging gas about, looking $XX seeing when curve increasing through plus customers we their activity of people third oil larger, of would based And of price and weeks XXXX average are were on ago an and in XX% pricing,

the would we of this half So anticipate will that later that increasing year hedge well as over into XXXX start activity year.

Steve Bradshaw

And of hedging over numbers. last the in have that's couple seen not weeks, fact in reflected these we significant

of at at this You a can $XX a $XX barrel. as barrel XXXX hedge o'clock X XXXX morning,

have still maybe A hedge that. of hedges things ample opportunity layered rolling lot and companies be to for will months in. these like So XX there is programs

So I number improve the of continue course XXXX year. to the think will over the

Marc Maun

they're significantly I of a environment that these drilling or kind a in improved see they're activity. discontinuing associated to is the If cash price thing one they leverage we think in That where of see I loss their $XX their because this support the trying their use operating And overall should we environment, experience level increase expense. increase flow kind with significantly to of to CapEx of production risk cash particular flow this because reduce not to for companies of return will potential having expense in in a at $XX is add dollar and have even loans of portfolio. these an existing dramatic don't this levels, couple need

activity. that would in the drilling drilling environment, current this don't significant increased. point if any change Now we time anticipate But given at

Matt Olney

through counterparty more hedges? Just talk about entity is or out else? you holding someone what risk the to trying can hedges BOK of And the wrong within hedge? that these end going figure Are

Stacy Kymes

an are Well, these them a done are of lot exchange. done -- through

credit the is got exchange you've that and counterparties on So the margin small. very risk really hold exchange and post

very who investment with have low some bilaterally. single but grade done with of credit that line are are rated, number hedges high counterparties We

of changes basis price line And settle a to and in the so on there's time. period daily cash the between exchanged credit during that any provided differences

counterparty at much is much, modest with this in than limits what trading the amount very than single were much of different where was it period, there risk at counterparties this credit today. a ‘XX, point but So higher it was there, time use we is done slight most ‘XX of

Operator

you. Thank

your line comes of question. the this proceed Tenner Davidson. D.A. Our morning with final question with Please Gary from

Gary Tenner

a had questions. couple I

retail slide. First million, the us is that areas million include you $XXX impact portfolio about real you of did the maybe about that highlight that tell on slide? Could commercial that COVID-XX estate not you $XXX on on

Steve Bradshaw

that clear CRE Well, retail I’ll I not let of is Stacy be portfolio the retail touch C&I But CRE. is COVID-XX want that to slide part portfolio. our that on in

Gary Tenner

out it’s Yes, of portfolio? and trade the retail

Stacy Kymes

alluded at do I of RAM. at this That's to the we And kind theory times correct, portfolio XX year yes. on positioned, the that that very retail the ‘XX we was debt of rate X.X case is have was that based on What for end well X.XX portfolio. I failed average service to of coverage stress kind in on mention

much that we to look but on be try that look So things normalize and as it it's we will actual portfolio. debt service that kind rates better to like at than of and at

Gary Tenner

is that? wholesale Is other trade billion $X.X segments other you $X or of segment. retail is there piece portfolio, is billion retail since all that from of so the that mentioned retail trade that And the that wholesale

Stacy Kymes

exposure. wholesale side. of amount No, the $XXX be in The million rest is would it the full retail of our the

Gary Tenner

last the was crude where the XX And of still then just trying year levels we energy the one I'm saw in over space more question square , for E&P the dynamics have bankruptcy. growing on to majority ask the and we to of front.

of the relative of this where we're, a obviously, generate as lot brings the $XX, And you forward forward would years, that be next the me that help or a kind year even So couple unhedged producers for the year. with the and per again? the hedge XX to or low that’s commodity weighted average reserve borrowers still producers we the production down last XXs that getting. base would portion in of saw Can price more over portion hedge then square price barrel looking vulnerability seem the the to going if you

Stacy Kymes

you're missing total think I that Yes, the is debt. piece

or accrual, debt able or contemplating we is the there the secured unsecured related they bankruptcies are largely in lending senior increase who can't as the the markets refinance, capital roll or revolver. not out that We've So borrowers denominator in on common debt facility got to the bond is in to much to who issue that expect on the bank is can't bank debt the of would issue repay. because refinance bankruptcy unsecured outside the leave not be or they nearly

to holders process go the And having holder becoming a so those a that. you're around equity to do bond bankruptcy having restructure and that through happens

prevalent think the analysis not probably as that's your link that in it I should is be. as

Operator

for and Thank session. you. to turn question-and-answer floor any I'll Ladies concludes our back gentlemen, that Nell Mr. final comments. the

Steven Nell

joining us you. again today. Thank everyone Thanks for

please me If further Have at call you you day. questions, Thank great email you. have can any us XXX-XXX-XXXX ir@bokf.com. at or a

Operator

and this program. you. Ladies today's gentlemen, Thank concludes

may lines. your And You your you for disconnect thank participation.

BOK Financial (BOKF) 22 Apr 202020 Q1 Earnings call transcript