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BOK Financial Corporation Reports Quarterly Earnings of $188 million or $2.74 Per Share in the Third Quarter

TULSA, Okla., Oct. 20, 2021 (GLOBE NEWSWIRE) -- BOK Financial Corporation (NASD: BOKF) -

CEO Commentary

Steven G. Bradshaw, president and chief executive officer, stated, “The third quarter was BOKF’s second-consecutive record quarter with net income of $188 million or $2.74 per share. This quarter exhibits many of the benefits achieved from our strategy to generate revenue growth through long-term commitments and investments. Our diversified Wealth Management business, built over 30+ years, largely through organic growth, led the way with a record $153 million in total revenues, a 14% increase from their previous high set during the same quarter last year. Our alternative investment practice, which began in 2005 and provides equity and debt capital to growing businesses, experienced significant gains during the third quarter adding $31 million to pretax revenue. These types of long-term differentiators set us apart and demonstrate the force of a diversified business model.”

Bradshaw continued, “Equally impressive to our revenue generating opportunities this year has been our firm hold on expense management, which has grown at a rate just slightly above 2% over the last two trailing twelve month periods, despite significant technology and cyber-related investments.

“While loan growth continues to be a challenge, and our line utilization levels at five year lows, we believe that the inevitable return to normalized levels will result in significant earnings growth potential. Our strong results today leave us well-positioned to aggressively add customers throughout our loan portfolio.”

Third Quarter 2021 Financial Highlights

  • Net income was $188.3 million or $2.74 per diluted share for the third quarter of 2021 and $166.4 million or $2.40 per diluted share for the second quarter of 2021.
  • Net interest revenue totaled $280.2 million, consistent with the prior quarter. Net interest margin was 2.66 percent compared to 2.60 percent in the second quarter of 2021.
  • Operating revenue totaled $229.8 million, an increase of $38.4 million. Growth in much of our fee-based businesses, led by brokerage and trading and mortgage banking revenues, was partially offset by lower operating revenues from repossessed assets related to oil and gas properties sold during the quarter. In addition, we recognized a $31.1 million pre-tax gain on the sale of an alternative investment. This gain was partially offset by losses on the extinguishment of subordinated debt and sale of repossessed assets.
  • Operating expense totaled $291.3 million, consistent with the prior quarter, as a $3.8 million increase in personnel expense was offset by a $3.7 million decrease in non-personnel expense, primarily due to a reduction of operating expenses related to oil and gas properties sold during the quarter.
  • Period-end loans decreased $1.1 billion to $20.3 billion at September 30, 2021. Period-end Paycheck Protection Program ("PPP") loans decreased $586 million to $536 million. The remaining decrease was primarily due to paydowns of commercial energy loans and commercial real estate loans. Average loans were $20.8 billion, a $1.3 billion decrease compared to the second quarter of 2021.
  • Continued improvement in credit quality metrics and lower loan balances coupled with strength in commodity prices and a continued optimistic outlook for growth in gross domestic product and the labor markets resulted in a $23.0 million negative provision for expected credit losses in the third quarter of 2021. A $35.0 million negative provision for expected credit losses was recorded in the prior quarter. The combined allowance for credit losses totaled $306 million or 1.54 percent of outstanding loans, excluding PPP loans, at September 30, 2021. The combined allowance for credit losses was $336 million or 1.66 percent of outstanding loans, excluding PPP loans, at June 30, 2021.
  • Average deposits increased $344 million to $37.8 billion and period-end deposits increased $1.1 billion to $38.5 billion, largely due to growth in commercial balances. Average demand deposits grew by $481 million and average interest bearing deposits decreased by $137 million.
  • The company's common equity Tier 1 capital ratio was 12.26 percent at September 30, 2021. In addition, the company's Tier 1 capital ratio was 12.29 percent, total capital ratio was 13.38 percent, and leverage ratio was 8.77 percent at September 30, 2021. At June 30, 2021, the company's common equity Tier 1 capital ratio was 11.95 percent, Tier 1 capital ratio was 12.01 percent, total capital ratio was 13.61 percent, and leverage ratio was 8.58 percent.
  • The company repurchased 478,141 shares of common stock at an average price of $85.00 a share in the third quarter of 2021.
  • On August 23, 2021, the company redeemed the subordinated debt issued in June of 2016 at the interest rate of 5.375 percent using existing capital, saving approximately $8.0 million per year in interest payments. The repayment resulted in a realized loss on extinguishment of debt of $5.2 million.
  • Commercial Banking contributed $102.7 million to net income in the third quarter of 2021, an increase of $30.1 million compared to the second quarter of 2021. The sale of an alternative investment resulted in a $31.1 million pre-tax gain, net of non-controlling interest. Combined net interest revenue and fee revenue decreased $3.7 million, largely due to a decrease of $6.0 million in production revenue from repossessed oil and gas properties, which was partially offset by a decrease in expenses on the same properties. In addition, favorable yields on deposits sold to our Funds Management unit dampened the reduction of total revenue. Average Commercial Banking loans decreased $393 million due to purposeful deleveraging by our customers. Average Commercial Banking deposits grew 5 percent to $17.9 billion in the third quarter of 2021.
  • Consumer Banking contributed $12.4 million to net income in the third quarter of 2021, an increase of $10.7 million compared to the prior quarter. Combined net interest revenue and fee revenue increased $9.0 million. Net interest revenue increased $2.3 million, mainly due to favorable yields on deposits sold to our Funds Management unit. Fees and commissions revenue increased $6.7 million, largely due to mortgage production revenue. Lower mortgage banking costs largely drove a $3.0 million decrease in operating expense. Average Consumer Banking deposits were consistent with the prior quarter.
  • Wealth Management contributed a record $41.4 million to net income in the third quarter of 2021, an increase of $10.3 million compared to the prior quarter. Our diverse set of investment-focused businesses including fixed income trading, private wealth, institutional wealth, financial risk management, and multiple fiduciary businesses combined to provide total net interest and fee revenues of $153.2 million, an increase of $22.0 million over the second quarter of 2021. Revenue primarily from agency residential mortgage trading activity increased $15.4 million to $77.3 million due to higher margin market opportunities. Operating expense increased $8.0 million, primarily due to incentive compensation costs related to increased trading activity. Average Wealth Management deposits decreased 6 percent to $9.1 billion in the third quarter of 2021. Assets under management were $98.8 billion, an increase of $2.2 billion compared to the prior quarter.

Net Interest Revenue

Net interest revenue was $280.2 million for the third quarter of 2021, largely unchanged compared to the second quarter of 2021. Net interest margin was 2.66 percent compared to 2.60 percent in the prior quarter.

Average earning assets decreased $892 million compared to the second quarter of 2021. Average loan balances decreased $1.3 billion, largely due to paydowns of PPP loans. Available for sale securities increased $203 million. Average trading securities grew by $187 million. Other borrowings decreased $1.1 billion while funds purchased and repurchase agreements decreased $342 million.

The yield on average earning assets was 2.78 percent, a 3 basis point increase from the prior quarter. The loan portfolio yield increased 14 basis points to 3.68 percent, primarily due to non-use fees related to lower credit line utilization. The yield on the available for sale securities portfolio decreased 5 basis points to 1.80 percent.

Funding costs were 0.19 percent, down 2 basis points. The cost of interest-bearing deposits decreased 1 basis point to 0.13 percent. The cost of other borrowed funds increased 2 basis points to 0.30 percent. The cost of subordinated debentures decreased 24 basis points due to the redemption of $150 million in the third quarter. The benefit to net interest margin from assets funded by non-interest liabilities was 7 basis points for the third quarter of 2021, compared to 6 basis points for the prior quarter.

Operating Revenue

Growing $21.0 million over the prior quarter, fees and commissions revenue totaled $190.4 million for the third quarter of 2021. Brokerage and trading revenue increased $18.5 million to $47.9 million. Higher margin market opportunities led to an $11.1 million increase in trading revenue. Customer hedging revenue increased $5.1 million, primarily attributed to energy customers. Investment banking revenue increased $1.9 million, largely due to the timing of financial advisory fees.

Mortgage banking revenue increased $5.1 million compared to the prior quarter. While mortgage production volume decreased $28 million to $615 million, production revenue as a percentage of production volume, which includes unrealized gains and losses on our mortgage commitment pipeline and related hedges, increased to 2.50 percent. An increase in consumer activity following the pandemic shut downs resulted in a $1.6 million increase in deposit service charges.

Other gains and losses, net increased $14.6 million over the prior quarter. The sale of an alternative investment resulted in a $31.1 million gain, net of non-controlling interest, which was partially offset by a $5.2 million loss on the extinguishment of subordinated debentures and a $3.9 million loss on the sale of a repossessed oil and gas asset. The prior quarter included a $7.4 million gain on the sale of a repossessed asset.

Other revenue decreased $4.3 million as a result of lower operating revenue from repossessed oil and gas assets due to the sale of a property, which was largely offset by a reduction of expenses on the same properties.

Operating Expense

Total operating expense remained consistent with the prior quarter at $291.3 million with a $3.8 million increase in personnel expense offset by a $3.7 million decrease in non-personnel expense.

Cash based incentive compensation increased $8.8 million, primarily in relation to increased 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 $2.4 million. Employee benefits expense decreased $3.3 million due to reduced payroll taxes and employee healthcare costs.

Other expense decreased $6.8 million as a result of lower operating expenses on repossessed assets. Mortgage banking costs decreased $2.2 million due to a decrease in prepayments. These decreases were partially offset by a $2.2 million increase in business promotion costs, a $2.0 million increase in data processing and communications expense and a $1.8 million increase in occupancy and equipment expense.

Loans, Deposits and Capital

Loans

Outstanding loans were $20.3 billion at September 30, 2021, a $1.1 billion decrease compared to June 30, 2021, led by lower PPP loan balances and to a lesser extent, energy and commercial real estate loans.

Outstanding commercial loan balances decreased $298 million compared to June 30, 2021, primarily due to lower energy loan balances. 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 $197 million to $2.8 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 67 percent of committed production loans are secured by properties primarily producing oil. The remaining 33 percent is secured by properties primarily producing natural gas. Unfunded energy loan commitments were $2.8 billion at September 30, 2021, an increase of $109 million over June 30, 2021.

Services loan balances decreased $66 million to $3.3 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, foundations and not-for-profit organizations, educational services and specialty trade contractors.

Healthcare sector loan balances decreased $34 million compared to the prior quarter, totaling $3.3 billion or 16 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.

Commercial real estate loan balances decreased $130 million compared to June 30, 2021 and represent 20 percent of total loans at September 30, 2021, largely due to refinancing in the long term, non-recourse markets. Multifamily residential loans, decreased $89 million to $876 million at September 30, 2021. Loans secured by office facilities decreased $43 million to $1.0 billion. Loans secured by other commercial real estate properties decreased $35 million to $435 million. Loans secured by industrial facilities increased $66 million to $890 million.

PPP loan balances decreased $586 million to $536 million or 3 percent of total loans.

Loans to individuals decreased $55 million and represent 17 percent of total loans at September 30, 2021. Residential mortgage loans decreased $62 million, largely due to the re-sale of loans previously sold into GNMA mortgage pools that the Company repurchased when certain defined delinquency criteria were met. Many loans repurchased during the pandemic have since been cured and meet the re-sale qualifications. Personal loans were up $7.1 million.

Deposits

Period-end deposits totaled $38.5 billion at September 30, 2021, a $1.1 billion increase compared to June 30, 2021. Demand deposit account balances grew by $710 million and interest-bearing transaction account balances increased by $474 million. Average deposits were $37.8 billion at September 30, 2021, a $344 million increase compared to June 30, 2021. Demand deposit account balances increased $481 million primarily from deposits attributed to the Commercial Banking segment while interest-bearing deposits decreased $137 million.

Capital

The company's common equity Tier 1 capital ratio was 12.26 percent at September 30, 2021. In addition, the company's Tier 1 capital ratio was 12.29 percent, total capital ratio was 13.38 percent, and leverage ratio was 8.77 percent at September 30, 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 20 basis points to the company's common equity tier 1 capital ratio at September 30. At June 30, 2021, the company's common equity Tier 1 capital ratio was 11.95 percent, Tier 1 capital ratio was 12.01 percent, total capital ratio was 13.61 percent, and leverage ratio was 8.58 percent.

The company's tangible common equity ratio, a non-GAAP measure, was 9.28 percent at September 30, 2021 and 9.09 percent at June 30, 2021. The tangible common equity ratio is primarily based on total shareholders' equity, which includes unrealized gains and losses on available for sale securities. The company has elected to exclude unrealized gains and losses from available for sale securities from its calculation of Tier 1 capital for regulatory capital purposes, consistent with the treatment under the previous capital rules.

The company repurchased 478,141 shares of common stock at an average price of $85.00 a share in the third quarter of 2021. We view share buybacks opportunistically, but within the context of maintaining our strong capital position.

Credit Quality

Expected credit losses on assets carried at amortized cost are recognized over their expected lives based on models that measure the probability of default and loss given default over a 12-month reasonable and supportable forecast period. Our models incorporate base case, downside and upside macroeconomic variables such as real gross domestic product ("GDP") growth, civilian unemployment rate and West Texas Intermediate ("WTI") oil prices on a probability weighted basis.

We recorded a $23.0 million negative provision for credit losses in the third quarter of 2021. Changes in our reasonable and supportable forecasts of macroeconomic variables, primarily due to continued strength in commodity prices and a continued optimistic outlook for economic growth in GDP and labor markets resulted in a $12.3 million decrease in the allowance for credit losses related to lending activities. Changes in loan portfolio characteristics, primarily related to improving credit quality metrics and lower loan balances resulted in a $10.1 million decrease in the allowance for credit losses related to lending activities.

Our base case reasonable and supportable forecast assumes that the COVID-19 pandemic continues to improve from the Delta variant as global virus immunity continues to be more widespread and vaccines prove to be effective against severe virus outcomes as well as new virus strains. Elevated consumer consumption and the need for inventory restocking is expected to result in GDP growth above historical averages throughout mid-year 2022, but begins to moderate thereafter. We expect a 4.1 percent increase in GDP over the next twelve months. We expect labor force participants will continue to re-enter the job market to help meet record job openings. This increase in employment helps maintain household income above its pre-pandemic trend and prevents a sharp drop-off in spending. Our forecasted civilian unemployment rate is 4.9 percent for the fourth quarter of 2021, improving to 4.5 percent by the third quarter of 2022. WTI oil prices are projected to generally follow the NYMEX forward curve that existed at the end of September 2021, averaging $68.38 per barrel over the next twelve months.

The probability weighting of our base case reasonable and supportable forecast decreased to 65 percent in the third quarter of 2021 compared to 70 percent in the second quarter of 2021 as the level of uncertainty in the current economic outlook worsened slightly. Our downside case, probability weighted at 25 percent, assumes additional waves and hotspots emerge in areas of the country with lower vaccination rates stemming from the impact of new virus strains, such as the current Delta variant, as the U.S. enters the fall and winter months. This results in a relatively mild recession with conditions beginning to improve in the summer of 2022.

The allowance for loan losses totaled $277 million or 1.36 percent of outstanding loans and 208 percent of nonaccruing loans at September 30, 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 $306 million or 1.50 percent of outstanding loans and 230 percent of nonaccruing loans at September 30, 2021. Excluding PPP loans, the allowance for loan losses was 1.40 percent of outstanding loans and the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was 1.54 percent.

At June 30, 2021, the allowance for loan losses was $312 million or 1.46 percent of outstanding loans and 183 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 $336 million or 1.57 percent of outstanding loans and 197 percent of nonaccruing loans.

Nonperforming assets totaled $349 million or 1.71 percent of outstanding loans and repossessed assets at September 30, 2021, down from $408 million or 1.90 percent at June 30, 2021. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $162 million or 0.83 percent of outstanding loans and repossessed assets at September 30, 2021, compared to $228 million or 1.14 percent at June 30, 2021. The decrease in nonperforming assets was primarily related to a decrease in nonaccruing energy loans and sales of energy-related repossessed assets during the third quarter of 2021.

Nonaccruing loans were $142 million or 0.72 percent of outstanding loans, excluding PPP loans, at September 30, 2021. Nonaccruing commercial loans totaled $81 million or 0.66 percent of outstanding commercial loans. Nonaccruing commercial real estate loans totaled $21 million or 0.52 percent of outstanding commercial real estate loans. Nonaccruing loans to individuals totaled $40 million or 1.14 percent of outstanding loans to individuals.

Nonaccruing loans decreased $38 million compared to June 30, 2021, primarily due to a decrease in nonaccruing energy loans. New nonaccruing loans identified in the third quarter totaled $22 million, offset by $42 million in payments received and $10 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 $333 million at September 30, 2021, down significantly from $384 million at June 30. Potential problem energy and services loans decreased compared to the prior quarter, partially offset by an increase in potential problem commercial real estate loans.

Net charge-offs were $7.8 million or 0.16 percent of average loans on an annualized basis for the third quarter of 2021, excluding PPP loans. Net charge-offs were 0.26 percent of average loans over the last four quarters. Net charge-offs were $15.4 million or 0.30 percent of average loans on an annualized basis for the second quarter of 2021, excluding PPP loans. Gross charge-offs were $9.6 million for the third quarter compared to $18.3 million for the previous quarter. Recoveries totaled $1.8 million for the third quarter of 2021 and $2.9 million for the second quarter of 2021.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $13.3 billion at September 30, 2021, a $24 million increase compared to June 30, 2021. At September 30, 2021, the available for sale securities portfolio consisted primarily of $8.2 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $4.7 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. At September 30, 2021, the available for sale securities portfolio had a net unrealized gain of $221 million compared to $297 million at June 30, 2021.

The company also maintains a portfolio of residential mortgage-backed securities issued by U.S. government agencies and interest rate derivative contracts as an economic hedge of the changes in the fair value of our mortgage servicing rights. This portfolio of fair value option securities decreased $9.4 million to $51 million at September 30, 2021.

The net economic benefit of the changes in the fair value of mortgage servicing rights and related economic hedges was $7.3 million during the third quarter of 2021, including a $12.9 million increase in the fair value of mortgage servicing rights, a $5.9 million decrease in the fair value of securities and derivative contracts held as an economic hedge, and $286 thousand of related net interest revenue.

Conference Call and Webcast

The company will hold a conference call at 9 a.m. Central time on Wednesday, October 20, 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 # 13723814.

About BOK Financial Corporation

BOK Financial Corporation is a $47 billion regional financial services company headquartered in Tulsa, Oklahoma with $99 billion in assets under management and administration. The company's stock is publicly traded on NASDAQ under the Global Select market listings (BOKF). BOK Financial Corporation's holdings include BOKF, NA; BOK Financial Securities, Inc., BOK Financial Private Wealth, Inc. and BOK Financial Insurance, Inc. BOKF, NA's holdings include TransFund, Cavanal Hill Investment Management, Inc. and BOK Financial Asset Management, Inc. BOKF, NA operates banking divisions across eight states as: Bank of Albuquerque; Bank of Oklahoma; Bank of Texas; and BOK Financial in Arizona, Arkansas, Colorado, Kansas and Missouri; as well as having limited purpose offices in Nebraska, Wisconsin and Connecticut. Through its subsidiaries, BOK Financial Corporation provides commercial and consumer banking, brokerage trading, investment, trust and insurance services, mortgage origination and servicing, and an electronic funds transfer network. For more information, visit www.bokf.com.

The company will continue to evaluate critical assumptions and estimates, such as the appropriateness of the allowance for credit losses and asset impairment as of September 30, 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)

 Sept. 30, 2021 June 30, 2021
ASSETS   
Cash and due from banks$729,285  $678,998 
Interest-bearing cash and cash equivalents1,162,477  580,457 
Trading securities5,554,040  5,699,070 
Investment securities, net of allowance215,592  220,832 
Available for sale securities13,342,113  13,317,922 
Fair value option securities51,019  60,432 
Restricted equity securities77,542  134,885 
Residential mortgage loans held for sale176,813  200,842 
Loans:   
Commercial12,175,140  12,472,907 
Commercial real estate4,116,892  4,246,992 
Paycheck protection program536,052  1,121,583 
Loans to individuals3,519,852  3,574,967 
Total loans20,347,936  21,416,449 
Allowance for loan losses(276,680) (311,890)
Loans, net of allowance20,071,256  21,104,559 
Premises and equipment, net558,126  556,400 
Receivables171,505  195,763 
Goodwill1,044,749  1,048,091 
Intangible assets, net96,186  105,694 
Mortgage servicing rights133,308  117,629 
Real estate and other repossessed assets, net28,770  57,337 
Derivative contracts, net1,901,136  1,701,443 
Cash surrender value of bank-owned life insurance403,369  401,163 
Receivable on unsettled securities sales215,755  70,954 
Other assets990,368  901,904 
TOTAL ASSETS$46,923,409  $47,154,375 
    
LIABILITIES AND EQUITY   
Deposits:   
Demand$14,090,229  $13,380,409 
Interest-bearing transaction21,753,110  21,278,719 
Savings900,497  875,456 
Time1,780,715  1,905,349 
Total deposits38,524,551  37,439,933 
Funds purchased and repurchase agreements843,273  730,183 
Other borrowings37,426  1,546,231 
Subordinated debentures131,220  276,043 
Accrued interest, taxes and expense220,266  199,014 
Due on unsettled securities purchases614,598  576,536 
Derivative contracts, net739,641  612,261 
Other liabilities415,986  419,623 
TOTAL LIABILITIES41,526,961  41,799,824 
Shareholders' equity:   
Capital, surplus and retained earnings5,219,801  5,106,209 
Accumulated other comprehensive gain169,172  226,768 
TOTAL SHAREHOLDERS' EQUITY5,388,973  5,332,977 
Non-controlling interests7,475  21,574 
TOTAL EQUITY5,396,448  5,354,551 
TOTAL LIABILITIES AND EQUITY$46,923,409  $47,154,375 

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

 Three Months Ended
 Sept. 30, 2021 June 30, 2021 Mar. 31, 2021 Dec. 31, 2020 Sept. 30, 2020
ASSETS         
Interest-bearing cash and cash equivalents$682,788  $659,312  $711,047  $643,926  $553,070 
Trading securities7,617,236  7,430,217  6,963,617  6,888,189  1,834,160 
Investment securities, net of allowance218,117  221,401  237,313  251,863  258,965 
Available for sale securities13,446,095  13,243,542  13,433,767  12,949,702  12,580,850 
Fair value option securities56,307  64,864  104,662  122,329  387,784 
Restricted equity securities245,485  208,692  189,921  280,428  144,415 
Residential mortgage loans held for sale167,620  218,200  207,013  229,631  213,125 
Loans:         
Commercial12,231,230  12,402,925  12,908,461  13,113,449  13,772,217 
Commercial real estate4,218,190  4,395,848  4,547,945  4,788,393  4,754,269 
Paycheck protection program792,728  1,668,047  1,741,534  1,928,665  2,092,933 
Loans to individuals3,606,460  3,700,269  3,559,067  3,617,011  3,491,044 
Total loans20,848,608  22,167,089  22,757,007  23,447,518  24,110,463 
Allowance for loan losses(306,125) (345,269) (382,734) (414,225) (441,831)
Loans, net of allowance20,542,483  21,821,820  22,374,273  23,033,293  23,668,632 
Total earning assets42,976,131  43,868,048  44,221,613  44,399,361  39,641,001 
Cash and due from banks766,688  763,393  760,691  742,432  723,826 
Derivative contracts, net1,501,736  1,022,137  873,712  553,779  581,839 
Cash surrender value of bank-owned life insurance401,926  401,760  399,830  397,354  394,680 
Receivable on unsettled securities sales632,539  716,700  735,482  1,094,198  4,563,301 
Other assets3,220,129  3,424,884  3,319,305  3,200,040  3,027,108 
TOTAL ASSETS$49,499,149  $50,196,922  $50,310,633  $50,387,164  $48,931,755 
          
LIABILITIES AND EQUITY         
Deposits:         
Demand$13,670,656  $13,189,954  $12,312,629  $12,136,071  $11,929,694 
Interest-bearing transaction21,435,736  21,491,145  21,433,406  20,718,390  19,752,106 
Savings888,011  872,618  789,656  737,360  707,121 
Time1,839,983  1,936,510  1,986,425  1,930,808  2,251,012 
Total deposits37,834,386  37,490,227  36,522,116  35,522,629  34,639,933 
               
Funds purchased and repurchase agreements1,448,800  1,790,490  2,830,378  2,153,254  2,782,150 
Other borrowings2,546,083  3,608,369  3,392,346  5,193,656  3,382,688 
Subordinated debentures214,654  276,034  276,015  275,998  275,980 
Derivative contracts, net434,334  366,202  428,488  399,476  458,390 
Due on unsettled securities purchases957,538  701,495  915,410  957,642  1,516,880 
Other liabilities619,913  634,460  671,715  656,147  712,674 
TOTAL LIABILITIES44,055,708  44,867,277  45,036,468  45,158,802  43,768,695 
Total equity5,443,441  5,329,645  5,274,165  5,228,362  5,163,060 
TOTAL LIABILITIES AND EQUITY$49,499,149  $50,196,922  $50,310,633  $50,387,164  $48,931,755 

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

 Three Months Ended Nine Months Ended
 September 30, September 30,
 2021 2020 2021 2020
        
Interest revenue$293,463  $294,659  $887,595  $949,980 
Interest expense13,236  22,909  46,639  138,766 
Net interest revenue280,227  271,750  840,956  811,214 
Provision for credit losses(23,000)   (83,000) 229,092 
Net interest revenue after provision for credit losses303,227  271,750  923,956  582,122 
Other operating revenue:       
Brokerage and trading revenue47,930  69,526  98,120  182,327 
Transaction card revenue24,632  23,465  71,985  68,286 
Fiduciary and asset management revenue45,248  39,931  131,402  125,646 
Deposit service charges and fees27,429  24,286  77,499  72,462 
Mortgage banking revenue26,286  51,959  84,618  143,062 
Other revenue18,896  13,698  58,364  37,486 
Total fees and commissions190,421  222,865  521,988  629,269 
Other gains (losses), net31,091  2,044  57,661  (1,347)
Gain (loss) on derivatives, net(5,760) 2,354  (14,590) 42,659 
Gain (loss) on fair value option securities, net(120) (754) (3,657) 53,180 
Change in fair value of mortgage servicing rights12,945  3,441  33,778  (85,800)
Gain (loss) on available for sale securities, net1,255  (12) 3,152  5,571 
Total other operating revenue229,832  229,938  598,332  643,532 
Other operating expense:       
Personnel175,863  179,860  520,908  512,276 
Business promotion4,939  2,633  9,837  10,783 
Charitable contributions to BOKF Foundation    4,000  3,000 
Professional fees and services12,436  14,074  36,777  39,183 
Net occupancy and equipment28,395  28,111  81,690  84,847 
Insurance3,712  5,848  11,992  15,984 
Data processing and communications38,371  34,751  112,256  100,436 
Printing, postage and supplies3,558  3,482  11,283  11,256 
Amortization of intangible assets4,488  5,071  13,873  15,355 
Mortgage banking costs8,962  15,803  34,031  41,946 
Other expense10,553  7,411  41,566  26,571 
Total other operating expense291,277  297,044  878,213  861,637 
        
Net income before taxes241,782  204,644  644,075  364,017 
Federal and state income taxes54,061  50,552  144,939  83,655 
        
Net income187,721  154,092  499,136  280,362 
Net income (loss) attributable to non-controlling interests(601) 58  (1,667) (444)
Net income attributable to BOK Financial Corporation shareholders$188,322  $154,034  $500,803  $280,806 
        
Average shares outstanding:       
Basic68,359,125  69,877,866  68,768,044  69,958,944 
Diluted68,360,871  69,879,290  68,770,663  69,962,053 
        
Net income per share:       
Basic$2.74  $2.19  $7.23  $3.99 
Diluted$2.74  $2.19  $7.23  $3.99 
                

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

 Three Months Ended
 Sept. 30, 2021 June 30, 2021 Mar. 31, 2021 Dec. 31, 2020 Sept. 30, 2020
Capital:         
Period-end shareholders' equity$5,388,973  $5,332,977  $5,239,462  $5,266,266  $5,218,787 
Risk weighted assets$33,916,456  $33,824,860  $32,623,108  $32,492,277  $31,529,826 
Risk-based capital ratios:         
Common equity tier 112.26% 11.95% 12.14% 11.95% 12.07%
Tier 112.29% 12.01% 12.21% 11.95% 12.07%
Total capital13.38% 13.61% 13.98% 13.82% 14.05%
Leverage ratio8.77% 8.58% 8.42% 8.28% 8.39%
Tangible common equity ratio19.28% 9.09% 8.82% 9.02% 9.02%
          
Common stock:         
Book value per share$78.56  $77.20  $75.33  $75.62  $74.23 
Tangible book value per share$61.93  $60.50  $58.67  $58.94  $57.64 
Market value per share:         
High$92.97  $93.00  $98.95  $73.07  $62.86 
Low$77.20  $83.59  $67.57  $50.09  $48.41 
Cash dividends paid$35,725  $35,925  $36,038  $36,219  $35,799 
Dividend payout ratio18.97% 21.59% 24.67% 23.48% 23.24%
Shares outstanding, net68,596,764  69,078,458  69,557,873  69,637,600  70,305,833 
Stock buy-back program:         
Shares repurchased478,141  492,994  260,000  665,100   
Amount$40,644  $43,797  $20,071  $42,450  $ 
Average price per share$85.00  $88.84  $77.20  $63.82  $ 
          
Performance ratios (quarter annualized):
Return on average assets1.51% 1.33% 1.18% 1.22% 1.25%
Return on average equity13.78% 12.58% 11.28% 11.75% 11.89%
Net interest margin2.66% 2.60% 2.62% 2.72% 2.81%
Efficiency ratio61.23% 64.20% 66.26% 62.77% 59.57%
          
Reconciliation of non-GAAP measures:
1 Tangible common equity ratio:         
Total shareholders' equity$5,388,973  $5,332,977  $5,239,462  $5,266,266  $5,218,787 
Less: Goodwill and intangible assets, net1,140,935  1,153,785  1,158,676  1,161,527  1,166,615 
Tangible common equity$4,248,038  $4,179,192  $4,080,786  $4,104,739  $4,052,172 
          
Total assets$46,923,409  $47,154,375  $47,442,513  $46,671,088  $46,067,224 
Less: Goodwill and intangible assets, net1,140,935  1,153,785  1,158,676  1,161,527  1,166,615 
Tangible assets$45,782,474  $46,000,590  $46,283,837  $45,509,561  $44,900,609 
          
Tangible common equity ratio9.28% 9.09% 8.82% 9.02% 9.02%
          


 Three Months Ended
 Sept. 30, 2021 June 30, 2021 Mar. 31, 2021 Dec. 31, 2020 Sept. 30, 2020
Pre-provision net revenue:          
Net income before taxes$241,782   $215,603   $186,690   $199,847   $204,644  
Provision for expected credit losses(23,000)  (35,000)  (25,000)  (6,500)    
Net income (loss) attributable to non-controlling interests(601)  686   (1,752)  485   58  
Pre-provision net revenue$219,383   $179,917   $163,442   $192,862   $204,586  
          
Other data:         
Tax equivalent interest$2,217   $2,320   $2,301   $2,414   $2,457  
Net unrealized gain on available for sale securities$221,487   $297,267   $290,217   $440,814   $480,563  
          
Mortgage banking:         
Mortgage production revenue$15,403   $10,004   $25,287   $26,662   $38,431  
          
Mortgage loans funded for sale$652,336   $754,893   $843,053   $998,435   $1,032,472  
Add: current period-end outstanding commitments239,066   276,154   387,465   380,637   560,493  
Less: prior period end outstanding commitments276,154   387,465   380,637   560,493   546,304  
Total mortgage production volume$615,248   $643,582   $849,881   $818,579   $1,046,661  
          
Mortgage loan refinances to mortgage loans funded for sale48 % 48 % 65 % 58 % 54 %
Realized margin on funded mortgage loans2.48 % 2.75 % 3.10 % 3.78 % 3.52 %
Production revenue as a percentage of production volume2.50 % 1.55 % 2.98 % 3.26 % 3.67 %
          
Mortgage servicing revenue$10,883   $11,215   $11,826   $12,636   $13,528  
Average outstanding principal balance of mortgage loans serviced for others14,899,306   15,065,173   15,723,231   16,518,208   17,434,215  
Average mortgage servicing revenue rates0.29 % 0.30 % 0.31 % 0.30 % 0.31 %
          
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net$(5,829)  $18,764   $(27,705)  $(385)  $2,295  
Gain (loss) on fair value option securities, net(120)  (1,627)  (1,910)  68   (754) 
Gain (loss) on economic hedge of mortgage servicing rights(5,949)  17,137   (29,615)  (317)  1,541  
Gain (loss) on changes in fair value of mortgage servicing rights12,945   (13,041)  33,874   6,276   3,441  
Gain on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue6,996   4,096   4,259   5,959   4,982  
Net interest revenue on fair value option securities2286   341   393   550   1,565  
Total economic benefit of changes in the fair value of mortgage servicing rights, net of economic hedges$7,282   $4,437   $4,652   $6,509   $6,547  

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
 Sept. 30, 2021 June 30, 2021 Mar. 31, 2021 Dec. 31, 2020 Sept. 30, 2020
          
Interest revenue$293,463  $295,893  $298,239  $319,020  $294,659 
Interest expense13,236  15,584  17,819  21,790  22,909 
Net interest revenue280,227  280,309  280,420  297,230  271,750 
Provision for credit losses(23,000) (35,000) (25,000) (6,500)  
Net interest revenue after provision for credit losses303,227  315,309  305,420  303,730  271,750 
Other operating revenue:         
Brokerage and trading revenue47,930  29,408  20,782  39,506  69,526 
Transaction card revenue24,632  24,923  22,430  21,896  23,465 
Fiduciary and asset management revenue45,248  44,832  41,322  41,799  39,931 
Deposit service charges and fees27,429  25,861  24,209  24,343  24,286 
Mortgage banking revenue26,286  21,219  37,113  39,298  51,959 
Other revenue18,896  23,172  16,296  14,209  13,698 
Total fees and commissions190,421  169,415  162,152  181,051  222,865 
Other gains, net31,091  16,449  10,121  7,394  2,044 
Gain (loss) on derivatives, net(5,760) 18,820  (27,650) (339) 2,354 
Gain (loss) on fair value option securities, net(120) (1,627) (1,910) 68  (754)
Change in fair value of mortgage servicing rights12,945  (13,041) 33,874  6,276  3,441 
Gain (loss) on available for sale securities, net1,255  1,430  467  4,339  (12)
Total other operating revenue229,832  191,446  177,054  198,789  229,938 
Other operating expense:         
Personnel175,863  172,035  173,010  176,198  179,860 
Business promotion4,939  2,744  2,154  3,728  2,633 
Charitable contributions to BOKF Foundation    4,000  6,000   
Professional fees and services12,436  12,361  11,980  14,254  14,074 
Net occupancy and equipment28,395  26,633  26,662  27,875  28,111 
Insurance3,712  3,660  4,620  4,006  5,848 
Data processing and communications38,371  36,418  37,467  35,061  34,751 
Printing, postage and supplies3,558  4,285  3,440  3,805  3,482 
Amortization of intangible assets4,488  4,578  4,807  5,088  5,071 
Mortgage banking costs8,962  11,126  13,943  14,765  15,803 
Other expense10,553  17,312  13,701  11,892  7,411 
Total other operating expense291,277  291,152  295,784  302,672  297,044 
Net income before taxes241,782  215,603  186,690  199,847  204,644 
Federal and state income taxes54,061  48,496  42,382  45,138  50,552 
Net income187,721  167,107  144,308  154,709  154,092 
Net income (loss) attributable to non-controlling interests(601) 686  (1,752) 485  58 
Net income attributable to BOK Financial Corporation shareholders$188,322  $166,421  $146,060  $154,224  $154,034 
          
Average shares outstanding:         
Basic68,359,125  68,815,666  69,137,375  69,489,597  69,877,866 
Diluted68,360,871  68,817,442  69,141,710  69,493,050  69,879,290 
Net income per share:         
Basic$2.74  $2.40  $2.10  $2.21  $2.19 
Diluted$2.74  $2.40  $2.10  $2.21  $2.19 
                    

LOANS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)

  Sept. 30, 2021 June 30, 2021 Mar. 31, 2021 Dec. 31, 2020 Sept. 30, 2020
Commercial:          
Healthcare $3,347,641  $3,381,261  $3,290,758  $3,305,990  $3,325,790 
Services 3,323,422  3,389,756  3,421,948  3,508,583  3,545,825 
Energy 2,814,059  3,011,331  3,202,488  3,469,194  3,717,101 
General business 2,690,018  2,690,559  2,742,590  2,793,768  2,976,990 
Total commercial 12,175,140  12,472,907  12,657,784  13,077,535  13,565,706 
           
Commercial real estate:          
Office 1,030,755  1,073,346  1,094,060  1,085,257  1,099,563 
Industrial 890,316  824,577  789,437  810,510  792,389 
Multifamily 875,586  964,824  1,227,915  1,328,045  1,387,461 
Retail 766,402  784,445  787,648  796,223  786,211 
Residential construction and land development 118,416  128,939  119,079  119,394  121,258 
Other commercial real estate 435,417  470,861  485,208  559,109  506,818 
Total commercial real estate 4,116,892  4,246,992  4,503,347  4,698,538  4,693,700 
           
Paycheck protection program 536,052  1,121,583  1,848,550  1,682,310  2,097,325 
           
Loans to individuals:          
Residential mortgage 1,747,243  1,772,627  1,797,478  1,863,003  1,849,144 
Residential mortgages guaranteed by U.S. government agencies 376,986  413,806  420,051  408,687  384,247 
Personal 1,395,623  1,388,534  1,306,637  1,277,447  1,213,178 
Total loans to individuals 3,519,852  3,574,967  3,524,166  3,549,137  3,446,569 
           
Total $20,347,936  $21,416,449  $22,533,847  $23,007,520  $23,803,300 

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

 Sept. 30, 2021 June 30, 2021 Mar. 31, 2021 Dec. 31, 2020 Sept. 30, 2020
          
Texas:         
Commercial$5,815,562  $5,690,901  $5,748,345  $5,926,534  $6,135,471 
Commercial real estate1,383,871  1,403,751  1,511,714  1,519,217  1,523,226 
Paycheck protection program115,623  342,933  537,899  501,079  614,970 
Loans to individuals901,121  885,619  848,194  855,410  794,055 
Total Texas8,216,177  8,323,204  8,646,152  8,802,240  9,067,722 
          
Oklahoma:         
Commercial2,590,887  2,840,560  2,975,477  3,144,782  3,332,244 
Commercial real estate552,184  552,673  597,840  597,733  608,448 
Paycheck protection program192,474  242,880  468,002  413,108  487,247 
Loans to individuals2,014,099  2,063,419  2,043,705  2,052,784  2,034,576 
Total Oklahoma5,349,644  5,699,532  6,085,024  6,208,407  6,462,515 
          
Colorado:         
Commercial1,874,613  1,904,182  1,910,826  1,929,320  1,993,364 
Commercial real estate526,653  656,521  777,786  879,648  893,626 
Paycheck protection program140,470  299,712  436,540  377,111  494,910 
Loans to individuals249,298  262,796  264,759  264,295  257,832 
Total Colorado2,791,034  3,123,211  3,389,911  3,450,374  3,639,732 
          
Arizona:         
Commercial1,194,801  1,239,270  1,207,089  1,219,072  1,218,769 
Commercial real estate734,174  705,497  667,766  726,111  702,291 
Paycheck protection program42,815  104,946  208,481  211,725  272,114 
Loans to individuals182,506  178,481  179,031  177,948  166,203 
Total Arizona2,154,296  2,228,194  2,262,367  2,334,856  2,359,377 
          
Kansas/Missouri:         
Commercial336,414  388,291  421,974  455,914  493,606 
Commercial real estate408,001  406,055  395,590  366,821  352,663 
Paycheck protection program6,920  41,954  60,741  56,011  80,230 
Loans to individuals100,920  103,092  104,954  105,995  96,598 
Total Kansas/Missouri852,255  939,392  983,259  984,741  1,023,097 
          
New Mexico:         
Commercial287,695  304,804  307,395  303,833  288,374 
Commercial real estate437,302  437,996  448,298  473,204  473,697 
Paycheck protection program31,444  86,716  124,059  109,881  133,244 
Loans to individuals66,651  68,177  70,491  75,665  79,890 
Total New Mexico823,092  897,693  950,243  962,583  975,205 
          
Arkansas:         
Commercial75,168  104,899  86,678  98,080  103,878 
Commercial real estate74,707  84,499  104,353  135,804  139,749 
Paycheck protection program6,306  2,442  12,828  13,395  14,610 
Loans to individuals5,257  13,383  13,032  17,040  17,415 
Total Arkansas161,438  205,223  216,891  264,319  275,652 
          
TOTAL BOK FINANCIAL$20,347,936  $21,416,449  $22,533,847  $23,007,520  $23,803,300 

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

DEPOSITS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)

 Sept. 30, 2021 June 30, 2021 Mar. 31, 2021 Dec. 31, 2020 Sept. 30, 2020
Oklahoma:         
Demand$5,080,162  $4,985,542  $4,823,436  $4,329,205  $4,493,978 
Interest-bearing:         
Transaction11,692,679  12,065,844  12,828,070  12,603,658  12,586,449 
Savings510,906  500,344  487,862  420,996  401,062 
Time1,039,866  1,139,980  1,197,517  1,134,453  1,081,176 
Total interest-bearing13,243,451  13,706,168  14,513,449  14,159,107  14,068,687 
Total Oklahoma18,323,613  18,691,710  19,336,885  18,488,312  18,562,665 
          
Texas:         
Demand3,987,503  3,752,790  3,592,969  3,449,882  3,152,106 
Interest-bearing:         
Transaction4,985,465  4,335,113  4,257,234  3,800,427  3,482,555 
Savings165,043  160,805  154,406  139,173  136,787 
Time337,389  346,577  368,086  383,062  438,337 
Total interest-bearing5,487,897  4,842,495  4,779,726  4,322,662  4,057,679 
Total Texas9,475,400  8,595,285  8,372,695  7,772,544  7,209,785 
          
Colorado:         
Demand2,158,596  1,991,343  2,115,354  2,168,404  2,057,603 
Interest-bearing:         
Transaction2,337,354  2,159,819  2,100,135  2,170,485  1,861,763 
Savings79,873  73,990  73,446  69,384  68,230 
Time184,002  193,787  204,973  208,778  226,780 
Total interest-bearing2,601,229  2,427,596  2,378,554  2,448,647  2,156,773 
Total Colorado4,759,825  4,418,939  4,493,908  4,617,051  4,214,376 
          
New Mexico:         
Demand1,222,895  1,197,412  1,131,713  941,074  964,908 
Interest-bearing:         
Transaction837,630  723,757  736,923  733,007  713,418 
Savings107,615  105,837  103,591  91,646  85,463 
Time168,879  174,665  181,863  186,307  200,525 
Total interest-bearing1,114,124  1,004,259  1,022,377  1,010,960  999,406 
Total New Mexico2,337,019  2,201,671  2,154,090  1,952,034  1,964,314 
          
Arizona:         
Demand1,110,884  943,511  915,439  905,201  928,671 
Interest-bearing:         
Transaction784,614  820,901  835,795  768,220  771,319 
Savings16,468  13,496  13,235  12,174  11,498 
Time30,862  30,012  30,997  32,721  36,929 
Total interest-bearing831,944  864,409  880,027  813,115  819,746 
Total Arizona1,942,828  1,807,920  1,795,466  1,718,316  1,748,417 


 Sept. 30, 2021 June 30, 2021 Mar. 31, 2021 Dec. 31, 2020 Sept. 30, 2020
Kansas/Missouri:         
Demand488,595  463,339  478,370  426,738  405,360 
Interest-bearing:         
Transaction965,757  978,160  991,510  960,237  616,797 
Savings17,303  17,539  18,686  16,286  15,520 
Time13,040  13,509  13,898  14,610  16,430 
Total interest-bearing996,100  1,009,208  1,024,094  991,133  648,747 
Total Kansas/Missouri1,484,695  1,472,547  1,502,464  1,417,871  1,054,107 
          
Arkansas:         
Demand41,594  46,472  45,889  45,834  44,712 
Interest-bearing:         
Transaction149,611  195,125  141,207  122,388  164,439 
Savings3,289  3,445  3,000  2,333  2,389 
Time6,677  6,819  7,022  7,197  7,796 
Total interest-bearing159,577  205,389  151,229  131,918  174,624 
Total Arkansas201,171  251,861  197,118  177,752  219,336 
          
TOTAL BOK FINANCIAL$38,524,551  $37,439,933  $37,852,626  $36,143,880  $34,973,000 

NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION

 Three Months Ended
 Sept. 30, 2021 June 30, 2021 Mar. 31, 2021 Dec. 31, 2020 Sept. 30, 2020
          
TAX-EQUIVALENT ASSETS YIELDS         
Interest-bearing cash and cash equivalents0.14% 0.10% 0.10% 0.10% 0.12%
Trading securities2.04% 1.95% 2.06% 2.02% 1.92%
Investment securities, net of allowance5.02% 5.01% 4.88% 4.88% 4.85%
Available for sale securities1.80% 1.85% 1.84% 1.98% 2.11%
Fair value option securities2.62% 2.60% 1.95% 2.27% 1.92%
Restricted equity securities2.55% 3.36% 2.86% 3.25% 2.53%
Residential mortgage loans held for sale3.06% 2.91% 2.71% 2.75% 3.01%
Loans3.68% 3.54% 3.55% 3.68% 3.60%
Allowance for loan losses         
Loans, net of allowance3.73% 3.60% 3.62% 3.75% 3.67%
Total tax-equivalent yield on earning assets2.78% 2.75% 2.78% 2.92% 3.04%
          
COST OF INTEREST-BEARING LIABILITIES        
Interest-bearing deposits:         
Interest-bearing transaction0.09% 0.10% 0.12% 0.14% 0.17%
Savings0.04% 0.04% 0.04% 0.05% 0.05%
Time0.55% 0.58% 0.70% 0.89% 1.13%
Total interest-bearing deposits0.13% 0.14% 0.17% 0.19% 0.26%
Funds purchased and repurchase agreements0.20% 0.16% 0.19% 0.28% 0.17%
Other borrowings0.37% 0.34% 0.39% 0.42% 0.43%
Subordinated debt4.63% 4.87% 4.92% 4.87% 4.89%
Total cost of interest-bearing liabilities0.19% 0.21% 0.24% 0.28% 0.31%
Tax-equivalent net interest revenue spread2.59% 2.54% 2.54% 2.64% 2.73%
Effect of noninterest-bearing funding sources and other0.07% 0.06% 0.08% 0.08% 0.08%
Tax-equivalent net interest margin2.66% 2.60% 2.62% 2.72% 2.81%

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

CREDIT QUALITY INDICATORS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratios)

 Three Months Ended
 Sept. 30, 2021 June 30, 2021 Mar. 31, 2021 Dec. 31, 2020 Sept. 30, 2020
Nonperforming assets:         
Nonaccruing loans:         
Commercial:         
Energy$45,500  $70,341  $101,800  $125,059  $126,816 
Services25,714  29,913  28,033  25,598  25,817 
Healthcare509  527  3,187  3,645  3,645 
General business8,951  11,823  14,053  12,857  13,675 
Total commercial80,674  112,604  147,073  167,159  169,953 
          
Commercial real estate21,223  26,123  27,243  27,246  12,952 
          
Loans to individuals:         
Permanent mortgage30,674  31,473  32,884  32,228  31,599 
Permanent mortgage guaranteed by U.S. government agencies9,188  9,207  8,564  7,741  6,397 
Personal188  229  255  319  252 
Total loans to individuals40,050  40,909  41,703  40,288  38,248 
          
Total nonaccruing loans$141,947  $179,636  $216,019  $234,693  $221,153 
Accruing renegotiated loans guaranteed by U.S. government agencies178,554  171,324  154,591  151,775  142,770 
Real estate and other repossessed assets28,770  57,337  70,911  90,526  52,847 
Total nonperforming assets$349,271  $408,297  $441,521  $476,994  $416,770 
Total nonperforming assets excluding those guaranteed by U.S. government agencies$161,529  $227,766  $278,366  $317,478  $267,603 
          
Accruing loans 90 days past due1$223  $252  $395  $10,369  $7,684 
          
Gross charge-offs$9,584  $18,304  $16,905  $18,251  $26,661 
Recoveries(1,769) (2,856) (2,437) (1,592) (4,232)
Net charge-offs$7,815  $15,448  $14,468  $16,659  $22,429 
          
Provision for loan losses$(27,395) $(25,064) $(21,770) $(14,478) $6,609 
Provision for credit losses from off-balance sheet unfunded loan commitments4,952  (8,590) (4,044) 8,952  (4,950)
Provision for expected credit losses from mortgage banking activities(534) (1,222) 885  (923) (770)
Provision for credit losses related to held-to maturity (investment) securities portfolio(23) (124) (71) (51) (889)
Total provision for credit losses$(23,000) $(35,000) $(25,000) $(6,500) $ 


 Three Months Ended
 Sept. 30, 2021 June 30, 2021 Mar. 31, 2021 Dec. 31, 2020 Sept. 30, 2020
Allowance for loan losses to period end loans1.36% 1.46% 1.56% 1.69% 1.76%
Allowance for loan losses to period end loans excluding PPP loans21.40% 1.54% 1.70% 1.82% 1.93%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans1.50% 1.57% 1.71% 1.85% 1.88%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans excluding PPP loans21.54% 1.66% 1.86% 2.00% 2.06%
Nonperforming assets to period end loans and repossessed assets1.71% 1.90% 1.95% 2.07% 1.75%
Net charge-offs (annualized) to average loans0.15% 0.28% 0.25% 0.28% 0.37%
Net charge-offs (annualized) to average loans excluding PPP loans20.16% 0.30% 0.28% 0.31% 0.41%
Allowance for loan losses to nonaccruing loans1208.41% 183.00% 169.87% 171.24% 195.47%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to nonaccruing loans1230.43% 197.25% 185.72% 187.51% 208.49%
               

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.

SEGMENTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratios)

  Three Months Ended 3Q21 vs 2Q21 3Q21 vs 3Q20
  Sept. 30, 2021 June 30, 2021  Sept. 30, 2020 $ change % change $ change % change
Commercial Banking              
Net interest revenue $134,104  $130,901  $149,946  $3,203  2.4 % $(15,842) (10.6)%
Fees and commissions revenue 56,452  63,368  50,085  (6,916) (10.9)% 6,367  12.7 %
Combined net interest and fee revenue 190,556  194,269  200,031  (3,713) (1.9)% (9,475) (4.7)%
Other operating expense 68,301  71,351  66,846  (3,050) (4.3)% 1,455  2.2 %
Corporate expense allocations 11,769  12,512  5,172  (743) (5.9)% 6,597  127.6 %
Net income 102,694  72,632  75,097  30,062  41.4 % 27,597  36.7 %
               
Average assets 28,474,182  28,160,594  28,000,183  313,588  1.1 % 473,999  1.7 %
Average loans 16,588,875  16,981,888  18,677,401  (393,013) (2.3)% (2,088,526) (11.2)%
Average deposits 17,881,673  17,049,772  15,375,450  831,901  4.9 % 2,506,223  16.3 %
               
Consumer Banking              
Net interest revenue $27,222  $24,945  $33,130  $2,277  9.1 % $(5,908) (17.8)%
Fees and commissions revenue 44,405  37,714  67,974  6,691  17.7 % (23,569) (34.7)%
Combined net interest and fee revenue 71,627  62,659  101,104  8,968  14.3 % (29,477) (29.2)%
Other operating expense 49,483  52,453  59,155  (2,970) (5.7)% (9,672) (16.4)%
Corporate expense allocations 11,516  11,599  10,691  (83) (0.7)% 825  7.7 %
Net income 12,432  1,698  26,855  10,734  632.2 % (14,423) (53.7)%
               
Average assets 10,083,593  10,087,488  9,898,112  (3,895)  % 185,481  1.9 %
Average loans 1,763,705  1,786,242  1,825,865  (22,537) (1.3)% (62,160) (3.4)%
Average deposits 8,516,942  8,469,043  7,940,973  47,899  0.6 % 575,969  7.3 %
               
Wealth Management              
Net interest revenue $55,196  $52,293  $22,985  $2,903  5.6 % $32,211  140.1 %
Fees and commissions revenue 97,966  78,841  111,655  19,125  24.3 % (13,689) (12.3)%
Combined net interest and fee revenue 153,162  131,134  134,640  22,028  16.8 % 18,522  13.8 %
Other operating expense 87,417  79,429  82,868  7,988  10.1 % 4,549  5.5 %
Corporate expense allocations 10,101  10,343  9,397  (242) (2.3)% 704  7.5 %
Net income 41,406  31,061  31,212  10,345  33.3 % 10,194  32.7 %
               
Average assets 19,109,700  19,201,041  16,204,510  (91,341) (0.5)% 2,905,190  17.9 %
Average loans 1,971,380  1,968,513  1,777,008  2,867  0.1 % 194,372  10.9 %
Average deposits 9,120,446  9,695,319  9,090,116  (574,873) (5.9)% 30,330  0.3 %
Fiduciary assets 60,497,576  58,654,788  48,887,513  1,842,788  3.1 % 11,610,063  23.7 %
Assets under management or administration 98,842,789  96,632,748  82,419,932  2,210,041  2.3 % 16,422,857  19.9 %
                        

Contact:

Sue Hermann
Senior Vice President, Corporate Communications, BOK Financial
303-312-3488