Exhibit 99(a)
NASD: BOKF
BOK Financial Corporation Reports Annual Earnings of $618 million or $8.95 Per Share and
Quarterly Earnings of $117 million or $1.71 Per Share in the Fourth Quarter
Quarterly Earnings of $117 million or $1.71 Per Share in the Fourth Quarter
| CEO Commentary | ||
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Stacy Kymes, president and chief executive officer, stated, “Our record earnings in 2021 are a testament to our diversified business model focused on revenue growth from long-term commitments and investments. It also reflects extraordinary dedication from our employees serving our clients in all areas of our business in a very difficult environment. While there were facets to our financial performance in 2021 that are non-recurring, the business activities that created those opportunistic gains are core to our franchise. Our diversified Wealth Management business achieved significant milestones this year, assets under management grew just over 14 percent, to over $100 billion, period end loan balances surpassed $2.1 billion, growing $250 million or 13 percent, while trust fees grew $11 million or 6 percent.”
Kymes continued, “Although our Commercial Lending segment experienced net payoffs this past year, the fourth quarter has been a bright spot as we’ve realized annualized growth above 10 percent in our Commercial and Industrial category. Also encouraging is that outstanding C&I loan commitments increased, with the resulting C&I utilization levels actually decreasing linked quarter. This further underscores the capacity we have for future loan growth. Although Commercial Real Estate payoffs continued in the fourth quarter, we expect these balances to grow in 2022 after the first quarter.”
Kymes added, “As I look forward, I am excited about BOK Financial's prospects for 2022. We believe we have turned the corner on loan growth, our overall asset quality is better than pre-pandemic, we have strong fundamental growth in assets under management in our Wealth Management business, and we are well positioned for a rising rate environment. Based on our history during the last rising rate cycle, we believe that we can deliver net interest revenue growth that will perform exceptionally well in the regional bank space.”
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| 2021 Financial Highlights | ||
•Net income was $618.1 million or $8.95 per diluted share for the year ended December 31, 2021, and $435.0 million or $6.19 per diluted share for the year ended December 31, 2020. Improving economic conditions related to the COVID-19 pandemic and massive government stimulus drove a $100.0 million reversal in 2021 of the $222.6 million provision for credit losses recorded in 2020.
•Net interest revenue totaled $1.1 billion, consistent with the prior year. Net interest margin was 2.60 percent compared to 2.83 percent for 2020. The full impact of the reduction of the federal funds rate by the Federal Reserve in 2020 was realized in 2021. The following reduction in other short-term market interest rates reduced the yield on floating-rate assets by more than the amount by which funding costs could be reduced, compressing the margin.
•Fees and commissions revenue totaled $668.3 million, a decrease of $142.0 million. Brokerage and trading revenues decreased $108.8 million, largely due to a shift from fee revenue to net interest revenue. Mortgage banking revenue decreased $76.5 million due to a decrease in mortgage production volume combined with a reduction in production revenue as a percentage of production volume. Other revenue increased $18.3 million, largely due to higher revenue on repossessed oil and gas properties, which was largely offset by related operating expenses.
•Other gains and losses, net increased $57.7 million to $63.7 million due to sales of an alternative investment and repossessed assets.
•Operating expense increased $13.4 million to $1.2 billion. Personnel expense increased $6.9 million while non-personnel expense increased $6.5 million, including an increase of $10.8 million of operating expenses on repossessed assets.
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•Period-end loans decreased $2.8 billion to $20.2 billion at December 31, 2021. Period-end Paycheck Protection Program ("PPP") loans decreased $1.4 billion to $276.3 million while commercial real estate loans decreased $867 million and commercial loans decreased $571 million. Average loans were $21.5 billion, a $1.9 billion decrease compared to the prior year.
•The combined allowance for credit losses totaled $289 million or 1.45 percent of outstanding loans, excluding PPP loans, at December 31, 2021. The combined allowance for credit losses was $426 million or 2.00 percent of outstanding loans, excluding PPP loans, at December 31, 2020.
•Average deposits increased $5.2 billion to $37.9 billion and period-end deposits increased $5.1 billion to $41.2 billion as customers maintained higher deposit balances during this time of economic uncertainty. Average interest bearing deposits increased by $2.9 billion and average demand deposits grew by $2.3 billion.
•Commercial Banking contributed $328.5 million to net income in 2021, an increase of $22.5 million compared to 2020. The sale of an alternative investment in the third quarter resulted in a $31.1 million pre-tax gain, net of non-controlling interest. Combined net interest revenue and fee revenue decreased $12.8 million, largely due to a reduction in outstanding loan balances and lower yields on deposits sold to our Funds Management unit. Production revenue from oil and gas properties increased $17.1 million, which was partially offset by an increase in related operating expenses. Revenue growth was supplemented by increases in syndication fees, transaction card revenue, and deposit service charges and fees. Personnel expense increased $9.1 million, primarily due to incentive compensation costs. Net loan charge-offs decreased $38.3 million. Average Commercial Banking loans decreased $1.9 billion due to purposeful deleveraging by our customers. Average Commercial Banking deposits grew 23 percent to $17.7 billion in 2021.
•Consumer Banking contributed $27.6 million to net income in 2021, a decrease of $70.3 million compared to 2020. Combined net interest revenue and fee revenue decreased $115.7 million. Net interest revenue decreased $43.5 million, mainly due to lower yields on deposits sold to our Funds Management unit. Fees and commissions revenue decreased $72.2 million, largely due to reduced mortgage production volume and margin compression. Operating expense decreased $20.8 million, due to lower mortgage banking costs and incentive compensation expense. Average Consumer Banking deposits increased 11 percent to $8.4 billion in 2021.
•Wealth Management contributed $113.6 million to net income in 2021, a decrease of $2.1 million compared to record earnings in 2020. Total wealth management revenue decreased $3.7 million. Revenue primarily from agency residential mortgage-backed securities trading activity decreased $10.8 million due to narrowing margins and a reduction in trading volumes. Fiduciary and asset management revenue increased $10.8 million. Growth in trust fees and managed account fees as a result of growth in assets under management and administration was partially offset by lower mutual fund fees and increased waivers. Operating expense decreased $5.3 million, primarily due to incentive compensation costs related to reduced trading activity. Average Wealth Management loans grew by 13 percent to $2.0 billion. Average Wealth Management deposits increased 9 percent to $9.4 billion in 2021, led by growth in interest-bearing transaction deposits.
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Fourth Quarter 2021 Financial Highlights
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•Net income was $117.3 million or $1.71 per diluted share for the fourth quarter of 2021 and $188.3 million or $2.74 per diluted share for the third quarter of 2021.
•Net interest revenue totaled $277.1 million, a decrease of $3.2 million. Net interest margin was 2.52 percent compared to 2.66 percent in the third quarter of 2021.
•Operating revenue totaled $157.4 million, a decrease of $72.4 million. Brokerage and trading revenues decreased $33.1 million. Uncertainty in the markets led to reduced transaction activity and tighter margins compared to the elevated volumes in the third quarter. Lower mortgage loan production volume and lower margins also reduced mortgage banking revenue by $5.0 million. The prior quarter also included a $31.1 million pre-tax gain on the sale of an alternative investment.
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•Operating expense increased $8.2 million to $299.5 million. The fourth quarter of 2021 included a $5.0 million charitable donation to the BOKF Foundation. Increases in business promotion costs, professional fees, and other expenses were partially offset by lower personnel expense.
•Period-end loans decreased $142 million to $20.2 billion at December 31, 2021. Period-end PPP loans decreased $260 million to $276 million. Excluding PPP loans, period-end loans grew $117 million with growth in commercial loans partially offset by paydowns in commercial real estate loans. Average loans were $20.2 billion, a $606 million decrease compared to the third quarter of 2021.
•Continued strength in commodity prices coupled with an outlook for moderate growth in gross domestic product and the labor markets, improving credit quality metrics and lower loan balances resulted in a $17.0 million negative provision for expected credit losses in the fourth quarter of 2021. A $23.0 million negative provision for expected credit losses was recorded in the prior quarter. The combined allowance for credit losses totaled $289 million or 1.45 percent of outstanding loans, excluding PPP loans, at December 31, 2021. The combined allowance for credit losses was $306 million or 1.54 percent of outstanding loans, excluding PPP loans, at September 30, 2021.
•Average deposits increased $2.0 billion to $39.8 billion and period-end deposits increased $2.7 billion to $41.2 billion, largely due to growth in commercial balances. Average demand deposits grew by $1.1 billion and average interest bearing deposits increased by $820 million.
•The company's common equity Tier 1 capital ratio was 12.23 percent at December 31, 2021. In addition, the company's Tier 1 capital ratio was 12.24 percent, total capital ratio was 13.28 percent, and leverage ratio was 8.55 percent at December 31, 2021. At September 30, 2021, the company's common equity Tier 1 capital ratio was 12.26 percent, Tier 1 capital ratio was 12.29 percent, total capital ratio was 13.38 percent, and leverage ratio was 8.77 percent.
•The company repurchased 128,522 shares of common stock at an average price of $104.46 a share in the fourth quarter of 2021.
•Commercial Banking contributed $83.5 million to net income in the fourth quarter of 2021, a decrease of $19.2 million compared to the third quarter of 2021 as the prior quarter included a pre-tax gain of $31.1 million from the sale of an alternative investment. Combined net interest revenue and fee revenue increased $7.6 million, largely driven by increased deposit balances and improved spreads, and was partially offset by an increase in personnel expense. Average Commercial Banking loans decreased $254 million due to purposeful deleveraging by our customers. Average Commercial Banking deposits grew 9 percent to $19.5 billion in the fourth quarter of 2021.
•Consumer Banking contributed $6.8 million to net income in the fourth quarter of 2021, a decrease of $5.6 million compared to the prior quarter. Combined net interest revenue and fee revenue decreased $2.3 million. Net interest revenue increased $3.2 million, mainly due to increased deposit balances and improved spreads. Fees and commissions revenue decreased $5.5 million due to normal seasonality in mortgage loan production volume and margin compression. Operating expense increased $2.6 million, due to increases in professional fees and other expenses. Average Consumer Banking deposits increased 2 percent to $8.7 billion in the fourth quarter of 2021.
•Wealth Management contributed $21.7 million to net income in the fourth quarter of 2021, a decrease of $19.7 million compared to the prior quarter. Our diverse set of investment-focused businesses including fixed income trading, private wealth, institutional wealth, financial risk management, and multiple fiduciary businesses combined to provide total net interest and fee revenues of $114.5 million, a decrease of $38.7 million compared to the third quarter of 2021. Revenue, primarily from trading activity, decreased $39.1 million to $38.2 million. Uncertainty around tapering by the Federal Reserve combined with year-end balance sheet management and concerns over yield curve steepening, resulted in decreased transaction activity and tighter margins. Operating expense decreased $12.5 million, primarily due to incentive compensation costs related to reduced trading activity. Average Wealth Management deposits were consistent with the prior quarter. Assets under management were $104.9 billion, an increase of $6.1 billion compared to the prior quarter.
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| Net Interest Revenue | ||||||||||||||
Net interest revenue was $277.1 million for the fourth quarter of 2021 compared to $280.2 million for the third quarter of 2021. Net interest margin was 2.52 percent compared to 2.66 percent in the prior quarter. PPP loan fees of $7.7 million were recognized in the fourth quarter of 2021 compared to $12.7 million in the previous quarter. PPP loan fees remaining to be recognized were $7.5 million.
Average earning assets increased $1.3 billion compared to the third quarter of 2021. Average loan balances decreased $606 million, largely due to paydowns of PPP and commercial real estate loans, partially offset by growth in commercial loans. Average trading securities increased by $1.6 billion. Average interest bearing cash and cash equivalents grew by $526 million. Available for sale securities decreased $198 million. Other borrowings decreased $1.7 billion while funds purchased and repurchase agreements increased $1.4 billion.
The yield on average earning assets was 2.61 percent, a 17 basis point decrease from the prior quarter. The yield on trading securities was down 35 basis points to 1.69 percent, largely due to a decrease in the weighted average coupon rate. The yield on the available for sale securities portfolio decreased 8 basis points to 1.72 percent. The loan portfolio yield increased 2 basis points to 3.70 percent. Excluding PPP loan fees, the loan portfolio yield increased 11 basis points, primarily due to the timing of loan fees.
Funding costs were 0.15 percent, down 4 basis points. The cost of interest-bearing deposits decreased 1 basis point to 0.12 percent. The cost of other borrowed funds decreased 11 basis points to 0.19 percent. The cost of subordinated debentures decreased 61 basis points due to the redemption of $150 million in the third quarter. The benefit to net interest margin from assets funded by non-interest liabilities was 6 basis points for the fourth quarter of 2021, compared to 7 basis points for the prior quarter.
| Operating Revenue | ||||||||||||||
Fees and commissions revenue totaled $146.3 million for the fourth quarter of 2021, a $44.1 million decrease compared to the third quarter of 2021. Brokerage and trading revenue decreased $33.1 million to $14.9 million. Uncertainty around tapering by the Federal Reserve combined with year-end balance sheet management and concerns over yield curve steepening, resulted in decreased transaction activity and tighter margins for trading activities in the market. These factors combined to decrease trading revenue by $37.3 million. Customer hedging revenue increased $2.2 million, primarily attributed to energy customers. Investment banking revenue increased $2.6 million, largely due to the timing and increase of syndication activity.
Mortgage banking revenue decreased $5.0 million compared to the prior quarter due to lower production volume combined with narrowing margins. Mortgage production volume decreased $114 million to $501 million due to normal seasonal decline and continued inventory constraints. Production revenue as a percentage of production volume, which includes unrealized gains and losses on our mortgage commitment pipeline and related hedges, decreased 50 basis points to 2.00 percent.
Other revenue decreased $7.3 million as a result of lower operating revenue from repossessed oil and gas assets due to the sale of a property, which was largely offset by a reduction of expenses on the same properties.
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Other gains and losses, net decreased $25.0 million compared to the prior quarter. The third quarter of 2021 included a $31.1 million gain on the sale of an alternative investment, which was partially offset by a $5.2 million loss on the extinguishment of subordinated debentures and a $3.9 million loss on the sale of a repossessed oil and gas asset.
| Operating Expense | ||||||||||||||
Total operating expense was $299.5 million for the fourth quarter of 2021, an increase of $8.2 million compared to the third quarter of 2021.
Personnel expense decreased $1.4 million. Cash based incentive compensation decreased $8.8 million due to reduced trading volumes, and was partially offset by an increase of $5.9 million in share based incentive compensation resulting from changes in vesting assumptions. Employee benefits expense increased $1.1 million due to an increase in employee healthcare costs, partially offset by a seasonal decrease in retirement costs and payroll taxes.
Non-personnel expense increased $9.6 million over the third quarter of 2021. The fourth quarter of 2021 included a $5.0 million charitable donation to the BOKF Foundation as we continue to focus on the communities we serve and the extreme need created by the pandemic. Smaller increases in business promotion costs, professional fees and services expense, and other expense supplemented the overall rise in non-personnel expense.
| Loans, Deposits and Capital | ||||||||||||||
Loans
Outstanding loans were $20.2 billion at December 31, 2021, a $142 million decrease compared to September 30, 2021. A reduction in PPP and commercial real estate loan balances was partially offset by growth in commercial and personal loan balances.
Outstanding commercial loan balances increased $331 million compared to September 30, 2021, with growth in all categories led by energy. Although the primary source of repayment of our commercial loan portfolio is the ongoing 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 increased $193 million to $3.0 billion or 15 percent of total loans. 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 $3.0 billion at December 31, 2021, an increase of $248 million over September 30, 2021.
Healthcare sector loan balances increased $67 million compared to the prior quarter, totaling $3.4 billion or 17 percent of total loans. Our healthcare sector loans primarily consist of $2.7 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, which serves to help diversify risks specific to a single facility.
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Services loan balances increased $44 million to $3.4 billion or 17 percent of total loans. Services loans consist of a large number of loans to a variety of businesses, including Native American tribal and state and local municipal government entities, Native American tribal casino operations, foundations and not-for-profit organizations, educational services and specialty trade contractors.
Commercial real estate loan balances decreased $286 million compared to September 30, 2021 and represent 19 percent of total loans at December 31, 2021, largely due to refinancing in the long term, non-recourse markets. Loans secured by industrial facilities decreased $124 million to $766 million. Multifamily residential loans decreased $89 million to $786 million at December 31, 2021. Loans secured by retail facilities decreased $86 million to $680 million.
PPP loan balances decreased $260 million to $276 million or 1 percent of total loans.
Loans to individuals increased $72 million and represent 18 percent of total loans at December 31, 2021. Personal loans increased $120 million while residential mortgage loans decreased $48 million, largely due to the re-sale of loans previously sold into GNMA mortgage pools that the Company repurchased when certain defined delinquency criteria were met. Many loans repurchased during the pandemic have since been cured and meet the re-sale qualifications.
Deposits
Period-end deposits totaled $41.2 billion at December 31, 2021, a $2.7 billion increase compared to September 30, 2021. Interest-bearing transaction account balances increased by $1.5 billion and demand deposit account balances grew by $1.3 billion. Average deposits were $39.8 billion at December 31, 2021, a $2.0 billion increase compared to September 30, 2021. Demand deposit account balances increased $1.1 billion primarily from deposits attributed to the Commercial Banking segment while interest-bearing deposits increased $820 million.
Capital
The company's common equity Tier 1 capital ratio was 12.23 percent at December 31, 2021. In addition, the company's Tier 1 capital ratio was 12.24 percent, total capital ratio was 13.28 percent, and leverage ratio was 8.55 percent at December 31, 2021. We have elected to delay the regulatory capital impact of the transition of the allowance for credit losses from the incurred loss methodology to CECL for two years, followed by a three-year transition period, which added 19 basis points to the company's common equity tier 1 capital ratio at December 31. At September 30, 2021, the company's common equity Tier 1 capital ratio was 12.26 percent, Tier 1 capital ratio was 12.29 percent, total capital ratio was 13.38 percent, and leverage ratio was 8.77 percent.
The company's tangible common equity ratio, a non-GAAP measure, was 8.61 percent at December 31, 2021 and 9.28 percent at September 30, 2021. The tangible common equity ratio is primarily based on total shareholders' equity, which includes unrealized gains and losses on available for sale securities. The company has elected to exclude unrealized gains and losses from available for sale securities from its calculation of Tier 1 capital for regulatory capital purposes, consistent with the treatment under the previous capital rules.
The company repurchased 128,522 shares of common stock at an average price of $104.46 a share in the fourth quarter of 2021. We view share buybacks opportunistically, but within the context of maintaining our strong capital position.
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| Credit Quality | ||||||||||||||
Expected credit losses on assets carried at amortized cost are recognized over their expected lives based on models that measure the probability of default and loss given default over a 12-month reasonable and supportable forecast period. Our models incorporate base case, downside and upside macroeconomic variables such as real gross domestic product ("GDP") growth, civilian unemployment rate and West Texas Intermediate ("WTI") oil prices on a probability weighted basis.
We recorded a $17.0 million negative provision for credit losses in the fourth quarter of 2021. Changes in our reasonable and supportable forecasts of macroeconomic variables, primarily due to continued strength in commodity prices and an outlook for moderate growth in GDP and labor markets resulted in a $12.6 million decrease in the allowance for credit losses related to lending activities. Changes in loan portfolio characteristics, primarily from net recoveries and changes in specific impairment, improving credit quality metrics and lower loan balances resulted in a $4.7 million decrease in the allowance for credit losses related to lending activities.
Our base case reasonable and supportable forecast assumes that the COVID-19 cases will increase due to the Omicron and Delta variants during the winter months in the U.S., though global virus immunity continues to be more widespread and vaccines prove to be effective against severe virus outcomes. Elevated consumer consumption and the need for inventory restocking is expected to result in GDP growth consistent with pre-pandemic levels. We expect a 2.9 percent increase in GDP over the next twelve months. We expect labor force participants will continue to re-enter the job market to help meet record job openings. This increase in employment helps maintain household income above its pre-pandemic trend and prevents a sharp drop-off in spending. Our forecasted civilian unemployment rate is 4.0 percent for the first quarter of 2022, improving to 3.7 percent by the fourth quarter of 2022. Our base case also assumes the Federal Reserve completes the tapering of their bond purchases in March 2022 and one federal funds rate increase in 2022 with the target range ending the year at 0.25 percent to 0.50 percent. WTI oil prices are projected to generally follow the NYMEX forward curve that existed at the end of December 2021, averaging $68.75 per barrel over the next twelve months.
Our downside case assumes new COVID-19 variants continue to emerge and spread rapidly in areas of the country with lower vaccination rates as the U.S. enters the winter months. This results in a relatively mild recession with conditions beginning to improve in the summer of 2022.
The allowance for loan losses totaled $256 million or 1.27 percent of outstanding loans and 213 percent of nonaccruing loans at December 31, 2021, excluding residential mortgage loans guaranteed by U.S. government agencies. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $289 million or 1.43 percent of outstanding loans and 241 percent of nonaccruing loans at December 31, 2021. Excluding PPP loans, the allowance for loan losses was 1.29 percent of outstanding loans and the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was 1.45 percent.
At September 30, 2021, the allowance for loan losses was $277 million or 1.36 percent of outstanding loans and 208 percent of nonaccruing loans, excluding loans guaranteed by U.S. government agencies. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $306 million or 1.50 percent of outstanding loans and 230 percent of nonaccruing loans.
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Nonperforming assets totaled $369 million or 1.83 percent of outstanding loans and repossessed assets at December 31, 2021, compared to $349 million or 1.71 percent at September 30, 2021. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $145 million or 0.74 percent of outstanding loans and repossessed assets at December 31, 2021, compared to $162 million or 0.83 percent at September 30, 2021.
Nonaccruing loans were $134 million or 0.67 percent of outstanding loans, excluding PPP loans, at December 31, 2021. Nonaccruing commercial loans totaled $74 million or 0.59 percent of outstanding commercial loans. Nonaccruing commercial real estate loans totaled $14 million or 0.37 percent of outstanding commercial real estate loans. Nonaccruing loans to individuals totaled $46 million or 1.27 percent of outstanding loans to individuals.
Nonaccruing loans decreased $7.9 million compared to September 30, 2021. A decrease in nonaccruing energy, services, and commercial real estate loans, was partially offset by an increase in nonaccruing healthcare sector loans. New nonaccruing loans identified in the fourth quarter totaled $28 million, offset by $32 million in payments received and $6.6 million in charge-offs.
Potential problem loans, which are defined as performing loans that, based on known information, cause management concern as to the borrowers' ability to continue to perform, totaled $222 million at December 31, 2021, down significantly from $333 million at September 30, primarily due to a decrease in potential problem energy loans. Potential problem healthcare, services and general business loans also decreased compared to the prior quarter.
Net recoveries for the fourth quarter of 2021 were $714 thousand or 0.01 percent of average loans on an annualized basis for the fourth quarter of 2021, excluding PPP loans. Net charge-offs were 0.18 percent of average loans over the last four quarters. Net charge-offs were $7.8 million or 0.16 percent of average loans on an annualized basis for the third quarter of 2021, excluding PPP loans. Gross charge-offs were $6.6 million for the fourth quarter compared to $9.6 million for the previous quarter. Recoveries totaled $7.3 million for the fourth quarter of 2021 and $1.8 million for the third quarter of 2021.
| Securities and Derivatives | ||||||||||||||
The fair value of the available for sale securities portfolio totaled $13.2 billion at December 31, 2021, a $184 million decrease compared to September 30, 2021. At December 31, 2021, the available for sale securities portfolio consisted primarily of $8.0 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $4.6 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. At December 31, 2021, the available for sale securities portfolio had a net unrealized gain of $93 million compared to $221 million at September 30, 2021.
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 $7.2 million to $44 million at December 31, 2021.
The net economic benefit of the changes in the fair value of mortgage servicing rights and related economic hedges was $4.7 million during the fourth quarter of 2021, including a $7.9 million increase in the fair value of mortgage servicing rights, a $3.4 million decrease in the fair value of securities and derivative contracts held as an economic hedge, and $259 thousand of related net interest revenue.
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| Conference Call and Webcast | ||||||||||||||
The company will hold a conference call at 9 a.m. Central time on Wednesday, January 19, 2022 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 1-844-512-2921 and referencing conference ID # 13725961.
| About BOK Financial Corporation | ||||||||||||||
BOK Financial Corporation is a $50 billion regional financial services company headquartered in Tulsa, Oklahoma with $105 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's holdings include TransFund, Cavanal Hill Investment Management, Inc. and BOK Financial Asset Management, Inc. BOKF, NA operates banking divisions across eight states as: Bank of Albuquerque; Bank of Oklahoma; Bank of Texas; and BOK Financial in Arizona, Arkansas, Colorado, Kansas and Missouri; as well as having limited purpose offices in Nebraska, Wisconsin and Connecticut. Through its subsidiaries, BOK Financial Corporation provides commercial and consumer banking, brokerage trading, investment, trust and insurance services, mortgage origination and servicing, and an electronic funds transfer network. For more information, visit www.bokf.com.
The company will continue to evaluate critical assumptions and estimates, such as the appropriateness of the allowance for credit losses and asset impairment as of December 31, 2021 through the date its financial statements are filed with the Securities and Exchange Commission and will adjust amounts reported if necessary.
This news release contains forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about BOK Financial Corporation, the financial services industry, the economy generally and the expected or potential impact of the novel coronavirus (COVID-19) pandemic, and the related responses of the government, consumers, and others, on our business, financial condition and results of operations. Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “plans,” “projects,” “will,” “intends,” variations of such words and similar expressions are intended to identify such forward-looking statements. Management judgments relating to and discussion of the provision and allowance for credit losses, allowance for uncertain tax positions, accruals for loss contingencies and valuation of mortgage servicing rights involve judgments as to expected events and are inherently forward-looking statements. Assessments that acquisitions and growth endeavors will be profitable are necessary statements of belief as to the outcome of future events based in part on information provided by others which BOK Financial has not independently verified. These various forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions which are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what is expected, implied or forecasted in such forward-looking statements. Internal and external factors that might cause such a difference include, but are not limited to changes in government, consumer or business responses to, and ability to treat or prevent further outbreak of the COVID-19 pandemic, changes in commodity prices, interest rates and interest rate relationships, inflation, demand for products and services, the degree of competition by traditional and nontraditional competitors, changes in banking regulations, tax laws, prices, levies and assessments, the impact of technological advances, and trends in customer behavior as well as their ability to repay loans. BOK
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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.
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Exhibit 99(b)
BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
| Dec. 31, 2021 | Sept. 30, 2021 | ||||||||||||||||
| ASSETS | |||||||||||||||||
| Cash and due from banks | $ | 712,067 | $ | 729,285 | |||||||||||||
| Interest-bearing cash and cash equivalents | 2,125,343 | 1,162,477 | |||||||||||||||
| Trading securities | 9,136,813 | 5,554,040 | |||||||||||||||
| Investment securities, net of allowance | 210,444 | 215,592 | |||||||||||||||
| Available for sale securities | 13,157,817 | 13,342,113 | |||||||||||||||
| Fair value option securities | 43,770 | 51,019 | |||||||||||||||
| Restricted equity securities | 83,113 | 77,542 | |||||||||||||||
| Residential mortgage loans held for sale | 192,295 | 176,813 | |||||||||||||||
| Loans: | |||||||||||||||||
| Commercial | 12,506,465 | 12,175,140 | |||||||||||||||
| Commercial real estate | 3,831,325 | 4,116,892 | |||||||||||||||
| Paycheck protection program | 276,341 | 536,052 | |||||||||||||||
| Loans to individuals | 3,591,549 | 3,519,852 | |||||||||||||||
| Total loans | 20,205,680 | 20,347,936 | |||||||||||||||
| Allowance for loan losses | (256,421) | (276,680) | |||||||||||||||
| Loans, net of allowance | 19,949,259 | 20,071,256 | |||||||||||||||
| Premises and equipment, net | 574,148 | 558,126 | |||||||||||||||
| Receivables | 223,021 | 171,505 | |||||||||||||||
| Goodwill | 1,044,749 | 1,044,749 | |||||||||||||||
| Intangible assets, net | 91,778 | 96,186 | |||||||||||||||
| Mortgage servicing rights | 163,198 | 133,308 | |||||||||||||||
| Real estate and other repossessed assets, net | 24,589 | 28,770 | |||||||||||||||
| Derivative contracts, net | 1,097,297 | 1,901,136 | |||||||||||||||
| Cash surrender value of bank-owned life insurance | 405,607 | 403,369 | |||||||||||||||
| Receivable on unsettled securities sales | 56,172 | 215,755 | |||||||||||||||
| Other assets | 957,951 | 990,368 | |||||||||||||||
| TOTAL ASSETS | $ | 50,249,431 | $ | 46,923,409 | |||||||||||||
| LIABILITIES AND EQUITY | |||||||||||||||||
| Deposits: | |||||||||||||||||
| Demand | $ | 15,344,423 | $ | 14,090,229 | |||||||||||||
| Interest-bearing transaction | 23,268,573 | 21,753,110 | |||||||||||||||
| Savings | 924,735 | 900,497 | |||||||||||||||
| Time | 1,704,328 | 1,780,715 | |||||||||||||||
| Total deposits | 41,242,059 | 38,524,551 | |||||||||||||||
| Funds purchased and repurchase agreements | 2,326,449 | 843,273 | |||||||||||||||
| Other borrowings | 36,753 | 37,426 | |||||||||||||||
| Subordinated debentures | 131,226 | 131,220 | |||||||||||||||
| Accrued interest, taxes and expense | 273,041 | 220,266 | |||||||||||||||
| Due on unsettled securities purchases | 160,686 | 614,598 | |||||||||||||||
| Derivative contracts, net | 275,625 | 739,641 | |||||||||||||||
| Other liabilities | 435,221 | 415,986 | |||||||||||||||
| TOTAL LIABILITIES | 44,881,060 | 41,526,961 | |||||||||||||||
| Shareholders' equity: | |||||||||||||||||
| Capital, surplus and retained earnings | 5,291,361 | 5,219,801 | |||||||||||||||
|
Accumulated other comprehensive gain
|
72,371 | 169,172 | |||||||||||||||
| TOTAL SHAREHOLDERS' EQUITY | 5,363,732 | 5,388,973 | |||||||||||||||
| Non-controlling interests | 4,639 | 7,475 | |||||||||||||||
| TOTAL EQUITY | 5,368,371 | 5,396,448 | |||||||||||||||
| TOTAL LIABILITIES AND EQUITY | $ | 50,249,431 | $ | 46,923,409 | |||||||||||||
11
AVERAGE BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
| Three Months Ended | |||||||||||||||||||||||||||||
| Dec. 31, 2021 | Sept. 30, 2021 | June 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |||||||||||||||||||||||||
| ASSETS | |||||||||||||||||||||||||||||
| Interest-bearing cash and cash equivalents | $ | 1,208,552 | $ | 682,788 | $ | 659,312 | $ | 711,047 | $ | 643,926 | |||||||||||||||||||
| Trading securities | 9,260,778 | 7,617,236 | 7,430,217 | 6,963,617 | 6,888,189 | ||||||||||||||||||||||||
| Investment securities, net of allowance | 213,188 | 218,117 | 221,401 | 237,313 | 251,863 | ||||||||||||||||||||||||
| Available for sale securities | 13,247,607 | 13,446,095 | 13,243,542 | 13,433,767 | 12,949,702 | ||||||||||||||||||||||||
| Fair value option securities | 46,458 | 56,307 | 64,864 | 104,662 | 122,329 | ||||||||||||||||||||||||
| Restricted equity securities | 137,874 | 245,485 | 208,692 | 189,921 | 280,428 | ||||||||||||||||||||||||
| Residential mortgage loans held for sale | 163,433 | 167,620 | 218,200 | 207,013 | 229,631 | ||||||||||||||||||||||||
| Loans: | |||||||||||||||||||||||||||||
| Commercial | 12,401,935 | 12,231,230 | 12,402,925 | 12,908,461 | 13,113,449 | ||||||||||||||||||||||||
| Commercial real estate | 3,838,336 | 4,218,190 | 4,395,848 | 4,547,945 | 4,788,393 | ||||||||||||||||||||||||
| Paycheck protection program | 404,261 | 792,728 | 1,668,047 | 1,741,534 | 1,928,665 | ||||||||||||||||||||||||
| Loans to individuals | 3,598,121 | 3,606,460 | 3,700,269 | 3,559,067 | 3,617,011 | ||||||||||||||||||||||||
| Total loans | 20,242,653 | 20,848,608 | 22,167,089 | 22,757,007 | 23,447,518 | ||||||||||||||||||||||||
| Allowance for loan losses | (271,794) | (306,125) | (345,269) | (382,734) | (414,225) | ||||||||||||||||||||||||
| Loans, net of allowance | 19,970,859 | 20,542,483 | 21,821,820 | 22,374,273 | 23,033,293 | ||||||||||||||||||||||||
| Total earning assets | 44,248,749 | 42,976,131 | 43,868,048 | 44,221,613 | 44,399,361 | ||||||||||||||||||||||||
| Cash and due from banks | 783,670 | 766,688 | 763,393 | 760,691 | 742,432 | ||||||||||||||||||||||||
|
Derivative contracts, net
|
1,441,869 | 1,501,736 | 1,022,137 | 873,712 | 553,779 | ||||||||||||||||||||||||
|
Cash surrender value of bank-owned life insurance
|
404,149 | 401,926 | 401,760 | 399,830 | 397,354 | ||||||||||||||||||||||||
| Receivable on unsettled securities sales | 585,901 | 632,539 | 716,700 | 735,482 | 1,094,198 | ||||||||||||||||||||||||
| Other assets | 3,139,718 | 3,220,129 | 3,424,884 | 3,319,305 | 3,200,040 | ||||||||||||||||||||||||
| TOTAL ASSETS | $ | 50,604,056 | $ | 49,499,149 | $ | 50,196,922 | $ | 50,310,633 | $ | 50,387,164 | |||||||||||||||||||
| LIABILITIES AND EQUITY | |||||||||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||||||||
| Demand | $ | 14,818,841 | $ | 13,670,656 | $ | 13,189,954 | $ | 12,312,629 | $ | 12,136,071 | |||||||||||||||||||
| Interest-bearing transaction | 22,326,401 | 21,435,736 | 21,491,145 | 21,433,406 | 20,718,390 | ||||||||||||||||||||||||
| Savings | 909,131 | 888,011 | 872,618 | 789,656 | 737,360 | ||||||||||||||||||||||||
| Time | 1,747,715 | 1,839,983 | 1,936,510 | 1,986,425 | 1,930,808 | ||||||||||||||||||||||||
| Total deposits | 39,802,088 | 37,834,386 | 37,490,227 | 36,522,116 | 35,522,629 | ||||||||||||||||||||||||
|
Funds purchased and repurchase agreements
|
2,880,230 | 1,448,800 | 1,790,490 | 2,830,378 | 2,153,254 | ||||||||||||||||||||||||
| Other borrowings | 880,837 | 2,546,083 | 3,608,369 | 3,392,346 | 5,193,656 | ||||||||||||||||||||||||
| Subordinated debentures | 131,224 | 214,654 | 276,034 | 276,015 | 275,998 | ||||||||||||||||||||||||
| Derivative contracts, net | 320,757 | 434,334 | 366,202 | 428,488 | 399,476 | ||||||||||||||||||||||||
| Due on unsettled securities purchases | 629,642 | 957,538 | 701,495 | 915,410 | 957,642 | ||||||||||||||||||||||||
| Other liabilities | 578,091 | 619,913 | 634,460 | 671,715 | 656,147 | ||||||||||||||||||||||||
| TOTAL LIABILITIES | 45,222,869 | 44,055,708 | 44,867,277 | 45,036,468 | 45,158,802 | ||||||||||||||||||||||||
| Total equity | 5,381,187 | 5,443,441 | 5,329,645 | 5,274,165 | 5,228,362 | ||||||||||||||||||||||||
| TOTAL LIABILITIES AND EQUITY | $ | 50,604,056 | $ | 49,499,149 | $ | 50,196,922 | $ | 50,310,633 | $ | 50,387,164 | |||||||||||||||||||
12
STATEMENTS OF EARNINGS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except per share data)
| Three Months Ended | Year Ended | ||||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Interest revenue | $ | 292,334 | $ | 319,020 | $ | 1,179,929 | $ | 1,269,000 | |||||||||||||||
| Interest expense | 15,257 | 21,790 | 61,896 | 160,556 | |||||||||||||||||||
| Net interest revenue | 277,077 | 297,230 | 1,118,033 | 1,108,444 | |||||||||||||||||||
| Provision for credit losses | (17,000) | (6,500) | (100,000) | 222,592 | |||||||||||||||||||
|
Net interest revenue after provision for credit losses
|
294,077 | 303,730 | 1,218,033 | 885,852 | |||||||||||||||||||
| Other operating revenue: | |||||||||||||||||||||||
| Brokerage and trading revenue | 14,869 | 39,506 | 112,989 | 221,833 | |||||||||||||||||||
| Transaction card revenue | 24,998 | 21,896 | 96,983 | 90,182 | |||||||||||||||||||
| Fiduciary and asset management revenue | 46,872 | 41,799 | 178,274 | 167,445 | |||||||||||||||||||
| Deposit service charges and fees | 26,718 | 24,343 | 104,217 | 96,805 | |||||||||||||||||||
| Mortgage banking revenue | 21,278 | 39,298 | 105,896 | 182,360 | |||||||||||||||||||
| Other revenue | 11,586 | 14,209 | 69,950 | 51,695 | |||||||||||||||||||
| Total fees and commissions | 146,321 | 181,051 | 668,309 | 810,320 | |||||||||||||||||||
| Other gains, net | 6,081 | 7,394 | 63,742 | 6,046 | |||||||||||||||||||
| Gain (loss) on derivatives, net | (4,788) | (339) | (19,378) | 42,320 | |||||||||||||||||||
| Gain (loss) on fair value option securities, net | 1,418 | 68 | (2,239) | 53,248 | |||||||||||||||||||
| Change in fair value of mortgage servicing rights | 7,859 | 6,276 | 41,637 | (79,524) | |||||||||||||||||||
| Gain on available for sale securities, net | 552 | 4,339 | 3,704 | 9,910 | |||||||||||||||||||
| Total other operating revenue | 157,443 | 198,789 | 755,775 | 842,320 | |||||||||||||||||||
| Other operating expense: | |||||||||||||||||||||||
| Personnel | 174,474 | 176,198 | 695,382 | 688,474 | |||||||||||||||||||
| Business promotion | 6,452 | 3,728 | 16,289 | 14,511 | |||||||||||||||||||
| Charitable contributions to BOKF Foundation | 5,000 | 6,000 | 9,000 | 9,000 | |||||||||||||||||||
| Professional fees and services | 14,129 | 14,254 | 50,906 | 53,437 | |||||||||||||||||||
| Net occupancy and equipment | 26,897 | 27,875 | 108,587 | 112,722 | |||||||||||||||||||
| Insurance | 3,889 | 4,006 | 15,881 | 19,990 | |||||||||||||||||||
| Data processing and communications | 39,358 | 35,061 | 151,614 | 135,497 | |||||||||||||||||||
| Printing, postage and supplies | 2,935 | 3,805 | 14,218 | 15,061 | |||||||||||||||||||
| Amortization of intangible assets | 4,438 | 5,088 | 18,311 | 20,443 | |||||||||||||||||||
| Mortgage banking costs | 8,667 | 14,765 | 42,698 | 56,711 | |||||||||||||||||||
| Other expense | 13,256 | 11,892 | 54,822 | 38,462 | |||||||||||||||||||
| Total other operating expense | 299,495 | 302,672 | 1,177,708 | 1,164,308 | |||||||||||||||||||
| Net income before taxes | 152,025 | 199,847 | 796,100 | 563,864 | |||||||||||||||||||
| Federal and state income taxes | 34,836 | 45,138 | 179,775 | 128,793 | |||||||||||||||||||
| Net income | 117,189 | 154,709 | 616,325 | 435,071 | |||||||||||||||||||
| Net income (loss) attributable to non-controlling interests | (129) | 485 | (1,796) | 41 | |||||||||||||||||||
|
Net income attributable to BOK Financial Corporation shareholders
|
$ | 117,318 | $ | 154,224 | $ | 618,121 | $ | 435,030 | |||||||||||||||
| Average shares outstanding: | |||||||||||||||||||||||
| Basic | 68,069,160 | 69,489,597 | 68,591,920 | 69,840,977 | |||||||||||||||||||
| Diluted | 68,070,910 | 69,493,050 | 68,594,322 | 69,844,172 | |||||||||||||||||||
| Net income per share: | |||||||||||||||||||||||
| Basic | $ | 1.71 | $ | 2.21 | $ | 8.95 | $ | 6.19 | |||||||||||||||
| Diluted | $ | 1.71 | $ | 2.21 | $ | 8.95 | $ | 6.19 | |||||||||||||||
13
FINANCIAL HIGHLIGHTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and share data)
| Three Months Ended | |||||||||||||||||||||||||||||
| Dec. 31, 2021 | Sept. 30, 2021 | June 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |||||||||||||||||||||||||
| Capital: | |||||||||||||||||||||||||||||
| Period-end shareholders' equity | $ | 5,363,732 | $ | 5,388,973 | $ | 5,332,977 | $ | 5,239,462 | $ | 5,266,266 | |||||||||||||||||||
| Risk weighted assets | $ | 34,606,309 | $ | 33,916,456 | $ | 33,824,860 | $ | 32,623,108 | $ | 32,492,277 | |||||||||||||||||||
| Risk-based capital ratios: | |||||||||||||||||||||||||||||
| Common equity tier 1 | 12.23 | % | 12.26 | % | 11.95 | % | 12.14 | % | 11.95 | % | |||||||||||||||||||
| Tier 1 | 12.24 | % | 12.29 | % | 12.01 | % | 12.21 | % | 11.95 | % | |||||||||||||||||||
| Total capital | 13.28 | % | 13.38 | % | 13.61 | % | 13.98 | % | 13.82 | % | |||||||||||||||||||
| Leverage ratio | 8.55 | % | 8.77 | % | 8.58 | % | 8.42 | % | 8.28 | % | |||||||||||||||||||
|
Tangible common equity ratio1
|
8.61 | % | 9.28 | % | 9.09 | % | 8.82 | % | 9.02 | % | |||||||||||||||||||
| Common stock: | |||||||||||||||||||||||||||||
| Book value per share | $ | 78.34 | $ | 78.56 | $ | 77.20 | $ | 75.33 | $ | 75.62 | |||||||||||||||||||
| Tangible book value per share | $ | 61.74 | $ | 61.93 | $ | 60.50 | $ | 58.67 | $ | 58.94 | |||||||||||||||||||
| Market value per share: | |||||||||||||||||||||||||||||
| High | $ | 110.21 | $ | 92.97 | $ | 93.00 | $ | 98.95 | $ | 73.07 | |||||||||||||||||||
| Low | $ | 89.01 | $ | 77.20 | $ | 83.59 | $ | 67.57 | $ | 50.09 | |||||||||||||||||||
| Cash dividends paid | $ | 36,256 | $ | 35,725 | $ | 35,925 | $ | 36,038 | $ | 36,219 | |||||||||||||||||||
| Dividend payout ratio | 30.90 | % | 18.97 | % | 21.59 | % | 24.67 | % | 23.48 | % | |||||||||||||||||||
| Shares outstanding, net | 68,467,772 | 68,596,764 | 69,078,458 | 69,557,873 | 69,637,600 | ||||||||||||||||||||||||
| Stock buy-back program: | |||||||||||||||||||||||||||||
| Shares repurchased | 128,522 | 478,141 | 492,994 | 260,000 | 665,100 | ||||||||||||||||||||||||
| Amount | $ | 13,426 | $ | 40,644 | $ | 43,797 | $ | 20,071 | $ | 42,450 | |||||||||||||||||||
| Average price per share | $ | 104.46 | $ | 85.00 | $ | 88.84 | $ | 77.20 | $ | 63.82 | |||||||||||||||||||
|
Performance ratios (quarter annualized):
|
|||||||||||||||||||||||||||||
| Return on average assets | 0.92 | % | 1.51 | % | 1.33 | % | 1.18 | % | 1.22 | % | |||||||||||||||||||
| Return on average equity | 8.66 | % | 13.78 | % | 12.58 | % | 11.28 | % | 11.75 | % | |||||||||||||||||||
| Net interest margin | 2.52 | % | 2.66 | % | 2.60 | % | 2.62 | % | 2.72 | % | |||||||||||||||||||
| Efficiency ratio | 70.14 | % | 61.23 | % | 64.20 | % | 66.26 | % | 62.77 | % | |||||||||||||||||||
| Reconciliation of non-GAAP measures: | |||||||||||||||||||||||||||||
|
1 Tangible common equity ratio:
|
|||||||||||||||||||||||||||||
| Total shareholders' equity | $ | 5,363,732 | $ | 5,388,973 | $ | 5,332,977 | $ | 5,239,462 | $ | 5,266,266 | |||||||||||||||||||
|
Less: Goodwill and intangible assets, net
|
1,136,527 | 1,140,935 | 1,153,785 | 1,158,676 | 1,161,527 | ||||||||||||||||||||||||
| Tangible common equity | $ | 4,227,205 | $ | 4,248,038 | $ | 4,179,192 | $ | 4,080,786 | $ | 4,104,739 | |||||||||||||||||||
| Total assets | $ | 50,249,431 | $ | 46,923,409 | $ | 47,154,375 | $ | 47,442,513 | $ | 46,671,088 | |||||||||||||||||||
|
Less: Goodwill and intangible assets, net
|
1,136,527 | 1,140,935 | 1,153,785 | 1,158,676 | 1,161,527 | ||||||||||||||||||||||||
| Tangible assets | $ | 49,112,904 | $ | 45,782,474 | $ | 46,000,590 | $ | 46,283,837 | $ | 45,509,561 | |||||||||||||||||||
| Tangible common equity ratio | 8.61 | % | 9.28 | % | 9.09 | % | 8.82 | % | 9.02 | % | |||||||||||||||||||
14
| Three Months Ended | |||||||||||||||||||||||||||||
| Dec. 31, 2021 | Sept. 30, 2021 | June 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |||||||||||||||||||||||||
| Pre-provision net revenue: | |||||||||||||||||||||||||||||
| Net income before taxes | $ | 152,025 | $ | 241,782 | $ | 215,603 | $ | 186,690 | $ | 199,847 | |||||||||||||||||||
| Provision for expected credit losses | (17,000) | (23,000) | (35,000) | (25,000) | (6,500) | ||||||||||||||||||||||||
| Net income (loss) attributable to non-controlling interests | (129) | (601) | 686 | (1,752) | 485 | ||||||||||||||||||||||||
| Pre-provision net revenue | $ | 135,154 | $ | 219,383 | $ | 179,917 | $ | 163,442 | $ | 192,862 | |||||||||||||||||||
| Other data: | |||||||||||||||||||||||||||||
| Tax equivalent interest | $ | 2,104 | $ | 2,217 | $ | 2,320 | $ | 2,301 | $ | 2,414 | |||||||||||||||||||
| Net unrealized gain on available for sale securities | $ | 93,381 | $ | 221,487 | $ | 297,267 | $ | 290,217 | $ | 440,814 | |||||||||||||||||||
| Mortgage banking: | |||||||||||||||||||||||||||||
| Mortgage production revenue | $ | 10,018 | $ | 15,403 | $ | 10,004 | $ | 25,287 | $ | 26,662 | |||||||||||||||||||
| Mortgage loans funded for sale | $ | 568,507 | $ | 652,336 | $ | 754,893 | $ | 843,053 | $ | 998,435 | |||||||||||||||||||
|
Add: current period-end outstanding commitments
|
171,412 | 239,066 | 276,154 | 387,465 | 380,637 | ||||||||||||||||||||||||
|
Less: prior period end outstanding commitments
|
239,066 | 276,154 | 387,465 | 380,637 | 560,493 | ||||||||||||||||||||||||
|
Total mortgage production volume
|
$ | 500,853 | $ | 615,248 | $ | 643,582 | $ | 849,881 | $ | 818,579 | |||||||||||||||||||
|
Mortgage loan refinances to mortgage loans funded for sale
|
51 | % | 48 | % | 48 | % | 65 | % | 58 | % | |||||||||||||||||||
| Realized margin on funded mortgage loans | 1.76 | % | 2.48 | % | 2.75 | % | 3.10 | % | 3.78 | % | |||||||||||||||||||
| Production revenue as a percentage of production volume | 2.00 | % | 2.50 | % | 1.55 | % | 2.98 | % | 3.26 | % | |||||||||||||||||||
| Mortgage servicing revenue | $ | 11,260 | $ | 10,883 | $ | 11,215 | $ | 11,826 | $ | 12,636 | |||||||||||||||||||
|
Average outstanding principal balance of mortgage loans serviced for others
|
15,930,480 | 14,899,306 | 15,065,173 | 15,723,231 | 16,518,208 | ||||||||||||||||||||||||
| Average mortgage servicing revenue rates | 0.28 | % | 0.29 | % | 0.30 | % | 0.31 | % | 0.30 | % | |||||||||||||||||||
|
Gain (loss) on mortgage servicing rights, net of economic hedge:
|
|||||||||||||||||||||||||||||
|
Gain (loss) on mortgage hedge derivative contracts, net
|
$ | (4,862) | $ | (5,829) | $ | 18,764 | $ | (27,705) | $ | (385) | |||||||||||||||||||
|
Gain (loss) on fair value option securities, net
|
1,418 | (120) | (1,627) | (1,910) | 68 | ||||||||||||||||||||||||
|
Gain (loss) on economic hedge of mortgage servicing rights
|
(3,444) | (5,949) | 17,137 | (29,615) | (317) | ||||||||||||||||||||||||
|
Gain (loss) on changes in fair value of mortgage servicing rights
|
7,859 | 12,945 | (13,041) | 33,874 | 6,276 | ||||||||||||||||||||||||
| Gain on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue | 4,415 | 6,996 | 4,096 | 4,259 | 5,959 | ||||||||||||||||||||||||
|
Net interest revenue on fair value option securities2
|
259 | 286 | 341 | 393 | 550 | ||||||||||||||||||||||||
| Total economic benefit of changes in the fair value of mortgage servicing rights, net of economic hedges | $ | 4,674 | $ | 7,282 | $ | 4,437 | $ | 4,652 | $ | 6,509 | |||||||||||||||||||
2 Actual interest earned on fair value option securities less internal transfer-priced cost of funds.
15
QUARTERLY EARNINGS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and per share data)
| Three Months Ended | |||||||||||||||||||||||||||||
| Dec. 31, 2021 | Sept. 30, 2021 | June 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |||||||||||||||||||||||||
| Interest revenue | $ | 292,334 | $ | 293,463 | $ | 295,893 | $ | 298,239 | $ | 319,020 | |||||||||||||||||||
| Interest expense | 15,257 | 13,236 | 15,584 | 17,819 | 21,790 | ||||||||||||||||||||||||
| Net interest revenue | 277,077 | 280,227 | 280,309 | 280,420 | 297,230 | ||||||||||||||||||||||||
| Provision for credit losses | (17,000) | (23,000) | (35,000) | (25,000) | (6,500) | ||||||||||||||||||||||||
|
Net interest revenue after provision for credit losses
|
294,077 | 303,227 | 315,309 | 305,420 | 303,730 | ||||||||||||||||||||||||
| Other operating revenue: | |||||||||||||||||||||||||||||
| Brokerage and trading revenue | 14,869 | 47,930 | 29,408 | 20,782 | 39,506 | ||||||||||||||||||||||||
| Transaction card revenue | 24,998 | 24,632 | 24,923 | 22,430 | 21,896 | ||||||||||||||||||||||||
| Fiduciary and asset management revenue | 46,872 | 45,248 | 44,832 | 41,322 | 41,799 | ||||||||||||||||||||||||
| Deposit service charges and fees | 26,718 | 27,429 | 25,861 | 24,209 | 24,343 | ||||||||||||||||||||||||
| Mortgage banking revenue | 21,278 | 26,286 | 21,219 | 37,113 | 39,298 | ||||||||||||||||||||||||
| Other revenue | 11,586 | 18,896 | 23,172 | 16,296 | 14,209 | ||||||||||||||||||||||||
| Total fees and commissions | 146,321 | 190,421 | 169,415 | 162,152 | 181,051 | ||||||||||||||||||||||||
| Other gains, net | 6,081 | 31,091 | 16,449 | 10,121 | 7,394 | ||||||||||||||||||||||||
| Gain (loss) on derivatives, net | (4,788) | (5,760) | 18,820 | (27,650) | (339) | ||||||||||||||||||||||||
|
Gain (loss) on fair value option securities, net
|
1,418 | (120) | (1,627) | (1,910) | 68 | ||||||||||||||||||||||||
|
Change in fair value of mortgage servicing rights
|
7,859 | 12,945 | (13,041) | 33,874 | 6,276 | ||||||||||||||||||||||||
| Gain on available for sale securities, net | 552 | 1,255 | 1,430 | 467 | 4,339 | ||||||||||||||||||||||||
| Total other operating revenue | 157,443 | 229,832 | 191,446 | 177,054 | 198,789 | ||||||||||||||||||||||||
| Other operating expense: | |||||||||||||||||||||||||||||
| Personnel | 174,474 | 175,863 | 172,035 | 173,010 | 176,198 | ||||||||||||||||||||||||
| Business promotion | 6,452 | 4,939 | 2,744 | 2,154 | 3,728 | ||||||||||||||||||||||||
|
Charitable contributions to BOKF Foundation
|
5,000 | — | — | 4,000 | 6,000 | ||||||||||||||||||||||||
| Professional fees and services | 14,129 | 12,436 | 12,361 | 11,980 | 14,254 | ||||||||||||||||||||||||
| Net occupancy and equipment | 26,897 | 28,395 | 26,633 | 26,662 | 27,875 | ||||||||||||||||||||||||
| Insurance | 3,889 | 3,712 | 3,660 | 4,620 | 4,006 | ||||||||||||||||||||||||
|
Data processing and communications
|
39,358 | 38,371 | 36,418 | 37,467 | 35,061 | ||||||||||||||||||||||||
| Printing, postage and supplies | 2,935 | 3,558 | 4,285 | 3,440 | 3,805 | ||||||||||||||||||||||||
|
Amortization of intangible assets
|
4,438 | 4,488 | 4,578 | 4,807 | 5,088 | ||||||||||||||||||||||||
| Mortgage banking costs | 8,667 | 8,962 | 11,126 | 13,943 | 14,765 | ||||||||||||||||||||||||
| Other expense | 13,256 | 10,553 | 17,312 | 13,701 | 11,892 | ||||||||||||||||||||||||
| Total other operating expense | 299,495 | 291,277 | 291,152 | 295,784 | 302,672 | ||||||||||||||||||||||||
| Net income before taxes | 152,025 | 241,782 | 215,603 | 186,690 | 199,847 | ||||||||||||||||||||||||
| Federal and state income taxes | 34,836 | 54,061 | 48,496 | 42,382 | 45,138 | ||||||||||||||||||||||||
| Net income | 117,189 | 187,721 | 167,107 | 144,308 | 154,709 | ||||||||||||||||||||||||
|
Net income (loss) attributable to non-controlling interests
|
(129) | (601) | 686 | (1,752) | 485 | ||||||||||||||||||||||||
|
Net income attributable to BOK Financial Corporation shareholders
|
$ | 117,318 | $ | 188,322 | $ | 166,421 | $ | 146,060 | $ | 154,224 | |||||||||||||||||||
| Average shares outstanding: | |||||||||||||||||||||||||||||
| Basic | 68,069,160 | 68,359,125 | 68,815,666 | 69,137,375 | 69,489,597 | ||||||||||||||||||||||||
| Diluted | 68,070,910 | 68,360,871 | 68,817,442 | 69,141,710 | 69,493,050 | ||||||||||||||||||||||||
| Net income per share: | |||||||||||||||||||||||||||||
| Basic | $ | 1.71 | $ | 2.74 | $ | 2.40 | $ | 2.10 | $ | 2.21 | |||||||||||||||||||
| Diluted | $ | 1.71 | $ | 2.74 | $ | 2.40 | $ | 2.10 | $ | 2.21 | |||||||||||||||||||
16
LOANS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
| Dec. 31, 2021 | Sept. 30, 2021 | June 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | ||||||||||||||||||||||||||||
| Commercial: | ||||||||||||||||||||||||||||||||
| Healthcare | $ | 3,414,940 | $ | 3,347,641 | $ | 3,381,261 | $ | 3,290,758 | $ | 3,305,990 | ||||||||||||||||||||||
| Services | 3,367,193 | 3,323,422 | 3,389,756 | 3,421,948 | 3,508,583 | |||||||||||||||||||||||||||
| Energy | 3,006,884 | 2,814,059 | 3,011,331 | 3,202,488 | 3,469,194 | |||||||||||||||||||||||||||
| General business | 2,717,448 | 2,690,018 | 2,690,559 | 2,742,590 | 2,793,768 | |||||||||||||||||||||||||||
| Total commercial | 12,506,465 | 12,175,140 | 12,472,907 | 12,657,784 | 13,077,535 | |||||||||||||||||||||||||||
| Commercial real estate: | ||||||||||||||||||||||||||||||||
| Office | 1,040,963 | 1,030,755 | 1,073,346 | 1,094,060 | 1,085,257 | |||||||||||||||||||||||||||
| Industrial | 766,125 | 890,316 | 824,577 | 789,437 | 810,510 | |||||||||||||||||||||||||||
| Multifamily | 786,404 | 875,586 | 964,824 | 1,227,915 | 1,328,045 | |||||||||||||||||||||||||||
| Retail | 679,917 | 766,402 | 784,445 | 787,648 | 796,223 | |||||||||||||||||||||||||||
|
Residential construction and land development
|
120,016 | 118,416 | 128,939 | 119,079 | 119,394 | |||||||||||||||||||||||||||
| Other commercial real estate | 437,900 | 435,417 | 470,861 | 485,208 | 559,109 | |||||||||||||||||||||||||||
| Total commercial real estate | 3,831,325 | 4,116,892 | 4,246,992 | 4,503,347 | 4,698,538 | |||||||||||||||||||||||||||
| Paycheck protection program | 276,341 | 536,052 | 1,121,583 | 1,848,550 | 1,682,310 | |||||||||||||||||||||||||||
| Loans to individuals: | ||||||||||||||||||||||||||||||||
| Residential mortgage | 1,722,170 | 1,747,243 | 1,772,627 | 1,797,478 | 1,863,003 | |||||||||||||||||||||||||||
| Residential mortgages guaranteed by U.S. government agencies | 354,173 | 376,986 | 413,806 | 420,051 | 408,687 | |||||||||||||||||||||||||||
| Personal | 1,515,206 | 1,395,623 | 1,388,534 | 1,306,637 | 1,277,447 | |||||||||||||||||||||||||||
| Total loans to individuals | 3,591,549 | 3,519,852 | 3,574,967 | 3,524,166 | 3,549,137 | |||||||||||||||||||||||||||
| Total | $ | 20,205,680 | $ | 20,347,936 | $ | 21,416,449 | $ | 22,533,847 | $ | 23,007,520 | ||||||||||||||||||||||
17
LOANS MANAGED BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
| Dec. 31, 2021 | Sept. 30, 2021 | June 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |||||||||||||||||||||||||
| Texas: | |||||||||||||||||||||||||||||
| Commercial | $ | 6,068,700 | $ | 5,815,562 | $ | 5,690,901 | $ | 5,748,345 | $ | 5,926,534 | |||||||||||||||||||
| Commercial real estate | 1,253,439 | 1,383,871 | 1,403,751 | 1,511,714 | 1,519,217 | ||||||||||||||||||||||||
| Paycheck protection program | 81,654 | 115,623 | 342,933 | 537,899 | 501,079 | ||||||||||||||||||||||||
| Loans to individuals | 942,982 | 901,121 | 885,619 | 848,194 | 855,410 | ||||||||||||||||||||||||
| Total Texas | 8,346,775 | 8,216,177 | 8,323,204 | 8,646,152 | 8,802,240 | ||||||||||||||||||||||||
| Oklahoma: | |||||||||||||||||||||||||||||
| Commercial | 2,633,014 | 2,590,887 | 2,840,560 | 2,975,477 | 3,144,782 | ||||||||||||||||||||||||
| Commercial real estate | 546,021 | 552,184 | 552,673 | 597,840 | 597,733 | ||||||||||||||||||||||||
| Paycheck protection program | 69,817 | 192,474 | 242,880 | 468,002 | 413,108 | ||||||||||||||||||||||||
| Loans to individuals | 2,024,404 | 2,014,099 | 2,063,419 | 2,043,705 | 2,052,784 | ||||||||||||||||||||||||
| Total Oklahoma | 5,273,256 | 5,349,644 | 5,699,532 | 6,085,024 | 6,208,407 | ||||||||||||||||||||||||
| Colorado: | |||||||||||||||||||||||||||||
| Commercial | 1,936,149 | 1,874,613 | 1,904,182 | 1,910,826 | 1,929,320 | ||||||||||||||||||||||||
| Commercial real estate | 470,937 | 526,653 | 656,521 | 777,786 | 879,648 | ||||||||||||||||||||||||
| Paycheck protection program | 82,781 | 140,470 | 299,712 | 436,540 | 377,111 | ||||||||||||||||||||||||
| Loans to individuals | 256,533 | 249,298 | 262,796 | 264,759 | 264,295 | ||||||||||||||||||||||||
| Total Colorado | 2,746,400 | 2,791,034 | 3,123,211 | 3,389,911 | 3,450,374 | ||||||||||||||||||||||||
| Arizona: | |||||||||||||||||||||||||||||
| Commercial | 1,130,798 | 1,194,801 | 1,239,270 | 1,207,089 | 1,219,072 | ||||||||||||||||||||||||
| Commercial real estate | 674,309 | 734,174 | 705,497 | 667,766 | 726,111 | ||||||||||||||||||||||||
| Paycheck protection program | 21,594 | 42,815 | 104,946 | 208,481 | 211,725 | ||||||||||||||||||||||||
| Loans to individuals | 186,528 | 182,506 | 178,481 | 179,031 | 177,948 | ||||||||||||||||||||||||
| Total Arizona | 2,013,229 | 2,154,296 | 2,228,194 | 2,262,367 | 2,334,856 | ||||||||||||||||||||||||
| Kansas/Missouri: | |||||||||||||||||||||||||||||
| Commercial | 338,697 | 336,414 | 388,291 | 421,974 | 455,914 | ||||||||||||||||||||||||
| Commercial real estate | 382,761 | 408,001 | 406,055 | 395,590 | 366,821 | ||||||||||||||||||||||||
| Paycheck protection program | 4,718 | 6,920 | 41,954 | 60,741 | 56,011 | ||||||||||||||||||||||||
| Loans to individuals | 110,889 | 100,920 | 103,092 | 104,954 | 105,995 | ||||||||||||||||||||||||
| Total Kansas/Missouri | 837,065 | 852,255 | 939,392 | 983,259 | 984,741 | ||||||||||||||||||||||||
| New Mexico: | |||||||||||||||||||||||||||||
| Commercial | 306,964 | 287,695 | 304,804 | 307,395 | 303,833 | ||||||||||||||||||||||||
| Commercial real estate | 442,128 | 437,302 | 437,996 | 448,298 | 473,204 | ||||||||||||||||||||||||
| Paycheck protection program | 13,510 | 31,444 | 86,716 | 124,059 | 109,881 | ||||||||||||||||||||||||
| Loans to individuals | 63,930 | 66,651 | 68,177 | 70,491 | 75,665 | ||||||||||||||||||||||||
| Total New Mexico | 826,532 | 823,092 | 897,693 | 950,243 | 962,583 | ||||||||||||||||||||||||
| Arkansas: | |||||||||||||||||||||||||||||
| Commercial | 92,143 | 75,168 | 104,899 | 86,678 | 98,080 | ||||||||||||||||||||||||
| Commercial real estate | 61,730 | 74,707 | 84,499 | 104,353 | 135,804 | ||||||||||||||||||||||||
| Paycheck protection program | 2,267 | 6,306 | 2,442 | 12,828 | 13,395 | ||||||||||||||||||||||||
| Loans to individuals | 6,283 | 5,257 | 13,383 | 13,032 | 17,040 | ||||||||||||||||||||||||
| Total Arkansas | 162,423 | 161,438 | 205,223 | 216,891 | 264,319 | ||||||||||||||||||||||||
| TOTAL BOK FINANCIAL | $ | 20,205,680 | $ | 20,347,936 | $ | 21,416,449 | $ | 22,533,847 | $ | 23,007,520 | |||||||||||||||||||
Loans attributed to a principal market may not always represent the location of the borrower or the collateral.
18
DEPOSITS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
| Dec. 31, 2021 | Sept. 30, 2021 | June 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |||||||||||||||||||||||||
| Oklahoma: | |||||||||||||||||||||||||||||
| Demand | $ | 5,433,405 | $ | 5,080,162 | $ | 4,985,542 | $ | 4,823,436 | $ | 4,329,205 | |||||||||||||||||||
| Interest-bearing: | |||||||||||||||||||||||||||||
| Transaction | 12,689,367 | 11,692,679 | 12,065,844 | 12,828,070 | 12,603,658 | ||||||||||||||||||||||||
| Savings | 521,439 | 510,906 | 500,344 | 487,862 | 420,996 | ||||||||||||||||||||||||
| Time | 978,822 | 1,039,866 | 1,139,980 | 1,197,517 | 1,134,453 | ||||||||||||||||||||||||
| Total interest-bearing | 14,189,628 | 13,243,451 | 13,706,168 | 14,513,449 | 14,159,107 | ||||||||||||||||||||||||
| Total Oklahoma | 19,623,033 | 18,323,613 | 18,691,710 | 19,336,885 | 18,488,312 | ||||||||||||||||||||||||
| Texas: | |||||||||||||||||||||||||||||
| Demand | 4,552,983 | 3,987,503 | 3,752,790 | 3,592,969 | 3,449,882 | ||||||||||||||||||||||||
| Interest-bearing: | |||||||||||||||||||||||||||||
| Transaction | 5,345,461 | 4,985,465 | 4,335,113 | 4,257,234 | 3,800,427 | ||||||||||||||||||||||||
| Savings | 178,458 | 165,043 | 160,805 | 154,406 | 139,173 | ||||||||||||||||||||||||
| Time | 337,559 | 337,389 | 346,577 | 368,086 | 383,062 | ||||||||||||||||||||||||
| Total interest-bearing | 5,861,478 | 5,487,897 | 4,842,495 | 4,779,726 | 4,322,662 | ||||||||||||||||||||||||
| Total Texas | 10,414,461 | 9,475,400 | 8,595,285 | 8,372,695 | 7,772,544 | ||||||||||||||||||||||||
| Colorado: | |||||||||||||||||||||||||||||
| Demand | 2,526,855 | 2,158,596 | 1,991,343 | 2,115,354 | 2,168,404 | ||||||||||||||||||||||||
| Interest-bearing: | |||||||||||||||||||||||||||||
| Transaction | 2,334,371 | 2,337,354 | 2,159,819 | 2,100,135 | 2,170,485 | ||||||||||||||||||||||||
| Savings | 78,636 | 79,873 | 73,990 | 73,446 | 69,384 | ||||||||||||||||||||||||
| Time | 174,351 | 184,002 | 193,787 | 204,973 | 208,778 | ||||||||||||||||||||||||
| Total interest-bearing | 2,587,358 | 2,601,229 | 2,427,596 | 2,378,554 | 2,448,647 | ||||||||||||||||||||||||
| Total Colorado | 5,114,213 | 4,759,825 | 4,418,939 | 4,493,908 | 4,617,051 | ||||||||||||||||||||||||
| New Mexico: | |||||||||||||||||||||||||||||
| Demand | 1,196,057 | 1,222,895 | 1,197,412 | 1,131,713 | 941,074 | ||||||||||||||||||||||||
| Interest-bearing: | |||||||||||||||||||||||||||||
| Transaction | 858,394 | 837,630 | 723,757 | 736,923 | 733,007 | ||||||||||||||||||||||||
| Savings | 107,963 | 107,615 | 105,837 | 103,591 | 91,646 | ||||||||||||||||||||||||
| Time | 163,871 | 168,879 | 174,665 | 181,863 | 186,307 | ||||||||||||||||||||||||
| Total interest-bearing | 1,130,228 | 1,114,124 | 1,004,259 | 1,022,377 | 1,010,960 | ||||||||||||||||||||||||
| Total New Mexico | 2,326,285 | 2,337,019 | 2,201,671 | 2,154,090 | 1,952,034 | ||||||||||||||||||||||||
| Arizona: | |||||||||||||||||||||||||||||
| Demand | 934,282 | 1,110,884 | 943,511 | 915,439 | 905,201 | ||||||||||||||||||||||||
| Interest-bearing: | |||||||||||||||||||||||||||||
| Transaction | 834,491 | 784,614 | 820,901 | 835,795 | 768,220 | ||||||||||||||||||||||||
| Savings | 16,182 | 16,468 | 13,496 | 13,235 | 12,174 | ||||||||||||||||||||||||
| Time | 31,274 | 30,862 | 30,012 | 30,997 | 32,721 | ||||||||||||||||||||||||
| Total interest-bearing | 881,947 | 831,944 | 864,409 | 880,027 | 813,115 | ||||||||||||||||||||||||
| Total Arizona | 1,816,229 | 1,942,828 | 1,807,920 | 1,795,466 | 1,718,316 | ||||||||||||||||||||||||
19
| Dec. 31, 2021 | Sept. 30, 2021 | June 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |||||||||||||||||||||||||
| Kansas/Missouri: | |||||||||||||||||||||||||||||
| Demand | 658,342 | 488,595 | 463,339 | 478,370 | 426,738 | ||||||||||||||||||||||||
| Interest-bearing: | |||||||||||||||||||||||||||||
| Transaction | 1,086,946 | 965,757 | 978,160 | 991,510 | 960,237 | ||||||||||||||||||||||||
| Savings | 18,844 | 17,303 | 17,539 | 18,686 | 16,286 | ||||||||||||||||||||||||
| Time | 12,255 | 13,040 | 13,509 | 13,898 | 14,610 | ||||||||||||||||||||||||
| Total interest-bearing | 1,118,045 | 996,100 | 1,009,208 | 1,024,094 | 991,133 | ||||||||||||||||||||||||
| Total Kansas/Missouri | 1,776,387 | 1,484,695 | 1,472,547 | 1,502,464 | 1,417,871 | ||||||||||||||||||||||||
| Arkansas: | |||||||||||||||||||||||||||||
| Demand | 42,499 | 41,594 | 46,472 | 45,889 | 45,834 | ||||||||||||||||||||||||
| Interest-bearing: | |||||||||||||||||||||||||||||
| Transaction | 119,543 | 149,611 | 195,125 | 141,207 | 122,388 | ||||||||||||||||||||||||
| Savings | 3,213 | 3,289 | 3,445 | 3,000 | 2,333 | ||||||||||||||||||||||||
| Time | 6,196 | 6,677 | 6,819 | 7,022 | 7,197 | ||||||||||||||||||||||||
| Total interest-bearing | 128,952 | 159,577 | 205,389 | 151,229 | 131,918 | ||||||||||||||||||||||||
| Total Arkansas | 171,451 | 201,171 | 251,861 | 197,118 | 177,752 | ||||||||||||||||||||||||
| TOTAL BOK FINANCIAL | $ | 41,242,059 | $ | 38,524,551 | $ | 37,439,933 | $ | 37,852,626 | $ | 36,143,880 | |||||||||||||||||||
20
NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
| Three Months Ended | |||||||||||||||||||||||||||||
| Dec. 31, 2021 | Sept. 30, 2021 | June 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |||||||||||||||||||||||||
| TAX-EQUIVALENT ASSETS YIELDS | |||||||||||||||||||||||||||||
| Interest-bearing cash and cash equivalents | 0.16 | % | 0.14 | % | 0.10 | % | 0.10 | % | 0.10 | % | |||||||||||||||||||
| Trading securities | 1.69 | % | 2.04 | % | 1.95 | % | 2.06 | % | 2.02 | % | |||||||||||||||||||
| Investment securities, net of allowance | 4.99 | % | 5.02 | % | 5.01 | % | 4.88 | % | 4.88 | % | |||||||||||||||||||
| Available for sale securities | 1.72 | % | 1.80 | % | 1.85 | % | 1.84 | % | 1.98 | % | |||||||||||||||||||
| Fair value option securities | 2.71 | % | 2.62 | % | 2.60 | % | 1.95 | % | 2.27 | % | |||||||||||||||||||
| Restricted equity securities | 2.98 | % | 2.55 | % | 3.36 | % | 2.86 | % | 3.25 | % | |||||||||||||||||||
| Residential mortgage loans held for sale | 3.06 | % | 3.06 | % | 2.91 | % | 2.71 | % | 2.75 | % | |||||||||||||||||||
| Loans | 3.70 | % | 3.68 | % | 3.54 | % | 3.55 | % | 3.68 | % | |||||||||||||||||||
| Allowance for loan losses | |||||||||||||||||||||||||||||
| Loans, net of allowance | 3.75 | % | 3.73 | % | 3.60 | % | 3.62 | % | 3.75 | % | |||||||||||||||||||
| Total tax-equivalent yield on earning assets | 2.61 | % | 2.78 | % | 2.75 | % | 2.78 | % | 2.92 | % | |||||||||||||||||||
| COST OF INTEREST-BEARING LIABILITIES | |||||||||||||||||||||||||||||
| Interest-bearing deposits: | |||||||||||||||||||||||||||||
| Interest-bearing transaction | 0.09 | % | 0.09 | % | 0.10 | % | 0.12 | % | 0.14 | % | |||||||||||||||||||
| Savings | 0.04 | % | 0.04 | % | 0.04 | % | 0.04 | % | 0.05 | % | |||||||||||||||||||
| Time | 0.53 | % | 0.55 | % | 0.58 | % | 0.70 | % | 0.89 | % | |||||||||||||||||||
| Total interest-bearing deposits | 0.12 | % | 0.13 | % | 0.14 | % | 0.17 | % | 0.19 | % | |||||||||||||||||||
| Funds purchased and repurchase agreements | 0.10 | % | 0.20 | % | 0.16 | % | 0.19 | % | 0.28 | % | |||||||||||||||||||
| Other borrowings | 0.49 | % | 0.37 | % | 0.34 | % | 0.39 | % | 0.42 | % | |||||||||||||||||||
| Subordinated debt | 4.02 | % | 4.63 | % | 4.87 | % | 4.92 | % | 4.87 | % | |||||||||||||||||||
| Total cost of interest-bearing liabilities | 0.15 | % | 0.19 | % | 0.21 | % | 0.24 | % | 0.28 | % | |||||||||||||||||||
| Tax-equivalent net interest revenue spread | 2.46 | % | 2.59 | % | 2.54 | % | 2.54 | % | 2.64 | % | |||||||||||||||||||
|
Effect of noninterest-bearing funding sources and other
|
0.06 | % | 0.07 | % | 0.06 | % | 0.08 | % | 0.08 | % | |||||||||||||||||||
| Tax-equivalent net interest margin | 2.52 | % | 2.66 | % | 2.60 | % | 2.62 | % | 2.72 | % | |||||||||||||||||||
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.
21
CREDIT QUALITY INDICATORS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratios)
| Three Months Ended | |||||||||||||||||||||||||||||
| Dec. 31, 2021 | Sept. 30, 2021 | June 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |||||||||||||||||||||||||
| Nonperforming assets: | |||||||||||||||||||||||||||||
| Nonaccruing loans: | |||||||||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||||
| Energy | $ | 31,091 | $ | 45,500 | $ | 70,341 | $ | 101,800 | $ | 125,059 | |||||||||||||||||||
| Services | 17,170 | 25,714 | 29,913 | 28,033 | 25,598 | ||||||||||||||||||||||||
| Healthcare | 15,762 | 509 | 527 | 3,187 | 3,645 | ||||||||||||||||||||||||
| General business | 10,081 | 8,951 | 11,823 | 14,053 | 12,857 | ||||||||||||||||||||||||
| Total commercial | 74,104 | 80,674 | 112,604 | 147,073 | 167,159 | ||||||||||||||||||||||||
| Commercial real estate | 14,262 | 21,223 | 26,123 | 27,243 | 27,246 | ||||||||||||||||||||||||
| Loans to individuals: | |||||||||||||||||||||||||||||
| Permanent mortgage | 31,574 | 30,674 | 31,473 | 32,884 | 32,228 | ||||||||||||||||||||||||
|
Permanent mortgage guaranteed by U.S. government agencies
|
13,861 | 9,188 | 9,207 | 8,564 | 7,741 | ||||||||||||||||||||||||
| Personal | 258 | 188 | 229 | 255 | 319 | ||||||||||||||||||||||||
| Total loans to individuals | 45,693 | 40,050 | 40,909 | 41,703 | 40,288 | ||||||||||||||||||||||||
| Total nonaccruing loans | $ | 134,059 | $ | 141,947 | $ | 179,636 | $ | 216,019 | $ | 234,693 | |||||||||||||||||||
|
Accruing renegotiated loans guaranteed by U.S. government agencies
|
210,618 | 178,554 | 171,324 | 154,591 | 151,775 | ||||||||||||||||||||||||
| Real estate and other repossessed assets | 24,589 | 28,770 | 57,337 | 70,911 | 90,526 | ||||||||||||||||||||||||
| Total nonperforming assets | $ | 369,266 | $ | 349,271 | $ | 408,297 | $ | 441,521 | $ | 476,994 | |||||||||||||||||||
|
Total nonperforming assets excluding those guaranteed by U.S. government agencies
|
$ | 144,787 | $ | 161,529 | $ | 227,766 | $ | 278,366 | $ | 317,478 | |||||||||||||||||||
|
Accruing loans 90 days past due1
|
$ | 313 | $ | 223 | $ | 252 | $ | 395 | $ | 10,369 | |||||||||||||||||||
| Gross charge-offs | $ | 6,558 | $ | 9,584 | $ | 18,304 | $ | 16,905 | $ | 18,251 | |||||||||||||||||||
| Recoveries | (7,272) | (1,769) | (2,856) | (2,437) | (1,592) | ||||||||||||||||||||||||
| Net charge-offs (recoveries) | $ | (714) | $ | 7,815 | $ | 15,448 | $ | 14,468 | $ | 16,659 | |||||||||||||||||||
|
Provision for loan losses
|
$ | (20,973) | $ | (27,395) | $ | (25,064) | $ | (21,770) | $ | (14,478) | |||||||||||||||||||
|
Provision for credit losses from off-balance sheet unfunded loan commitments
|
3,738 | 4,952 | (8,590) | (4,044) | 8,952 | ||||||||||||||||||||||||
| Provision for expected credit losses from mortgage banking activities | 150 | (534) | (1,222) | 885 | (923) | ||||||||||||||||||||||||
| Provision for credit losses related to held-to maturity (investment) securities portfolio | 85 | (23) | (124) | (71) | (51) | ||||||||||||||||||||||||
| Total provision for credit losses | $ | (17,000) | $ | (23,000) | $ | (35,000) | $ | (25,000) | $ | (6,500) | |||||||||||||||||||
22
| Three Months Ended | |||||||||||||||||||||||||||||
| Dec. 31, 2021 | Sept. 30, 2021 | June 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |||||||||||||||||||||||||
|
Allowance for loan losses to period end loans
|
1.27 | % | 1.36 | % | 1.46 | % | 1.56 | % | 1.69 | % | |||||||||||||||||||
|
Allowance for loan losses to period end loans excluding PPP loans2
|
1.29 | % | 1.40 | % | 1.54 | % | 1.70 | % | 1.82 | % | |||||||||||||||||||
|
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans
|
1.43 | % | 1.50 | % | 1.57 | % | 1.71 | % | 1.85 | % | |||||||||||||||||||
|
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans excluding PPP loans2
|
1.45 | % | 1.54 | % | 1.66 | % | 1.86 | % | 2.00 | % | |||||||||||||||||||
|
Nonperforming assets to period end loans and repossessed assets
|
1.83 | % | 1.71 | % | 1.90 | % | 1.95 | % | 2.07 | % | |||||||||||||||||||
|
Net charge-offs (annualized) to average loans
|
(0.01) | % | 0.15 | % | 0.28 | % | 0.25 | % | 0.28 | % | |||||||||||||||||||
|
Net charge-offs (annualized) to average loans excluding PPP loans2
|
(0.01) | % | 0.16 | % | 0.30 | % | 0.28 | % | 0.31 | % | |||||||||||||||||||
|
Allowance for loan losses to nonaccruing loans1
|
213.33 | % | 208.41 | % | 183.00 | % | 169.87 | % | 171.24 | % | |||||||||||||||||||
|
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to nonaccruing loans1
|
240.77 | % | 230.43 | % | 197.25 | % | 185.72 | % | 187.51 | % | |||||||||||||||||||
1 Excludes residential mortgage loans guaranteed by agencies of the U.S. government.
2 Metric meaningful due to the unique characteristics and short-term nature of the PPP loans.
23
SEGMENTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratios)
| Three Months Ended | 4Q21 vs 3Q21 | Year Ended | 2021 vs 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dec. 31, 2021 | Sept. 30, 2021 | $ change | % change | Dec. 31, 2021 | Dec. 31, 2020 | $ change | % change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial Banking | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net interest revenue | $ | 140,723 | $ | 134,104 | $ | 6,619 | 4.9 | % | $ | 535,735 | $ | 588,488 | $ | (52,753) | (9.0) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fees and commissions revenue | 57,414 | 56,452 | 962 | 1.7 | % | 227,081 | 187,119 | 39,962 | 21.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Combined net interest and fee revenue | 198,137 | 190,556 | 7,581 | 4.0 | % | 762,816 | 775,607 | (12,791) | (1.6) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other operating expense | 74,459 | 68,301 | 6,158 | 9.0 | % | 281,089 | 258,903 | 22,186 | 8.6 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate expense allocations | 12,926 | 11,769 | 1,157 | 9.8 | % | 49,941 | 24,862 | 25,079 | 100.9 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | 83,514 | 102,694 | (19,180) | (18.7) | % | 328,516 | 306,005 | 22,511 | 7.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average assets | 29,451,007 | 28,474,132 | 976,875 | 3.4 | % | 28,536,881 | 26,994,075 | 1,542,806 | 5.7 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average loans | 16,334,695 | 16,588,875 | (254,180) | (1.5) | % | 16,853,006 | 18,711,372 | (1,858,366) | (9.9) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average deposits | 19,537,285 | 17,881,673 | 1,655,612 | 9.3 | % | 17,659,695 | 14,319,729 | 3,339,966 | 23.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Consumer Banking | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net interest revenue | $ | 30,385 | $ | 27,222 | $ | 3,163 | 11.6 | % | $ | 103,527 | $ | 147,004 | $ | (43,477) | (29.6) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fees and commissions revenue | 38,944 | 44,405 | (5,461) | (12.3) | % | 173,364 | 245,554 | (72,190) | (29.4) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Combined net interest and fee revenue | 69,329 | 71,627 | (2,298) | (3.2) | % | 276,891 | 392,558 | (115,667) | (29.5) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other operating expense | 52,036 | 49,483 | 2,553 | 5.2 | % | 209,596 | 230,402 | (20,806) | (9.0) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate expense allocations | 11,420 | 11,516 | (96) | (0.8) | % | 46,010 | 42,155 | 3,855 | 9.1 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | 6,810 | 12,432 | (5,622) | (45.2) | % | 27,643 | 97,974 | (70,331) | (71.8) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average assets | 10,186,797 | 10,083,593 | 103,204 | 1.0 | % | 10,029,687 | 9,842,114 | 187,573 | 1.9 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average loans | 1,705,222 | 1,763,705 | (58,483) | (3.3) | % | 1,769,384 | 1,764,682 | 4,702 | 0.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average deposits | 8,682,437 | 8,516,942 | 165,495 | 1.9 | % | 8,439,577 | 7,599,937 | 839,640 | 11.0 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wealth Management | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net interest revenue | $ | 58,229 | $ | 55,196 | $ | 3,033 | 5.5 | % | $ | 214,072 | $ | 117,290 | $ | 96,782 | 82.5 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fees and commissions revenue | 56,275 | 97,966 | (41,691) | (42.6) | % | 298,765 | 399,229 | (100,464) | (25.2) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Combined net interest and fee revenue | 114,504 | 153,162 | (38,658) | (25.2) | % | 512,837 | 516,519 | (3,682) | (0.7) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other operating expense | 74,947 | 87,417 | (12,470) | (14.3) | % | 320,357 | 325,627 | (5,270) | (1.6) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate expense allocations | 9,971 | 10,101 | (130) | (1.3) | % | 40,301 | 35,331 | 4,970 | 14.1 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | 21,700 | 41,406 | (19,706) | (47.6) | % | 113,550 | 115,614 | (2,064) | (1.8) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average assets | 19,526,382 | 19,109,704 | 416,678 | 2.2 | % | 19,123,130 | 15,695,646 | 3,427,484 | 21.8 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average loans | 2,065,261 | 1,971,380 | 93,881 | 4.8 | % | 1,981,159 | 1,758,226 | 222,933 | 12.7 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average deposits | 9,194,019 | 9,120,446 | 73,573 | 0.8 | % | 9,426,771 | 8,676,047 | 750,724 | 8.7 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fiduciary assets | 64,536,833 | 60,497,576 | 4,039,257 | 6.7 | % | 64,536,833 | 55,486,492 | 9,050,341 | 16.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Assets under management or administration | 104,917,721 | 98,842,789 | 6,074,932 | 6.1 | % | 104,917,721 | 91,592,247 | 13,325,474 | 14.5 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
24