Press Release

BOK Financial Reports Record Quarterly Earnings of $114 million or $1.75 Per Share; Results Driven by Strong Loan Growth, Net Interest Margin Expansion, and Continued Expense Control; Quarterly Dividend Increased 11.1 percent to 50 Cents Per Share

Company Release - 7/25/2018 7:55 AM ET

TULSA, Okla., July 25, 2018 (GLOBE NEWSWIRE) -- BOK Financial Corporation (NASDAQ:BOKF) reported net income of $114.4 million or $1.75 per diluted share for the second quarter of 2018. Net income was $105.6 million or $1.61 per diluted share for the first quarter of 2018 and $88.1 million or $1.35 per diluted share for the second quarter of 2017.

Steven G. Bradshaw, president and chief executive officer, stated, “This was a record quarter for BOK Financial, with the highest level of pre–tax, pre–provision income in our company’s history. In addition, we saw sustainable momentum across all of our lending businesses, with a record $665 million of new loan production in the quarter and 3.8 percent sequential growth in period end loans outstanding. With continued loan growth and net interest margin expansion, a stable credit environment, and ongoing expense management as we move toward our 60 percent efficiency ratio goal, we see earnings leverage continuing for the foreseeable future. Accordingly, our Board of Directors approved an 11 percent increase in our regular quarterly dividend to 50 cents per share.”

Bradshaw continued, “We look forward to closing our acquisition of CoBiz Financial later this year, which we believe will further enhance our growth profile. We believe the combination of CoBiz and BOK Financial will create the premier commercial bank in Colorado and Arizona. In addition, the financial metrics of the deal are highly compelling, as we expect it to be accretive to earnings per share, return on average assets, return on tangible common equity, net interest margin, and efficiency ratio.”

 Second Quarter 2018 Highlights

  • Net interest revenue totaled $238.6 million for the second quarter of 2018, growing $18.8 million over the first quarter of 2018. Net interest margin increased to 3.17 percent for the second quarter of 2018 from 2.99 percent for the first quarter of 2018. Recoveries of foregone interest on nonaccruing loans added $5.3 million or 7 basis points to net interest margin in the second quarter. Average earning assets grew by $423 million over the prior quarter.
  • Fees and commissions revenue totaled $157.9 million for the second quarter of 2018, largely unchanged compared to the first quarter of 2018. Modest changes in other revenue lines were offset by decreased brokerage and trading revenue.
  • Operating expense was $246.5 million for the second quarter of 2018, a $2.0 million increase compared to the first quarter of 2018. Personnel expense decreased $1.0 million, primarily due to decreased incentive compensation expense. Non-personnel expense increased $3.0 million including $1.0 million of professional fees associated with the pending CoBiz acquisition.
  • The Company recorded no provision for credit losses in the second quarter of 2018. A $5.0 million negative provision for credit losses was recorded in the first quarter of 2018. The company had net charge-offs of $10.5 million or 0.24 percent of average loans on an annualized basis for second quarter of 2018, compared to net charge-offs of $1.3 million or 0.03 percent of average loans on an annualized basis for the first quarter of 2018. Net charge-offs totaled $26.9 million or 0.16 percent of average loans over the last four quarters.
  • The combined allowance for credit losses totaled $218 million or 1.21 percent of outstanding loans at June 30, 2018, compared to $228 million or 1.32 percent of outstanding loans at March 31, 2018.
  • Nonperforming assets that are not guaranteed by U.S. government agencies totaled $186 million or 1.04 percent of outstanding loans and repossessed assets at June 30, 2018 and $195 million or 1.13 percent of outstanding loans and repossessed assets at March 31, 2018. In addition, potential problem loans decreased $82 million to $140 million at June 30, 2018.
  • Average loan balances grew by $490 million over the previous quarter, primarily due to growth in commercial and commercial real estate loan balances. Period-end outstanding loan balances increased more than $665 million to $18.0 billion at June 30, 2018.
  • Average deposits were largely unchanged compared to the previous quarter. Average interest-bearing transaction deposit balances decreased $155 million, partially offset by an increase in demand deposit balances of $72 million. Period-end deposits were $22.2 billion at June 30, 2018, a $36 million decrease compared to March 31, 2018.
  • The common equity Tier 1 capital ratio at June 30, 2018 was 11.92 percent. Other regulatory capital ratios were Tier 1 capital ratio, 11.92 percent, total capital ratio, 13.26 percent, and leverage ratio, 9.57 percent. At March 31, 2018, the common equity Tier 1 capital ratio was 12.06 percent, the Tier 1 capital ratio was 12.06 percent, total capital ratio was 13.49 percent, and leverage ratio was 9.40 percent.
  • The Company's Board of Directors declared a dividend on the Company's common stock of 50 cents per share. This is an increase of 11.1 percent from 45 cents per share previously. The dividend will be payable on or about August 27, 2018, to shareholders of record on August 13.

Net Interest Revenue

Net interest revenue was $238.6 million for the second quarter of 2018, an $18.8 million increase over the first quarter of 2018.

Net interest margin was 3.17 percent for the second quarter of 2018, an increase of 18 basis points over the first quarter of 2018. Recoveries of foregone interest on nonaccruing loans added $5.3 million or 7 basis points to net interest margin in the second quarter. Excluding the impact of interest recoveries in the second quarter, the yield on average earning assets was 3.84 percent, a 23 basis point increase over the prior quarter. The loan portfolio yield also increased 23 basis points to 4.68 percent. The yield on the available for sale securities portfolio increased 7 basis points to 2.30 percent. The yield on interest-bearing cash and cash equivalents increased 29 basis points. Funding costs were 1.11 percent, up 18 basis points. The cost of interest-bearing deposits increased 9 basis points to 0.66 percent. The cost of other borrowed funds was up 34 basis points to 1.84 percent. The benefit to net interest margin from assets funded by non-interest liabilities increased to 37 basis points from 31 basis points in the first quarter of 2018.

Average earning assets increased $423 million over the second quarter of 2018. Trading securities balances increased $549 million. Average loan balances grew by $490 million. Average interest-bearing cash and cash equivalents balances decreased $386 million. Average fair value option securities held as an economic hedge of our mortgage servicing rights decreased $139 million. Average available for sale securities decreased $74 million. Average interest-bearing deposit balances decreased $144 million compared to the first quarter of 2018. The average balance of borrowed funds increased $231 million.

Fees and Commissions Revenue

Fees and commissions revenue totaled $157.9 million for the second quarter of 2018, consistent with the results from the first quarter of 2018.

Brokerage and trading revenue decreased $4.2 million compared to the first quarter of 2018. Rising mortgage interest rates narrowed trading margins and slowed turnover of our trading inventory. However, the longer average hold time of trading securities increased net interest revenue by $3.1 million.

Other revenue increased $2.2 million compared to the first quarter of 2018 primarily due to appreciation in assets related to the deferred compensation plan. This is primarily offset by an increase in deferred compensation expense. Mortgage banking revenue was relatively consistent with the previous quarter.  A 2 percent decrease in mortgage production volume was offset by an increase in the gain on sale margin.

Operating Expense

Total operating expense was $246.5 million for the second quarter of 2018, largely unchanged compared to the first quarter of 2018.

Personnel expense decreased $1.0 million. Incentive compensation expense decreased $1.0 million. Changes in assumptions for performance-based awards decreased equity compensation expense by $4.3 million. This was partially offset by an increase of $2.4 million in cash based incentive compensation. Employee benefits expense decreased $1.2 million primarily due to a seasonal decrease in payroll taxes partially offset by an overall increase in employee healthcare costs. Regular compensation increased $1.2 million as merit increases were effective for most employees in March 2018.

Non-personnel expense increased $3.0 million. Professional fees and services expense increased $4.8 million mainly due to $1.8 million in project costs, $1.0 million in costs related to the pending CoBiz acquisition and $953 thousand in seasonal tax preparation charges from trust operations. Mortgage banking costs increased $2.7 million primarily due to a $1.9 million increase in accruals related to default servicing and loss mitigation costs on loans serviced for others.

Net losses and operating expenses of repossessed assets decreased $5.0 million, primarily due to a $5.0 million write-down on a set of repossessed oil and gas properties in the first quarter of 2018.

Loans, Deposits and Capital

Loans

Outstanding loans were $18.0 billion at June 30, 2018, up more than $665 million or 3.8 percent over March 31, 2018. Loan growth can generally be attributed to tax reform changes and regulatory easing resulting in a better overall business environment. Specifically, growth in energy loans is consistent with our ongoing support and commitment to the oil and gas industry.

Outstanding commercial loan balances grew by $429 million or 3.9 percent over March 31, 2018. Energy loan balances were up $178 million. Unfunded energy loan commitments increased $80 million over March 31, 2018 to $3.0 billion at June 30, 2018. Wholesale/retail sector loan balances grew by $168 million. Manufacturing sector loan balances were up $88 million. Service sector loans increased $16 million, mostly offset by a $14 million decrease in other commercial and industrial loans.

Commercial real estate loan balances grew by $205 million or 5.9 percent over March 31, 2018. Loans secured by office buildings increased $83 million. Multifamily residential loan balances were up $48 million. Loans secured by industrial properties grew by $40 million. Loans secured by retail facilities and other commercial real estate loans increased $18 million and $15 million, respectively.

Deposits

Period-end deposits totaled $22.2 billion at June 30, 2018, a $36 million decrease compared to March 31, 2018. Interest-bearing transaction account balances decreased $63 million and time deposit balances decreased by $39 million. These decreases were partially offset by a $68 million increase in demand deposit balances. Consumer Banking deposits were down $71 million and Commercial Banking deposits decreased $41 million, partially offset by a $7.3 million increase in Wealth Management deposits.

Capital

The company's common equity Tier 1 capital ratio was 11.92 percent at June 30, 2018. In addition, the company's Tier 1 capital ratio was 11.92 percent, total capital ratio was 13.26 percent, and leverage ratio was 9.57 percent at June 30, 2018. At March 31, 2018, the company's common equity Tier 1 capital ratio was 12.06 percent, Tier 1 capital ratio was 12.06 percent, total capital ratio was 13.49 percent, and leverage ratio was 9.40 percent.

The decrease in regulatory capital ratios was due in part to introduction of the market risk capital rules. The company exceeded the $1 billion regulatory capital rules threshold for trading assets and liabilities at March 31. This subjects the company to the market risk rule, which imposed additional modeling, systems, oversight and reporting requirements beginning in the second quarter of 2018 and resulted in an increase in risk weighted assets associated with our trading activities.

The company's tangible common equity ratio, a non-GAAP measure, was 9.21 percent at June 30, 2018 and 9.18 percent at March 31, 2018. The tangible common equity ratio is primarily based on total shareholders' equity, which includes unrealized gains and losses on available for sale securities. The company has elected to exclude unrealized gains and losses from available for sale securities from its calculation of Tier 1 capital for regulatory capital purposes, consistent with the treatment under the previous capital rules.

Credit Quality

Nonperforming assets totaled $269 million or 1.49 percent of outstanding loans and repossessed assets at June 30, 2018, down from $278 million or 1.60 percent at March 31, 2018. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $186 million or 1.04 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at June 30, 2018, compared to $195 million or 1.13 percent at March 31, 2018.

Nonaccruing loans were $166 million or 0.92 percent of outstanding loans at June 30, 2018, compared to $180 million or 1.04 percent of outstanding loans at March 31, 2018. The decrease in nonaccruing loans was primarily due to a $24 million decrease in energy loans, partially offset by a $12 million increase in wholesale/retail sector loans. New nonaccruing loans identified in the second quarter totaled $42 million, offset by $31 million in payments received, $15 million in charge-offs and $8.2 million in foreclosures and repossessions. At June 30, 2018, nonaccruing commercial loans totaled $121 million or 1.07 percent of outstanding commercial loans, nonaccruing commercial real estate loans totaled $2.0 million or 0.05 percent of outstanding commercial real estate loans and nonaccruing residential mortgage loans totaled $42 million or 2.18 percent of outstanding residential mortgage loans.

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 $140 million at June 30, down from $222 million at March 31. The decrease largely resulted from energy, services, and wholesale/retail sector loans.

The company had net charge-offs of $10.5 million or 0.24 percent of average loans on an annualized basis for second quarter of 2018, compared to net charge-offs of $1.3 million or 0.03 percent of average loans on an annualized basis for the first quarter of 2018. Net charge-offs were 0.16 percent of average loans over the last four quarters. Over half of the second quarter net charge-offs was from one energy loan that had previously been identified as impaired and appropriately reserved. Gross charge-offs were $15.1 million for the second quarter compared to $2.9 million for the previous quarter. Recoveries totaled $4.6 million for the second quarter of 2018 and $1.6 million for the first quarter of 2018.

Based on an evaluation of all credit factors, including overall loan portfolio growth, changes in nonaccruing and potential problem loans and net charge-offs, the company determined that no provision for credit losses was appropriate for the second quarter of 2018. The company had a $5.0 million negative provision for credit losses in the first quarter of 2018.

The combined allowance for credit losses totaled $218 million or 1.21 percent of outstanding loans and 138 percent of nonaccruing loans at June 30, 2018, excluding residential mortgage loans guaranteed by U.S. government agencies. The allowance for loan losses was $215 million and the accrual for off-balance sheet credit losses was $2.4 million. At March 31, 2018, the combined allowance for credit losses was $228 million or 1.32 percent of outstanding loans and 133 percent of nonaccruing loans, excluding loans guaranteed by U.S. government agencies. The allowance for loan losses was $224 million and the accrual for off-balance sheet credit losses was $4.1 million.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $8.2 billion at June 30, 2018, an $87 million decrease compared to March 31, 2018. At June 30, 2018, the available for sale portfolio consisted primarily of $5.3 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $2.7 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. At June 30, 2018, the available for sale securities portfolio had a net unrealized loss of $181 million compared to a $148 million net unrealized loss at March 31, 2018.

Trading securities increased $617 million to $1.9 billion during the second quarter of 2018 as a result of expanded relationships with mortgage loan originator clients along with slower inventory turnover rates. The company holds an inventory of trading securities in support of sales to a variety of customers, including banks, corporations, insurance companies, money managers, and others.

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.

The net economic cost of the changes in fair value of mortgage servicing rights and related economic hedges was $3.5 million during the second quarter of 2018, including a $1.7 million increase in the fair value of mortgage servicing rights, a $6.4 million decrease in the fair value of securities and derivative contracts held as an economic hedge, and $1.2 million of related net interest revenue.

The fair value of mortgage servicing rights increased by $21.2 million during the first quarter of 2018.  The fair value of securities and interest rate derivative contracts held as an economic hedge of mortgage servicing rights decreased by $23.3 million. Related net interest revenue was $1.8 million during the first quarter of 2018.

Conference Call and Webcast

The company will hold a conference call at 9 a.m. Central time on Wednesday, July 25, 2018 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 # 13681367.

About BOK Financial Corporation

BOK Financial Corporation is a $34 billion regional financial services company based in Tulsa, Oklahoma. The company's stock is publicly traded on NASDAQ under the Global Select market listings (symbol: BOKF). BOK Financial's holdings include BOKF, NA, BOK Financial Securities, Inc. and The Milestone Group, Inc. BOKF, NA operates TransFund, Cavanal Hill Investment Management, BOK Financial Asset Management, Inc. and seven banking divisions: Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Mobank, Bank of Oklahoma, Bank of Texas and Colorado State Bank and Trust. Through its subsidiaries, the company provides commercial and consumer banking, investment and trust services, mortgage origination and servicing, and an electronic funds transfer network. For more information, visit www.bokf.com.

The company will continue to evaluate critical assumptions and estimates, such as the appropriateness of the allowance for credit losses and asset impairment as of June 30, 2018 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 within the meaning of the Private Securities Litigation Reform Act of 1995 including, but not limited to, CoBiz Financial Inc.’s and BOK Financial Corporation’s expectations or predictions of future financial or business performance or conditions. Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “target,” “estimate,” “continue,” “positions,” “plan,” “predict,” “project,” “forecast,” “guidance,” “goal,” “objective,” “prospects,” “possible” or “potential,” by future conditional verbs such as “assume,” “will,” “would,” “should,” “could” or “may”, or by variations of such words or by similar expressions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made and we assume no duty to update forward-looking statements. Actual results may differ materially from current projections.

In addition to factors previously disclosed in CoBiz Financial Inc.’s and BOK Financial Corporation’s reports filed with the SEC and those identified elsewhere in this communication, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: the ability to obtain regulatory approvals and meet other closing conditions to the merger, including approval by CoBiz Financial Inc.’s shareholders on the expected terms and schedule, including the risk that regulatory approvals required for the merger are not obtained or are obtained subject to conditions that are not anticipated; delay in closing the merger; difficulties and delays in integrating CoBiz Financial Inc.’s business or fully realizing cost savings and other benefits; business disruption following the merger; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer acceptance of BOK Financial Corporation’s products and services; customer borrowing, repayment, investment and deposit practices; customer disintermediation; the introduction, withdrawal, success and timing of business initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with mergers, acquisitions and divestitures; economic conditions; and the impact, extent and timing of technological changes, capital management activities, and other actions of the Federal Reserve Board and legislative and regulatory actions and reforms.

Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.

In this news release we may sometimes use non-GAAP Financial information.  Please note that although non-GAAP financial measures provide useful insight to analysts, investors and regulators, they should not be considered in isolation or relied upon as a substitute for analysis using GAAP measures.  If applicable, we provide GAAP reconciliations for non-GAAP financial measures.

IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT

In connection with the proposed merger, BOK Financial Corporation has filed with the SEC a Registration Statement on Form S-4 that will include the Proxy Statement of CoBiz Financial Inc. and a Prospectus of BOK Financial Corporation, as well as other relevant documents concerning the proposed transaction. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. INVESTORS AND SHAREHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER E AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.

A free copy of the Proxy Statement/Prospectus, as well as other filings containing information about BOK Financial Corporation and CoBiz Financial Inc., may be obtained at the SEC’s Internet site (http://www.sec.gov). You will also be able to obtain these documents, free of charge, from CoBiz Financial Inc. at ir.cobizfinancial.com or from BOK Financial Corporation by accessing BOK Financial Corporation’s website at www.bokf.com. Copies of the Proxy Statement/Prospectus can also be obtained, free of charge, by directing a request to CoBiz Financial Inc. Investor Relations at CoBiz Financial Inc. Investor Relations, 1401 Lawrence Street, Suite 1200, Denver, CO, by calling (303) 312-3412, or by sending an e-mail to info@cobizfinancial.com or to BOK Financial Corporation Investor Relations at Bank of Oklahoma Tower, Boston Avenue at Second Street, Tulsa, Oklahoma, by calling (918) 588-6000 or by sending an e-mail to investorrelations@bokf.com.

CoBiz Financial Inc. and BOK Financial Corporation and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of CoBiz Financial Inc. in respect of the transaction described in the Proxy Statement/Prospectus. Information regarding CoBiz Financial Inc.’s directors and executive officers is contained in CoBiz Financial Inc.’s Annual Report on Form 10-K for the year ended December 31, 2017 and its Proxy Statement on Schedule 14A, dated March 9, 2018, which are filed with the SEC.  Information regarding BOK Financial Corporation’s directors and executive officers is contained in BOK Financial Corporation’s Annual Report on Form 10-K for the year ended December 31, 2017 and its Proxy Statement on Schedule 14A, dated March 15, 2018, which are filed with the SEC. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the Proxy Statement/Prospectus regarding the proposed merger when it becomes available. Free copies of this document may be obtained as described in the preceding paragraph.


BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
 June 30, 2018 Mar. 31, 2018 June 30, 2017
ASSETS     
Cash and due from banks$585,801  $544,534  $561,587 
Interest-bearing cash and cash equivalents872,999  2,054,899  2,078,831 
Trading securities1,909,615  1,292,432  441,414 
Investment securities392,013  416,672  490,426 
Available for sale debt securities8,162,866  8,249,432  8,341,041 
Fair value option securities482,227  513,668  445,169 
Restricted equity securities347,721  338,552  311,033 
Residential mortgage loans held for sale223,301  225,190  287,259 
Loans:     
Commercial11,349,039  10,919,667  10,637,955 
Commercial real estate3,712,220  3,506,782  3,688,592 
Residential mortgage1,942,250  1,945,769  1,939,198 
Personal1,000,187  965,632  917,900 
Total loans18,003,696  17,337,850  17,183,645 
Allowance for loan losses(215,142) (223,967) (250,061)
Loans, net of allowance17,788,554  17,113,883  16,933,584 
Premises and equipment, net320,810  314,347  321,038 
Receivables212,893  206,577  170,094 
Goodwill453,093  447,430  446,697 
Intangible assets, net28,273  29,658  40,755 
Mortgage servicing rights278,719  274,978  245,239 
Real estate and other repossessed assets, net27,891  23,652  39,436 
Derivative contracts, net373,373  286,687  280,289 
Cash surrender value of bank-owned life insurance321,024  318,661  312,774 
Receivable on unsettled securities sales604,552  275,088  158,125 
Other assets447,382  435,152  358,741 
TOTAL ASSETS$33,833,107  $33,361,492  $32,263,532 
      
LIABILITIES AND EQUITY     
Deposits:     
Demand$9,373,959  $9,306,023  $9,568,895 
Interest-bearing transaction10,164,099  10,226,971  10,087,139 
Savings503,474  505,952  464,318 
Time2,127,732  2,166,254  2,196,122 
Total deposits22,169,264  22,205,200  22,316,474 
Funds purchased and repurchase agreements880,027  546,324  464,323 
Other borrowings5,929,445  5,727,025  5,232,343 
Subordinated debentures144,697  144,687  144,658 
Accrued interest, taxes and expense160,568  156,146  133,198 
Due on unsettled securities purchases571,034  553,840  31,214 
Derivative contracts, net234,856  233,202  285,819 
Other liabilities167,171  277,726  205,958 
TOTAL LIABILITIES30,257,062  29,844,150  28,813,987 
Shareholders' equity:     
Capital, surplus and retained earnings3,688,736  3,606,220  3,414,505 
Accumulated other comprehensive gain (loss)
(135,305) (111,191) 7,964 
TOTAL SHAREHOLDERS' EQUITY3,553,431  3,495,029  3,422,469 
Non-controlling interests22,614  22,313  27,076 
TOTAL EQUITY3,576,045  3,517,342  3,449,545 
TOTAL LIABILITIES AND EQUITY$33,833,107  $33,361,492  $32,263,532 


AVERAGE BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
 Three Months Ended
 June 30, 2018 Mar. 31, 2018 Dec. 31, 2017 Sept. 30, 2017 June 30, 2017
ASSETS         
Interest-bearing cash and cash equivalents$1,673,387  $2,059,517  $1,976,395  $1,965,645  $2,007,746 
Trading securities1,482,302  933,404  560,321  491,613  456,028 
Investment securities399,088  441,207  462,869  475,705  499,372 
Available for sale debt securities8,163,142  8,236,938  8,435,916  8,428,353  8,384,057 
Fair value option securities487,192  626,251  792,647  684,571  476,102 
Restricted equity securities348,546  349,176  337,673  328,677  295,743 
Residential mortgage loans held for sale218,600  199,380  257,927  256,343  245,401 
Loans:         
Commercial11,189,899  10,871,569  10,751,235  10,827,198  10,604,456 
Commercial real estate3,660,166  3,491,335  3,485,583  3,528,330  3,676,976 
Residential mortgage1,915,015  1,937,198  1,976,860  1,951,385  1,933,091 
Personal986,162  961,379  967,329  949,750  915,010 
Total loans17,751,242  17,261,481  17,181,007  17,256,663  17,129,533 
Allowance for loan losses(222,856) (228,996) (246,143) (250,590) (251,632)
Total loans, net17,528,386  17,032,485  16,934,864  17,006,073  16,877,901 
Total earning assets30,300,643  29,878,358  29,758,612  29,636,980  29,242,350 
Cash and due from banks571,333  564,585  576,737  546,653  530,352 
Derivative contracts, net318,375  278,694  292,961  238,583  248,168 
Cash surrender value of bank-owned life insurance319,507  317,334  315,034  313,079  311,310 
Receivable on unsettled securities sales618,240  998,803  821,275  608,412  372,894 
Other assets1,777,937  1,687,178  1,687,496  1,664,463  1,663,497 
TOTAL ASSETS$33,906,035  $33,724,952  $33,452,115  $33,008,170  $32,368,571 
          
LIABILITIES AND EQUITY         
Deposits:         
Demand$9,223,327  $9,151,272  $9,417,351  $9,389,849  $9,338,683 
Interest-bearing transaction10,189,354  10,344,469  10,142,744  10,088,522  10,087,640 
Savings503,671  480,110  466,496  464,130  461,586 
Time2,138,880  2,151,044  2,134,469  2,176,820  2,204,422 
Total deposits22,055,232  22,126,895  22,161,060  22,119,321  22,092,331 
Funds purchased and repurchase agreements593,250  532,412  488,330  411,286  490,616 
Other borrowings6,497,020  6,326,967  6,209,903  6,162,641  5,572,031 
Subordinated debentures144,692  144,682  144,673  144,663  144,654 
Derivative contracts, net235,543  223,373  288,408  221,371  178,695 
Due on unsettled securities purchases527,804  558,898  332,155  145,977  162,348 
Other liabilities340,322  333,151  312,196  318,270  318,463 
TOTAL LIABILITIES30,393,863  30,246,378  29,936,725  29,523,529  28,959,138 
Total equity3,512,172  3,478,574  3,515,390  3,484,641  3,409,433 
TOTAL LIABILITIES AND EQUITY$33,906,035  $33,724,952  $33,452,115  $33,008,170  $32,368,571 


STATEMENTS OF EARNINGS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except per share data)
 Three Months Ended Six Months Ended
 June 30, June 30,
 2018 2017 2018 2017
        
Interest revenue$294,180  $235,181  $559,587  $461,571 
Interest expense55,618  29,977  101,289  55,185 
Net interest revenue238,562  205,204  458,298  406,386 
Provision for credit losses    (5,000)  
Net interest revenue after provision for credit losses238,562  205,204  463,298  406,386 
Other operating revenue:       
Brokerage and trading revenue26,488  31,764  57,136  65,387 
Transaction card revenue120,975  20,009  41,965  38,186 
Fiduciary and asset management revenue41,699  41,808  83,531  80,439 
Deposit service charges and fees27,827  28,422  54,988  56,199 
Mortgage banking revenue26,346  30,276  52,371  55,467 
Other revenue14,518  14,984  26,848  26,736 
Total fees and commissions157,853  167,263  316,839  322,414 
Other gains, net3,983  6,108  3,319  9,735 
Gain (loss) on derivatives, net(3,057) 3,241  (8,742) 2,791 
Gain (loss) on fair value option securities, net(3,341) 1,984  (20,905) 844 
Change in fair value of mortgage servicing rights1,723  (6,943) 22,929  (5,087)
Gain (loss) on available for sale securities, net(762) 380  (1,052) 2,429 
Total other operating revenue156,399  172,033  312,388  333,126 
Other operating expense:       
Personnel138,947  143,744  278,894  280,169 
Business promotion7,686  7,738  13,696  14,455 
Professional fees and services14,978  12,419  25,178  23,836 
Net occupancy and equipment22,761  21,125  46,807  42,749 
Insurance6,245  689  12,838  7,093 
Data processing and communications127,739  26,111  55,556  51,810 
Printing, postage and supplies4,011  4,140  8,100  7,991 
Net losses and operating expenses of repossessed assets2,722  2,267  10,427  3,276 
Amortization of intangible assets1,386  1,803  2,686  3,605 
Mortgage banking costs12,890  12,072  23,039  25,075 
Other expense7,111  8,558  13,685  16,115 
Total other operating expense246,476  240,666  490,906  476,174 
        
Net income before taxes148,485  136,571  284,780  263,338 
Federal and state income taxes33,330  47,705  64,278  85,808 
        
Net income115,155  88,866  220,502  177,530 
Net income attributable to non-controlling interests783  719  568  1,027 
Net income attributable to BOK Financial Corporation shareholders$114,372  $88,147  $219,934  $176,503 
        
Average shares outstanding:       
Basic64,901,975  64,729,752  64,874,567  64,722,744 
Diluted64,937,226  64,793,134  64,912,552  64,788,322 
        
Net income per share:       
Basic$1.75  $1.35  $3.36  $2.70 
Diluted$1.75  $1.35  $3.36  $2.69 

1 Non-GAAP measure to net interchange charges for periods prior to 2018 between transaction card revenue and data processing and communications expense. This measure has no effect on net income or earnings per share.


FINANCIAL HIGHLIGHTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and share data)
 Three Months Ended
 June 30, 2018 Mar. 31, 2018 Dec. 31, 2017 Sept. 30, 2017 June 30, 2017
Capital:         
Period-end shareholders' equity$3,553,431  $3,495,029  $3,495,367  $3,488,814  $3,422,469 
Risk weighted assets$27,004,559  $26,025,660  $25,733,711  $25,409,728  $25,130,802 
Risk-based capital ratios:         
Common equity tier 111.92% 12.06% 12.05% 11.90% 11.76%
Tier 111.92% 12.06% 12.05% 11.90% 11.76%
Total capital13.26% 13.49% 13.54% 13.47% 13.36%
Leverage ratio9.57% 9.40% 9.31% 9.30% 9.27%
Tangible common equity ratio19.21% 9.18% 9.50% 9.23% 9.24%
          
Common stock:         
Book value per share$54.30  $53.39  $53.45  $53.30  $52.32 
Tangible book value per share46.95  46.10  46.17  45.88  44.87 
Market value per share:         
High$106.65  $107.00  $93.97  $90.69  $88.31 
Low$92.39  $89.82  $79.67  $77.10  $74.09 
Cash dividends paid$29,340  $29,342  $29,328  $28,655  $28,652 
Dividend payout ratio25.65% 27.80% 40.46% 33.46% 32.50%
Shares outstanding, net65,439,090  65,459,505  65,394,937  65,456,786  65,416,403 
Stock buy-back program:         
Shares repurchased8,257  82,583  80,000     
Amount$824  $7,584  $7,403  $  $ 
Average price per share$99.84  $91.83  $92.54  $  $ 
          
Performance ratios (quarter annualized):
Return on average assets1.35% 1.27% 0.86% 1.03% 1.09%
Return on average equity13.14% 12.39% 8.24% 9.83% 10.46%
Net interest margin3.17% 2.99% 2.97% 3.01% 2.89%
Efficiency ratio361.68% 65.09% 66.07% 65.92% 63.66%
          
Reconciliation of non-GAAP measures:
1     Tangible common equity ratio:         
Total shareholders' equity$3,553,431  $3,495,029  $3,495,367  $3,488,814  $3,422,469 
Less: Goodwill and intangible assets, net481,366  477,088  476,088  485,710  487,452 
Tangible common equity$3,072,065  $3,017,941  $3,019,279  $3,003,104  $2,935,017 
          
Total assets$33,833,107  $33,361,492  $32,272,160  $33,005,515  $32,263,532 
Less: Goodwill and intangible assets, net481,366  477,088  476,088  485,710  487,452 
Tangible assets$33,351,741  $32,884,404  $31,796,072  $32,519,805  $31,776,080 
          
Tangible common equity ratio9.21% 9.18% 9.50% 9.23% 9.24%
          
Other data:         
Fiduciary assets$46,531,900  $46,648,290  $48,761,477  $45,177,185  $45,089,153 
Tax equivalent interest$1,983  $2,010  $4,131  $4,314  $4,330 
Net unrealized gain (loss) on available for sale securities$(180,602) $(148,247) $(47,497) $14,061  $16,041 
          
Mortgage banking:         
Mortgage production revenue$9,915  $9,452  $7,786  $8,329  $13,840 
          
Mortgage loans funded for sale$773,910  $664,958  $840,080  $832,796  $902,978 
Add: current period-end outstanding commitments251,231  298,318  222,919  334,337  362,088 
Less: prior period end outstanding commitments298,318  222,919  334,337  362,088  381,732 
Total mortgage production volume$726,823  $740,357  $728,662  $805,045  $883,334 
          
Mortgage loan refinances to mortgage loans funded for sale22% 42% 47% 38% 33%
Gain on sale margin1.36% 1.28% 1.07% 1.03% 1.57%
          
Mortgage servicing revenue$16,431  $16,573  $16,576  $16,561  $16,436 
Average outstanding principal balance of mortgage loans serviced for others21,986,065  22,027,726  22,054,877  22,079,177  22,055,127 
Average mortgage servicing revenue rates0.30% 0.31% 0.30% 0.30% 0.30%
          
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net$(3,070) $(5,698) $(3,057) $1,025  $3,241 
Gain (loss) on fair value option securities, net(3,341) (17,564) (4,238) 661  1,984 
Gain (loss) on economic hedge of mortgage servicing rights(6,411) (23,262) (7,295) 1,686  5,225 
Gain (loss) on changes in fair value of mortgage servicing rights1,723  21,206  5,898  (639) (6,943)
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue(4,688) (2,056) (1,397) 1,047  (1,718)
Net interest revenue on fair value option securities21,203  1,800  2,656  2,543  1,965 
Total economic benefit (cost) of changes in the fair value of mortgage servicing rights, net of economic hedges$(3,485) $(256) $1,259  $3,590  $247 

2    Actual interest earned on fair value option securities less internal transfer-priced cost of funds.
3    Periods prior to 2018 are shown on a comparable basis to net interchange charges between transaction card revenue and data processing and communications expense.


QUARTERLY EARNINGS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and per share data)
 Three Months Ended
 June 30, 2018 Mar. 31, 2018 Dec. 31, 2017 Sept. 30, 2017 June 30, 2017
          
Interest revenue$294,180  $265,407  $255,767  $255,413  $235,181 
Interest expense55,618  45,671  38,904  36,961  29,977 
Net interest revenue238,562  219,736  216,863  218,452  205,204 
Provision for credit losses  (5,000) (7,000)    
Net interest revenue after provision for credit losses238,562  224,736  223,863  218,452  205,204 
Other operating revenue:         
Brokerage and trading revenue26,488  30,648  33,045  33,169  31,764 
Transaction card revenue120,975  20,990  20,028  22,929  20,009 
Fiduciary and asset management revenue41,699  41,832  41,767  40,687  41,808 
Deposit service charges and fees27,827  27,161  27,685  28,191  28,422 
Mortgage banking revenue26,346  26,025  24,362  24,890  30,276 
Other revenue14,518  12,330  11,762  13,670  14,984 
Total fees and commissions157,853  158,986  158,649  163,536  167,263 
Other gains (losses), net3,983  (664) 552  (1,283) 6,108 
Gain (loss) on derivatives, net(3,057) (5,685) (3,045) 1,033  3,241 
Gain (loss) on fair value option securities, net(3,341) (17,564) (4,238) 661  1,984 
Change in fair value of mortgage servicing rights1,723  21,206  5,898  (639) (6,943)
Gain (loss) on available for sale securities, net(762) (290) (488) 2,487  380 
Total other operating revenue156,399  155,989  157,328  165,795  172,033 
Other operating expense:         
Personnel138,947  139,947  145,329  147,910  143,744 
Business promotion7,686  6,010  7,317  7,105  7,738 
Charitable contributions to BOKF Foundation    2,000     
Professional fees and services14,978  10,200  15,344  11,887  12,419 
Net occupancy and equipment22,761  24,046  22,403  21,325  21,125 
Insurance6,245  6,593  6,555  6,005  689 
Data processing and communications127,739  27,817  28,903  27,412  26,111 
Printing, postage and supplies4,011  4,089  3,781  3,917  4,140 
Net losses (gains) and operating expenses of repossessed assets2,722  7,705  340  6,071  2,267 
Amortization of intangible assets1,386  1,300  1,430  1,744  1,803 
Mortgage banking costs12,890  10,149  14,331  13,450  12,072 
Other expense7,111  6,574  6,746  9,193  8,558 
Total other operating expense246,476  244,430  254,479  256,019  240,666 
Net income before taxes148,485  136,295  126,712  128,228  136,571 
Federal and state income taxes33,330  30,948  54,347  42,438  47,705 
Net income115,155  105,347  72,365  85,790  88,866 
Net income (loss) attributable to non-controlling interests783  (215) (127) 141  719 
Net income attributable to BOK Financial Corporation shareholders$114,372  $105,562  $72,492  $85,649  $88,147 
          
Average shares outstanding:         
Basic64,901,975  64,847,334  64,793,005  64,742,822  64,729,752 
Diluted64,937,226  64,888,033  64,843,179  64,805,172  64,793,134 
Net income per share:         
Basic$1.75  $1.61  $1.11  $1.31  $1.35 
Diluted$1.75  $1.61  $1.11  $1.31  $1.35 

1    Non-GAAP measure to net interchange charges for periods prior to 2018 between transaction card revenue and data processing and communications expense. This measure has no effect on net income or earnings per share.


LOANS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
  June 30, 2018 Mar. 31, 2018 Dec. 31, 2017 Sept. 30, 2017 June 30, 2017
Commercial:          
Energy $3,147,219  $2,969,618  $2,930,156  $2,867,981  $2,847,240 
Services 2,944,499  2,928,294  2,986,949  2,967,513  2,958,827 
Healthcare 2,353,722  2,359,928  2,314,753  2,239,451  2,221,518 
Wholesale/retail 1,699,554  1,531,576  1,471,256  1,658,098  1,543,695 
Manufacturing 647,816  559,695  496,774  519,446  546,137 
Other commercial and industrial 556,229  570,556  534,087  543,445  520,538 
Total commercial 11,349,039  10,919,667  10,733,975  10,795,934  10,637,955 
           
Commercial real estate:          
Multifamily 1,056,984  1,008,903  980,017  999,009  952,380 
Office 820,127  737,144  831,770  797,089  862,973 
Retail 768,024  750,396  691,532  725,865  722,805 
Industrial 653,384  613,608  573,014  591,080  693,635 
Residential construction and land development 118,999  117,458  117,245  112,102  141,592 
Other commercial real estate 294,702  279,273  286,409  292,997  315,207 
Total commercial real estate 3,712,220  3,506,782  3,479,987  3,518,142  3,688,592 
           
Residential mortgage:          
Permanent mortgage 1,068,412  1,047,785  1,043,435  1,013,965  989,040 
Permanent mortgages guaranteed by U.S. government agencies 169,653  177,880  197,506  187,370  191,729 
Home equity 704,185  720,104  732,745  744,415  758,429 
Total residential mortgage 1,942,250  1,945,769  1,973,686  1,945,750  1,939,198 
           
Personal 1,000,187  965,632  965,776  947,008  917,900 
           
Total $18,003,696  $17,337,850  $17,153,424  $17,206,834  $17,183,645 



LOANS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
 June 30, 2018 Mar. 31, 2018 Dec. 31, 2017 Sept. 30, 2017 June 30, 2017
          
Bank of Oklahoma:         
Commercial$3,465,407  $3,265,013  $3,238,720  $3,408,973  $3,369,967 
Commercial real estate662,665  668,031  682,037  712,915  667,932 
Residential mortgage1,403,658  1,419,281  1,435,432  1,405,900  1,398,021 
Personal362,846  353,128  342,212  322,320  318,016 
Total Bank of Oklahoma5,894,576  5,705,453  5,698,401  5,850,108  5,753,936 
          
Bank of Texas:         
Commercial4,922,451  4,715,841  4,520,401  4,434,595  4,339,634 
Commercial real estate1,336,101  1,254,421  1,261,864  1,236,702  1,360,164 
Residential mortgage243,400  229,761  233,675  229,993  232,074 
Personal394,021  363,608  375,084  375,173  354,222 
Total Bank of Texas6,895,973  6,563,631  6,391,024  6,276,463  6,286,094 
          
Bank of Albuquerque:         
Commercial305,167  315,701  343,296  367,747  369,370 
Commercial real estate386,878  348,485  341,282  319,208  324,405 
Residential mortgage90,581  93,490  98,018  101,983  103,849 
Personal11,107  11,667  11,721  12,953  12,439 
Total Bank of Albuquerque793,733  769,343  794,317  801,891  810,063 
          
Bank of Arkansas:         
Commercial93,217  94,430  95,644  91,051  85,020 
Commercial real estate90,807  88,700  87,393  80,917  73,943 
Residential mortgage6,927  7,033  6,596  6,318  6,395 
Personal12,331  9,916  9,992  10,388  11,993 
Total Bank of Arkansas203,282  200,079  199,625  188,674  177,351 
          
Colorado State Bank & Trust:         
Commercial1,165,721  1,180,655  1,130,714  1,124,200  1,065,780 
Commercial real estate267,065  210,801  174,201  186,427  255,379 
Residential mortgage64,839  64,530  63,350  63,734  63,346 
Personal60,504  63,118  63,115  60,513  56,187 
Total Colorado State Bank & Trust1,558,129  1,519,104  1,431,380  1,434,874  1,440,692 
          
Bank of Arizona:         
Commercial681,852  624,106  687,792  634,809  617,759 
Commercial real estate710,784  672,319  660,094  706,188  705,858 
Residential mortgage47,010  39,227  41,771  40,730  37,034 
Personal65,541  57,023  57,140  55,050  55,528 
Total Bank of Arizona1,505,187  1,392,675  1,446,797  1,436,777  1,416,179 
          
Mobank (Kansas City):         
Commercial715,224  723,921  717,408  734,559  790,425 
Commercial real estate257,920  264,025  273,116  275,785  300,911 
Residential mortgage85,835  92,447  94,844  97,092  98,479 
Personal93,837  107,172  106,512  110,611  109,515 
Total Mobank (Kansas City)1,152,816  1,187,565  1,191,880  1,218,047  1,299,330 
          
TOTAL BOK FINANCIAL$18,003,696  $17,337,850  $17,153,424  $17,206,834  $17,183,645 

Loans attributed to a geographical region may not always represent the location of the borrower or the collateral.


DEPOSITS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
 June 30, 2018 Mar. 31, 2018 Dec. 31, 2017 Sept. 30, 2017 June 30, 2017
Bank of Oklahoma:         
Demand$3,867,933  $4,201,842  $3,885,008  $4,061,612  $4,353,421 
Interest-bearing:         
Transaction5,968,460  6,051,302  5,901,293  5,909,259  5,998,787 
Savings289,202  289,351  265,870  265,023  263,664 
Time1,207,471  1,203,534  1,092,133  1,131,547  1,170,014 
Total interest-bearing7,465,133  7,544,187  7,259,296  7,305,829  7,432,465 
Total Bank of Oklahoma11,333,066  11,746,029  11,144,304  11,367,441  11,785,886 
          
Bank of Texas:         
Demand3,317,656  3,015,869  3,239,098  3,094,184  3,121,890 
Interest-bearing:         
Transaction2,168,488  2,208,480  2,397,071  2,272,987  2,272,185 
Savings97,809  98,852  93,620  93,400  91,491 
Time445,500  475,967  502,879  521,072  502,128 
Total interest-bearing2,711,797  2,783,299  2,993,570  2,887,459  2,865,804 
Total Bank of Texas6,029,453  5,799,168  6,232,668  5,981,643  5,987,694 
          
Bank of Albuquerque:         
Demand770,974  695,060  663,353  659,793  612,117 
Interest-bearing:         
Transaction586,593  555,414  552,393  551,884  558,523 
Savings59,415  60,596  55,647  53,532  54,136 
Time212,689  216,306  216,743  224,773  229,616 
Total interest-bearing858,697  832,316  824,783  830,189  842,275 
Total Bank of Albuquerque1,629,671  1,527,376  1,488,136  1,489,982  1,454,392 
          
Bank of Arkansas:         
Demand39,896  35,291  30,384  31,442  40,511 
Interest-bearing:         
Transaction143,298  94,206  85,095  126,746  129,848 
Savings1,885  1,960  1,881  1,876  2,135 
Time10,771  11,878  14,045  14,434  14,876 
Total interest-bearing155,954  108,044  101,021  143,056  146,859 
Total Bank of Arkansas195,850  143,335  131,405  174,498  187,370 
          
Colorado State Bank & Trust:         
Demand529,912  521,963  633,714  540,300  577,617 
Interest-bearing:         
Transaction701,362  687,785  657,629  628,807  626,343 
Savings38,176  37,232  35,223  34,776  35,651 
Time208,049  215,330  224,962  231,927  228,458 
Total interest-bearing947,587  940,347  917,814  895,510  890,452 
Total Colorado State Bank & Trust1,477,499  1,462,310  1,551,528  1,435,810  1,468,069 
          
Bank of Arizona:         
Demand387,952  330,196  334,701  335,740  366,866 
Interest-bearing:         
Transaction194,353  248,337  274,846  174,010  154,457 
Savings3,935  4,116  3,343  4,105  3,638 
Time22,447  21,009  20,394  20,831  19,911 
Total interest-bearing220,735  273,462  298,583  198,946  178,006 
Total Bank of Arizona608,687  603,658  633,284  534,686  544,872 
          
Mobank (Kansas City):         
Demand459,636  505,802  457,080  462,410  496,473 
Interest-bearing:         
Transaction401,545  381,447  382,066  361,391  346,996 
Savings13,052  13,845  13,574  12,513  13,603 
Time20,805  22,230  27,260  27,705  31,119 
Total interest-bearing435,402  417,522  422,900  401,609  391,718 
Total Mobank (Kansas City)895,038  923,324  879,980  864,019  888,191 
          
TOTAL BOK FINANCIAL$22,169,264  $22,205,200  $22,061,305  $21,848,079  $22,316,474 



NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
 Three Months Ended
  June 30, 2018 Mar. 31, 2018 Dec. 31, 2017 Sept. 30, 2017 June 30, 2017
          
TAX-EQUIVALENT ASSETS YIELDS         
Interest-bearing cash and cash equivalents1.86% 1.57% 1.27% 1.29% 1.04%
Trading securities3.63% 3.40% 3.38% 3.47% 3.23%
Investment securities:         
  Taxable5.23% 5.21% 5.31% 5.31% 5.34%
  Tax-exempt2.42% 2.25% 2.69% 2.60% 2.51%
Total investment securities3.95% 3.78% 3.98% 3.86% 3.76%
Available for sale securities:         
  Taxable2.29% 2.22% 2.19% 2.16% 2.09%
  Tax-exempt3.26% 3.26% 5.41% 5.27% 6.09%
Total available for sale securities2.30% 2.23% 2.21% 2.17% 2.11%
Fair value option securities3.16% 2.95% 2.90% 2.97% 2.92%
Restricted equity securities6.21% 5.86% 5.87% 5.87% 5.95%
Residential mortgage loans held for sale4.28% 3.71% 3.72% 3.36% 3.92%
Loans4.80% 4.45% 4.29% 4.31% 4.03%
Allowance for loan losses         
Loans, net of allowance4.86% 4.51% 4.35% 4.38% 4.09%
Total tax-equivalent yield on earning assets3.91% 3.61% 3.49% 3.50% 3.30%
          
COST OF INTEREST-BEARING LIABILITIES        
Interest-bearing deposits:         
  Interest-bearing transaction0.55% 0.45% 0.35% 0.32% 0.26%
  Savings0.08% 0.07% 0.07% 0.08% 0.08%
  Time1.29% 1.25% 1.17% 1.16% 1.11%
Total interest-bearing deposits0.66% 0.57% 0.48% 0.45% 0.40%
Funds purchased and repurchase agreements0.53% 0.40% 0.28% 0.25% 0.13%
Other borrowings1.96% 1.60% 1.36% 1.29% 1.09%
Subordinated debt5.67% 5.61% 5.55% 5.68% 5.55%
Total cost of interest-bearing liabilities1.11% 0.93% 0.79% 0.75% 0.63%
Tax-equivalent net interest revenue spread2.80% 2.68% 2.70% 2.75% 2.67%
Effect of noninterest-bearing funding sources and other0.37% 0.31% 0.27% 0.26% 0.22%
Tax-equivalent net interest margin3.17% 2.99% 2.97% 3.01% 2.89%

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


CREDIT QUALITY INDICATORS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratios)
 Three Months Ended
 June 30, 2018 Mar. 31, 2018 Dec. 31, 2017 Sept. 30, 2017 June 30, 2017
Nonperforming assets:         
Nonaccruing loans:         
Commercial$120,978  $131,460  $137,303  $176,900  $197,157 
Commercial real estate1,996  2,470  2,855  2,975  3,775 
Residential mortgage42,343  45,794  47,447  45,506  44,235 
Personal340  340  269  255  272 
Total nonaccruing loans165,657  180,064  187,874  225,636  245,439 
Accruing renegotiated loans guaranteed by U.S. government agencies75,374  74,418  73,994  69,440  80,624 
Real estate and other repossessed assets27,891  23,652  28,437  32,535  39,436 
Total nonperforming assets$268,922  $278,134  $290,305  $327,611  $365,499 
Total nonperforming assets excluding those guaranteed by U.S. government agencies$185,981  $194,833  $207,132  $249,280  $275,823 
          
Nonaccruing loans by loan class:         
Commercial:         
Energy$65,597  $89,942  $92,284  $110,683  $123,992 
Services4,377  2,109  2,620  1,174  7,754 
Healthcare16,125  15,342  14,765  24,446  24,505 
Wholesale/retail14,095  2,564  2,574  1,893  10,620 
Manufacturing2,991  3,002  5,962  9,059  9,656 
Other commercial and industrial17,793  18,501  19,098  29,645  20,630 
Total commercial120,978  131,460  137,303  176,900  197,157 
Commercial real estate:         
Multifamily        10 
Office275  275  275  275  396 
Retail1,068  264  276  289  301 
Industrial         
Residential construction and land development350  1,613  1,832  1,924  2,051 
Other commercial real estate303  318  472  487  1,017 
Total commercial real estate1,996  2,470  2,855  2,975  3,775 
Residential mortgage:         
Permanent mortgage23,105  24,578  25,193  24,623  23,415 
Permanent mortgage guaranteed by U.S. government agencies7,567  8,883  9,179  8,891  9,052 
Home equity11,671  12,333  13,075  11,992  11,768