BOK FINANCIAL CORP ET AL (Form: 8-K, Received: 07/22/2020 08:09:32)

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):

July 22, 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 July 22, 2020, BOK Financial Corporation (“BOK Financial”) issued a press release announcing its financial results for the three and six months ended June 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 July 22, 2020, in connection with the issuance of the Press Release, BOK Financial released financial information related to the three and six months ended June 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 July 22, 2020, titled "BOK Financial Corporation Reports Quarterly Earnings of $6 5 million or $0.92 Per Share in the Second Quarter" and Financial Information for the Three and Six Months Ended June 3 0 , 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: July 22, 2020

Exhibit 99(a)

NASD: BOKF

BOK Financial Corporation Reports Quarterly Earnings of $65 million or $0.92 Per Share in the Second Quarter


CEO Commentary
"The second quarter, unlike any in recent memory, demonstrated the effectiveness of our diversified revenue model," said Steven G. Bradshaw, president and chief executive officer. "Record quarters from both our Wealth Management and Mortgage businesses added more than $150 million to fee revenue this quarter, eclipsing our pre-provision net revenue from the same quarter a year ago. In fact, this quarter generated the highest level of pre-provision net revenue in the history of our company, even after normalizing for the impact of the Paycheck Protection Program. Considering the economic environment we find ourselves in today, this is truly a remarkable outcome." Bradshaw continued, "With more than 40 percent of our company's revenues derived from a host of fee-based businesses, we have the proven ability to generate positive outcomes through all parts of the economic cycle. In this time of margin compression and credit concerns, financial institutions like BOK Financial demonstrate the real power of a diversified business model and sound underwriting methods."


Second Quarter 2020 Financial Highlights

•Net income was $64.7 million or $0.92 per diluted share for the second quarter of 2020 and $62.1 million or $0.88 per diluted share for the first quarter of 2020. Pre-provision net revenue was $215.8 million for the second quarter of 2020 compared to $173.0 million for the prior quarter. The second quarter of 2020 included a pre-tax provision for expected credit losses of $135.3 million compared to $93.8 million in the prior quarter.

•Net interest revenue totaled $278.1 million, an increase of $16.7 million, largely due to the addition of loans related to the Small Business Administration's ("SBA") Paycheck Protection Program ("PPP") that began on April 3, 2020. Net interest margin was 2.83 percent compared to 2.80 percent in the first quarter of 2020. Our ability to move deposit costs down, along with LIBOR remaining elevated early in the second quarter relative to recent Federal Reserve rate cuts and the strategic positioning of our balance sheet, has allowed us to combat much of the market pressure on our margin.

•Fees and commissions revenue totaled $213.7 million, an increase of $21.0 million. Low mortgage interest rates continued to drive increases in mortgage banking revenue of $16.8 million and related bond trading activity of $9.5 million over the first quarter of 2020. These increases were partially offset by a reduction in service charges, largely due to "shelter in place" impacts coupled with proactive waivers of fees that were extended as a courtesy to our customers during the COVID-19 pandemic.

•Operating expense was $295.4 million, an increase of $26.8 million. Personnel expense increased $20.1 million, including an $11.0 million increase in incentive compensation expense reflecting the growth in our trading activity. Non-personnel expense increased $6.7 million compared to the first quarter of 2020. Increases in mortgage banking costs and occupancy and equipment expense were partially offset by a decrease in business promotion expense.

•Changes in the fair value of mortgage servicing rights and related economic hedges provided $9.3 million during the second quarter of 2020. A $7.4 million increase in the fair value of securities and derivative contracts held as an economic hedge and $2.7 million of related net interest revenue, were partially offset by a $761 thousand decrease in the fair value of mortgage servicing rights.

•We have implemented programs to help our customers through this uncertain time. We are actively participating in programs initiated by the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"), including the SBA's PPP. Average loans for the second quarter increased $2.2 billion to $24.1 billion with $1.7 billion of those being PPP loans. Period-end loans increased $1.7 billion to $24.2 billion. Period-end PPP loans were $2.1 billion. We have also granted $1.2 billion in forbearance requests from customers as of June 30, including $704 million of commercial loans, $398 million in commercial real estate loans and $143 million in loans to individuals.

•The allowance for loan losses totaled $436 million or 1.80 percent of outstanding loans at June 30, 2020. 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 at June 30, 2020. Excluding PPP loans, the allowance for loan losses was 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 2.12 percent. At March 31, 2020, the allowance for loan losses was $315 million or 1.40 percent of outstanding loans. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $344 million or 1.53 percent of outstanding loans.

•Average deposits increased $4.5 billion to $32.7 billion and period-end deposits increased $4.6 billion to $33.9 billion. An estimated $2.7 billion of this growth was related to CARES Act funding, with the remainder due to growth from our broader customer base.

•The company's common equity Tier 1 capital ratio was 11.41 percent at June 30, 2020. In addition, the company's Tier 1 capital ratio was 11.41 percent, total capital ratio was 13.40 percent, and leverage ratio was 7.74 percent at June 30, 2020. At March 31, 2020, the company's common equity Tier 1 capital ratio was 10.98 percent, Tier 1 capital ratio was 10.98 percent, total capital ratio was 12.65 percent, and leverage ratio was 8.15 percent.

Second Quarter 2020 Business Segment Highlights

•Commercial Banking contributed $81.0 million to net income, an increase of $6.0 million over the first quarter. While net interest revenue decreased $6.3 million, fees and commissions revenue increased $5.1 million. Customer reaction to the volatile price environment drove an increase of $4.4 million in customer hedging revenue this quarter. Other gains (losses), net also increased $4.6 million, primarily related to an impairment of an alternative investment in the first quarter. Operating expense increased $2.2 million, largely due to incentive compensation.

•Consumer Banking contributed $31.9 million to net income, an increase of $9.0 million over the first quarter. Net interest revenue decreased $4.7 million; however, fees and commissions revenue increased $12.1 million. Mortgage banking revenue increased $16.8 million following another strong quarter for mortgage loan production. Low mortgage interest rates continue to increase volume, particularly around refinances, which is responsible for 71 percent of the volume in the second quarter. The large increase in refinance demand, which reduced industry-wide capacity, has led to the ability to increase margins. Gain on sale margin increased 159 basis points to 3.65 percent. This increase was partially offset by a decrease in service charges as we waived certain fees in the second quarter to help customers throughout this uncertain time. Changes in the fair value of mortgage servicing rights and related economic hedges provided $9.3 million during the second quarter of 2020. Operating expense increased $4.1 million, primarily due to an increase in mortgage banking costs.

•Wealth Management contributed $33.4 million to net income, an increase of $10.8 million over the first quarter. Net interest revenue increased $8.0 million and fees and commissions increased $8.9 million. Lower interest rates drove record increases in industry-wide mortgage loan production volume during the second quarter. We increased our trading pipeline to provide greater liquidity to the housing market. As a result, trading revenue increased $9.5 million. Trust fees and commissions decreased $3.2 million as we waived certain fees for our customers and market conditions led to reduction in trust revenue. Operating expense increased $2.4 million, primarily due to incentive compensation costs related to increased trading activity partially offset by lower business promotion expense.

Net Interest Revenue

Net interest revenue was $278.1 million for the second quarter of 2020, a $16.7 million increase compared to the first quarter of 2020. PPP loans added $13.6 million to net interest revenue in the second quarter.

Average earning assets increased $1.9 billion compared to the first quarter of 2020. Average loan balances increased $2.2 billion, largely due to the influx of PPP loans. Available for sale securities increased $816 million as we have adjusted our balance sheet for the current rate environment. Fair value option securities, held as an economic hedge of the changes in fair value of our mortgage servicing rights, decreased $1.0 billion. In addition, receivables from unsettled securities sales, primarily related to our U.S. agency residential mortgage-backed trading operations, increased $1.6 billion. Growth in average earning assets and non-interest bearing receivables was largely funded by a $2.2 billion increase in interest-bearing deposits. Other borrowings decreased $3.0 billion, primarily due to a decrease in funds borrowed from the Federal Home Loan Bank, partially offset by an increase in PPP loans funded through the Federal Reserve's PPP Liquidity Facility. Funds purchased and repurchase agreements increased $2.0 billion.

Net interest margin was 2.83 percent compared to 2.80 percent in the previous quarter. The reduction in deposit costs, LIBOR remaining elevated early in the second quarter, and the strategic positioning of our balance sheet, have combined to reduce the pressure on margin. PPP loans added one basis point to net interest margin.

The yield on average earning assets was 3.12 percent, a 61 basis point decrease from the prior quarter as we start to see the effects of the recent Federal Reserve rate cuts. The loan portfolio yield was 3.63 percent, down 87 basis points. The yield on the available for sale securities portfolio decreased 19 basis points to 2.29 percent.

Funding costs were 0.37 percent, down 82 basis points. The cost of interest-bearing deposits decreased 64 basis points to 0.34 percent. The cost of other borrowed funds was down 117 basis points to 0.30 percent. The benefit to net interest margin from assets funded by non-interest liabilities was 8 basis points for the second quarter of 2020 compared to 26 basis points for the first quarter of 2020.

Fees and Commissions Revenue

Fees and commissions revenue totaled $213.7 million for the second quarter of 2020, an increase of $21.0 million over the first quarter of 2020, led by significant growth in mortgage banking and brokerage and trading revenue.

Declining interest rates have propelled mortgage production, particularly refinance activities, and have allowed for margin expansion. Mortgage banking revenue increased $16.8 million to $53.9 million compared to the prior quarter. Mortgage loan production volume was $1.1 billion for the second quarter of 2020, an increase of 2 percent over an already very strong first quarter. Refinances grew to 71 percent of our production volume compared to 57 percent in the prior quarter. Gain on sale margin increased 159 basis points to 3.65 percent as industry-wide capacity constraints have eased pricing competition.

Brokerage and trading revenue increased $11.2 million to $62.0 million. We continue to grow our relationships with mortgage originators by providing liquidity and financial instruments to help them manage their pipeline risk. Trading revenue, primarily related to sales of residential mortgage-backed securities guaranteed by U.S. government agencies and related derivative instruments, increased $9.5 million. Industry-wide mortgage loan production increased in the second quarter driven by the lower rates as the Federal Reserve stepped in to provide market stability. We increased our bond trading pipeline to provide greater liquidity to the housing market during a time of record loan production volumes. Customer hedging revenue also increased $3.0 million as existing customers increased hedging activities in the volatile environment.

Deposit service charges decreased $4.1 million compared to the first quarter. In order to help our customers during uncertain times, we proactively waived certain fees during the second quarter.

Fiduciary and asset management revenue decreased $3.2 million compared to the first quarter of 2020. As a result of the significant decline in interest rates, we provided $1.1 million in fee waivers during the second quarter. In addition, asset volumes and market conditions have affected our trust revenues. These decreases were partially offset by an increase in seasonal tax preparation fees.

Operating Expense

Total operating expense was $295.4 million for the second quarter of 2020, an increase of $26.8 million compared to the first quarter of 2020.

Personnel expense increased $20.1 million. Incentive compensation increased $22.3 million. Cash based incentive compensation increased $11.0 million, primarily due to increased residential mortgage-backed securities trading activity. Deferred compensation, which is largely offset by an increase in the value of related investments included in Other gains (losses), net, increased $11.6 million. Regular compensation increased $1.5 million. Employee benefits decreased $3.8 million, primarily due to a seasonal decrease in payroll taxes.

Non-personnel expense increased $6.7 million compared to the first quarter of 2020. Mortgage banking costs increased $5.1 million. Accruals related to default servicing and loss mitigation costs on loans serviced for others increased $2.8 million due to changes in our portfolio and loan counts, delinquency levels, and additional accruals related to losses on loans in forbearance. Increased amortization of mortgage servicing rights from actual prepayments also added $1.7 million to mortgage banking costs during the second quarter of 2020. Occupancy and equipment expense increased $4.6 million as impairment charges were incurred on two leases where assumptions regarding subleasing changed due to deteriorating economic conditions. We also made a charitable contribution of $3.0 million to the BOKF Foundation in the second quarter. These increases were partially offset by a decrease of $4.3 million in business promotion costs, largely related to reduced travel and entertainment expenses.

Loans, Deposits and Capital

Loans

Outstanding loans were $24.2 billion at June 30, 2020, up $1.7 billion over March 31, 2020, primarily due to a $2.1 billion increase from PPP loans, partially offset by paydowns in the commercial portfolio.

Outstanding core commercial loan balances decreased $637 million or 4 percent compared to March 31, 2020, primarily due to paydowns during the second quarter. 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.

General business loans decreased $448 million to $3.1 billion or 13 percent of total loans. General business loans include $1.7 billion of wholesale/retail loans and $780 million of loans from other commercial industries. Broad paydowns across our core commercial and industrial loan book contracted the portfolio.

Services loan balances decreased $176 million to $3.8 billion or 16 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.

Energy loan balances decreased $138 million to $4.0 billion or 16 percent of total loans as the current commodity price environment dampened demand for new loans and borrowers focused on paying down debt to reduce leverage. Supporting the energy industry has been a hallmark of the Company for over a century. 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 62 percent of committed production loans are secured by properties primarily producing oil. The remaining 38 percent is secured by properties primarily producing natural gas. Unfunded energy loan commitments were $2.5 billion at June 30, 2020, a $222 million decrease compared to March 31, 2020, primarily due to semi-annual borrowing base redeterminations completed during the second quarter.

Healthcare sector loan balances increased $124 million to $3.3 billion or 14 percent of total loans, primarily due to growth in balances from hospital systems. Our healthcare sector loans primarily consist of $2.4 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.

Commercial real estate loan balances were up $104 million over March 31, 2020 and represent 19 percent of total loans at June 30, 2020. Multifamily residential loans, our largest exposure in commercial real estate, increased $125 million to $1.4 billion at June 30, 2020. Paydowns from refinances into the permanent market slowed during the second quarter. Loans secured by office buildings increased $12 million to $974 million. Loans secured by other commercial real estate properties decreased $32 million to $533 million. Loans secured by retail facilities were $780 million at June 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 $144 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 June 30, 2020.

Deposits

Period-end deposits totaled $33.9 billion at June 30, 2020, a $4.6 billion increase over March 31, 2020. Inflows resulting from PPP loans and government stimulus payments during the pandemic, along with additional core deposit growth as customers maintain higher balances, have all contributed to the significant increase in deposits. Interest-bearing transaction account balances grew by $2.3 billion and demand deposit balances increased $2.2 billion. Average deposits were $32.7 billion at June 30, 2020, a $4.5 billion increase compared to March 31, 2020. Average demand deposit balances grew by $2.3 billion and interest-bearing transaction deposits increased $1.9 billion.

Capital

The company's common equity Tier 1 capital ratio was 11.41 percent at June 30, 2020. In addition, the company's Tier 1 capital ratio was 11.41 percent, total capital ratio was 13.40 percent, and leverage ratio was 7.74 percent at June 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 30 basis points to the company's common equity tier 1 capital ratio at June 30. At March 31, 2020, the company's common equity Tier 1 capital ratio was 10.98 percent, Tier 1 capital ratio was 10.98 percent, total capital ratio was 12.65 percent, and leverage ratio was 8.15 percent.

The company's tangible common equity ratio, a non-GAAP measure, was 8.79 percent at June 30, 2020 and 8.39 percent at March 31, 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.

The company paused share repurchases through the second quarter of 2020. The company repurchased 442,000 shares at an average price of $75.52 in the first quarter of 2020. We view share buybacks opportunistically, but within the context of maintaining our strong capital position.

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. The previous incurred loss model incorporated only known information as of the balance sheet date. CECL uses models to 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.

The provision for credit losses was $135.3 million for the second quarter of 2020, with $138.8 million related to lending activities. Changes in our reasonable and supportable forecasts of macroeconomic variables, primarily due to the anticipated impact of the on-going COVID-19 pandemic, and other assumptions, required a provision of $54.6 million. All other changes totaled $84.2 million, which included $14.4 million primarily due to increased specific impairment of energy loans, portfolio changes of $55.7 million primarily due to changes in risk grades related to energy loans, partially offset by the impact of a decrease in loan balances, and net charge-offs of $14.1 million. The provision related to lending activities was partially offset by a $3.6 million decrease in the accrual for expected credit losses from mortgage banking activities. During the second quarter, the Company sold certain mortgage servicing rights related to residential mortgage loans transferred to mortgage-backed securities. These servicing rights expose the Company to credit risk for amounts that exceed the U.S. government agency guarantees.

Our base case reasonable and supportable forecast includes an 18 percent increase in GDP and an 8.4 percent civilian unemployment rate in the third quarter of 2020, as adjusted for the impact of government stimulus programs. Our forward twelve month forecast through the second quarter of 2021 assumes a 5.0 percent increase in GDP and an 8.5 percent civilian unemployment rate. WTI oil prices are projected to generally follow the NYMEX forward curve that existed at the end of June 2020, $38.99 per barrel for delivery in the third quarter of 2020 and increasing to $40.13 per barrel for delivery in the second quarter of 2021. Our downside reasonable and supportable forecast reflects a more severe and prolonged disruption in economic activity than the base case and includes a 6.0 percent increase in GDP and a 9.7 percent adjusted civilian unemployment rate in the third quarter of 2020. Our forward twelve month forecast through the second quarter of 2021 assumes a 6.0 percent increase in GDP and a 10.0 percent civilian unemployment rate. WTI oil prices are projected to range from $33.99 per barrel for delivery in the third quarter of 2020 to $34.63 per barrel for delivery in the second quarter of 2021.

The allowance for loan losses totaled $436 million or 1.80 percent of outstanding loans and 175 percent of nonaccruing loans at June 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 $469 million or 1.94 percent of outstanding loans and 188 percent of nonaccruing loans at June 30, 2020. The combined allowance for credit losses attributed to energy was 4.44 percent of outstanding energy loans at June 30. Excluding PPP loans, the allowance for loan losses was 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 2.12 percent.

At March 31, 2020, the allowance for loan losses was $315 million or 1.40 percent of outstanding loans and 199 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 $344 million or 1.53 percent of outstanding loans and 217 percent of nonaccruing loans.

Nonperforming assets totaled $405 million or 1.68 percent of outstanding loans and repossessed assets at June 30, 2020, compared to $292 million or 1.30 percent at March 31, 2020. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $285 million or 1.19 percent of outstanding loans and repossessed assets at June 30, 2020, compared to $195 million or 0.87 percent at March 31, 2020.

Nonaccruing loans were $255 million or 1.16 percent of outstanding loans at June 30, 2020. Nonaccruing commercial loans totaled $202 million or 1.43 percent of outstanding commercial loans. Nonaccruing commercial real estate loans totaled $14.0 million or 0.31 percent of outstanding commercial real estate loans. Nonaccruing loans to individuals totaled $39 million or 1.17 percent of outstanding loans to individuals.

Nonaccruing loans increased $92 million from March 31, 2020, primarily due to a $67 million increase in nonaccruing energy loans and a $13 million increase in nonaccruing services loans. New nonaccruing loans identified in the second quarter totaled $124 million, offset by $16 million in payments received, $16 million in charge-offs and $1.1 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 $626 million at June 30, compared to $293 million at March 31. The increase largely resulted from energy and service sector loans. Oil prices remained depressed during April and May during our semi-annual borrowing base redeterminations resulting in credit quality migration in the energy portfolio. While prices have subsequently improved, the pricing environment remains fragile and tied to the continued economic recovery.

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. Net charge-offs were $17.2 million or 0.31 percent of average loans on an annualized basis for the first quarter of 2020. Gross charge-offs were $15.6 million for the second quarter compared to $18.9 million for the previous quarter. Recoveries totaled $1.5 million for the second quarter of 2020 and $1.7 million for the first quarter of 2020.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $12.5 billion at June 30, 2020, a $218 million decrease compared to March 31, 2020. At June 30, 2020, the available for sale securities portfolio consisted primarily of $9.1 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 June 30, 2020, the available for sale securities portfolio had a net unrealized gain of $487 million compared to $436 million at March 31, 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 $981 million to $723 million at June 30, 2020.

The net economic benefit of the changes in the fair value of mortgage servicing rights and related economic hedges was $9.3 million during the second quarter of 2020, including a $7.4 million increase in the fair value of securities and derivative contracts held as an economic hedge, $761 thousand decrease in the fair value of mortgage servicing rights, and $2.7 million of related net interest revenue. The completion of a sale of mortgage servicing rights on $1.6 billion of unpaid principal balance, primarily related to loans guaranteed by the Veteran's Administration, was a large contributor to the increase in the fair value of contracts held as an economic hedge. Interest rate movements between the date we established the transaction price and the closing date of the sale produced positive results.

Conference Call and Webcast

The company will hold a conference call at 9 a.m. Central time on July 22, 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 # 13706496.

About BOK Financial Corporation

BOK Financial Corporation is a $46 billion regional financial services company headquartered in Tulsa, Oklahoma with $79 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 June 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)


	June 30, 2020		Mar. 31, 2020
ASSETS
Cash and due from banks	$	762,453	$	670,500
Interest-bearing cash and cash equivalents	485,319		302,577
Trading securities	1,196,105		2,110,585
Investment securities, net of allowance	267,988		272,576
Available for sale securities	12,475,919		12,694,277
Fair value option securities	722,657		1,703,238
Restricted equity securities	125,683		390,042
Residential mortgage loans held for sale	319,357		204,720
Loans:
Commercial	14,158,510		14,795,975
Commercial real estate	4,554,144		4,450,085
Paycheck protection program	2,081,428		—
Loans to individuals	3,361,808		3,217,910
Total loans	24,155,890		22,463,970
Allowance for loan losses	(435,597)		(315,311)
Loans, net of allowance	23,720,293		22,148,659
Premises and equipment, net	550,230		546,093
Receivables	226,934		207,341
Goodwill	1,048,091		1,048,091
Intangible assets, net	123,595		121,807
Mortgage servicing rights	97,971		110,828
Real estate and other repossessed assets, net	35,330		36,744
Derivative contracts, net	651,553		922,716
Cash surrender value of bank-owned life insurance	393,741		391,006
Receivable on unsettled securities sales	1,863,719		2,171,881
Other assets	752,936		1,065,481
TOTAL ASSETS	$	45,819,874	$	47,119,162

LIABILITIES AND EQUITY
Deposits:
Demand	$	11,992,165	$	9,821,582
Interest-bearing transaction	18,850,418		16,596,292
Savings	696,971		593,805
Time	2,352,760		2,232,473
Total deposits	33,892,314		29,244,152
Funds purchased and repurchase agreements	1,357,602		4,583,768
Other borrowings	3,173,563		5,529,554
Subordinated debentures	275,973		275,942
Accrued interest, taxes and expense	365,634		309,236
Due on unsettled securities purchases	599,510		537,709
Derivative contracts, net	610,020		1,213,445
Other liabilities	440,835		391,196
TOTAL LIABILITIES	40,715,451		42,085,002
Shareholders' equity:
Capital, surplus and retained earnings	4,726,679		4,694,956
Accumulated other comprehensive gain	370,316		331,292
TOTAL SHAREHOLDERS' EQUITY	5,096,995		5,026,248
Non-controlling interests	7,428		7,912
TOTAL EQUITY	5,104,423		5,034,160
TOTAL LIABILITIES AND EQUITY	$	45,819,874	$	47,119,162

AVERAGE BALANCE SHEETS -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands)


	Three Months Ended
	June 30, 2020		Mar. 31, 2020		Dec. 31, 2019		Sept. 30, 2019		June 30, 2019
ASSETS
Interest-bearing cash and cash equivalents	$	619,737	$	721,659	$	573,203	$	500,823	$	535,491
Trading securities	1,871,647		1,690,104		1,672,426		1,696,568		1,757,335
Investment securities, net of allowance	268,947		282,265		298,567		308,090		328,482
Available for sale securities	12,480,065		11,664,521		11,333,524		10,747,439		9,435,668
Fair value option securities	786,757		1,793,480		1,521,528		1,553,879		898,772
Restricted equity securities	273,922		429,133		479,687		476,781		413,812
Residential mortgage loans held for sale	288,588		129,708		203,535		203,319		192,102
Loans:
Commercial	14,502,652		14,452,851		14,344,534		14,507,185		14,175,057
Commercial real estate	4,543,511		4,346,886		4,532,649		4,652,534		4,656,861
Paycheck protection program	1,699,369		—		—		—		—
Loans to individuals	3,353,960		3,143,286		3,358,817		3,253,199		3,172,487
Total loans	24,099,492		21,943,023		22,236,000		22,412,918		22,004,405
Allowance for loan losses	(367,583)		(250,338)		(205,417)		(201,714)		(205,532)
Loans, net of allowance	23,731,909		21,692,685		22,030,583		22,211,204		21,798,873
Total earning assets	40,321,572		38,403,555		38,113,053		37,698,103		35,360,535
Cash and due from banks	678,878		669,369		690,806		717,338		703,294
Derivative contracts, net	642,969		376,621		311,542		331,834		328,802
Cash surrender value of bank-owned life insurance	391,951		390,009		388,012		385,190		384,974
Receivable on unsettled securities sales	4,626,307		3,046,111		1,973,604		1,742,794		1,437,462
Other assets	3,095,354		2,834,953		2,736,337		2,705,089		2,629,710
TOTAL ASSETS	$	49,757,031	$	45,720,618	$	44,213,354	$	43,580,348	$	40,844,777

LIABILITIES AND EQUITY
Deposits:
Demand	$	11,489,322	$	9,232,859	$	9,612,533	$	9,759,710	$	9,883,965
Interest-bearing transaction	18,040,170		16,159,654		14,685,385		13,131,542		12,512,282
Savings	656,669		563,821		554,605		557,122		558,738
Time	2,464,793		2,239,234		2,247,717		2,251,800		2,207,391
Total deposits	32,650,954		28,195,568		27,100,240		25,700,174		25,162,376
Funds purchased and repurchase agreements	5,816,484		3,815,941		4,120,610		3,106,163		2,066,950
Other borrowings	3,527,303		6,542,325		6,247,194		8,125,023		7,175,617
Subordinated debentures	275,949		275,932		275,916		275,900		275,887
Derivative contracts, net	836,667		379,342		276,078		300,051		283,484
Due on unsettled securities purchases	887,973		960,780		784,174		745,893		821,688
Other liabilities	690,087		642,764		561,654		547,144		460,732
TOTAL LIABILITIES	44,685,417		40,812,652		39,365,866		38,800,348		36,246,734
Total equity	5,071,614		4,907,966		4,847,488		4,780,000		4,598,043
TOTAL LIABILITIES AND EQUITY	$	49,757,031	$	45,720,618	$	44,213,354	$	43,580,348	$	40,844,777

STATEMENTS OF EARNINGS -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands, except per share data)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020		2019		2020		2019

Interest revenue	$	306,384	$	390,820	$	655,321	$	766,894
Interest expense	28,280		105,388		115,857		203,360
Net interest revenue	278,104		285,432		539,464		563,534
Provision for credit losses	135,321		5,000		229,092		13,000
Net interest revenue after provision for credit losses	142,783		280,432		310,372		550,534
Other operating revenue:
Brokerage and trading revenue	62,022		40,526		112,801		72,143
Transaction card revenue	22,940		21,915		44,821		42,653
Fiduciary and asset management revenue	41,257		45,025		85,715		88,383
Deposit service charges and fees	22,046		28,074		48,176		56,317
Mortgage banking revenue	53,936		28,131		91,103		51,965
Other revenue	11,479		12,437		23,788		25,199
Total fees and commissions	213,680		176,108		406,404		336,660
Other gains (losses), net	6,768		3,480		(3,973)		6,456
Gain on derivatives, net	21,885		11,150		40,305		15,817
Gain (loss) on fair value option securities, net	(14,459)		9,853		53,934		19,518
Change in fair value of mortgage servicing rights	(761)		(29,555)		(89,241)		(50,221)
Gain on available for sale securities, net	5,580		1,029		5,583		1,105



Total other operating revenue	232,693		172,065		413,012		329,335
Other operating expense:
Personnel	176,235		160,342		332,416		329,570
Business promotion	1,935		10,142		8,150		18,016

Professional fees and services	12,161		13,002		25,109		29,141
Net occupancy and equipment	30,675		26,880		56,736		56,401
Insurance	5,156		6,454		10,136		11,293
Data processing and communications	32,942		29,735		65,685		61,184
Printing, postage and supplies	3,502		4,107		7,774		8,992
Net losses and operating expenses of repossessed assets	1,766		580		3,297		2,576
Amortization of intangible assets	5,190		5,138		10,284		10,329
Mortgage banking costs	15,598		11,545		26,143		21,451

Other expense	7,227		8,212		15,281		14,341
Total other operating expense	295,387		277,137		564,011		564,294

Net income before taxes	80,089		175,360		159,373		315,575
Federal and state income taxes	15,803		37,580		33,103		67,530

Net income	64,286		137,780		126,270		248,045
Net income (loss) attributable to non-controlling interests	(407)		217		(502)		(130)
Net income attributable to BOK Financial Corporation shareholders	$	64,693	$	137,563	$	126,772	$	248,175

Average shares outstanding:
Basic	69,876,043		70,887,063		69,999,865		71,135,414
Diluted	69,877,467		70,902,033		70,003,817		71,151,558

Net income per share:
Basic	$	0.92	$	1.93	$	1.80	$	3.47
Diluted	$	0.92	$	1.93	$	1.80	$	3.46

FINANCIAL HIGHLIGHTS -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands, except ratio and share data)


	Three Months Ended
	June 30, 2020			Mar. 31, 2020			Dec. 31, 2019			Sept. 30, 2019			June 30, 2019
Capital:
Period-end shareholders' equity	$	5,096,995		$	5,026,248		$	4,855,795		$	4,829,016		$	4,709,438
Risk weighted assets	$	32,258,548		$	32,973,242		$	31,673,425		$	32,159,139		$	32,040,741
Risk-based capital ratios:
Common equity tier 1	11.41		%	10.98		%	11.39		%	11.06		%	10.84		%
Tier 1	11.41		%	10.98		%	11.39		%	11.06		%	10.84		%
Total capital	13.40		%	12.65		%	12.94		%	12.56		%	12.34		%
Leverage ratio	7.74		%	8.15		%	8.40		%	8.41		%	8.75		%
Tangible common equity ratio¹	8.79		%	8.39		%	8.98		%	8.72		%	8.69		%

Common stock:
Book value per share	$	72.50		$	71.49		$	68.80		$	68.15		$	66.15
Tangible book value per share	55.83			54.85			52.17			51.60			49.68
Market value per share:
High	$	67.62		$	87.40		$	88.28		$	84.35		$	88.17
Low	$	37.80		$	34.57		$	71.85		$	72.96		$	72.60
Cash dividends paid	$	35,769		$	35,949		$	36,011		$	35,472		$	35,631
Dividend payout ratio	55.29		%	57.91		%	32.63		%	24.94		%	25.90		%
Shares outstanding, net	70,306,690			70,308,532			70,579,598			70,858,010			71,193,770
Stock buy-back program:
Shares repurchased	—			442,000			280,000			336,713			250,000
Amount	$	—		$	33,380		$	22,844		$	25,937		$	20,125
Average price per share	$	—		$	75.52		$	81.59		$	77.03		$	80.50

Performance ratios (quarter annualized):
Return on average assets	0.52		%	0.55		%	0.99		%	1.29		%	1.35		%
Return on average equity	5.14		%	5.10		%	9.05		%	11.83		%	12.02		%
Net interest margin	2.83		%	2.80		%	2.88		%	3.01		%	3.30		%
Efficiency ratio	59.57		%	58.62		%	63.65		%	59.31		%	59.51		%

Reconciliation of non-GAAP measures:
¹ Tangible common equity ratio:
Total shareholders' equity	$	5,096,995		$	5,026,248		$	4,855,795		$	4,829,016		$	4,709,438
Less: Goodwill and intangible assets, net	1,171,686			1,169,898			1,173,362			1,172,411			1,172,564
Tangible common equity	$	3,925,309		$	3,856,350		$	3,682,433		$	3,656,605		$	3,536,874

Total assets	$	45,819,874		$	47,119,162		$	42,172,021		$	43,127,205		$	41,893,073
Less: Goodwill and intangible assets, net	1,171,686			1,169,898			1,173,362			1,172,411			1,172,564
Tangible assets	$	44,648,188		$	45,949,264		$	40,998,659		$	41,954,794		$	40,720,509

Tangible common equity ratio	8.79		%	8.39		%	8.98		%	8.72		%	8.69		%


	Three Months Ended
	June 30, 2020			Mar. 31, 2020			Dec. 31, 2019			Sept. 30, 2019			June 30, 2019
Pre-provision net revenue:
Net income before taxes	$	80,089		$	79,284		$	141,039		$	174,254		$	175,360
Provision for expected credit losses	135,321			93,771			19,000			12,000			5,000
Net income (loss) attributable to non-controlling interests	(407)			(95)			430			(373)			217
Pre-provision net revenue	$	215,817		$	173,150		$	159,609		$	186,627		$	180,143

Other data:
Tax equivalent interest	$	2,630		$	2,715		$	2,726		$	2,936		$	3,481
Net unrealized gain (loss) on available for sale securities	$	487,334		$	435,989		$	138,149		$	178,060		$	131,780

Mortgage banking:
Mortgage production revenue	$	39,185		$	21,570		$	9,169		$	13,814		$	11,869

Mortgage loans funded for sale	$	1,184,249		$	548,956		$	855,643		$	877,280		$	729,841
Add: current period-end outstanding commitments	546,304			657,570			158,460			379,377			344,087
Less: prior period end outstanding commitments	657,570			158,460			379,377			344,087			263,434
Total mortgage production volume	$	1,072,983		$	1,048,066		$	634,726		$	912,570		$	810,494

Mortgage loan refinances to mortgage loans funded for sale	71		%	57		%	57		%	56		%	31		%
Gain on sale margin	3.65		%	2.06		%	1.44		%	1.51		%	1.46		%

Mortgage servicing revenue	$	14,751		$	15,597		$	16,227		$	16,366		$	16,262
Average outstanding principal balance of mortgage loans serviced for others	19,319,872			20,416,546			20,856,446			21,172,874			21,418,690
Average mortgage servicing revenue rates	0.31		%	0.31		%	0.31		%	0.31		%	0.30		%

Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net	$	21,815		$	18,371		$	(4,714)		$	3,742		$	11,128
Gain (loss) on fair value option securities, net	(14,459)			68,393			(8,328)			4,597			9,853
Gain (loss) on economic hedge of mortgage servicing rights	7,356			86,764			(13,042)			8,339			20,981
Gain (loss) on changes in fair value of mortgage servicing rights	(761)			(88,480)			9,297			(12,593)			(29,555)
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue	6,595			(1,716)			(3,745)			(4,254)			(8,574)
Net interest revenue on fair value option securities²	2,702			4,268			1,544			1,245			1,296
Total economic benefit (cost) of changes in the fair value of mortgage servicing rights, net of economic hedges	$	9,297		$	2,552		$	(2,201)		$	(3,009)		$	(7,278)

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

Interest revenue	$	306,384	$	348,937	$	369,857	$	395,207	$	390,820
Interest expense	28,280		87,577		99,608		116,111		105,388
Net interest revenue	278,104		261,360		270,249		279,096		285,432
Provision for credit losses	135,321		93,771		19,000		12,000		5,000
Net interest revenue after provision for credit losses	142,783		167,589		251,249		267,096		280,432
Other operating revenue:
Brokerage and trading revenue	62,022		50,779		43,843		43,840		40,526
Transaction card revenue	22,940		21,881		22,548		22,015		21,915
Fiduciary and asset management revenue	41,257		44,458		45,021		43,621		45,025
Deposit service charges and fees	22,046		26,130		27,331		28,837		28,074
Mortgage banking revenue	53,936		37,167		25,396		30,180		28,131
Other revenue	11,479		12,309		15,283		17,626		12,437
Total fees and commissions	213,680		192,724		179,422		186,119		176,108
Other gains (losses), net	6,768		(10,741)		(1,649)		4,544		3,480
Gain (loss) on derivatives, net	21,885		18,420		(4,644)		3,778		11,150
Gain (loss) on fair value option securities, net	(14,459)		68,393		(8,328)		4,597		9,853
Change in fair value of mortgage servicing rights	(761)		(88,480)		9,297		(12,593)		(29,555)
Gain on available for sale securities, net	5,580		3		4,487		5		1,029



Total other operating revenue	232,693		180,319		178,585		186,450		172,065
Other operating expense:
Personnel	176,235		156,181		168,422		162,573		160,342
Business promotion	1,935		6,215		8,787		8,859		10,142
Charitable contributions to BOKF Foundation	3,000		—		2,000		—		1,000
Professional fees and services	12,161		12,948		13,408		12,312		13,002
Net occupancy and equipment	30,675		26,061		26,316		27,558		26,880
Insurance	5,156		4,980		5,393		4,220		6,454
Data processing and communications	32,942		32,743		31,884		31,915		29,735
Printing, postage and supplies	3,502		4,272		3,700		3,825		4,107
Net losses and operating expenses of repossessed assets	1,766		1,531		2,403		1,728		580
Amortization of intangible assets	5,190		5,094		5,225		5,064		5,138
Mortgage banking costs	15,598		10,545		14,259		14,975		11,545

Other expense	7,227		8,054		6,998		6,263		8,212
Total other operating expense	295,387		268,624		288,795		279,292		277,137
Net income before taxes	80,089		79,284		141,039		174,254		175,360
Federal and state income taxes	15,803		17,300		30,257		32,396		37,580
Net income	64,286		61,984		110,782		141,858		137,780
Net income (loss) attributable to non-controlling interests	(407)		(95)		430		(373)		217
Net income attributable to BOK Financial Corporation shareholders	$	64,693	$	62,079	$	110,352	$	142,231	$	137,563

Average shares outstanding:
Basic	69,876,043		70,123,685		70,295,899		70,596,307		70,887,063
Diluted	69,877,467		70,130,166		70,309,644		70,609,924		70,902,033
Net income per share:
Basic	$	0.92	$	0.88	$	1.56	$	2.00	$	1.93
Diluted	$	0.92	$	0.88	$	1.56	$	2.00	$	1.93

LOANS TREND -- UNAUDITED

BOK FINANCIAL CORPORATION

(In thousands)


	June 30, 2020		Mar. 31, 2020		Dec. 31, 2019		Sept. 30, 2019		June 30, 2019
Commercial:
Energy	$	3,974,174	$	4,111,676	$	3,973,377	$	4,114,269	$	3,921,353
Services	3,779,881		3,955,748		3,832,031		4,011,089		4,105,117
Healthcare	3,289,343		3,165,096		3,033,916		3,032,968		2,926,510
General business	3,115,112		3,563,455		3,192,326		3,266,299		3,383,928
Total commercial	14,158,510		14,795,975		14,031,650		14,424,625		14,336,908

Commercial real estate:
Multifamily	1,407,107		1,282,457		1,265,562		1,324,839		1,300,372
Office	973,995		962,004		928,379		1,014,275		1,056,306
Retail	780,467		774,198		775,521		799,169		825,399
Industrial	723,005		728,026		856,117		873,536		828,569
Residential construction and land development	136,911		138,958		150,879		135,361		141,509
Other commercial real estate	532,659		564,442		457,325		478,877		557,878
Total commercial real estate	4,554,144		4,450,085		4,433,783		4,626,057		4,710,033

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

Loans to individuals:
Permanent mortgage	1,813,442		1,844,555		1,886,378		1,925,539		1,975,449
Permanent mortgages guaranteed by U.S. government agencies	322,269		197,889		197,794		191,764		195,373
Personal	1,226,097		1,175,466		1,201,382		1,117,382		1,037,889
Total loans to individuals	3,361,808		3,217,910		3,285,554		3,234,685		3,208,711

Total	$	24,155,890	$	22,463,970	$	21,750,987	$	22,285,367	$	22,255,652

LOANS MANAGED BY PRINCIPAL MARKET AREA -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands)


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

Texas:
Commercial	$	5,771,691	$	6,350,690	$	6,174,894	$	6,220,227	$	5,877,265
Commercial real estate	1,389,547		1,296,266		1,259,117		1,292,116		1,341,609
Paycheck protection program	612,133		—		—		—		—
Loans to individuals	748,474		756,634		727,175		749,361		673,463
Total Texas	8,521,845		8,403,590		8,161,186		8,261,704		7,892,337

Oklahoma:
Commercial	5,086,934		3,886,086		3,454,825		3,690,100		3,762,234
Commercial real estate	636,021		593,473		631,026		679,786		717,970
Paycheck protection program	442,518		—		—		—		—
Loans to individuals	1,967,665		1,788,518		1,854,864		1,753,698		1,786,162
Total Oklahoma	8,133,138		6,268,077		5,940,715		6,123,584		6,266,366

Colorado:
Commercial	1,600,382		2,181,309		2,169,598		2,247,798		2,325,742
Commercial real estate	937,742		955,608		927,826		975,066		1,023,410
Paycheck protection program	488,279		—		—		—		—
Loans to individuals	264,872		268,674		276,939		303,605		314,317
Total Colorado	3,291,275		3,405,591		3,374,363		3,526,469		3,663,469

Arizona:
Commercial	1,036,862		1,396,582		1,307,073		1,276,534		1,330,415
Commercial real estate	689,121		714,161		728,832		771,425		761,243
Paycheck protection program	318,961		—		—		—		—
Loans to individuals	177,066		181,821		186,539		170,815		168,019
Total Arizona	2,222,010		2,292,564		2,222,444		2,218,774		2,259,677

Kansas/Missouri:
Commercial	404,860		556,255		527,872		566,969		602,836
Commercial real estate	314,504		310,799		322,541		374,795		331,443
Paycheck protection program	76,724		—		—		—		—
Loans to individuals	102,577		116,734		131,069		146,522		155,453
Total Kansas/Missouri	898,665		983,788		981,482		1,088,286		1,089,732

New Mexico:
Commercial	182,688		327,164		305,320		335,409		350,520
Commercial real estate	455,574		434,150		402,148		374,331		385,058
Paycheck protection program	128,058		—		—		—		—
Loans to individuals	83,470		87,110		90,257		92,270		92,626
Total New Mexico	849,790		848,424		797,725		802,010		828,204

Arkansas:
Commercial	75,093		97,889		92,068		87,588		87,896
Commercial real estate	131,635		145,628		162,293		158,538		149,300
Paycheck protection program	14,755		—		—		—		—
Loans to individuals	17,684		18,419		18,711		18,414		18,671
Total Arkansas	239,167		261,936		273,072		264,540		255,867

TOTAL BOK FINANCIAL	$	24,155,890	$	22,463,970	$	21,750,987	$	22,285,367	$	22,255,652

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)


	June 30, 2020		Mar. 31, 2020		Dec. 31, 2019		Sept. 30, 2019		June 30, 2019
Oklahoma:
Demand	$	4,378,559	$	3,669,558	$	3,257,337	$	3,515,312	$	3,279,360
Interest-bearing:
Transaction	11,438,489		9,955,697		8,574,912		7,447,799		7,020,484
Savings	387,557		329,631		306,194		308,103		307,785
Time	1,330,619		1,137,802		1,125,446		1,198,170		1,253,804
Total interest-bearing	13,156,665		11,423,130		10,006,552		8,954,072		8,582,073
Total Oklahoma	17,535,224		15,092,688		13,263,889		12,469,384		11,861,433

Texas:
Demand	3,070,955		2,767,399		2,757,376		2,867,915		2,970,340
Interest-bearing:
Transaction	3,358,090		2,874,362		2,911,731		2,589,063		2,453,187
Savings	128,892		115,039		102,456		100,597		103,125
Time	476,867		505,565		495,343		464,264		425,253
Total interest-bearing	3,963,849		3,494,966		3,509,530		3,153,924		2,981,565
Total Texas	7,034,804		6,262,365		6,266,906		6,021,839		5,951,905

Colorado:
Demand	2,096,075		1,579,764		1,729,674		1,694,044		1,621,820
Interest-bearing:
Transaction	1,816,604		1,759,384		1,769,037		1,910,874		1,800,271
Savings	67,477		58,000		53,307		60,107		57,263
Time	254,845		279,105		283,517		273,622		246,198
Total interest-bearing	2,138,926		2,096,489		2,105,861		2,244,603		2,103,732
Total Colorado	4,235,001		3,676,253		3,835,535		3,938,647		3,725,552

New Mexico:
Demand	965,877		750,052		623,722		645,698		630,861
Interest-bearing:
Transaction	752,565		563,891		558,493		539,260		557,881
Savings	80,242		67,553		63,999		62,863		62,636
Time	222,370		235,778		238,140		236,135		232,569
Total interest-bearing	1,055,177		867,222		860,632		838,258		853,086
Total New Mexico	2,021,054		1,617,274		1,484,354		1,483,956		1,483,947

Arizona:
Demand	985,757		665,396		681,268		705,895		704,144
Interest-bearing:
Transaction	780,500		729,603		684,929		600,103		560,861
Savings	15,669		8,832		10,314		12,487		11,966
Time	42,318		47,081		49,676		44,347		43,099
Total interest-bearing	838,487		785,516		744,919		656,937		615,926
Total Arizona	1,824,244		1,450,912		1,426,187		1,362,832		1,320,070


	June 30, 2020		Mar. 31, 2020		Dec. 31, 2019		Sept. 30, 2019		June 30, 2019
Kansas/Missouri:
Demand	427,795		318,985		384,533		376,020		431,856
Interest-bearing:
Transaction	526,635		537,552		784,574		284,940		310,774
Savings	15,033		12,888		12,169		11,689		13,125
Time	17,746		19,137		17,877		19,126		19,205
Total interest-bearing	559,414		569,577		814,620		315,755		343,104
Total Kansas/Missouri	987,209		888,562		1,199,153		691,775		774,960

Arkansas:
Demand	67,147		70,428		27,381		39,513		29,176
Interest-bearing:
Transaction	177,535		175,803		108,076		149,506		148,485
Savings	2,101		1,862		1,837		1,747		1,783
Time	7,995		8,005		7,850		7,877		7,810
Total interest-bearing	187,631		185,670		117,763		159,130		158,078
Total Arkansas	254,778		256,098		145,144		198,643		187,254

TOTAL BOK FINANCIAL	$	33,892,314	$	29,244,152	$	27,621,168	$	26,167,076	$	25,305,121

NET INTEREST MARGIN TREND -- UNAUDITED

BOK FINANCIAL CORPORATION


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

TAX-EQUIVALENT ASSETS YIELDS
Interest-bearing cash and cash equivalents	0.07	%	1.33	%	1.62	%	2.42	%	2.57	%
Trading securities	2.46	%	2.89	%	3.19	%	3.49	%	3.59	%



Investment securities, net of allowance	4.77	%	4.73	%	4.69	%	4.46	%	4.41	%



Available for sale securities	2.29	%	2.48	%	2.52	%	2.60	%	2.63	%
Fair value option securities	2.00	%	2.67	%	2.62	%	2.79	%	3.34	%
Restricted equity securities	2.75	%	5.49	%	5.37	%	6.34	%	6.30	%
Residential mortgage loans held for sale	3.10	%	3.50	%	3.55	%	3.73	%	3.65	%
Loans	3.63	%	4.50	%	4.75	%	5.12	%	5.39	%
Allowance for loan losses
Loans, net of allowance	3.69	%	4.55	%	4.80	%	5.17	%	5.45	%
Total tax-equivalent yield on earning assets	3.12	%	3.73	%	3.93	%	4.25	%	4.51	%

COST OF INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest-bearing transaction	0.21	%	0.89	%	1.00	%	1.08	%	1.04	%
Savings	0.05	%	0.09	%	0.11	%	0.14	%	0.12	%
Time	1.36	%	1.83	%	1.94	%	1.94	%	1.90	%
Total interest-bearing deposits	0.34	%	0.98	%	1.09	%	1.17	%	1.13	%
Funds purchased and repurchase agreements	0.14	%	1.14	%	1.56	%	2.01	%	2.08	%
Other borrowings	0.56	%	1.66	%	2.01	%	2.42	%	2.67	%
Subordinated debt	5.16	%	5.30	%	5.40	%	5.48	%	5.53	%
Total cost of interest-bearing liabilities	0.37	%	1.19	%	1.40	%	1.68	%	1.70	%
Tax-equivalent net interest revenue spread	2.75	%	2.54	%	2.53	%	2.57	%	2.81	%
Effect of noninterest-bearing funding sources and other	0.08	%	0.26	%	0.35	%	0.44	%	0.49	%
Tax-equivalent net interest margin	2.83	%	2.80	%	2.88	%	3.01	%	3.30	%

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

CREDIT QUALITY INDICATORS -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands, except ratios)


	Three Months Ended
	June 30, 2020		Mar. 31, 2020		Dec. 31, 2019		Sept. 30, 2019		June 30, 2019
Nonperforming assets:
Nonaccruing loans:
Commercial:
Energy	$	162,989	$	96,448	$	91,722	$	88,894	$	71,632
Healthcare	3,645		4,070		4,480		5,978		16,148
Services	21,032		8,425		7,483		6,119		10,087
General business	14,333		9,681		11,731		10,715		25,528
Total commercial	201,999		118,624		115,416		111,706		123,395

Commercial real estate	13,956		8,545		27,626		23,185		21,670

Loans to individuals:
Permanent mortgage	33,098		30,721		31,522		30,972		31,734
Permanent mortgage guaranteed by U.S. government agencies	6,110		5,005		6,100		6,332		6,743
Personal	233		277		287		271		237
Total loans to individuals	39,441		36,003		37,909		37,575		38,714

Total nonaccruing loans	$	255,396	$	163,172	$	180,951	$	172,466	$	183,779
Accruing renegotiated loans guaranteed by U.S. government agencies	114,571		91,757		92,452		92,718		95,989
Real estate and other repossessed assets	35,330		36,744		20,359		21,026		16,940
Total nonperforming assets	$	405,297	$	291,673	$	293,762	$	286,210	$	296,708
Total nonperforming assets excluding those guaranteed by U.S. government agencies	284,616		194,911		195,210		187,160		193,976

Accruing loans 90 days past due¹	11,316		3,706		7,680		1,541		2,698

Gross charge-offs	$	15,570	$	18,917	$	14,268	$	11,707	$	13,227
Recoveries	(1,491)		(1,696)		(1,816)		(1,066)		(5,503)
Net charge-offs	$	14,079	$	17,221	$	12,452	$	10,641	$	7,724

Provision for loan losses	$	134,365	$	95,964	$	18,779	$	12,539	$	4,918
Provision for credit losses from off-balance sheet unfunded loan commitments	4,405		3,377		221		(539)		82
Provision for expected credit losses from mortgage banking acitivities²	(3,575)		(6,020)		—		—		—
Provision for credit losses related to held-to maturity (investment) securities portfolio²	126		450		—		—		—
Total provision for credit losses	$	135,321	$	93,771	$	19,000	$	12,000	$	5,000


	Three Months Ended
	June 30, 2020		Mar. 31, 2020		Dec. 31, 2019		Sept. 30, 2019		June 30, 2019
Allowance for loan losses to period end loans	1.80	%	1.40	%	0.97	%	0.92	%	0.91	%
Allowance for loan losses to period end loans excluding PPP loans³	1.97	%	1.40	%	0.97	%	0.92	%	0.91	%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans	1.94	%	1.53	%	0.98	%	0.92	%	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	2.12	%	1.53	%	0.98	%	0.92	%	0.92	%
Nonperforming assets to period end loans and repossessed assets	1.68	%	1.30	%	1.35	%	1.28	%	1.33	%
Net charge-offs (annualized) to average loans	0.23	%	0.31	%	0.22	%	0.19	%	0.14	%
Net charge-offs (annualized) to average loans excluding PPP loans³	0.25	%	0.31	%	0.22	%	0.19	%	0.14	%
Allowance for loan losses to nonaccruing loans¹	174.74	%	199.35	%	120.54	%	123.05	%	114.40	%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to nonaccruing loans¹	187.94	%	217.38	%	121.44	%	123.87	%	115.48	%

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	June 30, 2020		Mar. 31, 2020		June 30, 2019		2Q20 vs 1Q20		2Q20 vs 2Q19
Net interest revenue	$	145,109	$	151,407	$	184,471	(4.2)	%	(21.3)	%
Fees and commissions revenue	46,515		41,459		41,105		12.2	%	13.2	%
Other operating expense	62,933		60,752		63,415		3.6	%	(0.8)	%
Corporate expense allocations	5,437		8,905		10,652		(38.9)	%	(49.0)	%
Net income	80,992		74,975		106,280		8.0	%	(23.8)	%

Average assets	27,575,652		24,687,976		22,910,724		11.7	%	20.4	%
Average loans	19,262,827		18,812,015		18,812,800		2.4	%	2.4	%
Average deposits	14,599,225		11,907,386		10,724,206		22.6	%	36.1	%

Consumer Banking
Net interest revenue	$	39,270	$	43,932	$	52,715	(10.6)	%	(25.5)	%
Fees and commissions revenue	67,192		55,062		48,830		22.0	%	37.6	%
Other operating expense	58,936		54,793		57,694		7.6	%	2.2	%
Corporate expense allocations	10,812		10,487		11,695		3.1	%	(7.6)	%
Net income	31,900		22,921		16,342		39.2	%	95.2	%

Average assets	9,920,005		9,850,853		9,212,667		0.7	%	7.7	%
Average loans	1,679,164		1,711,703		1,796,823		(1.9)	%	(6.5)	%
Average deposits	7,587,246		6,869,481		6,998,677		10.4	%	8.4	%

Wealth Management
Net interest revenue	$	26,880	$	18,904	$	26,941	42.2	%	(0.2)	%
Fees and commissions revenue	106,757		97,881		85,925		9.1	%	24.2	%
Other operating expense	80,567		78,192		69,452		3.0	%	16.0	%
Corporate expense allocations	8,204		8,265		9,168		(0.7)	%	(10.5)	%
Net income	33,394		22,573		25,544		47.9	%	30.7	%

Average assets	15,721,452		12,723,412		9,849,396		23.6	%	59.6	%
Average loans	1,709,363		1,705,735		1,647,680		0.2	%	3.7	%
Average deposits	8,385,681		7,623,986		6,220,848		10.0	%	34.8	%
Fiduciary assets	50,560,584		47,053,101		49,296,896		7.5	%	2.6	%
Assets under management or administration	79,452,502		75,783,829		81,774,602		4.8	%	(2.8)	%