BOK FINANCIAL CORP (Form: 8-K, Received: 10/21/2020 08:03:40)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

October 21, 2020

Commission File No. 0-19341

BOK FINANCIAL CORP ET AL

(Exact name of registrant as specified in its charter)

Oklahoma

73-1373454

(State or other jurisdiction
of Incorporation or Organization)

(IRS Employer
Identification No.)

Bank of Oklahoma Tower

Boston Avenue at Second Street

Tulsa,

Oklahoma

74192

(Address of Principal Executive Offices)

(Zip Code)

(918) 588-6000

(Registrant’s telephone number, including area code)

N/A

___________________________________________

(Former name or former address, if changes since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

☐ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

INFORMATION TO BE INCLUDED IN THE REPORT

ITEM 2.02. Results of Operations and Financial Condition.

On October 21, 2020, BOK Financial Corporation (“BOK Financial”) issued a press release announcing its financial results for the three and nine months ended September 30, 2020 (“Press Release”). The full text of the Press Release is attached as Exhibit 99(a) to this report and is incorporated herein by reference. On October 21, 2020, in connection with the issuance of the Press Release, BOK Financial released financial information related to the three and nine months ended September 30, 2020 (“Financial Information”), which includes certain historical financial information relating to BOK Financial. The Financial Information is attached as Exhibit 99(b) to this report and is incorporated herein by reference.

ITEM 9.01. Financial Statements and Exhibits.

(a)Exhibits

99 Text of Press Release, dated October 21, 2020, titled "BOK Financial Corporation Reports Record Quarterly Earnings of $154 million or $2.19 Per Share in the Third Quarter" and Financial Information for the Three and Nine Months Ended September 30, 2020.

101 Interactive Data Files.

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

BOK FINANCIAL CORPORATION

By: /s/ Steven E. Nell

Steven E. Nell

Executive Vice President

Chief Financial Officer

Date: October 21, 2020

Exhibit 99(a)

NASD: BOKF

BOK Financial Corporation Reports Record Quarterly Earnings of $154 million or $2.19 Per Share in the Third Quarter


CEO Commentary
"Building off prior quarters, our large percentage of fee-based revenues provided a differentiated earnings outcome compared to many similar-sized financial institutions," said Steven G. Bradshaw, president and chief executive officer. "Both our Wealth Management and Mortgage businesses delivered impressively in a time of compressed net interest margin and unsure credit outcomes across the industry." Bradshaw continued, "Beyond the financial success we've had this quarter, I'm incredibly proud of the impact we've made in our communities. We have increased our charitable investments from the BOKF Foundation and our employees also stepped up their collective volunteer hours to help address needs across our communities. Our top ranking in the 2020 American Banker reputation survey is a testament to the level of leadership and engagement our employees provide in our banking communities. We have earned the reputation as an organization known for unwavering integrity, and that is demonstrated in everything that we do. Whether it's the role we play in our communities or the financial results for our shareholders - it's more about actions than words at BOK Financial."


Third Quarter 2020 Financial Highlights

•Net income was $154.0 million or $2.19 per diluted share for the third quarter of 2020 and $64.7 million or $0.92 per diluted share for the second quarter of 2020. Pre-provision net revenue was $204.6 million for the third quarter of 2020 compared to $215.0 million for the prior quarter. No provision for expected credit losses was necessary in the third quarter, while the second quarter of 2020 included a pre-tax provision for expected credit losses of $135.3 million. Our forecasts of economic conditions have improved since the previous quarter.

•Net interest revenue totaled $271.8 million, a decrease of $6.4 million. Discount accretion on acquired loans totaled $13.3 million in the third quarter of 2020 and $3.3 million in the prior quarter. Net interest margin was 2.81 percent compared to 2.83 percent in the second quarter of 2020. Excluding discount accretion, net interest margin was 2.67 percent compared to 2.80 percent in the prior quarter.

•Fees and commissions revenue totaled $222.9 million, an increase of $9.2 million. Brokerage and trading revenue increased $7.5 million, largely due to an increase trading revenue and customer hedging revenue.

•Operating expense was $301.3 million, an increase of $5.9 million. Personnel expense increased $3.6 million. Incentive compensation increased $5.6 million, largely related to vesting assumptions regarding the Company's earnings per share growth relative to a defined peer group. Non-personnel expense increased $2.3 million compared to the second quarter of 2020. Increases in net losses and expenses on two repossessed properties, professional fees and data processing and communications expense were partially offset by decreases in occupancy and equipment expense and other expenses. In addition, the second quarter of 2020 included a $3.0 million charitable contribution to the BOKF Foundation.

•Changes in the fair value of mortgage servicing rights and related economic hedges added $6.5 million during the third quarter of 2020 and $9.3 million in the prior quarter.

•Period-end loans decreased $353 million to $23.8 billion at September 30, 2020, primarily due to continued paydowns of commercial loans. Average loans were relatively consistent with the second quarter at $24.1 billion.

•The allowance for loan losses totaled $420 million or 1.76 percent of outstanding loans at September 30, 2020. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $448 million or 1.88 percent of outstanding loans at September 30, 2020. Excluding Paycheck Protection Program (PPP) loans, the allowance for loan losses was 1.93 percent of outstanding loans and the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was 2.06 percent. Excluding PPP loans, the allowance for loan losses was $436 million or 1.97 percent of outstanding loans and the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $469 million or 2.12 percent of outstanding loans at June 30, 2020.

•Average deposits increased $2.0 billion to $34.6 billion and period-end deposits increased $1.1 billion to $35.0 billion, largely due to growth in commercial and wealth management balances. Continued deposit growth was due primarily to customers retaining higher balances in the current economic environment.

•The company's common equity Tier 1 capital ratio was 12.07 percent at September 30, 2020. In addition, the company's Tier 1 capital ratio was 12.07 percent, total capital ratio was 14.05 percent, and leverage ratio was 8.39 percent at September 30, 2020. At June 30, 2020, the company's common equity Tier 1 capital ratio was 11.44 percent, Tier 1 capital ratio was 11.44 percent, total capital ratio was 13.43 percent, and leverage ratio was 7.74 percent.

Third Quarter 2020 Business Segment Highlights

•Commercial Banking contributed $75.1 million to net income, a decrease of $5.9 million compared to the second quarter. Net interest revenue increased $4.8 million, including higher discount accretion. Net loans charged off increased $8.8 million. Fees and commissions revenue increased $3.6 million led by increased customer hedging and loan syndication activity. Operating expense increased $3.9 million, largely due to increases in incentive compensation and deposit insurance expense. Net losses and expenses on repossessed assets also increased $4.5 million due to impairment of a set of oil and gas properties and a retail commercial real estate property. Average Commercial Banking loans decreased $585 million due to repayment of defensive draws taken earlier in the year and purposeful deleveraging by our customers. Commercial deposits grew more than 5 percent to $14.6 billion in the third quarter.

•Consumer Banking contributed $26.3 million to net income, a decrease of $5.6 million compared to the second quarter. Net interest revenue decreased $6.1 million, largely due to lower yields on deposits sold to our Funds Management unit and compressed loan spreads. Fees and commissions revenue was largely unchanged compared to the prior quarter. While mortgage production revenue decreased slightly compared to the prior quarter, it was another strong quarter for our mortgage banking business. Low mortgage interest rates continue to result in high volumes and increased margins. Deposit service charges increased in the current quarter as many "stay at home" orders have been lifted and consumer activity starts to return to more normal levels. Changes in the fair value of mortgage servicing rights and related economic hedges provided $6.5 million during the third quarter of 2020 and $9.3 million in the prior quarter.

•Wealth Management contributed $31.2 million to net income, a decrease of $2.2 million compared to the second quarter. This segment produced another record quarter for total revenue. While net interest revenue decreased $3.9 million due to lower yields on deposits sold to our Funds Management unit, fees and commissions grew by $4.9 million. Increases in trading revenue of $3.0 million and other revenue of $2.3 million were partially offset by a decrease in fiduciary and asset management revenue. We continue to maintain an increased trading pipeline to provide greater liquidity to the housing market during this time of low interest rates. Deposit growth remains strong with total average deposits growing $704 million or 8 percent compared to the previous quarter. Assets under management or administration totaled $82.4 billion, up $3.0 billion since June 30.

Net Interest Revenue

Net interest revenue was $271.8 million for the third quarter of 2020, a $6.4 million decrease compared to the second quarter of 2020. Net purchase accounting discount accretion on acquired loans totaled $13.3 million in the third quarter of 2020 and $3.3 million in the second quarter of 2020. Increased accretion was primarily due to early payoffs of acquired loans.

Average earning assets decreased $681 million compared to the second quarter of 2020. Fair value option securities, held as an economic hedge of the changes in fair value of our mortgage servicing rights, decreased $399 million and restricted equity securities decreased $130 million. Residential mortgage loans held for sale decreased $75 million while interest-bearing cash and cash equivalents decreased $67 million. Average loan balances remained largely unchanged. Available for sale securities increased $101 million. Average interest-bearing deposits grew by $1.5 billion, primarily due to interest-bearing transaction deposits. Funds purchased and repurchase agreements decreased $3.0 billion and other borrowings decreased $145 million.

Net interest margin was 2.81 percent compared to 2.83 percent in the second quarter of 2020. Excluding discount accretion on acquired loans, net interest margin was 2.67 percent compared to 2.80 percent in the prior quarter. Recent interest rate cuts continue to compress the net interest margin. While the company has been proactive in reducing deposit costs and implementing LIBOR floors in loan agreements to support the margin, funds received from available for sale securities continue to be reinvested at lower rates.

The yield on average earning assets was 3.04 percent, an 8 basis point decrease from the prior quarter. The yield on the available for sale securities portfolio decreased 18 basis points to 2.11 percent and the loan portfolio yield decreased 3 basis points to 3.60 percent. Excluding loan discount accretion, the yield on average earning assets was 2.91 percent, down 18 basis points and the loan portfolio yield was 3.38 percent, down 20 basis points from the previous quarter. The yield on fair value option securities decreased 8 basis points to 1.92 percent.

Funding costs were 0.31 percent, down 6 basis points. The cost of interest-bearing deposits decreased 8 basis points to 0.26 percent. The cost of other borrowed funds was down 1 basis point to 0.31 percent. The benefit to net interest margin from assets funded by non-interest liabilities was 8 basis points for the third quarter of 2020, consistent with the prior quarter.

Fees and Commissions Revenue

Fees and commissions revenue totaled $222.9 million for the third quarter of 2020, an increase of $9.2 million over the second quarter of 2020, led by continued growth in brokerage and trading revenue.

Brokerage and trading revenue increased $7.5 million to $69.5 million. Trading revenue increased $3.0 million. The low mortgage interest rate environment continues to drive our U.S. agency mortgage-backed securities trading activity. Customer hedging revenue increased $2.4 million as energy customers increased hedging activities in the volatile environment. Investment banking revenue also grew by $1.8 million largely due to loan syndication activity.

Deposit service charges increased $2.2 million compared to the first quarter. As "stay at home" orders have been lifted and customer activity returns to normal, we have seen service charges return to a more normal level as well. Other revenue increased $2.2 million.

Mortgage banking revenue decreased $2.0 million to $52.0 million, primarily due to a reduction of mortgage servicing revenue. During the second quarter of 2020, we completed a sale of mortgage servicing rights on $1.6 billion of unpaid principal balance, primarily related to loans guaranteed by the Veteran's Administration. Mortgage production revenue remained very strong at $38.4 million, decreasing only slightly from the previous quarter.

Fiduciary and asset management revenue decreased $1.3 million compared to the second quarter of 2020, largely due to a decrease from seasonal tax preparation fees earned in the second quarter.

Operating Expense

Total operating expense was $301.3 million for the third quarter of 2020, an increase of $5.9 million compared to the second quarter of 2020.

Personnel expense increased $3.6 million. Stock based incentive compensation increased $5.9 million due to changes related to vesting assumptions regarding the Company's earnings per share growth relative to a defined peer group. Cash based incentive compensation increased $3.1 million, primarily due to increased securities trading activity. Deferred compensation, which is largely offset by a decrease in the value of related investments included in Other gains (losses), decreased $3.5 million. Regular compensation decreased $2.6 million, primarily related to unfilled positions due to attrition.

Non-personnel expense increased $2.3 million over the second quarter of 2020. Net losses and expenses on repossessed assets increased $4.5 million, largely due to write-downs on a set of oil and gas properties and a retail commercial real estate property. Professional fees and services expense increased $1.9 million due mainly to higher legal fees. Data processing and communications expense increased $1.8 million due to continued investment in technology.

Occupancy and equipment expense decreased $2.6 million, primarily related to impairment charges incurred in the second quarter and other expense decreased $1.8 million. We also made a charitable contribution of $3.0 million to the BOKF Foundation in the second quarter.

Income Taxes

The effective tax rate was 24.7 percent for the third quarter of 2020, an increase from 19.7 percent for the second quarter of 2020. An increase in forecasted pre-tax income for 2020 and the completion of 2019 tax returns drove the increase in effective tax rate for the quarter. The effective tax rate excluding these items was 21.7 percent.

Loans, Deposits and Capital

Loans

Outstanding loans were $23.8 billion at September 30, 2020, a $353 million decrease compared to June 30, 2020, primarily due to commercial loan payoffs.

Outstanding core commercial loan balances decreased $593 million or 4 percent compared to June 30, 2020, primarily due to continued pay downs. Although the primary source of repayment of our commercial loan portfolio is the on-going cash flow from operations of the customer's business, loans are generally governed by a borrowing base and secured by the customer’s assets.

Energy loan balances decreased $257 million to $3.7 billion or 16 percent of total loans. The current commodity price environment is continuing to dampen demand for new loans and borrowers are paying down debt to reduce leverage. The majority of this portfolio is first lien, senior secured, reserve-based lending to oil and gas producers, which we believe is the lowest risk form of energy lending. Approximately 67 percent of committed production loans are secured by properties primarily producing oil. The remaining 33 percent is secured by properties primarily producing natural gas. Unfunded energy loan commitments were $2.3 billion at September 30, 2020, a $214 million decrease compared to June 30, 2020, and a $660 million decrease compared to December 31, 2019, largely as a result of the semi-annual borrowing base redetermination process in the second quarter.

Healthcare sector loan balances increased $36 million to $3.3 billion or 14 percent of total loans, primarily due to growth in loans to senior housing and care facilities. Our healthcare sector loans primarily consist of $2.5 billion of senior housing and care facilities, including independent living, assisted living and skilled nursing. Generally we loan to borrowers with a portfolio of multiple facilities that serves to help diversify risks specific to a single facility. The remaining balance is composed of hospitals and other medical service providers impacted by a deferral of elective procedures. The CARES Act does include multiple revenue enhancement measures for both hospitals and skilled nursing facilities as they manage through the risks of the virus.

General business loans decreased $138 million to $3.0 billion or 13 percent of total loans. General business loans include $1.7 billion of wholesale/retail loans and $748 million of loans from other commercial industries. Broad pay downs across our core commercial and industrial loan book contracted the portfolio.

Services loan balances decreased $234 million to $3.5 billion or 15 percent of total loans. Services loans consist of a large number of loans to a variety of businesses, including Native American tribal and state and local municipal government entities, Native American tribal casino operations, educational services, consumer services and commercial services.

Although not a significant portion of our commercial portfolio, our services and general business loans also include areas we consider to be more exposed to the economic slowdown as a result of the social distancing measures in place to combat the COVID-19 pandemic such as entertainment and recreation, retail, hotels, churches, airline travel, and higher education that are dependent on large social gatherings to remain profitable. This represents less than 7 percent of our total portfolio. Some of these borrowers have participated in the PPP, which has provided some measure of relief. We will continue to monitor these areas closely in the coming months.

Commercial real estate loan balances were up $140 million over June 30, 2020 and represent 20 percent of total loans at September 30, 2020. Loans secured by office buildings increased $126 million to $1.1 billion. Loans secured by industrial facilities increased $69 million. Loans secured by other commercial real estate properties decreased $26 million to $507 million. Multifamily residential loans, our largest exposure in commercial real estate, decreased $20 million to $1.4 billion at September 30, 2020. Loans secured by retail facilities were $786 million at September 30, 2020, largely unchanged from the prior quarter. Loans secured by retail facilities and office buildings may be impacted by measures being taken to hinder the spread of the virus as well as changes in consumer behavior.

Loans to individuals increased $85 million, primarily due to an increase in residential mortgage loans guaranteed by U.S. government agencies. The Company may repurchase loans previously sold into GNMA mortgage pools when certain defined delinquency criteria are met. Because of this repurchase right, the Company is deemed to have regained effective control over these loans and must include them on the Consolidated Balance Sheet. Loans to individuals represent 14 percent of total loans at September 30, 2020.

Deposits

Period-end deposits totaled $35.0 billion at September 30, 2020, a $1.1 billion increase over June 30, 2020. Continued deposit growth was due primarily to customers retaining higher balances in the current economic environment. Interest-bearing transaction account balances grew by $1.3 billion. Average deposits were $34.6 billion at September 30, 2020, a $2.0 billion increase compared to June 30, 2020. Interest-bearing transaction deposits increased $1.7 billion.

Capital

The company's common equity Tier 1 capital ratio was 12.07 percent at September 30, 2020. In addition, the company's Tier 1 capital ratio was 12.07 percent, total capital ratio was 14.05 percent, and leverage ratio was 8.39 percent at September 30, 2020. We have elected to delay the regulatory capital impact of the transition of the allowance for credit losses from the incurred loss methodology to CECL for two years, followed by a three-year transition period, which added 29 basis points to the company's common equity tier 1 capital ratio at September 30. At June 30, 2020, the company's common equity Tier 1 capital ratio was 11.44 percent, Tier 1 capital ratio was 11.44 percent, total capital ratio was 13.43 percent, and leverage ratio was 7.74 percent.

The company's tangible common equity ratio, a non-GAAP measure, was 9.02 percent at September 30, 2020 and 8.79 percent at June 30, 2020. The tangible common equity ratio is primarily based on total shareholders' equity, which includes unrealized gains and losses on available for sale securities. The company has elected to exclude unrealized gains and losses from available for sale securities from its calculation of Tier 1 capital for regulatory capital purposes, consistent with the treatment under the previous capital rules.

Credit Quality

The Company adopted FASB Accounting Standard Update No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Assets Measured at Amortized Cost ("CECL") on January 1, 2020. CECL requires recognition of expected credit losses on assets carried at amortized cost over their expected lives. Our CECL models measure the probability of default and loss given default over a 12-month reasonable and supportable forecast period. Models incorporate base case, downside and upside macroeconomic variables such as real gross domestic product ("GDP") growth, civilian unemployment rate and West Texas Intermediate ("WTI") oil prices on a probability weighted basis.

No provision for credit losses was necessary for the third quarter of 2020. A $1.7 million provision related to lending activities was offset by a decrease in the accrual for expected credit losses from mortgage banking activities and allowance for credit losses from investment securities. Changes in our reasonable and supportable forecasts of macroeconomic variables, primarily due to an improved economic outlook related to the anticipated impact of the on-going COVID-19 pandemic, and other assumptions, resulted in a $12.8 million decrease in the provision for credit losses from lending activities. Changes in the loan portfolio characteristics, including specific impairment and losses, loan balances and risk grading resulted in a $14.5 million increase in the provision for credit losses from lending activities.

Our base case reasonable and supportable forecast assumes that the COVID-19 pandemic maintains its current trajectory with localized and state-level hotspots. This scenario assumes approval of a vaccine prior to the end of 2020, with a large share of the U.S. population vaccinated by the end of the third quarter of 2021. After a strong increase in GDP in the third quarter, we expect GDP growth to moderate to rates consistent with historical averages and recovering to pre-COVID levels by the end of 2021. We expect a 4 percent increase in GDP over the next twelve months. Our forecasted civilian unemployment rate is 8.0 percent for the fourth quarter of 2020, improving to 6.9 percent by the third quarter of 2021. WTI oil prices are projected to generally follow the NYMEX forward curve that existed at the end of September 2020, averaging $41.65 per barrel over the next twelve months.

The allowance for loan losses totaled $420 million or 1.76 percent of outstanding loans and 195 percent of non-accruing loans at September 30, 2020, excluding residential mortgage loans guaranteed by U.S. government agencies. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $448 million or 1.88 percent of outstanding loans and 208 percent of non-accruing loans at September 30, 2020. The combined allowance for credit losses attributed to energy was 4.30 percent of outstanding energy loans at September 30. Excluding PPP loans, the allowance for loan losses was 1.93 percent of outstanding loans and the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was 2.06 percent.

At June 30, 2020, the allowance for loan losses was $436 million or 1.80 percent of outstanding loans and 175 percent of non-accruing loans, excluding loans guaranteed by U.S. government agencies. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $469 million or 1.94 percent of outstanding loans and 188 percent of non-accruing loans.

Non-performing assets totaled $417 million or 1.75 percent of outstanding loans and repossessed assets at September 30, 2020, compared to $405 million or 1.68 percent at June 30, 2020. Non-performing assets that are not guaranteed by U.S. government agencies totaled $268 million or 1.25 percent of outstanding loans and repossessed assets at September 30, 2020, down from $285 million or 1.31 percent at June 30, 2020.

Non-accruing loans were $221 million or 1.02 percent of outstanding loans, excluding PPP loans, at September 30, 2020. Non-accruing commercial loans totaled $170 million or 1.25 percent of outstanding commercial loans. Non-accruing commercial real estate loans totaled $13 million or 0.28 percent of outstanding commercial real estate loans. Non-accruing loans to individuals totaled $38 million or 1.11 percent of outstanding loans to individuals.

Non-accruing loans decreased $34 million compared to June 30, 2020, primarily due to a $36 million decrease in non-accruing energy loans. New non-accruing loans identified in the third quarter totaled $45 million, offset by $30 million in payments received, $27 million in charge-offs and $23 million of foreclosures.

Potential problem loans, which are defined as performing loans that, based on known information, cause management concern as to the borrowers' ability to continue to perform, totaled $623 million at September 30, compared to $626 million at June 30. A decrease in potential problem energy loans was partially offset by an increase in general business loans and commercial real estate loans.

Net charge-offs were $22.4 million or 0.41 percent of average loans on an annualized basis for the third quarter of 2020, excluding PPP loans. Net charge-offs were 0.30 percent of average loans over the last four quarters. Net charge-offs were $14.1 million or 0.25 percent of average loans on an annualized basis for the second quarter of 2020, excluding PPP loans. Gross charge-offs were $26.7 million for the third quarter compared to $15.6 million for the previous quarter. Recoveries totaled $4.2 million for the third quarter of 2020 and $1.5 million for the second quarter of 2020.

Loans in deferral status have dropped to just over 1 percent of total loans from a peak of more than 7 percent. More than 80 percent of the loans that were deferred have now moved back to payment status. Of the loans that remain in deferral, approximately half are in the Commercial Real Estate portfolio.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $12.8 billion at September 30, 2020, a $341 million increase compared to June 30, 2020. At September 30, 2020, the available for sale securities portfolio consisted primarily of $9.4 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $3.3 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. At September 30, 2020, the available for sale securities portfolio had a net unrealized gain of $481 million compared to $487 million at June 30, 2020.

The company also maintains a portfolio of residential mortgage-backed securities issued by U.S. government agencies and interest rate derivative contracts as an economic hedge of the changes in the fair value of our mortgage servicing rights. This portfolio of fair value option securities decreased $588 million to $135 million at September 30, 2020.

The net economic benefit of the changes in the fair value of mortgage servicing rights and related economic hedges was $6.5 million during the third quarter of 2020, including a $3.4 million increase in the fair value of mortgage servicing rights, $1.5 million increase in the fair value of securities and derivative contracts held as an economic hedge, and $1.6 million of related net interest revenue.

Conference Call and Webcast

The company will hold a conference call at 9 a.m. Central time on October 21, 2020 to discuss the financial results with investors. The live audio webcast and presentation slides will be available on the company’s website at www.bokf.com. The conference call can also be accessed by dialing 1-201-689-8471. A conference call and webcast replay will also be available shortly after conclusion of the live call at www.bokf.com or by dialing 1-412-317-6671 and referencing conference ID # 13711391.

About BOK Financial Corporation

BOK Financial Corporation is a $46 billion regional financial services company headquartered in Tulsa, Oklahoma with $82 billion in assets under management and administration. The company's stock is publicly traded on NASDAQ under the Global Select market listings (BOKF). BOK Financial Corporation's holdings include BOKF, NA; BOK Financial Securities, Inc., BOK Financial Private Wealth, Inc. and BOK Financial Insurance, Inc. BOKF, NA operates TransFund, Cavanal Hill Investment Management and BOK Financial Asset Management, Inc. BOKF, NA operates banking divisions across eight states as: Bank of Albuquerque; Bank of Oklahoma; Bank of Texas; and BOK Financial in Arizona, Arkansas, Colorado, Kansas and Missouri; as well as having limited purpose offices in Nebraska, Milwaukee and Connecticut. Through its subsidiaries, BOK Financial Corporation provides commercial and consumer banking, brokerage trading, investment, trust and insurance services, mortgage origination and servicing, and an electronic funds transfer network. For more information, visit www.bokf.com.

The company will continue to evaluate critical assumptions and estimates, such as the appropriateness of the allowance for credit losses and asset impairment as of September 30, 2020 through the date its financial statements are filed with the Securities and Exchange Commission and will adjust amounts reported if necessary.

This news release contains forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about BOK Financial Corporation, the financial services industry, the economy generally and the expected or potential impact of the novel coronavirus (COVID-19) pandemic, and the related responses of the government, consumers, and others, on our business, financial condition and results of operations. Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “plans,” “projects,” “will,” “intends,” variations of such words and similar expressions are intended to identify such forward-looking statements. Management judgments relating to and discussion of the provision and allowance for credit losses, allowance for uncertain tax positions, accruals for loss contingencies and valuation of mortgage servicing rights involve judgments as to expected events and are inherently forward-looking statements. Assessments that acquisitions and growth endeavors will be profitable are necessary statements of belief as to the outcome of future events based in part on information provided by others which BOK Financial has not independently verified. These various forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions which are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what is expected, implied or forecasted in such forward-looking statements. Internal and external factors that might cause such a difference include, but are not limited to changes in government, consumer or business responses to, and ability to treat or prevent further outbreak of the COVID-19 pandemic, changes in commodity prices, interest rates and interest rate relationships, inflation, demand for products and services, the degree of competition by traditional and nontraditional competitors, changes in banking regulations, tax laws, prices, levies and assessments, the impact of technological advances, and trends in customer behavior as well as their ability to repay loans. BOK Financial Corporation and its affiliates undertake no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events, or otherwise.

Exhibit 99(b)

BALANCE SHEETS -- UNAUDITED

BOK FINANCIAL CORPORATION

(In thousands)


	Sept. 30, 2020		June 30, 2020
ASSETS
Cash and due from banks	$	658,612	$	762,453
Interest-bearing cash and cash equivalents	347,759		485,319
Trading securities	2,245,480		1,196,105
Investment securities, net of allowance	256,001		267,988
Available for sale securities	12,817,269		12,475,919
Fair value option securities	134,756		722,657
Restricted equity securities	111,656		125,683
Residential mortgage loans held for sale	295,290		319,357
Loans:
Commercial	13,565,706		14,158,510
Commercial real estate	4,693,700		4,554,144
Paycheck protection program	2,097,325		2,081,428
Loans to individuals	3,446,569		3,361,808
Total loans	23,803,300		24,155,890
Allowance for loan losses	(419,777)		(435,597)
Loans, net of allowance	23,383,523		23,720,293
Premises and equipment, net	542,625		550,230
Receivables	245,514		226,934
Goodwill	1,048,091		1,048,091
Intangible assets, net	118,524		123,595
Mortgage servicing rights	97,644		97,971
Real estate and other repossessed assets, net	52,847		35,330
Derivative contracts, net	593,568		651,553
Cash surrender value of bank-owned life insurance	396,497		393,741
Receivable on unsettled securities sales	1,934,495		1,863,719
Other assets	787,073		752,936
TOTAL ASSETS	$	46,067,224	$	45,819,874

LIABILITIES AND EQUITY
Deposits:
Demand	$	12,047,338	$	11,992,165
Interest-bearing transaction	20,196,740		18,850,418
Savings	720,949		696,971
Time	2,007,973		2,352,760
Total deposits	34,973,000		33,892,314
Funds purchased and repurchase agreements	973,652		1,357,602
Other borrowings	2,771,429		3,173,563
Subordinated debentures	275,986		275,973
Accrued interest, taxes and expense	335,914		365,634
Due on unsettled securities purchases	641,817		599,510
Derivative contracts, net	446,328		610,020
Other liabilities	422,989		440,835
TOTAL LIABILITIES	40,841,115		40,715,451
Shareholders' equity:
Capital, surplus and retained earnings	4,853,617		4,726,679
Accumulated other comprehensive gain	365,170		370,316
TOTAL SHAREHOLDERS' EQUITY	5,218,787		5,096,995
Non-controlling interests	7,322		7,428
TOTAL EQUITY	5,226,109		5,104,423
TOTAL LIABILITIES AND EQUITY	$	46,067,224	$	45,819,874

AVERAGE BALANCE SHEETS -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands)


	Three Months Ended
	Sept. 30, 2020		June 30, 2020		Mar. 31, 2020		Dec. 31, 2019		Sept. 30, 2019
ASSETS
Interest-bearing cash and cash equivalents	$	553,070	$	619,737	$	721,659	$	573,203	$	500,823
Trading securities	1,834,160		1,871,647		1,690,104		1,672,426		1,696,568
Investment securities, net of allowance	258,965		268,947		282,265		298,567		308,090
Available for sale securities	12,580,850		12,480,065		11,664,521		11,333,524		10,747,439
Fair value option securities	387,784		786,757		1,793,480		1,521,528		1,553,879
Restricted equity securities	144,415		273,922		429,133		479,687		476,781
Residential mortgage loans held for sale	213,125		288,588		129,708		203,535		203,319
Loans:
Commercial	13,772,217		14,502,652		14,452,851		14,344,534		14,507,185
Commercial real estate	4,754,269		4,543,511		4,346,886		4,532,649		4,652,534
Paycheck protection program	2,092,933		1,699,369		—		—		—
Loans to individuals	3,491,044		3,353,960		3,143,286		3,358,817		3,253,199
Total loans	24,110,463		24,099,492		21,943,023		22,236,000		22,412,918
Allowance for loan losses	(441,831)		(367,583)		(250,338)		(205,417)		(201,714)
Loans, net of allowance	23,668,632		23,731,909		21,692,685		22,030,583		22,211,204
Total earning assets	39,641,001		40,321,572		38,403,555		38,113,053		37,698,103
Cash and due from banks	723,826		678,878		669,369		690,806		717,338
Derivative contracts, net	581,839		642,969		376,621		311,542		331,834
Cash surrender value of bank-owned life insurance	394,680		391,951		390,009		388,012		385,190
Receivable on unsettled securities sales	4,563,301		4,626,307		3,046,111		1,973,604		1,742,794
Other assets	3,027,108		3,095,354		2,834,953		2,736,337		2,705,089
TOTAL ASSETS	$	48,931,755	$	49,757,031	$	45,720,618	$	44,213,354	$	43,580,348

LIABILITIES AND EQUITY
Deposits:
Demand	$	11,929,694	$	11,489,322	$	9,232,859	$	9,612,533	$	9,759,710
Interest-bearing transaction	19,752,106		18,040,170		16,159,654		14,685,385		13,131,542
Savings	707,121		656,669		563,821		554,605		557,122
Time	2,251,012		2,464,793		2,239,234		2,247,717		2,251,800
Total deposits	34,639,933		32,650,954		28,195,568		27,100,240		25,700,174
Funds purchased and repurchase agreements	2,782,150		5,816,484		3,815,941		4,120,610		3,106,163
Other borrowings	3,382,688		3,527,303		6,542,325		6,247,194		8,125,023
Subordinated debentures	275,980		275,949		275,932		275,916		275,900
Derivative contracts, net	458,390		836,667		379,342		276,078		300,051
Due on unsettled securities purchases	1,516,880		887,973		960,780		784,174		745,893
Other liabilities	712,674		690,087		642,764		561,654		547,144
TOTAL LIABILITIES	43,768,695		44,685,417		40,812,652		39,365,866		38,800,348
Total equity	5,163,060		5,071,614		4,907,966		4,847,488		4,780,000
TOTAL LIABILITIES AND EQUITY	$	48,931,755	$	49,757,031	$	45,720,618	$	44,213,354	$	43,580,348

STATEMENTS OF EARNINGS -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands, except per share data)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2020		2019		2020		2019

Interest revenue	$	294,659	$	395,207	$	949,980	$	1,162,101
Interest expense	22,909		116,111		138,766		319,471
Net interest revenue	271,750		279,096		811,214		842,630
Provision for credit losses	—		12,000		229,092		25,000
Net interest revenue after provision for credit losses	271,750		267,096		582,122		817,630
Other operating revenue:
Brokerage and trading revenue	69,526		43,840		182,327		115,983
Transaction card revenue	23,465		22,015		68,286		64,668
Fiduciary and asset management revenue	39,931		43,621		125,646		132,004
Deposit service charges and fees	24,286		28,837		72,462		85,154
Mortgage banking revenue	51,959		30,180		143,062		82,145
Other revenue	13,698		17,626		37,486		42,825
Total fees and commissions	222,865		186,119		629,269		522,779
Other gains, net	6,265		4,544		2,292		11,000
Gain on derivatives, net	2,354		3,778		42,659		19,595
Gain (loss) on fair value option securities, net	(754)		4,597		53,180		24,115
Change in fair value of mortgage servicing rights	3,441		(12,593)		(85,800)		(62,814)
Gain (loss) on available for sale securities, net	(12)		5		5,571		1,110



Total other operating revenue	234,159		186,450		647,171		515,785
Other operating expense:
Personnel	179,860		162,573		512,276		492,143
Business promotion	2,633		8,859		10,783		26,875
Charitable contributions to BOKF Foundation	—		—		3,000		1,000
Professional fees and services	14,074		12,312		39,183		41,453
Net occupancy and equipment	28,111		27,558		84,847		83,959
Insurance	5,848		4,220		15,984		15,513
Data processing and communications	34,751		31,915		100,436		93,099
Printing, postage and supplies	3,482		3,825		11,256		12,817
Net losses and operating expenses of repossessed assets	6,244		1,728		9,541		4,304
Amortization of intangible assets	5,071		5,064		15,355		15,393
Mortgage banking costs	15,803		14,975		41,946		36,426

Other expense	5,388		6,263		20,669		20,604
Total other operating expense	301,265		279,292		865,276		843,586

Net income before taxes	204,644		174,254		364,017		489,829
Federal and state income taxes	50,552		32,396		83,655		99,926

Net income	154,092		141,858		280,362		389,903
Net income (loss) attributable to non-controlling interests	58		(373)		(444)		(503)
Net income attributable to BOK Financial Corporation shareholders	$	154,034	$	142,231	$	280,806	$	390,406

Average shares outstanding:
Basic	69,877,866		70,596,307		69,958,944		70,953,544
Diluted	69,879,290		70,609,924		69,962,053		70,968,845

Net income per share:
Basic	$	2.19	$	2.00	$	3.99	$	5.47
Diluted	$	2.19	$	2.00	$	3.99	$	5.47

FINANCIAL HIGHLIGHTS -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands, except ratio and share data)


	Three Months Ended
	Sept. 30, 2020			June 30, 2020			Mar. 31, 2020			Dec. 31, 2019			Sept. 30, 2019
Capital:
Period-end shareholders' equity	$	5,218,787		$	5,096,995		$	5,026,248		$	4,855,795		$	4,829,016
Risk weighted assets	$	31,529,826		$	32,180,602		$	32,973,242		$	31,673,425		$	32,159,139
Risk-based capital ratios:
Common equity tier 1	12.07		%	11.44		%	10.98		%	11.39		%	11.06		%
Tier 1	12.07		%	11.44		%	10.98		%	11.39		%	11.06		%
Total capital	14.05		%	13.43		%	12.65		%	12.94		%	12.56		%
Leverage ratio	8.39		%	7.74		%	8.15		%	8.40		%	8.41		%
Tangible common equity ratio¹	9.02		%	8.79		%	8.39		%	8.98		%	8.72		%

Common stock:
Book value per share	$	74.23		$	72.50		$	71.49		$	68.80		$	68.15
Tangible book value per share	57.64			55.83			54.85			52.17			51.60
Market value per share:
High	$	62.86		$	67.62		$	87.40		$	88.28		$	84.35
Low	$	48.41		$	37.80		$	34.57		$	71.85		$	72.96
Cash dividends paid	$	35,799		$	35,769		$	35,949		$	36,011		$	35,472
Dividend payout ratio	23.24		%	55.29		%	57.91		%	32.63		%	24.94		%
Shares outstanding, net	70,305,833			70,306,690			70,308,532			70,579,598			70,858,010
Stock buy-back program:
Shares repurchased	—			—			442,000			280,000			336,713
Amount	$	—		$	—		$	33,380		$	22,844		$	25,937
Average price per share	$	—		$	—		$	75.52		$	81.59		$	77.03

Performance ratios (quarter annualized):
Return on average assets	1.25		%	0.52		%	0.55		%	0.99		%	1.29		%
Return on average equity	11.89		%	5.14		%	5.10		%	9.05		%	11.83		%
Net interest margin	2.81		%	2.83		%	2.80		%	2.88		%	3.01		%
Efficiency ratio	60.41		%	59.57		%	58.62		%	63.65		%	59.31		%

Reconciliation of non-GAAP measures:
¹ Tangible common equity ratio:
Total shareholders' equity	$	5,218,787		$	5,096,995		$	5,026,248		$	4,855,795		$	4,829,016
Less: Goodwill and intangible assets, net	1,166,615			1,171,686			1,169,898			1,173,362			1,172,411
Tangible common equity	$	4,052,172		$	3,925,309		$	3,856,350		$	3,682,433		$	3,656,605

Total assets	$	46,067,224		$	45,819,874		$	47,119,162		$	42,172,021		$	43,127,205
Less: Goodwill and intangible assets, net	1,166,615			1,171,686			1,169,898			1,173,362			1,172,411
Tangible assets	$	44,900,609		$	44,648,188		$	45,949,264		$	40,998,659		$	41,954,794

Tangible common equity ratio	9.02		%	8.79		%	8.39		%	8.98		%	8.72		%


	Three Months Ended
	Sept. 30, 2020			June 30, 2020			Mar. 31, 2020			Dec. 31, 2019			Sept. 30, 2019
Pre-provision net revenue:
Net income before taxes	$	204,644		$	80,089		$	79,284		$	141,039		$	174,254
Provision for expected credit losses	—			135,321			93,771			19,000			12,000
Net income (loss) attributable to non-controlling interests	58			(407)			(95)			430			(373)
Pre-provision net revenue	$	204,586		$	215,817		$	173,150		$	159,609		$	186,627

Other data:
Tax equivalent interest	$	2,457		$	2,630		$	2,715		$	2,726		$	2,936
Net unrealized gain (loss) on available for sale securities	$	480,563		$	487,334		$	435,989		$	138,149		$	178,060

Mortgage banking:
Mortgage production revenue	$	38,431		$	39,185		$	21,570		$	9,169		$	13,814

Mortgage loans funded for sale	$	1,032,472		$	1,184,249		$	548,956		$	855,643		$	877,280
Add: current period-end outstanding commitments	560,493			546,304			657,570			158,460			379,377
Less: prior period end outstanding commitments	546,304			657,570			158,460			379,377			344,087
Total mortgage production volume	$	1,046,661		$	1,072,983		$	1,048,066		$	634,726		$	912,570

Mortgage loan refinances to mortgage loans funded for sale	54		%	71		%	57		%	57		%	56		%
Gain on sale margin	3.67		%	3.65		%	2.06		%	1.44		%	1.51		%

Mortgage servicing revenue	$	13,528		$	14,751		$	15,597		$	16,227		$	16,366
Average outstanding principal balance of mortgage loans serviced for others	17,434,215			19,319,872			20,416,546			20,856,446			21,172,874
Average mortgage servicing revenue rates	0.31		%	0.31		%	0.31		%	0.31		%	0.31		%

Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net	$	2,295		$	21,815		$	18,371		$	(4,714)		$	3,742
Gain (loss) on fair value option securities, net	(754)			(14,459)			68,393			(8,328)			4,597
Gain (loss) on economic hedge of mortgage servicing rights	1,541			7,356			86,764			(13,042)			8,339
Gain (loss) on changes in fair value of mortgage servicing rights	3,441			(761)			(88,480)			9,297			(12,593)
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue	4,982			6,595			(1,716)			(3,745)			(4,254)
Net interest revenue on fair value option securities²	1,565			2,702			4,268			1,544			1,245
Total economic benefit (cost) of changes in the fair value of mortgage servicing rights, net of economic hedges	$	6,547		$	9,297		$	2,552		$	(2,201)		$	(3,009)

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

QUARTERLY EARNINGS TREND -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands, except ratio and per share data)


	Three Months Ended
	Sept. 30, 2020		June 30, 2020		Mar. 31, 2020		Dec. 31, 2019		Sept. 30, 2019

Interest revenue	$	294,659	$	306,384	$	348,937	$	369,857	$	395,207
Interest expense	22,909		28,280		87,577		99,608		116,111
Net interest revenue	271,750		278,104		261,360		270,249		279,096
Provision for credit losses	—		135,321		93,771		19,000		12,000
Net interest revenue after provision for credit losses	271,750		142,783		167,589		251,249		267,096
Other operating revenue:
Brokerage and trading revenue	69,526		62,022		50,779		43,843		43,840
Transaction card revenue	23,465		22,940		21,881		22,548		22,015
Fiduciary and asset management revenue	39,931		41,257		44,458		45,021		43,621
Deposit service charges and fees	24,286		22,046		26,130		27,331		28,837
Mortgage banking revenue	51,959		53,936		37,167		25,396		30,180
Other revenue	13,698		11,479		12,309		15,283		17,626
Total fees and commissions	222,865		213,680		192,724		179,422		186,119
Other gains (losses), net	6,265		6,768		(10,741)		(1,649)		4,544
Gain (loss) on derivatives, net	2,354		21,885		18,420		(4,644)		3,778
Gain (loss) on fair value option securities, net	(754)		(14,459)		68,393		(8,328)		4,597
Change in fair value of mortgage servicing rights	3,441		(761)		(88,480)		9,297		(12,593)
Gain (loss) on available for sale securities, net	(12)		5,580		3		4,487		5



Total other operating revenue	234,159		232,693		180,319		178,585		186,450
Other operating expense:
Personnel	179,860		176,235		156,181		168,422		162,573
Business promotion	2,633		1,935		6,215		8,787		8,859
Charitable contributions to BOKF Foundation	—		3,000		—		2,000		—
Professional fees and services	14,074		12,161		12,948		13,408		12,312
Net occupancy and equipment	28,111		30,675		26,061		26,316		27,558
Insurance	5,848		5,156		4,980		5,393		4,220
Data processing and communications	34,751		32,942		32,743		31,884		31,915
Printing, postage and supplies	3,482		3,502		4,272		3,700		3,825
Net losses and operating expenses of repossessed assets	6,244		1,766		1,531		2,403		1,728
Amortization of intangible assets	5,071		5,190		5,094		5,225		5,064
Mortgage banking costs	15,803		15,598		10,545		14,259		14,975

Other expense	5,388		7,227		8,054		6,998		6,263
Total other operating expense	301,265		295,387		268,624		288,795		279,292
Net income before taxes	204,644		80,089		79,284		141,039		174,254
Federal and state income taxes	50,552		15,803		17,300		30,257		32,396
Net income	154,092		64,286		61,984		110,782		141,858
Net income (loss) attributable to non-controlling interests	58		(407)		(95)		430		(373)
Net income attributable to BOK Financial Corporation shareholders	$	154,034	$	64,693	$	62,079	$	110,352	$	142,231

Average shares outstanding:
Basic	69,877,866		69,876,043		70,123,685		70,295,899		70,596,307
Diluted	69,879,290		69,877,467		70,130,166		70,309,644		70,609,924
Net income per share:
Basic	$	2.19	$	0.92	$	0.88	$	1.56	$	2.00
Diluted	$	2.19	$	0.92	$	0.88	$	1.56	$	2.00

LOANS TREND -- UNAUDITED

BOK FINANCIAL CORPORATION

(In thousands)


	Sept. 30, 2020		June 30, 2020		Mar. 31, 2020		Dec. 31, 2019		Sept. 30, 2019
Commercial:
Energy	$	3,717,101	$	3,974,174	$	4,111,676	$	3,973,377	$	4,114,269
Services	3,545,825		3,779,881		3,955,748		3,832,031		4,011,089
Healthcare	3,325,790		3,289,343		3,165,096		3,033,916		3,032,968
General business	2,976,990		3,115,112		3,563,455		3,192,326		3,266,299
Total commercial	13,565,706		14,158,510		14,795,975		14,031,650		14,424,625

Commercial real estate:
Multifamily	1,387,461		1,407,107		1,282,457		1,265,562		1,324,839
Office	1,099,563		973,995		962,004		928,379		1,014,275
Retail	786,211		780,467		774,198		775,521		799,169
Industrial	792,389		723,005		728,026		856,117		873,536
Residential construction and land development	121,258		136,911		138,958		150,879		135,361
Other commercial real estate	506,818		532,659		564,442		457,325		478,877
Total commercial real estate	4,693,700		4,554,144		4,450,085		4,433,783		4,626,057

Paycheck protection program	2,097,325		2,081,428		—		—		—

Loans to individuals:
Residential mortgage	1,849,144		1,813,442		1,844,555		1,886,378		1,925,539
Residential mortgages guaranteed by U.S. government agencies	384,247		322,269		197,889		197,794		191,764
Personal	1,213,178		1,226,097		1,175,466		1,201,382		1,117,382
Total loans to individuals	3,446,569		3,361,808		3,217,910		3,285,554		3,234,685

Total	$	23,803,300	$	24,155,890	$	22,463,970	$	21,750,987	$	22,285,367

LOANS MANAGED BY PRINCIPAL MARKET AREA -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands)


	Sept. 30, 2020		June 30, 2020		Mar. 31, 2020		Dec. 31, 2019		Sept. 30, 2019

Texas:
Commercial	$	5,545,158	$	5,771,691	$	6,350,690	$	6,174,894	$	6,220,227
Commercial real estate	1,499,630		1,389,547		1,296,266		1,259,117		1,292,116
Paycheck protection program	614,970		612,133		—		—		—
Loans to individuals	792,994		748,474		756,634		727,175		749,361
Total Texas	8,452,752		8,521,845		8,403,590		8,161,186		8,261,704

Oklahoma:
Commercial	4,901,666		5,086,934		3,886,086		3,454,825		3,690,100
Commercial real estate	647,228		636,021		593,473		631,026		679,786
Paycheck protection program	487,247		442,518		—		—		—
Loans to individuals	2,036,452		1,967,665		1,788,518		1,854,864		1,753,698
Total Oklahoma	8,072,593		8,133,138		6,268,077		5,940,715		6,123,584

Colorado:
Commercial	1,501,821		1,600,382		2,181,309		2,169,598		2,247,798
Commercial real estate	890,746		937,742		955,608		927,826		975,066
Paycheck protection program	494,910		488,279		—		—		—
Loans to individuals	257,345		264,872		268,674		276,939		303,605
Total Colorado	3,144,822		3,291,275		3,405,591		3,374,363		3,526,469

Arizona:
Commercial	956,047		1,036,862		1,396,582		1,307,073		1,276,534
Commercial real estate	692,987		689,121		714,161		728,832		771,425
Paycheck protection program	272,114		318,961		—		—		—
Loans to individuals	166,115		177,066		181,821		186,539		170,815
Total Arizona	2,087,263		2,222,010		2,292,564		2,222,444		2,218,774

Kansas/Missouri:
Commercial	414,038		404,860		556,255		527,872		566,969
Commercial real estate	352,241		314,504		310,799		322,541		374,795
Paycheck protection program	80,230		76,724		—		—		—
Loans to individuals	96,358		102,577		116,734		131,069		146,522
Total Kansas/Missouri	942,867		898,665		983,788		981,482		1,088,286

New Mexico:
Commercial	157,322		182,688		327,164		305,320		335,409
Commercial real estate	471,505		455,574		434,150		402,148		374,331
Paycheck protection program	133,244		128,058		—		—		—
Loans to individuals	79,890		83,470		87,110		90,257		92,270
Total New Mexico	841,961		849,790		848,424		797,725		802,010

Arkansas:
Commercial	89,654		75,093		97,889		92,068		87,588
Commercial real estate	139,363		131,635		145,628		162,293		158,538
Paycheck protection program	14,610		14,755		—		—		—
Loans to individuals	17,415		17,684		18,419		18,711		18,414
Total Arkansas	261,042		239,167		261,936		273,072		264,540

TOTAL BOK FINANCIAL	$	23,803,300	$	24,155,890	$	22,463,970	$	21,750,987	$	22,285,367

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

DEPOSITS BY PRINCIPAL MARKET AREA -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands)


	Sept. 30, 2020		June 30, 2020		Mar. 31, 2020		Dec. 31, 2019		Sept. 30, 2019
Oklahoma:
Demand	$	4,493,691	$	4,378,559	$	3,669,558	$	3,257,337	$	3,515,312
Interest-bearing:
Transaction	12,586,401		11,438,489		9,955,697		8,574,912		7,447,799
Savings	401,062		387,557		329,631		306,194		308,103
Time	1,081,176		1,330,619		1,137,802		1,125,446		1,198,170
Total interest-bearing	14,068,639		13,156,665		11,423,130		10,006,552		8,954,072
Total Oklahoma	18,562,330		17,535,224		15,092,688		13,263,889		12,469,384

Texas:
Demand	3,152,393		3,070,955		2,767,399		2,757,376		2,867,915
Interest-bearing:
Transaction	3,482,603		3,358,090		2,874,362		2,911,731		2,589,063
Savings	136,787		128,892		115,039		102,456		100,597
Time	438,337		476,867		505,565		495,343		464,264
Total interest-bearing	4,057,727		3,963,849		3,494,966		3,509,530		3,153,924
Total Texas	7,210,120		7,034,804		6,262,365		6,266,906		6,021,839

Colorado:
Demand	2,057,603		2,096,075		1,579,764		1,729,674		1,694,044
Interest-bearing:
Transaction	1,861,763		1,816,604		1,759,384		1,769,037		1,910,874
Savings	68,230		67,477		58,000		53,307		60,107
Time	226,780		254,845		279,105		283,517		273,622
Total interest-bearing	2,156,773		2,138,926		2,096,489		2,105,861		2,244,603
Total Colorado	4,214,376		4,235,001		3,676,253		3,835,535		3,938,647

New Mexico:
Demand	964,908		965,877		750,052		623,722		645,698
Interest-bearing:
Transaction	713,418		752,565		563,891		558,493		539,260
Savings	85,463		80,242		67,553		63,999		62,863
Time	200,525		222,370		235,778		238,140		236,135
Total interest-bearing	999,406		1,055,177		867,222		860,632		838,258
Total New Mexico	1,964,314		2,021,054		1,617,274		1,484,354		1,483,956

Arizona:
Demand	928,671		985,757		665,396		681,268		705,895
Interest-bearing:
Transaction	771,319		780,500		729,603		684,929		600,103
Savings	11,498		15,669		8,832		10,314		12,487
Time	36,929		42,318		47,081		49,676		44,347
Total interest-bearing	819,746		838,487		785,516		744,919		656,937
Total Arizona	1,748,417		1,824,244		1,450,912		1,426,187		1,362,832


	Sept. 30, 2020		June 30, 2020		Mar. 31, 2020		Dec. 31, 2019		Sept. 30, 2019
Kansas/Missouri:
Demand	405,360		427,795		318,985		384,533		376,020
Interest-bearing:
Transaction	616,797		526,635		537,552		784,574		284,940
Savings	15,520		15,033		12,888		12,169		11,689
Time	16,430		17,746		19,137		17,877		19,126
Total interest-bearing	648,747		559,414		569,577		814,620		315,755
Total Kansas/Missouri	1,054,107		987,209		888,562		1,199,153		691,775

Arkansas:
Demand	44,712		67,147		70,428		27,381		39,513
Interest-bearing:
Transaction	164,439		177,535		175,803		108,076		149,506
Savings	2,389		2,101		1,862		1,837		1,747
Time	7,796		7,995		8,005		7,850		7,877
Total interest-bearing	174,624		187,631		185,670		117,763		159,130
Total Arkansas	219,336		254,778		256,098		145,144		198,643

TOTAL BOK FINANCIAL	$	34,973,000	$	33,892,314	$	29,244,152	$	27,621,168	$	26,167,076

NET INTEREST MARGIN TREND -- UNAUDITED

BOK FINANCIAL CORPORATION


	Three Months Ended
	Sept. 30, 2020		June 30, 2020		Mar. 31, 2020		Dec. 31, 2019		Sept. 30, 2019

TAX-EQUIVALENT ASSETS YIELDS
Interest-bearing cash and cash equivalents	0.12	%	0.07	%	1.33	%	1.62	%	2.42	%
Trading securities	1.92	%	2.46	%	2.89	%	3.19	%	3.49	%



Investment securities, net of allowance	4.85	%	4.77	%	4.73	%	4.69	%	4.46	%



Available for sale securities	2.11	%	2.29	%	2.48	%	2.52	%	2.60	%
Fair value option securities	1.92	%	2.00	%	2.67	%	2.62	%	2.79	%
Restricted equity securities	2.53	%	2.75	%	5.49	%	5.37	%	6.34	%
Residential mortgage loans held for sale	3.01	%	3.10	%	3.50	%	3.55	%	3.73	%
Loans	3.60	%	3.63	%	4.50	%	4.75	%	5.12	%
Allowance for loan losses
Loans, net of allowance	3.67	%	3.69	%	4.55	%	4.80	%	5.17	%
Total tax-equivalent yield on earning assets	3.04	%	3.12	%	3.73	%	3.93	%	4.25	%

COST OF INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest-bearing transaction	0.17	%	0.21	%	0.89	%	1.00	%	1.08	%
Savings	0.05	%	0.05	%	0.09	%	0.11	%	0.14	%
Time	1.13	%	1.36	%	1.83	%	1.94	%	1.94	%
Total interest-bearing deposits	0.26	%	0.34	%	0.98	%	1.09	%	1.17	%
Funds purchased and repurchase agreements	0.17	%	0.14	%	1.14	%	1.56	%	2.01	%
Other borrowings	0.43	%	0.56	%	1.66	%	2.01	%	2.42	%
Subordinated debt	4.89	%	5.16	%	5.30	%	5.40	%	5.48	%
Total cost of interest-bearing liabilities	0.31	%	0.37	%	1.19	%	1.40	%	1.68	%
Tax-equivalent net interest revenue spread	2.73	%	2.75	%	2.54	%	2.53	%	2.57	%
Effect of noninterest-bearing funding sources and other	0.08	%	0.08	%	0.26	%	0.35	%	0.44	%
Tax-equivalent net interest margin	2.81	%	2.83	%	2.80	%	2.88	%	3.01	%

Yield calculations are shown on a tax equivalent basis at the statutory federal and state rates for the periods presented. The yield calculations exclude security trades that have been recorded on trade date with no corresponding interest income and the unrealized gains and losses. The yield calculation also includes average loan balances for which the accrual of interest has been discontinued and are net of unearned income. Yield/rate calculations are generally based on the conventions that determine how interest income and expense is accrued.

CREDIT QUALITY INDICATORS -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands, except ratios)


	Three Months Ended
	Sept. 30, 2020		June 30, 2020		Mar. 31, 2020		Dec. 31, 2019		Sept. 30, 2019
Nonperforming assets:
Nonaccruing loans:
Commercial:
Energy	$	126,816	$	162,989	$	96,448	$	91,722	$	88,894
Healthcare	3,645		3,645		4,070		4,480		5,978
Services	25,817		21,032		8,425		7,483		6,119
General business	13,675		14,333		9,681		11,731		10,715
Total commercial	169,953		201,999		118,624		115,416		111,706

Commercial real estate	12,952		13,956		8,545		27,626		23,185

Loans to individuals:
Permanent mortgage	31,599		33,098		30,721		31,522		30,972
Permanent mortgage guaranteed by U.S. government agencies	6,397		6,110		5,005		6,100		6,332
Personal	252		233		277		287		271
Total loans to individuals	38,248		39,441		36,003		37,909		37,575

Total nonaccruing loans	$	221,153	$	255,396	$	163,172	$	180,951	$	172,466
Accruing renegotiated loans guaranteed by U.S. government agencies	142,770		114,571		91,757		92,452		92,718
Real estate and other repossessed assets	52,847		35,330		36,744		20,359		21,026
Total nonperforming assets	$	416,770	$	405,297	$	291,673	$	293,762	$	286,210
Total nonperforming assets excluding those guaranteed by U.S. government agencies	267,603		284,616		194,911		195,210		187,160

Accruing loans 90 days past due¹	7,684		10,992		3,706		7,680		1,541

Gross charge-offs	$	26,661	$	15,570	$	18,917	$	14,268	$	11,707
Recoveries	(4,232)		(1,491)		(1,696)		(1,816)		(1,066)
Net charge-offs	$	22,429	$	14,079	$	17,221	$	12,452	$	10,641

Provision for loan losses	$	6,609	$	134,365	$	95,964	$	18,779	$	12,539
Provision for credit losses from off-balance sheet unfunded loan commitments	(4,950)		4,405		3,377		221		(539)
Provision for expected credit losses from mortgage banking acitivities²	(770)		(3,575)		(6,020)		—		—
Provision for credit losses related to held-to maturity (investment) securities portfolio²	(889)		126		450		—		—
Total provision for credit losses	$	—	$	135,321	$	93,771	$	19,000	$	12,000


	Three Months Ended
	Sept. 30, 2020		June 30, 2020		Mar. 31, 2020		Dec. 31, 2019		Sept. 30, 2019
Allowance for loan losses to period end loans	1.76	%	1.80	%	1.40	%	0.97	%	0.92	%
Allowance for loan losses to period end loans excluding PPP loans³	1.93	%	1.97	%	1.40	%	0.97	%	0.92	%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans	1.88	%	1.94	%	1.53	%	0.98	%	0.92	%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans excluding PPP loans³	2.06	%	2.12	%	1.53	%	0.98	%	0.92	%
Nonperforming assets to period end loans and repossessed assets	1.75	%	1.68	%	1.30	%	1.35	%	1.28	%
Net charge-offs (annualized) to average loans	0.37	%	0.23	%	0.31	%	0.22	%	0.19	%
Net charge-offs (annualized) to average loans excluding PPP loans³	0.41	%	0.25	%	0.31	%	0.22	%	0.19	%
Allowance for loan losses to nonaccruing loans¹	195.47	%	174.74	%	199.35	%	120.54	%	123.05	%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to nonaccruing loans¹	208.49	%	187.94	%	217.38	%	121.44	%	123.87	%

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

² Included in Provision for credit losses effective with implementation of CECL on January 1, 2020.

³ Represents a non-GAAP measure meaningful due to the unique characteristics and short-term nature of the PPP loans.

SEGMENTS -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands, except ratios)


	Three Months Ended										Change
Commercial Banking	Sept. 30, 2020		June 30, 2020		Sept. 30, 2019		3Q20 vs 2Q20		3Q20 vs 3Q19
Net interest revenue	$	149,946	$	145,109	$	178,960	3.3	%	(16.2)	%
Fees and commissions revenue	50,085		46,515		46,159		7.7	%	8.5	%
Other operating expense	66,846		62,933		69,127		6.2	%	(3.3)	%
Corporate expense allocations	5,172		5,437		11,772		(4.9)	%	(56.1)	%
Net income	75,097		80,992		100,986		(7.3)	%	(25.6)	%

Average assets	28,000,183		27,575,652		23,973,925		1.5	%	16.8	%
Average loans	18,677,401		19,262,827		19,226,347		(3.0)	%	(2.9)	%
Average deposits	15,375,450		14,599,225		10,833,057		5.3	%	41.9	%

Consumer Banking
Net interest revenue	$	33,130	$	39,270	$	48,462	(15.6)	%	(31.6)	%
Fees and commissions revenue	67,974		67,192		51,461		1.2	%	32.1	%
Other operating expense	59,839		58,936		59,699		1.5	%	0.2	%
Corporate expense allocations	10,812		10,812		11,776		—	%	(8.2)	%
Net income	26,256		31,900		16,640		(17.7)	%	57.8	%

Average assets	9,898,119		9,920,005		9,827,130		(0.2)	%	0.7	%
Average loans	1,825,865		1,679,164		1,773,831		8.7	%	2.9	%
Average deposits	7,940,973		7,587,246		6,983,018		4.7	%	13.7	%

Wealth Management
Net interest revenue	$	22,985	$	26,880	$	23,066	(14.5)	%	(0.4)	%
Fees and commissions revenue	111,655		106,757		89,422		4.6	%	24.9	%
Other operating expense	82,868		80,567		71,619		2.9	%	15.7	%
Corporate expense allocations	9,397		8,204		9,416		14.5	%	(0.2)	%
Net income	31,212		33,394		23,206		(6.5)	%	34.5	%

Average assets	16,206,522		15,721,452		10,391,225		3.1	%	56.0	%
Average loans	1,777,008		1,709,363		1,671,102		4.0	%	6.3	%
Average deposits	9,090,116		8,385,681		6,590,332		8.4	%	37.9	%
Fiduciary assets	52,935,646		50,560,584		49,259,697		4.7	%	7.5	%
Assets under management or administration	82,419,932		79,452,502		80,796,949		3.7	%	2.0	%