BOK Financial Corporation Reports Quarterly Earnings of $146 million or $2.10 Per Share in the First Quarter

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TULSA, Okla., April 21, 2021 (GLOBE NEWSWIRE) — BOK Financial (NASDAQ: BOKF) today reported net earnings applicable to common shareholders for the first quarter of 2021 of $146.1 million, or $2.10 per diluted common share.

CEO Commentary

Steven G. Bradshaw, president and chief executive officer stated, “Not since the energy downturn in 2016 have we had an opportunity to demonstrate how valuable our organization’s differentiated credit culture is to shareholder outcomes. Exceptional credit outcomes coupled with improving economic metrics led us to release $25 million in reserves in the quarter. This is a testament not only to how well we’ve managed the ongoing crisis, but more importantly, our ability to remain disciplined with credit decisions in more favorable parts of the cycle.”

Bradshaw continued, “While loan growth remains challenged industry-wide during a time of unprecedented liquidity and heightened uncertainty, BOK Financial Corporation remains focused on the long-term. We have a longstanding track record of loan growth outpacing U.S. GDP growth, and with the economic recovery underway, we see a clear path to growing loans this year. With substantial capital levels, a strong competitive position and a favorable footprint, we remain confident in our ability to serve both our clients and our shareholders well in 2021.

As always, we are closely monitoring our expense levels, striving for balance between expense reductions and containment while keeping our level of long term investments in people and technology a top priority. We believe the company is extremely well positioned to attract and expand new relationships as the economy expands and further opens in 2021.” 

First Quarter 2021 Financial Highlights
  • Net income was $146.1 million or $2.10 per diluted share for the first quarter of 2021 and $154.2 million or $2.21 per diluted share for the fourth quarter of 2020.
  • Net interest revenue totaled $280.4 million, a decrease of $16.8 million. Net interest margin was 2.62 percent compared to 2.72 percent in the fourth quarter of 2020. A reduction in average outstanding loan balances and the timing of certain loan fees, combined with reinvestment of cash flows from our available for sale securities portfolio at current rates, led to lower net interest revenue and compressed net interest margin in the first quarter.
  • Fees and commissions revenue totaled $162.2 million, a decrease of $18.9 million. Brokerage and trading revenue decreased $18.7 million, largely due to a decrease in trading volume and margin compression. While still strong, mortgage banking revenue decreased $2.2 million, primarily the result of increasing mortgage interest rates coupled with margin compression.
  • Operating expense decreased $18.0 million to $282.6 million. Personnel expense decreased $3.2 million, primarily due to lower incentive compensation, partially offset by a seasonal increase in employee benefits expense. Non-personnel expense decreased $14.8 million primarily due to a gain on sale of repossessed oil and gas assets. Decreases in professional fees, business promotion, occupancy and equipment expense and other expenses were partially offset by an increase in data processing and communications expense.
  • Period-end loans decreased $474 million to $22.5 billion at March 31, 2021, primarily due to paydowns of commercial loans and commercial real estate loans. Period-end Paycheck Protection Program (“PPP”) loans increased $166 million to $1.8 billion. Average loans were $22.8 billion, a $691 million decrease compared to the fourth quarter of 2020.
  • Forecasts for improving macroeconomic factors as the pace of COVID-19 vaccinations accelerates and energy prices stabilize resulted in a $25.0 million negative provision for expected credit losses in the first quarter of 2021. A $6.5 million negative provision for expected credit losses was recorded in the prior quarter. The allowance for loan losses totaled $352 million or 1.70 percent of outstanding loans, excluding PPP loans, at March 31, 2021. The allowance for loan losses was $389 million or 1.82 percent of outstanding loans, excluding PPP loans, at December 31, 2020.
  • Average deposits increased $1.0 billion to $36.5 billion and period-end deposits increased $1.7 billion to $37.9 billion, largely due to growth in commercial balances. Clients across all of our business segments continued to maintain higher deposit balances during this period of economic uncertainty, supplemented by inflows from government stimulus payments.
  • The company’s common equity Tier 1 capital ratio was 12.14 percent at March 31, 2021. In addition, the company’s Tier 1 capital ratio was 12.21 percent, total capital ratio was 13.98 percent, and leverage ratio was 8.51 percent at March 31, 2021. At December 31, 2020, the company’s common equity Tier 1 capital ratio was 11.95 percent, Tier 1 capital ratio was 11.95 percent, total capital ratio was 13.82 percent, and leverage ratio was 8.28 percent.
  • The company repurchased 260,000 shares of common stock at an average price of $77.20 a share in the first quarter of 2021.
  • Commercial Banking contributed $69.7 million to net income, a decrease of $5.3 million compared to the fourth quarter of 2020. Combined net interest revenue and fee revenue decreased $11.2 million. Net interest revenue decreased $12.0 million, primarily due to a reduction in outstanding loan balances, timing of certain loan fees, and lower yields on deposits sold to our Funds Management unit. Average Commercial Banking loans decreased $578 million due to purposeful deleveraging by our customers. Average Commercial deposits grew 5 percent to $16.1 billion in the first quarter.
  • Consumer Banking contributed $6.8 million to net income in the first quarter of 2021, a decrease of $7.9 million compared to the fourth quarter of 2020. Combined net interest revenue and fee revenue decreased $12.7 million. Net interest revenue decreased $9.7 million, mainly due to lower yields on deposits sold to our Funds Management unit. Fees and commissions revenue decreased $3.0 million, largely due to reduced mortgage gain on sale margins. While mortgage production revenue decreased, mortgage production volumes remained strong in the first quarter.
  • Wealth Management contributed $19.4 million to net income in the first quarter of 2021, a decrease of $9.1 million compared to the fourth quarter of 2020. Combined net interest revenue and fee revenue decreased $17.4 million. Net interest revenue was relatively consistent with the previous quarter. However, brokerage and trading revenue decreased $15.0 million due to narrowing margins and a reduction in trading volumes. While our agency residential mortgage trading activity has slowed from the record levels in 2020, combined net interest revenue and fee revenue has grown compared to the first quarter of 2020. Operating expense decreased $5.4 million, primarily due to incentive compensation costs related to decreased trading activity. Average Wealth Management loans grew by $78.3 million compared to the prior quarter while average deposits increased $116 million. Assets under management or administration totaled $92.0 billion compared to $91.6 billion in the prior quarter.

Net interest revenue was $280.4 million for the first quarter of 2021, a $16.8 million decrease compared to the fourth quarter of 2020. The decrease in net interest revenue was primarily driven by lower average outstanding loan balances. Net interest margin was 2.62 percent compared to 2.72 percent in the fourth quarter of 2020. Reinvestment of cash flows from our available for sale securities portfolio to current interest rates and timing of PPP and other loan fees also contributed to a decrease in net interest revenue and net interest margin in the first quarter.

Average earning assets decreased $178 million compared to the fourth quarter of 2020. Average loan balances decreased $691 million, primarily from commercial and commercial real estate loan paydowns. Available for sale securities increased $484 million. Average interest-bearing deposits grew by $823 million, primarily due to higher interest-bearing transaction deposits in the wake of the most recent government stimulus program. Other borrowings decreased $1.8 billion while funds purchased and repurchase agreements increased $677 million.

The yield on average earning assets was 2.78 percent, a 14 basis point decrease from the prior quarter. The yield on the available for sale securities portfolio decreased 14 basis points to 1.84 percent. Cash flows received from these securities are currently being reinvested at 95 – 105 basis points. The loan portfolio yield decreased 13 basis points to 3.55 percent, largely due to the timing of certain loan fees, including Paycheck Protection Program loans.

Funding costs were 0.24 percent, down 4 basis points. The cost of other borrowed funds was down 8 basis points to 0.30 percent. The cost of interest-bearing deposits decreased 2 basis points to 0.17 percent. The benefit to net interest margin from assets funded by non-interest liabilities was 8 basis points for the first quarter of 2021, consistent with the prior quarter.

Fees and Commissions Revenue

Fees and commissions revenue totaled $162.2 million for the first quarter of 2021, a decrease of $18.9 million compared to the fourth quarter of 2020. Brokerage and trading revenue decreased $18.7 million to $20.8 million, including a $15.4 million reduction in trading revenue. Agency residential mortgage trading volumes have slowed from record levels in 2020 and margins compressed due to market conditions during the first quarter of 2021. In addition, customer hedging revenue decreased $2.1 million, primarily due to decreased energy customer hedging activities. Investment banking revenue decreased $2.1 million, mainly due to timing of loan syndication activity.

Mortgage banking revenue decreased $2.2 million compared to the prior quarter, down to a level comparable to the first quarter of 2020. While mortgage production volumes remained consistent with the prior quarter, mortgage interest rates began to increase and margins compressed. The gain on sale margin decreased 28 basis points to 2.98 percent.

Other revenue increased $2.1 million, primarily due to production revenue from repossessed oil and gas properties.

Total operating expense was $282.6 million for the first quarter of 2021, a decrease of $18.0 million compared to the fourth quarter of 2020.

Personnel expense decreased $3.2 million, led by a $10.3 million decrease in incentive compensation expense, partially offset by a $6.4 million seasonal increase in payroll taxes and retirement plan costs. Cash based incentive compensation expense decreased $8.2 million, primarily in relation to decreased trading revenue. Deferred compensation expense, which is largely offset by a decrease in the value of related investments included in Other gains (losses), net, decreased $3.4 million.

Non-personnel expense decreased $14.8 million compared to the fourth quarter of 2020. Net losses and expenses on repossessed assets decreased $7.8 million, largely due to $14.1 million gain on the sale of an equity interest received as part of the workout of a defaulted energy loan. Smaller reductions in expenses in professional fees and services, business promotion, and occupancy and equipment also supplemented the overall decrease in non-personnel expense. These were partially offset by a $2.4 million increase in data processing and communications expense as we continue to invest in technology.

We made a charitable contribution of $4.0 million in the first quarter and a contribution of $6.0 million in the prior quarter to the BOKF Foundation as we continue to focus on the communities we serve and the extreme needs created by the pandemic.

Loans, Deposits and Capital

Loans

Outstanding loans were $22.5 billion at March 31, 2021, a $474 million decrease compared to December 31, 2020, primarily due to payoffs of commercial and commercial real estate loans.

Outstanding commercial loan balances decreased $420 million or 3 percent compared to December 31, 2020. Borrowers continue to reduce leverage in this challenging economic environment. Although the primary source of repayment of our commercial loan portfolio is the on-going cash flow from operations of the customer’s business, loans are generally governed by a borrowing base and secured by the customer’s assets.

Energy loan balances decreased $267 million to $3.2 billion or 14 percent of total loans. While commodity prices have continued to improve and stabilize, sourcing new loans sufficient to offset paydowns remains a challenge. 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 66 percent of committed production loans are secured by properties primarily producing oil. The remaining 34 percent is secured by properties primarily producing natural gas. Unfunded energy loan commitments were $2.4 billion at March 31, 2021, consistent with December 31, 2020.

Healthcare sector loan balances were largely unchanged compared to the prior quarter, totaling $3.3 billion or 15 percent of total loans. Our healthcare sector loans primarily consist of $2.6 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 most recent stimulus bill, like the CARES Act, has multiple revenue enhancement measures for both hospitals and skilled nursing facilities as they manage through the risks of the virus.

General business loans decreased $51 million to $2.7 billion or 12 percent of total loans. General business loans include $1.5 billion of wholesale/retail loans and $1.2 billion of loans from other commercial industries.

Services loan balances decreased $87 million to $3.4 billion or 15 percent of total loans. Services loans consist of a large number of loans to a variety of businesses, including Native American tribal and state and local municipal government entities, Native American tribal casino operations, foundations and not-for-profit organizations, educational services and specialty trade contractors.

Commercial real estate loan balances decreased $195 million compared to December 31, 2020 and represent 20 percent of total loans at March 31, 2021. Multifamily residential loans, our largest exposure in commercial real estate, decreased $100 million to $1.2 billion at March 31, 2021. Loans secured by other commercial real estate properties decreased $74 million to $485 million. Loans secured by industrial facilities decreased $21 million to $789 million. Loans secured by retail facilities and office buildings were largely unchanged compared to December 31, 2020.

PPP loan balances increased $166 million to $1.8 billion or 8 percent of total loans. We originated $544 million of new PPP loans during the first quarter of 2021, maintaining our strategy of focusing on our existing client base to timely support our existing client needs. Growth from new originations was partially offset by paydowns from the first round of loans.

Loans to individuals decreased $25 million and represent 16 percent of total loans at March 31, 2021. Residential mortgage loans decreased $66 million. Personal loans were up $29 million and residential mortgage loans guaranteed by U.S. government agencies increased $11 million. The Company may repurchase loans previously sold into GNMA mortgage pools when certain defined delinquency criteria are met. Because of this repurchase right, we have regained effective control over these loans and must include them on the Consolidated Balance Sheet.

Deposits

Period-end deposits totaled $37.9 billion at March 31, 2021, a $1.7 billion increase over December 31, 2020. Continued deposit growth was due primarily to customers retaining higher balances in the current economic environment supplemented by the most recent government stimulus program. Demand deposit account balances grew by $837 million and interest-bearing transaction account balances grew by $732 million. Period-end commercial deposits grew by $1.0 billion, consumer deposits increased $474 million and wealth management deposits were up $566 million. Average deposits were $36.5 billion at March 31, 2021, a $1.0 billion increase compared to December 31, 2020. Interest-bearing transaction deposits increased $715 million.

Capital

The company’s common equity Tier 1 capital ratio was 12.14 percent at March 31, 2021. In addition, the company’s Tier 1 capital ratio was 12.21 percent, total capital ratio was 13.98 percent, and leverage ratio was 8.51 percent at March 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 23         basis points to the company’s common equity tier 1 capital ratio at March 31. At December 31, 2020, the company’s common equity Tier 1 capital ratio was 11.95 percent, Tier 1 capital ratio was 11.95 percent, total capital ratio was 13.82 percent, and leverage ratio was 8.28 percent.

The company’s tangible common equity ratio, a non-GAAP measure, was 8.82 percent at March 31, 2021 and 9.02 percent at December 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 repurchased 260,000 shares of common stock at an average price of $77.20 a share in the first quarter of 2021. We view share buybacks opportunistically, but within the context of maintaining our strong capital position.

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 $25.0 million negative provision for credit losses in the first quarter of 2021. Changes in our reasonable and supportable forecasts of macroeconomic variables, primarily due to an improved economic outlook related to the anticipated impact of the on-going COVID-19 pandemic, resulted in a $31.1 million decrease in the allowance for credit losses from lending activities. Changes in the loan portfolio characteristics, including specific impairment and losses, risk grading and loan balances resulted in a $5.2 million increase in the allowance for credit losses from lending activities.

Our base case reasonable and supportable forecast assumes that the COVID-19 pandemic continues to improve as virus immunity becomes increasingly more widespread and vaccines prove to be effective against new virus strains. This scenario assumes vaccine distribution continues to accelerate through the first half of 2021, with a large share of the U.S. population vaccinated by the end of the third quarter of 2021. Continued easing of restrictions and the release of pent-up consumer demand results in GDP growth above historical averages, with GDP recovering to pre-COVID levels in the second quarter of 2021. We expect a 5.6 percent increase in GDP over the next twelve months. Our forecasted civilian unemployment rate is 6.0 percent for the second quarter of 2021, improving to 5.0 percent by the first quarter of 2022. WTI oil prices are projected to generally follow the NYMEX forward curve that existed at the end of March 2021, averaging $57.87 per barrel over the next twelve months.

The probability weighting of our base case reasonable and supportable forecast was unchanged compared to the fourth quarter of 2020 as there continues to be a high level of uncertainty in the current economic outlook. Our downside case assumes additional waves and hotspots emerge stemming from new virus strains throughout the second and third quarter of 2021 and more constrained distribution of vaccines not reaching widespread distribution until the end of 2021. This results in no GDP growth over the next twelve months and unemployment rates remaining elevated through the first quarter of 2022.

The allowance for loan losses totaled $352 million or 1.56 percent of outstanding loans and 170 percent of nonaccruing loans at March 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 $385 million or 1.71 percent of outstanding loans and 186 percent of nonaccruing loans at March 31, 2021. The combined allowance for credit losses attributed to energy was 3.29 percent of outstanding energy loans at March 31 compared to 3.61 at December 31. Excluding PPP loans, the allowance for loan losses was 1.70 percent of outstanding loans and the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was 1.86 percent.

At December 31, 2020, the allowance for loan losses was $389 million or 1.69 percent of outstanding loans and 171 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 $426 million or 1.85 percent of outstanding loans and 188 percent of nonaccruing loans.

Nonperforming assets totaled $442 million or 1.95 percent of outstanding loans and repossessed assets at March 31, 2021, down from $477 million or 2.07 percent at December 31, 2020. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $278 million or 1.37 percent of outstanding loans and repossessed assets at March 31, 2021, compared to $317 million or 1.51 percent at December 31, 2020. The decrease in nonperforming assets was primarily related to a decrease in nonaccruing energy loans and sales of energy-related repossessed assets during the first quarter of 2021.

Nonaccruing loans were $216 million or 1.04 percent of outstanding loans, excluding PPP loans, at March 31, 2021. Nonaccruing commercial loans totaled $147 million or 1.16 percent of outstanding commercial loans. Nonaccruing commercial real estate loans totaled $27 million or 0.60 percent of outstanding commercial real estate loans. Nonaccruing loans to individuals totaled $42 million or 1.18 percent of outstanding loans to individuals.

Nonaccruing loans decreased $19 million compared to December 31, 2020, primarily due to a decrease in nonaccruing energy loans. New nonaccruing loans identified in the first quarter totaled $25 million, offset by $26 million in payments received and $17 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 $422 million at March 31, down from $478 million at December 31. Lower energy and services potential problem loans, were partially offset by an increase in potential problem healthcare loans.

Net charge-offs were $14.5 million or 0.28 percent of average loans on an annualized basis for the first quarter of 2021, excluding PPP loans. Net charge-offs were 0.31 percent of average loans over the last four quarters. Net charge-offs were $16.7 million or 0.31 percent of average loans on an annualized basis for the fourth quarter of 2020, excluding PPP loans. Gross charge-offs were $16.9 million for the first quarter compared to $18.3 million for the previous quarter. Recoveries totaled $2.4 million for the first quarter of 2021 and $1.6 million for the fourth quarter of 2020.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $13.4 billion at March 31, 2021, a $359 million increase compared to December 31, 2020. At March 31, 2021, the available for sale securities portfolio consisted primarily of $9.7 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $3.4 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. At March 31, 2021, the available for sale securities portfolio had a net unrealized gain of $290 million compared to $441 million at December 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 $42 million to $72 million at March 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 first quarter of 2021, including a $33.9 million increase in the fair value of mortgage servicing rights, $29.6 million decrease in the fair value of securities and derivative contracts held as an economic hedge, and $393 thousand of related net interest revenue.

Conference Call and Webcast

The company will hold a conference call at 9 a.m. Central time on April 21, 2021 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 # 13718312.

About BOK Financial Corporation

BOK Financial Corporation is a $47 billion regional financial services company headquartered in Tulsa, Oklahoma with $92 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, 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 March 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 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.

BALANCE SHEETS — UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)

  Mar. 31, 2021   Dec. 31, 2020
ASSETS      
Cash and due from banks $ 723,983       $ 798,757    
Interest-bearing cash and cash equivalents 695,213       381,816    
Trading securities 5,085,949       4,707,975    
Investment securities, net of allowance 226,121       244,843    
Available for sale securities 13,410,057       13,050,665    
Fair value option securities 72,498       114,982    
Restricted equity securities 139,614       171,391    
Residential mortgage loans held for sale 284,447       252,316    
Loans:      
Commercial 12,657,784       13,077,535    
Commercial real estate 4,503,347       4,698,538    
Paycheck protection program 1,848,550       1,682,310    
Loans to individuals 3,524,166       3,549,137    
Total loans 22,533,847       23,007,520    
Allowance for loan losses (352,402 )     (388,640 )  
Loans, net of allowance 22,181,445       22,618,880    
Premises and equipment, net 555,455       551,308    
Receivables 250,852       245,880    
Goodwill 1,048,091       1,048,091    
Intangible assets, net 110,585       113,436    
Mortgage servicing rights 132,915       101,172    
Real estate and other repossessed assets, net 70,911       90,526    
Derivative contracts, net 1,289,156       810,688    
Cash surrender value of bank-owned life insurance 401,320       398,758    
Receivable on unsettled securities sales 67,759       62,386    
Other assets 696,142       907,218    
TOTAL ASSETS $ 47,442,513       $ 46,671,088    
       
LIABILITIES AND EQUITY      
Deposits:      
Demand $ 13,103,170       $ 12,266,338    
Interest-bearing transaction 21,890,874       21,158,422    
Savings 854,226       751,992    
Time 2,004,356       1,967,128    
Total deposits 37,852,626       36,143,880    
Funds purchased and repurchase agreements 795,161       1,662,386    
Other borrowings 1,708,517       1,882,970    
Subordinated debentures 276,024       276,005    
Accrued interest, taxes and expense 290,328       323,667    
Due on unsettled securities purchases 106,835       257,627    
Derivative contracts, net 719,556       405,779    
Other liabilities 431,122       427,213    
TOTAL LIABILITIES 42,180,169       41,379,527    
Shareholders’ equity:      
Capital, surplus and retained earnings 5,018,053       4,930,398    
Accumulated other comprehensive gain 221,409       335,868    
TOTAL SHAREHOLDERS’ EQUITY 5,239,462       5,266,266    
Non-controlling interests 22,882       25,295    
TOTAL EQUITY 5,262,344       5,291,561    
TOTAL LIABILITIES AND EQUITY $ 47,442,513       $ 46,671,088    

AVERAGE BALANCE SHEETS — UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)

  Three Months Ended
  Mar. 31, 2021   Dec. 31, 2020   Sept. 30, 2020   June 30, 2020   Mar. 31, 2020
ASSETS                  
Interest-bearing cash and cash equivalents $ 711,047       $ 643,926       $ 553,070       $ 619,737       $ 721,659    
Trading securities 6,963,617       6,888,189       1,834,160       1,871,647       1,690,104    
Investment securities, net of allowance 237,313       251,863       258,965       268,947       282,265    
Available for sale securities 13,433,767       12,949,702       12,580,850       12,480,065       11,664,521    
Fair value option securities 104,662       122,329       387,784       786,757       1,793,480    
Restricted equity securities 189,921       280,428       144,415       273,922       429,133    
Residential mortgage loans held for sale 207,013       229,631       213,125       288,588       129,708    
Loans:                  
Commercial 12,908,461       13,113,449       13,772,217       14,502,652       14,452,851    
Commercial real estate 4,547,945       4,788,393       4,754,269       4,543,511       4,346,886    
Paycheck protection program 1,741,534       1,928,665       2,092,933       1,699,369          
Loans to individuals 3,559,067       3,617,011       3,491,044       3,353,960       3,143,286    
Total loans 22,757,007       23,447,518       24,110,463       24,099,492       21,943,023    
Allowance for loan losses (382,734 )     (414,225 )     (441,831 )     (367,583 )     (250,338 )  
Loans, net of allowance 22,374,273       23,033,293       23,668,632       23,731,909       21,692,685    
Total earning assets 44,221,613       44,399,361       39,641,001       40,321,572       38,403,555    
Cash and due from banks 760,691       742,432       723,826       678,878       669,369    
Derivative contracts, net 873,712       553,779       581,839       642,969       376,621    
Cash surrender value of bank-owned life insurance 399,830       397,354       394,680       391,951       390,009    
Receivable on unsettled securities sales 735,482       1,094,198       4,563,301       4,626,307       3,046,111    
Other assets 3,319,305       3,200,040       3,027,108       3,095,354       2,834,953    
TOTAL ASSETS $ 50,310,633       $ 50,387,164       $ 48,931,755       $ 49,757,031       $ 45,720,618    
                   
LIABILITIES AND EQUITY                  
Deposits:                  
Demand $ 12,312,629       $ 12,136,071       $ 11,929,694       $ 11,489,322       $ 9,232,859    
Interest-bearing transaction 21,433,406       20,718,390       19,752,106       18,040,170       16,159,654    
Savings 789,656       737,360       707,121       656,669       563,821    
Time 1,986,425       1,930,808       2,251,012       2,464,793       2,239,234    
Total deposits 36,522,116       35,522,629       34,639,933       32,650,954       28,195,568    
Funds purchased and repurchase agreements 2,830,378       2,153,254       2,782,150       5,816,484       3,815,941    
Other borrowings 3,392,346       5,193,656       3,382,688       3,527,303       6,542,325    
Subordinated debentures 276,015       275,998       275,980       275,949       275,932    
Derivative contracts, net 428,488       399,476       458,390       836,667       379,342    
Due on unsettled securities purchases 915,410       957,642       1,516,880       887,973       960,780    
Other liabilities 671,715       656,147       712,674       690,087       642,764    
TOTAL LIABILITIES 45,036,468       45,158,802       43,768,695       44,685,417       40,812,652    
Total equity 5,274,165       5,228,362       5,163,060       5,071,614       4,907,966    
TOTAL LIABILITIES AND EQUITY $ 50,310,633       $ 50,387,164       $ 48,931,755       $ 49,757,031       $ 45,720,618    

STATEMENTS OF EARNINGS — UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except per share data)

  Three Months Ended
  March 31,
  2021   2020
       
Interest revenue $ 298,239       $ 348,937    
Interest expense 17,819       87,577    
Net interest revenue 280,420       261,360    
Provision for credit losses (25,000 )     93,771    
Net interest revenue after provision for credit losses 305,420       167,589    
Other operating revenue:      
Brokerage and trading revenue 20,782       50,779    
Transaction card revenue 22,430       21,881    
Fiduciary and asset management revenue 41,322       44,458    
Deposit service charges and fees 24,209       26,130    
Mortgage banking revenue 37,113       37,167    
Other revenue 16,296       12,309    
Total fees and commissions 162,152       192,724    
Other gains (losses), net (3,036 )     (10,741 )  
Gain (loss) on derivatives, net (27,650 )     18,420    
Gain (loss) on fair value option securities, net (1,910 )     68,393    
Change in fair value of mortgage servicing rights 33,874       (88,480 )  
Gain on available for sale securities, net 467       3    
Total other operating revenue 163,897       180,319    
Other operating expense:      
Personnel 173,010       156,181    
Business promotion 2,154       6,215    
Charitable contributions to BOKF Foundation 4,000          
Professional fees and services 11,980       12,948    
Net occupancy and equipment 26,662       26,061    
Insurance 4,620       4,980    
Data processing and communications 37,467       32,743    
Printing, postage and supplies 3,440       4,272    
Net losses (gains) and operating expenses of repossessed assets (6,588 )     1,531    
Amortization of intangible assets 4,807       5,094    
Mortgage banking costs 13,943       10,545    
Other expense 7,132       8,054    
Total other operating expense 282,627       268,624    
       
Net income before taxes 186,690       79,284    
Federal and state income taxes 42,382       17,300    
       
Net income 144,308       61,984    
Net loss attributable to non-controlling interests (1,752 )     (95 )  
Net income attributable to BOK Financial Corporation shareholders $ 146,060       $ 62,079    
       
Average shares outstanding:      
Basic 69,137,375       70,123,685    
Diluted 69,141,710       70,130,166    
       
Net income per share:      
Basic $ 2.10       $ 0.88    
Diluted $ 2.10       $ 0.88    

FINANCIAL HIGHLIGHTS — UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and share data)

  Three Months Ended
  Mar. 31, 2021   Dec. 31, 2020   Sept. 30, 2020   June 30, 2020   Mar. 31, 2020
Capital:                  
Period-end shareholders’ equity $ 5,239,462       $ 5,266,266       $ 5,218,787       $ 5,096,995       $ 5,026,248    
Risk weighted assets $ 32,623,108       $ 32,492,277       $ 31,529,826       $ 32,180,602       $ 32,973,242    
Risk-based capital ratios:                  
Common equity tier 1 12.14%       11.95%       12.07%       11.44%       10.98%    
Tier 1 12.21%       11.95%       12.07%       11.44%       10.98%    
Total capital 13.98%       13.82%       14.05%       13.43%       12.65%    
Leverage ratio 8.51%       8.28%       8.39%       7.74%       8.15%    
Tangible common equity ratio1 8.82%       9.02%       9.02%       8.79%       8.39%    
                   
Common stock:                  
Book value per share $ 75.33       $ 75.62       $ 74.23       $ 72.50       $ 71.49    
Tangible book value per share $ 58.67       $ 58.94       $ 57.64       $ 55.83       $ 54.85    
Market value per share:                  
High $ 98.95       $ 73.07       $ 62.86       $ 67.62       $ 87.40    
Low $ 67.57       $ 50.09       $ 48.41       $ 37.80       $ 34.57    
Cash dividends paid $ 36,038       $ 36,219       $ 35,799       $ 35,769       $ 35,949    
Dividend payout ratio 24.67 %       23.48 %       23.24 %       55.29 %       57.91 %    
Shares outstanding, net 69,557,873       69,637,600       70,305,833       70,306,690       70,308,532    
Stock buy-back program:                  
Shares repurchased 260,000       665,100                   442,000    
Amount $ 20,071       $ 42,450       $       $       $ 33,380    
Average price per share $ 77.20       $ 63.82       $       $       $ 75.52    
                   
Performance ratios (quarter annualized):
Return on average assets 1.18%       1.22%       1.25%       0.52%       0.55%    
Return on average equity 11.28%       11.75%       11.89%       5.14%       5.10%    
Net interest margin 2.62%       2.72%       2.81%       2.83%       2.80%    
Efficiency ratio 63.32%       62.36%       60.41%       59.57%       58.62%    
                   
Reconciliation of non-GAAP measures:
1 Tangible common equity ratio:                  
Total shareholders’ equity $ 5,239,462       $ 5,266,266       $ 5,218,787       $ 5,096,995       $ 5,026,248    
Less: Goodwill and intangible assets, net 1,158,676       1,161,527       1,166,615       1,171,686       1,169,898    
Tangible common equity $ 4,080,786       $ 4,104,739       $ 4,052,172       $ 3,925,309       $ 3,856,350    
                   
Total assets $ 47,442,513       $ 46,671,088       $ 46,067,224       $ 45,819,874       $ 47,119,162    
Less: Goodwill and intangible assets, net 1,158,676       1,161,527       1,166,615       1,171,686       1,169,898    
Tangible assets $ 46,283,837       $ 45,509,561       $ 44,900,609       $ 44,648,188       $ 45,949,264    
                   
Tangible common equity ratio 8.82%       9.02%       9.02%       8.79%       8.39%    
                   
Pre-provision net revenue:                  
Net income before taxes $ 186,690       $ 199,847       $ 204,644       $ 80,089       $ 79,284    
Provision for expected credit losses (25,000 )     (6,500 )           135,321       93,771    
Net income (loss) attributable to non-controlling interests (1,752 )     485       58       (407 )     (95 )  
Pre-provision net revenue $ 163,442       $ 192,862       $ 204,586       $ 215,817       $ 173,150    
                   
Other data:                  
Tax equivalent interest $ 2,301       $ 2,414       $ 2,457       $ 2,630       $ 2,715    
Net unrealized gain on available for sale securities $ 290,217       $ 440,814       $ 480,563       $ 487,334       $ 435,989    
                   
Mortgage banking:                  
Mortgage production revenue $ 25,287       $ 26,662       $ 38,431       $ 39,185       $ 21,570    
                   
Mortgage loans funded for sale $ 843,053       $ 998,435       $ 1,032,472       $ 1,184,249       $ 548,956    
Add: current period-end outstanding commitments 387,465       380,637       560,493       546,304       657,570    
Less: prior period end outstanding commitments 380,637       560,493       546,304       657,570       158,460    
Total mortgage production volume $ 849,881       $ 818,579       $ 1,046,661       $ 1,072,983       $ 1,048,066    
                   
Mortgage loan refinances to mortgage loans funded for sale 65%       58%       54%       71%       57%    
Gain on sale margin 2.98%       3.26%       3.67%       3.65%       2.06%    
                   
Mortgage servicing revenue $ 11,826       $ 12,636       $ 13,528       $ 14,751       $ 15,597    
Average outstanding principal balance of mortgage loans serviced for others 15,723,231       16,518,208       17,434,215       19,319,872       20,416,546    
Average mortgage servicing revenue rates 0.31%       0.30%       0.31%       0.31%       0.31%    
                   
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net $ (27,705 )     $ (385 )     $ 2,295       $ 21,815       $ 18,371    
Gain (loss) on fair value option securities, net (1,910 )     68       (754 )     (14,459 )     68,393    
Gain (loss) on economic hedge of mortgage servicing rights (29,615 )     (317 )     1,541       7,356       86,764    
Gain (loss) on changes in fair value of mortgage servicing rights 33,874       6,276       3,441       (761 )     (88,480 )  
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue 4,259       5,959       4,982       6,595       (1,716 )  
Net interest revenue on fair value option securities2 393       550       1,565       2,702       4,268    
Total economic benefit of changes in the fair value of mortgage servicing rights, net of economic hedges $ 4,652       $ 6,509       $ 6,547       $ 9,297       $ 2,552    

2         Actual 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
  Mar. 31, 2021   Dec. 31, 2020   Sept. 30, 2020   June 30, 2020   Mar. 31, 2020
                   
Interest revenue $ 298,239       $ 319,020       $ 294,659       $ 306,384       $ 348,937    
Interest expense 17,819       21,790       22,909       28,280       87,577    
Net interest revenue 280,420       297,230       271,750       278,104       261,360    
Provision for credit losses (25,000 )     (6,500 )           135,321       93,771    
Net interest revenue after provision for credit losses 305,420       303,730       271,750       142,783       167,589    
Other operating revenue:                  
Brokerage and trading revenue 20,782       39,506       69,526       62,022       50,779    
Transaction card revenue 22,430       21,896       23,465       22,940       21,881    
Fiduciary and asset management revenue 41,322       41,799       39,931       41,257       44,458    
Deposit service charges and fees 24,209       24,343       24,286       22,046       26,130    
Mortgage banking revenue 37,113       39,298       51,959       53,936       37,167    
Other revenue 16,296       14,209       13,698       11,479       12,309    
Total fees and commissions 162,152       181,051       222,865       213,680       192,724    
Other gains (losses), net (3,036 )     5,383       6,265       6,768       (10,741 )  
Gain (loss) on derivatives, net (27,650 )     (339 )     2,354       21,885       18,420    
Gain (loss) on fair value option securities, net (1,910 )     68       (754 )     (14,459 )     68,393    
Change in fair value of mortgage servicing rights 33,874       6,276       3,441       (761 )     (88,480 )  
Gain (loss) on available for sale securities, net 467       4,339       (12 )     5,580       3    
Total other operating revenue 163,897       196,778       234,159       232,693       180,319    
Other operating expense:                  
Personnel 173,010       176,198       179,860       176,235       156,181    
Business promotion 2,154       3,728       2,633       1,935       6,215    
Charitable contributions to BOKF Foundation 4,000       6,000             3,000          
Professional fees and services 11,980       14,254       14,074       12,161       12,948    
Net occupancy and equipment 26,662       27,875       28,111       30,675       26,061    
Insurance 4,620       4,006       5,848       5,156       4,980    
Data processing and communications 37,467       35,061       34,751       32,942       32,743    
Printing, postage and supplies 3,440       3,805       3,482       3,502       4,272    
Net losses (gains) and operating expenses of repossessed assets (6,588 )     1,168       6,244       1,766       1,531    
Amortization of intangible assets 4,807       5,088       5,071       5,190       5,094    
Mortgage banking costs 13,943       14,765       15,803       15,598       10,545    
Other expense 7,132       8,713       5,388       7,227       8,054    
Total other operating expense 282,627       300,661       301,265       295,387       268,624    
Net income before taxes 186,690       199,847       204,644       80,089       79,284    
Federal and state income taxes 42,382       45,138       50,552       15,803       17,300    
Net income 144,308       154,709       154,092       64,286       61,984    
Net income (loss) attributable to non-controlling interests (1,752 )     485       58       (407 )     (95 )  
Net income attributable to BOK Financial Corporation shareholders $ 146,060       $ 154,224       $ 154,034       $ 64,693       $ 62,079    
                   
Average shares outstanding:                  
Basic 69,137,375       69,489,597       69,877,866       69,876,043       70,123,685    
Diluted 69,141,710       69,493,050       69,879,290       69,877,467       70,130,166    
Net income per share:                  
Basic $ 2.10       $ 2.21       $ 2.19       $ 0.92       $ 0.88    
Diluted $ 2.10       $ 2.21       $ 2.19       $ 0.92       $ 0.88    

LOANS TREND — UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)

    Mar. 31, 2021   Dec. 31, 2020   Sept. 30, 2020   June 30, 2020   Mar. 31, 2020
Commercial:                    
Services   $ 3,421,948     $ 3,508,583     $ 3,545,825     $ 3,779,881     $ 3,955,748  
Energy   3,202,488     3,469,194     3,717,101     3,974,174     4,111,676  
Healthcare   3,290,758     3,305,990     3,325,790     3,289,343     3,165,096  
General business   2,742,590     2,793,768     2,976,990     3,115,112     3,563,455  
Total commercial   12,657,784     13,077,535     13,565,706     14,158,510     14,795,975  
                     
Commercial real estate:                    
Multifamily   1,227,915     1,328,045     1,387,461     1,407,107     1,282,457  
Office   1,094,060     1,085,257     1,099,563     973,995     962,004  
Industrial   789,437     810,510     792,389     723,005     728,026  
Retail   787,648     796,223     786,211     780,467     774,198  
Residential construction and land development   119,079     119,394     121,258     136,911     138,958  
Other commercial real estate   485,208     559,109     506,818     532,659     564,442  
Total commercial real estate   4,503,347     4,698,538     4,693,700     4,554,144     4,450,085  
                     
Paycheck protection program   1,848,550     1,682,310     2,097,325     2,081,428      
                     
Loans to individuals:                    
Residential mortgage   1,797,478     1,863,003     1,849,144     1,813,442     1,844,555  
Residential mortgages guaranteed by U.S. government agencies   420,051     408,687     384,247     322,269     197,889  
Personal   1,306,637     1,277,447     1,213,178     1,226,097     1,175,466  
Total loans to individuals   3,524,166     3,549,137     3,446,569     3,361,808     3,217,910  
                     
Total   $ 22,533,847     $ 23,007,520     $ 23,803,300     $ 24,155,890     $ 22,463,970  

LOANS MANAGED BY PRINCIPAL MARKET AREA — UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)

  Mar. 31, 2021   Dec. 31, 2020   Sept. 30, 2020   June 30, 2020   Mar. 31, 2020
                   
Texas:                  
Commercial $ 5,748,345     $ 5,926,534     $ 6,135,471     $ 6,359,206     $ 6,350,690  
Commercial real estate 1,511,714     1,519,217     1,523,226     1,413,108     1,296,266  
Paycheck protection program 537,899     501,079     614,970     612,133      
Loans to individuals 848,194     855,410     794,055     749,531     756,634  
Total Texas 8,646,152     8,802,240     9,067,722     9,133,978     8,403,590  
                   
Oklahoma:                  
Commercial 2,975,477     3,144,782     3,332,244     3,489,259     3,886,086  
Commercial real estate 597,840     597,733     608,448     596,419     593,473  
Paycheck protection program 468,002     413,108     487,247     442,518      
Loans to individuals 2,043,705     2,052,784     2,034,576     1,966,032     1,788,518  
Total Oklahoma 6,085,024     6,208,407     6,462,515     6,494,228     6,268,077  
                   
Colorado:                  
Commercial 1,910,826     1,929,320     1,993,364     2,085,294     2,181,309  
Commercial real estate 777,786     879,648     893,626     940,622     955,608  
Paycheck protection program 436,540     377,111     494,910     488,279      
Loans to individuals 264,759     264,295     257,832     265,359     268,674  
Total Colorado 3,389,911     3,450,374     3,639,732     3,779,554     3,405,591  
                   
Arizona:                  
Commercial 1,207,089     1,219,072     1,218,769     1,346,037     1,396,582  
Commercial real estate 667,766     726,111     702,291     698,818     714,161  
Paycheck protection program 208,481     211,725     272,114     318,961      
Loans to individuals 179,031     177,948     166,203     177,155     181,821  
Total Arizona 2,262,367     2,334,856     2,359,377     2,540,971     2,292,564  
                   
Kansas/Missouri:                  
Commercial 421,974     455,914     493,606     481,162     556,255  
Commercial real estate 395,590     366,821     352,663     314,926     310,799  
Paycheck protection program 60,741     56,011     80,230     76,724      
Loans to individuals 104,954     105,995     96,598     102,577     116,734  
Total Kansas/Missouri 983,259     984,741     1,023,097     975,389     983,788  
                   
New Mexico:                  
Commercial 307,395     303,833     288,374     308,090     327,164  
Commercial real estate 448,298     473,204     473,697     458,230     434,150  
Paycheck protection program 124,059     109,881     133,244     128,058      
Loans to individuals 70,491     75,665     79,890     83,470     87,110  
Total New Mexico 950,243     962,583     975,205     977,848     848,424  
                   
Arkansas:                  
Commercial 86,678     98,080     103,878     89,462     97,889  
Commercial real estate 104,353     135,804     139,749     132,021     145,628  
Paycheck protection program 12,828     13,395     14,610     14,755      
Loans to individuals 13,032     17,040     17,415     17,684     18,419  
Total Arkansas 216,891     264,319     275,652     253,922     261,936  
                   
TOTAL BOK FINANCIAL $ 22,533,847     $ 23,007,520     $ 23,803,300     $ 24,155,890     $ 22,463,970  

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)

  Mar. 31, 2021   Dec. 31, 2020   Sept. 30, 2020   June 30, 2020   Mar. 31, 2020
Oklahoma:                  
Demand $ 4,822,895      $ 4,328,619      $ 4,493,691      $ 4,378,559      $ 3,669,558   
Interest-bearing:                  
Transaction 12,827,914      12,603,603      12,586,401      11,438,489      9,955,697   
Savings 487,862      420,996      401,062      387,557      329,631   
Time 1,197,517      1,134,453      1,081,176      1,330,619      1,137,802   
Total interest-bearing 14,513,293      14,159,052      14,068,639      13,156,665      11,423,130   
Total Oklahoma 19,336,188      18,487,671      18,562,330      17,535,224      15,092,688   
                   
Texas:                  
Demand 3,593,510      3,450,468      3,152,393      3,070,955      2,767,399   
Interest-bearing:                  
Transaction 4,257,390      3,800,482      3,482,603      3,358,090      2,874,362   
Savings 154,406      139,173      136,787      128,892      115,039   
Time 368,086      383,062      438,337      476,867      505,565   
Total interest-bearing 4,779,882      4,322,717      4,057,727      3,963,849      3,494,966   
Total Texas 8,373,392      7,773,185      7,210,120      7,034,804      6,262,365   
                   
Colorado:                  
Demand 2,115,354      2,168,404      2,057,603      2,096,075      1,579,764   
Interest-bearing:                  
Transaction 2,100,135      2,170,485      1,861,763      1,816,604      1,759,384   
Savings 73,446      69,384      68,230      67,477      58,000   
Time 204,973      208,778      226,780      254,845      279,105   
Total interest-bearing 2,378,554      2,448,647      2,156,773      2,138,926      2,096,489   
Total Colorado 4,493,908      4,617,051      4,214,376      4,235,001      3,676,253   
                   
New Mexico:                  
Demand 1,131,713      941,074      964,908      965,877      750,052   
Interest-bearing:                  
Transaction 736,923      733,007      713,418      752,565      563,891   
Savings 103,591      91,646      85,463      80,242      67,553   
Time 181,863      186,307      200,525      222,370      235,778   
Total interest-bearing 1,022,377      1,010,960      999,406      1,055,177      867,222   
Total New Mexico 2,154,090      1,952,034      1,964,314      2,021,054      1,617,274   
                   
Arizona:                  
Demand 915,439      905,201      928,671      985,757      665,396   
Interest-bearing:                  
Transaction 835,795      768,220      771,319      780,500      729,603   
Savings 13,235      12,174      11,498      15,669      8,832   
Time 30,997      32,721      36,929      42,318      47,081   
Total interest-bearing 880,027      813,115      819,746      838,487      785,516   
Total Arizona 1,795,466      1,718,316      1,748,417      1,824,244      1,450,912   
                   
                   
Kansas/Missouri:                  
Demand 478,370      426,738      405,360      427,795      318,985   
Interest-bearing:                  
Transaction 991,510      960,237      616,797      526,635      537,552   
Savings 18,686      16,286      15,520      15,033      12,888   
Time 13,898      14,610      16,430      17,746      19,137   
Total interest-bearing 1,024,094      991,133      648,747      559,414      569,577   
Total Kansas/Missouri 1,502,464      1,417,871      1,054,107      987,209      888,562   
                   
Arkansas:                  
Demand 45,889      45,834      44,712      67,147      70,428   
Interest-bearing:                  
Transaction 141,207      122,388      164,439      177,535      175,803   
Savings 3,000      2,333      2,389      2,101      1,862   
Time 7,022      7,197      7,796      7,995      8,005   
Total interest-bearing 151,229      131,918      174,624      187,631      185,670   
Total Arkansas 197,118      177,752      219,336      254,778      256,098   
                   
TOTAL BOK FINANCIAL $ 37,852,626      $ 36,143,880      $ 34,973,000      $ 33,892,314      $ 29,244,152   

NET INTEREST MARGIN TREND — UNAUDITED
BOK FINANCIAL CORPORATION

  Three Months Ended
  Mar. 31, 2021   Dec. 31, 2020   Sept. 30, 2020   June 30, 2020   Mar. 31, 2020
                   
TAX-EQUIVALENT ASSETS YIELDS                  
Interest-bearing cash and cash equivalents 0.10  %   0.10  %   0.12  %   0.07  %   1.33  %
Trading securities 2.06  %   2.02  %   1.92  %   2.46  %   2.89  %
Investment securities, net of allowance 4.88  %   4.88  %   4.85  %   4.77  %   4.73  %
Available for sale securities 1.84  %   1.98  %   2.11  %   2.29  %   2.48  %
Fair value option securities 1.95  %   2.27  %   1.92  %   2.00  %   2.67  %
Restricted equity securities 2.86  %   3.25  %   2.53  %   2.75  %   5.49  %
Residential mortgage loans held for sale 2.71  %   2.75  %   3.01  %   3.10  %   3.50  %
Loans 3.55  %   3.68  %   3.60  %   3.63  %   4.50  %
Allowance for loan losses                  
Loans, net of allowance 3.62  %   3.75  %   3.67  %   3.69  %   4.55  %
Total tax-equivalent yield on earning assets 2.78  %   2.92  %   3.04  %   3.12  %   3.73  %
                   
COST OF INTEREST-BEARING LIABILITIES                
Interest-bearing deposits:                  
Interest-bearing transaction 0.12  %   0.14  %   0.17  %   0.21  %   0.89  %
Savings 0.04  %   0.05  %   0.05  %   0.05  %   0.09  %
Time 0.70  %   0.89  %   1.13  %   1.36  %   1.83  %
Total interest-bearing deposits 0.17  %   0.19  %   0.26  %   0.34  %   0.98  %
Funds purchased and repurchase agreements 0.19  %   0.28  %   0.17  %   0.14  %   1.14  %
Other borrowings 0.39  %   0.42  %   0.43  %   0.56  %   1.66  %
Subordinated debt 4.92  %   4.87  %   4.89  %   5.16  %   5.30  %
Total cost of interest-bearing liabilities 0.24  %   0.28  %   0.31  %   0.37  %   1.19  %
Tax-equivalent net interest revenue spread 2.54  %   2.64  %   2.73  %   2.75  %   2.54  %
Effect of noninterest-bearing funding sources and other 0.08  %   0.08  %   0.08  %   0.08  %   0.26  %
Tax-equivalent net interest margin 2.62  %   2.72  %   2.81  %   2.83  %   2.80  %

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
  Mar. 31, 2021   Dec. 31, 2020   Sept. 30, 2020   June 30, 2020   Mar. 31, 2020
Nonperforming assets:                  
Nonaccruing loans:                  
Commercial:                  
Energy $ 101,800       $ 125,059       $ 126,816       $ 162,989       $ 96,448    
Services 28,033       25,598       25,817       21,032       8,425    
Healthcare 3,187       3,645       3,645       3,645       4,070    
General business 14,053       12,857       13,675       14,333       9,681    
Total commercial 147,073       167,159       169,953       201,999       118,624    
                   
Commercial real estate 27,243       27,246       12,952       13,956       8,545    
                   
Loans to individuals:                  
Permanent mortgage 32,884       32,228       31,599       33,098       30,721    
Permanent mortgage guaranteed by U.S. government agencies 8,564       7,741       6,397       6,110       5,005    
Personal 255       319       252       233       277    
Total loans to individuals 41,703       40,288       38,248       39,441       36,003    
                   
Total nonaccruing loans $ 216,019       $ 234,693       $ 221,153       $ 255,396       $ 163,172    
Accruing renegotiated loans guaranteed by U.S. government agencies 154,591       151,775       142,770       114,571       91,757    
Real estate and other repossessed assets 70,911       90,526       52,847       35,330       36,744    
Total nonperforming assets $ 441,521       $ 476,994       $ 416,770       $ 405,297       $ 291,673    
Total nonperforming assets excluding those guaranteed by U.S. government agencies $ 278,366       $ 317,478       $ 267,603       $ 284,616       $ 194,911    
                   
Accruing loans 90 days past due1 $ 395       $ 10,369       $ 7,684       $ 10,992       $ 3,706    
                   
Gross charge-offs $ 16,905       $ 18,251       $ 26,661       $ 15,570       $ 18,917    
Recoveries (2,437 )     (1,592 )     (4,232 )     (1,491 )     (1,696 )  
Net charge-offs $ 14,468       $ 16,659       $ 22,429       $ 14,079       $ 17,221    
                   
Provision for loan losses $ (21,770 )     $ (14,478 )     $ 6,609       $ 134,365       $ 95,964    
Provision for credit losses from off-balance sheet unfunded loan commitments (4,044 )     8,952       (4,950 )     4,405       3,377    
Provision for expected credit losses from mortgage banking activities 885       (923 )     (770 )     (3,575 )     (6,020 )  
Provision for credit losses related to held-to maturity (investment) securities portfolio (71 )     (51 )     (889 )     126       450    
Total provision for credit losses $ (25,000 )     $ (6,500 )     $       $ 135,321       $ 93,771    
                   
                   
                   
                   
                   
                   
                   
Allowance for loan losses to period end loans 1.56%       1.69%       1.76%       1.80%       1.40%    
Allowance for loan losses to period end loans excluding PPP loans2 1.70%       1.82%       1.93%       1.97%       1.40%    
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans 1.71%       1.85%       1.88%       1.94%       1.53%    
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans excluding PPP loans2 1.86%       2.00%       2.06%       2.12%       1.53%    
Nonperforming assets to period end loans and repossessed assets 1.95%       2.07%       1.75%       1.68%       1.30%    
Net charge-offs (annualized) to average loans 0.25%       0.28%       0.37%       0.23%       0.31%    
Net charge-offs (annualized) to average loans excluding PPP loans2 0.28%       0.31%       0.41%       0.25%       0.31%    
Allowance for loan losses to nonaccruing loans1 169.87%       171.24%       195.47%       174.74%       199.35%    
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to nonaccruing loans1 185.72%       187.51%       208.49%       187.94%       217.38%    

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.

LINE OF BUSINESS HIGHLIGHTS — UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratios)

    Three Months Ended   1Q21 vs 4Q20   1Q21 vs 1Q20
    Mar. 31,
2021
  Dec. 31,
2020
  Mar. 31,
2020
  $ change   % change   $ change   % change
Commercial Banking                            
Net interest revenue   $ 130,005     $ 142,026     $ 151,407     $ (12,021 )     (8.5)%       $ (21,402 )     (14.1)%    
Fees and commissions revenue   49,847     49,060     41,459     787       1.6%       8,388       20.2%    
Combined net interest and fee revenue   179,852     191,086     192,866     (11,234 )     (5.9)%       (13,014 )     (6.7)%    
Other operating expense   66,979     68,372     60,752     (1,393 )     (2.0)%       6,227       10.2%    
Corporate expense allocations   12,734     5,348     8,905     7,386       138.1%       3,829       43.0%    
Net income   69,673     74,941     74,975     (5,268 )     (7.0)%       (5,302 )     (7.1)%    
                             
Average assets   28,047,052     27,693,742     24,687,976     353,310       1.3%       3,359,076       13.6%    
Average loans   17,522,520     18,100,333     18,812,015     (577,813 )     (3.2)%       (1,289,495 )     (6.9)%    
Average deposits   16,130,168     15,373,673     11,907,386     756,495       4.9%       4,222,782       35.5%    
                             
Consumer Banking                            
Net interest revenue   $ 20,974     $ 30,672     $ 43,932     $ (9,698 )     (31.6)%       $ (22,958 )     (52.3)%    
Fees and commissions revenue   52,300     55,326     55,062     (3,026 )     (5.5)%       (2,762 )     (5.0)%    
Combined net interest and fee revenue   73,274     85,998     98,994     (12,724 )     (14.8)%       (25,720 )     (26.0)%    
Other operating expense   55,743     59,306     53,844     (3,563 )     (6.0)%       1,899       3.5%    
Corporate expense allocations   11,487     10,428     10,389     1,059       10.2%       1,098       10.6%    
Net income   6,849     14,768     23,701     (7,919 )     (53.6)%       (16,852 )     (71.1)%    
                             
Average assets   9,755,539     9,700,428     9,850,853     55,111       0.6%       (95,314 )     (1.0)%    
Average loans   1,823,732     1,840,492     1,711,703     (16,760 )     (0.9)%       112,029       6.5%    
Average deposits   8,082,443     7,993,971     6,869,481     88,472       1.1%       1,212,962       17.7%    
                             
Wealth Management                            
Net interest revenue   $ 48,354     $ 48,521     $ 18,904     $ (167 )     (0.3)%       $ 29,450       155.8%    
Fees and commissions revenue   65,684     82,936     97,881     (17,252 )     (20.8)%       (32,197 )     (32.9)%    
Combined net interest and fee revenue   114,038     131,457     116,785     (17,419 )     (13.3)%       (2,747 )     (2.4)%    
Other operating expense   78,565     84,000     78,192     (5,435 )     (6.5)%       373       0.5%    
Corporate expense allocations   9,887     9,465     8,265     422       4.5%       1,622       19.6%    
Net income   19,382     28,435     22,573     (9,053 )     (31.8)%       (3,191 )     (14.1)%    
                             
Average assets   18,645,865     18,101,182     12,723,412     544,683       3.0%       5,922,453       46.5%    
Average loans   1,917,973     1,839,695     1,705,735     78,278       4.3%       212,238       12.4%    
Average deposits   9,706,295     9,589,814     7,623,986     116,481       1.2%       2,082,309       27.3%    
Fiduciary assets   56,227,268     55,486,492     43,688,036     740,776       1.3%       12,539,232       28.7%    
Assets under management or administration   91,956,188     91,592,247     75,783,829     363,941       0.4%       16,172,359       21.3%    

Contact:

Cody McAlester
Vice President, Investor Relations
918-595-3030

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