TULSA, Okla.--(BUSINESS WIRE)--
BOK Financial Corporation (NASDAQ: BOKF) reported net income of
$55.0 million or $0.81 per diluted share for the first quarter of 2009,
up $19.6 million or 55% over the fourth quarter of 2008. Net income for
the first quarter of 2008 was $62.3 million or $0.92 per diluted share
including after-tax gains from the sale of Visa, Inc. Class B common
stock and reversal of accrued contingent liabilities related to Visa of
$6.2 million or $0.09 per diluted share.
"BOK Financial is pleased to report a strong start to 2009 as we
continue to manage the challenges of the current recession," said
President and CEO Stan Lybarger. "Our solid capital and liquidity
positions and diverse revenue sources have allowed us to perform much
better than the industry as a whole. This prompted us to increase our
quarterly cash dividend by 7% beginning in the second quarter."
Highlights of the first quarter of 2009 included:
-- Pre-tax net operating income, which we define as net interest revenue
plus fees and commissions revenue less operating expenses (excluding
changes in the fair value of mortgage servicing rights) was $123.6
million for the first quarter of 2009, $128.4 million for the fourth
quarter of 2008 and $109.3 million for the first quarter of 2008.
Pre-tax net operating income is a measure of the Company's ongoing
ability to generate earnings to absorb credit, impairment and other
losses.
-- Net interest revenue totaled $169.8 million, down $6.6 million compared
to the fourth quarter of 2008 and up $22.7 million or 15% over the first
quarter of 2008. Net interest margin was 3.47% for the first quarter of
2009, 3.57% for the fourth quarter of 2008 (3.42% excluding the 15 basis
point favorable LIBOR spread, as previously disclosed) and 3.31% for the
first quarter of 2008.
-- Fees and commissions revenue totaled $121.5 million for the first
quarter of 2009, $110.9 million for the fourth quarter of 2008 and
$113.9 million for the first quarter of 2008. Mortgage banking revenue
grew $11.3 million or 156% over the fourth quarter of 2008 driven by
increased volume in refinancing due to government initiatives to lower
national mortgage interest rates.
-- Other-than-temporary impairment charges reduced pre-tax income by $15.0
million in the first quarter of 2009 and $5.3 million in the first
quarter of 2008. No other-than-temporary impairment charges were
recognized in the fourth quarter of 2008. Impairment charges were
recognized for certain preferred stocks and privately-issued
mortgage-backed securities.
-- Combined reserve for credit losses totaled $262 million or 2.07% of
outstanding loans at March 31, 2009, up from $248 million or 1.93% of
outstanding loans at December 31, 2008. Net loans charged off and
provision for credit losses were $31.9 million and $45.0 million,
respectively for the first quarter of 2009. Net loans charged off and
provision for credit losses were $33.7 million and $73.0 million,
respectively, for the fourth quarter of 2008 and $8.9 million and $17.6
million, respectively, for the first quarter of 2008.
-- Non-performing assets totaled $414 million or 3.26% of outstanding loans
and repossessed assets at March 31, 2009. Non-performing assets totaled
$342 million or 2.65% of outstanding loans and repossessed assets at
December 31, 2008.
-- Average deposit accounts totaled $14.9 billion for the first quarter of
2009, up $756 million compared with average deposits for the fourth
quarter of 2008. Total period-end deposits were $15.3 billion at March
31, 2009.
-- The Company's Tier 1 and tangible common equity ratios were 9.76% and
6.84%, respectively at March 31, 2009. Tier 1 and tangible common equity
ratios were 9.42% and 6.64%, respectively, at December 31, 2008. The
Company chose not to participate in the U.S. Treasury's TARP Capital
Purchase Program.
-- The Company paid a cash dividend of $15.0 million or $0.225 per common
share during the first quarter of 2009. On April 28, 2009, the board of
directors declared an increase in the cash dividend to $0.24 per common
share payable on or about May 29, 2009 to shareholders of record as of
May 15, 2009.
Net Interest Revenue
Net interest revenue totaled $169.8 million, down $6.6 million compared
to the fourth quarter of 2008 and up $22.7 million or 15% over the first
quarter of 2008. Net interest margin was 3.47% for the first quarter of
2009, 3.57% for the fourth quarter of 2008 and 3.31% for the first
quarter of 2008. As previously disclosed, the decrease in the net
interest margin from the fourth quarter of 2008 was primarily due to the
spread between LIBOR and the federal funds rate returning to a
historically normal level. LIBOR is the basis for interest earned on
many of our loans and the federal funds rate is the basis for interest
paid on many interest-bearing liabilities. This spread positively
impacted net interest margin in the fourth quarter of 2008 by 15 basis
points. Net interest margin excluding the narrowed LIBOR / federal funds
rate spread increased by 5 basis points over the fourth quarter of 2008.
Average earning assets for the first quarter of 2009 increased $477
million compared to the previous quarter, primarily due to a $447
million increase in average securities. Average outstanding loans
decreased $42 million due primarily to lower outstanding commercial loan
balances. Residential mortgage loans held for sale increased $80 million
due to refinancing activity.
"A special focus has been placed on growing deposits to enhance our
strong liquidity position," said Lybarger. "We have succeeded in growing
deposits while, at the same time, reducing deposit costs."
Average deposits increased $756 million compared with the fourth quarter
of 2008, including a $494 million increase in average interest-bearing
transaction accounts, a $152 million increase in average demand
deposits, and a $106 million increase in average time deposits. Average
funds purchased, repurchase agreements and other borrowed funds
decreased $361 million from the fourth quarter of 2008.
Fees and Commission Revenue
Fees and commissions revenue totaled $121.5 million for the first
quarter of 2009, $110.6 million for the fourth quarter of 2008 and
$113.9 million for the first quarter of 2008. The $10.9 million increase
in fees and commissions revenue from the previous quarter was primarily
due to an $11.3 million increase in mortgage banking revenue. Mortgage
loan originations increased $494 million due to government initiatives
to lower national mortgage interest rates. Decreases in trust revenue
and deposits fees were largely offset by growth in brokerage and trading
revenue.
Operating Expenses
Operating expenses totaled $165.8 million for the first quarter of 2009,
down $19.6 million from the preceding quarter. Excluding changes in the
fair value of mortgage servicing rights, operating expense increased
$8.7 million over the fourth quarter of 2008. Personnel expenses
increased $4.9 million over the fourth quarter of 2008 primarily due to
seasonal increases in payroll taxes and other employee benefit costs. In
addition, the Company experienced an increase of $2.4 million over the
previous quarter due to higher FDIC insurance premiums, $2.5 million
increase in mortgage banking expenses and $800 thousand increase in net
losses and operating expenses related to repossessed assets.
Credit Quality
Non-performing assets continued to increase during the first quarter of
2009. "We are continuing to work closely with borrowers adversely
affected by the recession and expect those efforts to remain a major
focus throughout the balance of the year," Lybarger said. "We have no
plans to liquidate non-performing assets at depressed prices and will
selectively retain assets to maximize value."
Non-performing assets totaled $414 million or 3.26% of outstanding loans
and repossessed assets at March 31, 2009, up $72 million since December
31, 2008. Non-performing assets included $11 million of restructured
residential mortgage loans guaranteed by agencies of the U.S. government
and $11 million of other loans guaranteed by cash escrow funds.
Non-accruing energy loans included $47 million that represents
approximately one-third of the pre-bankruptcy amount due from a single
borrower.
Non-accruing loans totaled $339 million or 2.68% of outstanding loans at
March 31, 2009, compared with $300 million or 2.33% of outstanding loans
at December 31, 2008. Growth in non-accruing loans was concentrated
primarily in the Arizona market. Approximately $112 million or 20% of
loans in the Arizona market were non-accruing at March 31, 2009, up from
$81 million or 14% at December 31, 2008. Non-accruing loans in Oklahoma
and Texas, the Company's largest markets, totaled $106 million or 1.82%
of outstanding loans and $55 million or 1.52% of outstanding loans,
respectively, at March 31, 2009.
Non-accruing commercial loans totaled $129 million or 1.81% of total
commercial loans at March 31, 2009. Non-accruing commercial loans have
decreased $6.3 million since December 31, 2008. Energy loans totaled
$2.3 billion at March 31, 2009 and are the largest component of the
commercial loan portfolio. BOK Financial has always been an energy
lender and this continues to be an area of expertise. The energy sector
will be challenged if commodity pricing remains in its current range for
an extended period of time. The Company analyzes rigorous stress tests
over a range of commodity prices and takes proactive steps to mitigate
risk when appropriate.
Non-accruing commercial real estate loans totaled $175 million or 6.42%
of outstanding commercial real estate loans at March 31, 2009. Total
non-accruing commercial real estate loans increased $38 million since
December 31, 2008, including a $24 million increase in loans secured by
land, residential lots and residential construction properties and a $16
million increase in loans secured by commercial office buildings.
Non-accruing commercial real estate loans attributed to various markets
included $102 million in Arizona, $26 million in Oklahoma, $23 million
in Colorado and $10 million in New Mexico.
Non-accruing consumer loans primarily consist of permanent residential
mortgage loans which totaled $33 million or 1.80% of outstanding
residential mortgage loans at March 31, 2009, a $6.6 million increase
over December 31, 2008. The distribution of non-accruing residential
mortgage loans among various markets included $11 million in Oklahoma
and $11 million in Texas and $6 million in Arizona.
The combined reserve for credit losses totaled $262 million or 2.07% of
outstanding loans and 77% of non-accruing loans at March 31, 2009. The
allowance for loan losses was $251 million and the reserve for
off-balance sheet credit losses was $11 million. During the first
quarter of 2009, the Company recognized a $45.0 million provision for
credit losses. Net losses charged against the allowance for loan losses
totaled $31.9 million or 1.00% annualized of average outstanding loans.
At December 31, 2008, the combined allowance for loan losses and
off-balance sheet credit losses was $248 million or 1.93% of outstanding
loans and 83% of non-accruing loans. During the fourth quarter of 2008,
the Company recognized a $73.0 million provision for credit losses. Net
losses charged against the allowance for loan losses totaled $33.7
million or 1.05% annualized of average outstanding loans.
Real estate and other repossessed assets totaled $61 million at March
31, 2009, up $32 million from December 31, 2008. Real estate and other
repossessed assets included $34 million of 1-4 family residential
properties and residential land development properties, $11 million of
developed commercial real estate properties, $8 million of equipment, $6
million of undeveloped land and $2 million of automobiles. The
distribution of real estate owned and other repossessed assets among
various markets included $16 million in Arizona, $12 million in Texas,
$9 million in Kansas City, $8 million in New Mexico and $6 million in
Arkansas.
The Company also has off-balance sheet obligations related to certain
community development residential mortgage loans sold to U.S. government
agencies with recourse. These mortgage loans were underwritten to
standards approved by the agencies, including full documentation and
originated under programs available only for owner-occupied properties.
The outstanding principal balance of these loans totaled $379 million at
March 31, 2009. All of these loans are to borrowers in the Company's
primary market areas, including $266 million in Oklahoma, $41 million in
Arkansas, $21 million in New Mexico, $18 million in Kansas City and $17
million in Texas. At March 31, 2009, approximately 3.71% of these loans
are non-performing. A separate reserve for credit risk of $9.2 million
is available for losses on these loans.
Securities and Derivatives
The Company's securities portfolio totaled $7.7 billion at March 31,
2009, up $665 million since December 31, 2008. The increase in
securities portfolio included $589 million of net securities purchased
and a $69 million increase in the net fair value of available for sale
securities. The available for sale portfolio consisted primarily of
mortgage-backed securities, including $5.6 billion fully backed by U.S.
government agencies and $1.2 billion privately issued by publicly owned
financial institutions. The portfolio does not hold any securities
backed by sub-prime mortgage loans, collateralized debt obligations or
collateralized loan obligations. The Company holds no debt of corporate
issuers.
Net unrealized losses on the Company's portfolio of available for sale
debt securities totaled $262 million at March 31, 2009, a $69 million
improvement from December 31, 2008. The decrease in net unrealized
losses during the first quarter included a $52 million decrease in net
unrealized losses on U.S. government-issued mortgage-backed securities
and a $17 million decrease in net unrealized losses on privately-issued
mortgage-backed securities.
Approximately $437 million of the privately-issued mortgage-backed
securities were rated below investment grade by at least one
nationally-recognized rating agency. The aggregate unrealized losses on
securities rated below investment grade totaled $160 million at March
31, 2009. The Company completed an other-than-temporary impairment
analysis using criteria recently issued by the Financial Accounting
Standards Board. Based on this analysis, the Company determined that
mortgage-backed securities with unrealized losses of $46 million were
other-than-temporarily impaired. Further analysis determined that the
estimated credit loss to be recognized in earnings on these securities
was $7.0 million. The remaining impairment was recognized in equity.
The securities portfolio also included preferred stocks issued by six
financial institutions. The fair value of these preferred stocks
declined to $16 million at March 31, 2009 from $22 million at December
31, 2008. Although none of these institutions is in default, due to the
negative outlook for the financial services sector in 2009, one of these
issuers was downgraded to below investment grade by at least one
nationally recognized rating agency. Based on an assessment of current
and anticipated market conditions, the Company recognized an
other-than-temporary impairment of $8.0 million on these preferred
stocks in the first quarter of 2009. At March 31, the remaining carrying
value of these securities is $24 million.
Net gains on securities totaled $20.1 million for the first quarter of
2009, compared with a net gain of $20.2 million for the fourth quarter
of 2008 and of $9.9 million for the first quarter of 2008.
Quarter Ended
March 31 December 31 March 31
2009 2008 2008
Gain on available for sale securities $ 22,226 $ 5,067 $ 2,936
Gain (loss) on mortgage hedge securities (2,118 ) 15,089 191
Gain on Visa IPO securities - - 6,799
Net gains on securities $ 20,108 $ 20,156 $ 9,926
Gain (loss) on change in fair value of $ 1,955 $ (26,432 ) $ (1,762 )
mortgage servicing rights
The Company recognized $22.2 million of gains on the sale of $735
million of available for sale securities in the first quarter of 2009.
These securities were purchased at deep discounts near the beginning of
the recent market disruption. Securities sold were low coupon
mortgage-backed securities. These were replaced with higher coupon
securities that will have superior future yields.
The fair value of our mortgage servicing rights was $50 million at March
31, 2009. BOK Financial maintains a portfolio of mortgage-backed
securities as an economic hedge against changes in the fair value of our
servicing rights. The relationship between changes in the fair value of
these securities and mortgage servicing rights returned to a more
historically normal level during the first quarter of 2009.
The Company also has a portfolio of derivative contracts held for
customer risk management programs and internal interest rate risk
management programs. At March 31, 2009, the fair value of all asset
contracts totaled $551 million, net of cash margin held by the Company.
The largest net amount due from a single counterparty, a domestic
subsidiary of a major energy company, at March 31, 2009 was $187
million. This amount was fully offset by letters of credit issued by
independent financial institutions.
Balance Sheet Management
Outstanding loans at March 31, 2009 were $12.6 billion, a decrease of
$236 million from December 31, 2008. Commercial loans decreased $310
million from December 31, 2008. Outstanding balances were down across
most sectors of the commercial loan portfolio. Residential mortgage
loans increased $67 million from the prior quarter primarily due to
increased originations driven by lower interest rates. Commercial real
estate loans also increased over the prior quarter by $31 million.
Consumer loans decreased $24 million compared to the prior quarter due
to a $42 million decrease in indirect automobile loans. The Company
intentionally exited that business during the first quarter of 2009 in
favor of a customer-focused direct lending approach.
Total deposits increased $288 million during the first quarter and
totaled $15.3 billion at March 31, 2009. Consumer banking deposits
increased $353 million or 6% and wealth management deposits increased
$335 million or 12% during the first quarter. Commercial banking
deposits grew by $14 million. Deposit growth in our primary lines of
business was partially offset by decreases in brokered deposits and
other non-core deposit sources. The cost of our interest-bearing
deposits was 1.76% for the first quarter of 2009 and 2.29% for the
fourth quarter of 2008.
The Company and each of its subsidiary banks exceeded the regulatory
definition of well capitalized at March 31, 2009. The Company's Tier 1
and tangible common equity ratios were 9.76% and 6.84%, respectively, at
March 31, 2009. Tier 1 and tangible common equity ratios were 9.42% and
6.64%, respectively, at December 31, 2008. The increase in tangible
common equity ratio was primarily due to retained earnings and reduced
unrealized losses on securities. In addition, the Company's total
capital ratio was 13.20% at March 31, 2009 and 12.84% at December 31,
2008.
BOK Financial chose not to participate in the TARP Capital Purchase
Program. Participation in the TARP Capital Purchase Program places
restrictions on dividend increases and is now forcing companies that
participated to reduce or eliminate dividends in an effort to conserve
capital to repay the government. Since 2008, 186 publicly traded banks
and thrifts have cut their dividends. In contrast, on April 28, 2009,
BOK Financial's board of directors declared an increase in the quarterly
cash dividend to $0.24 per common share from $0.225 per common share.
About BOK Financial Corporation
BOK Financial is a regional financial services company that provides
commercial and consumer banking, investment and trust services, mortgage
origination and servicing, and an electronic funds transfer network.
Holdings include Bank of Albuquerque, N.A., Bank of Arizona, N.A., Bank
of Arkansas, N.A., Bank of Oklahoma, N.A., Bank of Texas, N.A., Colorado
State Bank & Trust, N.A., Bank of Kansas City, N.A., BOSC, Inc., Cavanal
Hill Investment Management, Inc., the TransFund electronic funds
network, and Southwest Trust Company, N.A. Shares of BOK Financial are
traded on the NASDAQ under the symbol BOKF. For more information, visit www.bokf.com.
The Company will continue to evaluate critical assumptions and
estimates, such as the adequacy of the allowance for credit losses and
asset impairment as of March 31, 2009 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, the financial services industry and the
economy generally. Words such as "anticipates," "believes," "estimates,"
"expects," "forecasts," "plans," "projects," 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 involve judgments as to future
events and are inherently forward-looking statements. Assessments that
BOK Financial's acquisitions and other 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 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 (1) the ability to fully realize
expected cost savings from mergers within the expected time frames, (2)
the ability of other companies on which BOK Financial relies to provide
goods and services in a timely and accurate manner, (3) changes in
interest rates and interest rate relationships, (4) demand for products
and services, (5) the degree of competition by traditional and
nontraditional competitors, (6) changes in banking regulations, tax
laws, prices, levies and assessments, (7) the impact of technological
advances and (8) trends in consumer behavior as well as their ability to
repay loans. BOK Financial 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
BOK FINANCIAL CORPORATION
(In thousands)
Period Ended
March 31, December 31, March 31,
2009 2008 2008
(Unaudited) (Unaudited)
ASSETS
Cash and due from $ 686,976 $ 581,133 $ 642,224
banks
Trading 128,179 99,601 93,081
securities
Funds sold and resell 27,197 113,809 23,291
agreements
Securities:
Available for 6,991,803 6,391,451 5,652,220
sale
Investment 251,848 242,344 256,255
Mortgage trading 454,493 399,211 182,533
securities
Total 7,698,144 7,033,006 6,091,008
securities
Residential mortgage 245,791 129,246 91,905
loans held for sale
Loans:
Commercial 7,101,530 7,411,603 6,956,858
Commercial 2,732,081 2,701,248 2,831,924
real estate
Residential 1,819,950 1,752,574 1,529,769
mortgage
Consumer 986,355 1,010,581 977,204
Total loans 12,639,916 12,876,006 12,295,755
Less reserve for loan (251,002 ) (233,236 ) (136,584 )
losses
Loans, net of 12,388,914 12,642,770 12,159,171
reserve
Premises and 281,300 277,458 261,814
equipment, net
Accrued revenue 104,205 96,673 128,224
receivable
Intangible 359,523 361,209 366,051
assets, net
Mortgage servicing 50,246 42,752 69,794
rights, net
Real estate and other 61,383 29,179 15,112
repossessed assets
Bankers' 9,316 12,913 12,590
acceptances
Derivative 551,316 452,604 716,173
contracts
Cash surrender value of 239,348 237,006 228,786
bank-owned life insurance
Receivable on
unsettled securities - 239,474 -
trades
Other assets 501,604 385,815 226,727
TOTAL ASSETS $ 23,333,442 $ 22,734,648 $ 21,125,951
LIABILITIES AND EQUITY
Deposits:
Demand $ 3,050,896 $ 3,082,379 $ 2,747,014
Interest-bearing 6,627,222 6,562,350 6,438,665
transaction
Savings 168,644 154,635 160,621
Time 5,423,659 5,183,243 3,983,160
Total 15,270,421 14,982,607 13,329,460
deposits
Funds purchased and 2,217,081 3,025,399 2,910,237
repurchase agreements
Other 2,276,430 1,522,054 1,802,388
borrowings
Subordinated 398,443 398,407 398,306
debentures
Accrued interest, 146,111 133,220 133,939
taxes, and expense
Bankers' 9,316 12,913 12,590
acceptances
Due on unsettled 311,133 - 16,824
securities trades
Derivative 640,275 667,034 378,243
contracts
Other 118,181 132,902 132,015
liabilities
TOTAL 21,387,391 20,874,536 19,114,002
LIABILITIES
Shareholders'
equity:
Capital, surplus and retained 2,111,823 2,069,143 2,018,246
earnings
Accumulated other (180,523 ) (222,886 ) (25,676 )
comprehensive loss
TOTAL SHAREHOLDERS' 1,931,300 1,846,257 1,992,570
EQUITY
Non-controlling 14,751 13,855 19,379
interest
TOTAL EQUITY 1,946,051 1,860,112 2,011,949
TOTAL LIABILITIES AND $ 23,333,442 $ 22,734,648 $ 21,125,951
EQUITY
AVERAGE BALANCE SHEETS - UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
Quarter Ended
March 31, December 31, September 30, June 30, March 31,
2009 2008 2008 2008 2008
ASSETS
Trading $ 111,962 $ 78,840 $ 66,419 $ 74,058 $ 74,957
securities
Funds sold and
resell 50,701 48,246 79,862 72,444 80,735
agreements
Securities:
Available 6,645,086 6,409,906 5,945,220 5,880,844 5,438,655
for sale
Investment 238,562 242,503 239,655 249,723 248,974
Mortgage trading 453,304 237,319 126,837 155,612 201,199
securities
Total 7,336,952 6,889,728 6,311,712 6,286,179 5,888,828
securities
Residential
mortgage loans 201,135 121,184 116,533 105,925 84,291
held for sale
Loans:
Commercial 7,182,481 7,452,799 7,228,814 6,976,292 6,841,006
Commercial 2,762,789 2,716,465 2,696,503 2,802,292 2,784,640
real estate
Residential 1,841,006 1,641,023 1,655,710 1,606,518 1,510,238
mortgage
Consumer 998,489 1,016,409 1,015,796 1,035,985 961,104
Total loans 12,784,765 12,826,696 12,596,823 12,421,087 12,096,988
Less allowance (252,734 ) (209,319 ) (182,844 ) (145,524 ) (131,709 )
for loan losses
Total loans, 12,532,031 12,617,377 12,413,979 12,275,563 11,965,279
net
Total
earning 20,232,781 19,755,374 18,988,504 18,814,168 18,094,090
assets
Cash and due 661,433 534,039 499,992 524,922 543,232
from banks
Cash surrender
value of 237,805 235,195 232,465 229,731 230,283
bank-owned life
insurance
Derivative 476,091 352,083 900,777 896,569 513,696
contracts
Other assets 1,335,259 1,394,960 1,199,425 1,142,910 1,115,752
TOTAL ASSETS $ 22,943,369 $ 22,271,651 $ 21,821,163 $ 21,608,300 $ 20,497,053
LIABILITIES AND
EQUITY
Deposits:
Demand $ 2,864,751 $ 2,712,384 $ 2,739,209 $ 2,634,038 $ 2,443,201
Interest-bearing 6,610,805 6,116,465 6,565,935 6,420,291 6,267,021
transaction
Savings 159,537 155,784 159,856 159,798 156,953
Time 5,215,091 5,109,303 4,792,366 4,076,167 4,225,141
Total 14,850,184 14,093,936 14,257,366 13,290,294 13,092,316
deposits
Funds purchased
and repurchase 2,562,066 3,095,054 3,061,186 3,126,110 3,061,783
agreements
Other 2,158,963 1,986,857 1,390,233 2,267,076 1,340,846
borrowings
Subordinated 398,425 398,392 398,361 398,336 398,241
debentures
Derivative 641,974 494,778 509,057 239,211 297,660
contracts
Other 416,242 293,752 258,775 282,656 301,994
liabilities
TOTAL 21,027,854 20,362,769 19,874,978 19,603,683 18,492,840
LIABILITIES
Total equity 1,915,515 1,908,882 1,946,185 2,004,617 2,004,213
TOTAL
LIABILITIES AND $ 22,943,369 $ 22,271,651 $ 21,821,163 $ 21,608,300 $ 20,497,053
EQUITY
STATEMENTS OF EARNINGS - UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands, except per share data)
Quarter Ended
March 31,
2009 2008
Interest revenue $ 233,227 $ 276,041
Interest expense 63,382 128,913
Net interest 169,845 147,128
revenue
Provision for credit losses 45,040 17,571
Net interest revenue after provision for credit 124,805 129,557
losses
Other operating
revenue
Brokerage and trading revenue 24,699 23,913
Transaction card revenue 25,428 23,558
Trust fees and commissions 16,510 20,796
Deposit service charges and 27,405 27,686
fees
Mortgage banking revenue 18,498 8,034
Bank-owned life insurance 2,317 2,512
Margin asset fees 67 1,967
Other revenue 6,583 5,391
Total fees and commissions 121,507 113,857
Gain (loss) on other assets 143 4
Gain (loss) on derivatives, (1,664 ) 2,113
net
Gain (loss) on securities, 20,108 9,926
net
Total other-than-temporary impairment losses (54,368 ) (5,306 )
Portion of loss recognized in other (39,366 ) -
comprehensive income
Net impairment losses recognized in earnings (15,002 ) (5,306 )
Total other operating revenue 125,092 120,594
Other operating expense
Personnel 92,627 88,106
Business promotion 4,428 4,639
Professional fees and 6,512 5,648
services
Net occupancy and equipment 16,258 15,061
Insurance 5,638 3,710
Data processing and 19,306 18,893
communications
Printing, postage and 4,571 4,419
supplies
Net (gains) losses and operating expenses of 1,806 378
repossessed assets
Amortization of intangible 1,686 1,925
assets
Mortgage banking costs 7,467 5,681
Change in fair value of mortgage servicing (1,955 ) 1,762
rights
Visa retrospective responsibility obligation - (2,767 )
Other expense 7,450 5,949
Total other operating expense 165,794 153,404
Net income before taxes 84,103 96,747
Federal and state income 28,838 34,450
taxes
Net income before non-controlling interest 55,265 62,297
Non-controlling interest income (expense), net (233 ) (32 )
Net income attributable to BOK Financial $ 55,032 $ 62,265
Corporation
Average shares outstanding:
Basic 67,315,986 67,202,128
Diluted 67,387,102 67,504,288
Net income per share:
Basic $ 0.81 $ 0.92
Diluted $ 0.81 $ 0.92
FINANCIAL HIGHLIGHTS - UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands, except ratio and share data)
Quarter Ended
March 31, December 31, September 30, June 30, March 31,
2009 2008 2008 2008 2008
Capital:
Period-end
shareholders' $ 1,931,300 $ 1,846,257 $ 1,940,503 $ 1,942,376 $ 1,992,570
equity
Risk-based
capital
ratios:
Tier 1 9.76 % 9.42 % 9.25 % 8.69 % 9.35 %
Total 13.20 % 12.84 % 12.55 % 11.69 % 12.44 %
capital
Leverage 7.85 % 7.89 % 7.94 % 7.83 % 8.23 %
ratio
Period-end
tangible 6.84 % 6.64 % 7.16 % 7.15 % 7.83 %
common equity
ratio
Common
stock:
Book value $ 28.57 $ 27.36 $ 28.78 $ 28.78 $ 29.57
per share
Market value
per share:
High $ 40.71 $ 54.42 $ 53.94 $ 60.74 $ 55.23
Low $ 22.95 $ 38.40 $ 38.61 $ 49.11 $ 46.82
Cash
dividends $ 15,027 $ 15,358 $ 15,170 $ 15,180 $ 13,484
paid
Dividend 27.31 % 43.33 % 26.76 % (1307.49 %) 21.66 %
payout ratio
Shares
outstanding, 67,589,045 67,473,086 67,433,837 67,488,388 67,383,318
net
Stock
buy-back
program:
Shares - - 75,000 - 91,114
repurchased
Amount $ - $ - $ 3,337,000 $ - $ 4,655,477
Average price $ - $ - $ 44.49 $ - $ 51.10
per share
Performance
ratios
(quarter
annualized):
Return on
average 0.97 % 0.63 % 1.03 % (0.02 %) 1.22 %
assets
Return on
average 11.65 % 7.39 % 11.59 % (0.23 %) 12.50 %
equity
Net interest 3.47 % 3.57 % 3.48 % 3.44 % 3.31 %
margin
Efficiency 57.10 % 54.94 % 54.19 % 70.52 % 57.60 %
ratio
Other data:
Gain (loss) on
economic hedge
of mortgage $ (2,118 ) $ 15,089 $ 1,186 $ (5,518 ) $ 191
servicing
rights
Trust assets $ 28,700,791 $ 30,454,512 $ 33,242,296 $ 34,433,874 $ 35,524,730
Mortgage
servicing $ 5,515,893 $ 5,256,159 $ 5,167,584 $ 5,075,285 $ 4,967,384
portfolio
Mortgage loan
fundings $ 708,561 $ 214,521 $ 258,171 $ 288,937 $ 256,617
during the
quarter
Mortgage loan
refinances to 73.51 % 34.84 % 25.14 % 36.76 % 51.19 %
total fundings
Tax
equivalent $ 2,105 $ 2,063 $ 1,927 $ 2,084 $ 2,154
adjustment
Unrealized
gain (loss) on
available for $ (261,856 ) $ (330,973 ) $ (158,652 ) $ (91,226 ) $ (28,375 )
sale
securities
QUARTERLY EARNINGS TRENDS - UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands, except ratio and per share data)
Quarter Ended
March 31, December 31, September 30, June 30, March 31,
2009 2008 2008 2008 2008
Interest $ 233,227 $ 262,160 $ 263,358 $ 260,086 $ 276,041
revenue
Interest 63,382 85,713 99,010 101,147 128,913
expense
Net
interest 169,845 176,447 164,348 158,939 147,128
revenue
Provision for 45,040 73,001 52,711 59,310 17,571
credit losses
Net interest
revenue after 124,805 103,446 111,637 99,629 129,557
provision for
credit losses
Other
operating
revenue
Brokerage and
trading 24,699 23,507 30,846 (35,462 ) 23,913
revenue
Transaction 25,428 25,177 25,632 25,786 23,558
card revenue
Trust fees and 16,510 17,143 20,100 20,940 20,796
commissions
Deposit
service 27,405 29,239 30,404 30,199 27,686
charges and
fees
Mortgage
banking 18,498 7,217 7,145 8,203 8,034
revenue
Bank-owned 2,317 2,682 2,829 2,658 2,512
life insurance
Margin
asset 67 187 1,934 4,460 1,967
fees
Other 6,583 5,778 7,768 6,965 5,391
revenue
Total fees and 121,507 110,930 126,658 63,749 113,857
commissions
Gain (loss) on 143 (7,420 ) (841 ) (1,149 ) 4
other assets
Gain (loss) on
derivatives, (1,664 ) (2,219 ) 4,366 (2,961 ) 2,113
net
Gain (loss) on
securities, 20,108 20,156 2,103 (5,242 ) 9,926
net
Total
other-than-temporar(54,368 ) - - - (5,306 )
impairment
losses
Portion of loss
recognized in
other (39,366 ) - - - -
comprehensive
income
Net impairment
losses (15,002 ) - - - (5,306 )
recognized in
earnings
Total other
operating 125,092 121,447 132,286 54,397 120,594
revenue
Other
operating
expense
Personnel 92,627 87,695 87,549 89,597 88,106
Business 4,428 7,283 5,837 5,777 4,639
promotion
Professional
fees and 6,512 7,923 6,501 6,973 5,648
services
Net occupancy 16,258 14,901 15,570 15,100 15,061
and equipment
Insurance 5,638 3,216 2,436 2,626 3,710
Data
processing and 19,306 19,720 19,911 19,523 18,893
communications
Printing,
postage and 4,571 3,823 4,035 4,156 4,419
supplies
Net (gains)
losses and
operating 1,806 1,006 (136 ) (229 ) 378
expenses of
repossessed
assets
Amortization
of intangible 1,686 1,967 1,884 1,885 1,925
assets
Mortgage 7,467 4,967 5,811 6,054 5,681
banking costs
Change in fair
value of
mortgage (1,955 ) 26,432 5,554 767 1,762
servicing
rights
Visa
retrospective - (1,700 ) 1,700 - (2,767 )
responsibility
obligation
Other 7,450 8,209 7,638 7,039 5,949
expense
Total other
operating 165,794 185,442 164,290 159,268 153,404
expense
Net income 84,103 39,451 79,633 (5,242 ) 96,747
before taxes
Federal and
state income 28,838 10,363 22,958 (2,862 ) 34,450
taxes
Net income
before 55,265 29,088 56,675 (2,380 ) 62,297
non-controlling
interest
Non-controlling
interest income (233 ) 6,355 10 1,219 (32 )
(expense), net
Net income
attributable to $ 55,032 $ 35,443 $ 56,685 $ (1,161 ) $ 62,265
BOK Financial
Corporation
Average shares
outstanding:
Basic 67,315,986 67,294,069 67,263,317 67,452,181 67,202,128
Diluted 67,387,102 67,456,267 67,432,444 67,452,181 67,504,288
Net income
(loss) per
share:
Basic $ 0.81 $ 0.53 $ 0.84 $ (0.02 ) $ 0.92
Diluted $ 0.81 $ 0.52 $ 0.84 $ (0.02 ) $ 0.92
LOANS BY PRINCIPAL MARKET AREA - UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
Quarter Ended
March 31, December 31, September June 30, March 31,
30,
2009 2008 2008 2008 2008
Oklahoma:
Commercial $ 3,119,362 $ 3,356,520 $ 3,368,823 $ 3,228,179 $ 3,248,424
Commercial 881,620 843,576 827,357 875,546 940,686
real estate
Residential 1,234,417 1,196,924 1,134,066 1,099,277 1,080,882
mortgage
Consumer 562,021 579,809 580,211 601,184 586,695
Total 5,797,420 5,976,829 5,910,457 5,804,186 5,856,687
Oklahoma
Texas:
Commercial 2,277,186 2,353,860 2,205,169 2,166,925 2,124,192
Commercial 816,830 825,769 853,653 889,364 838,781
real estate
Residential 337,044 315,438 307,655 299,996 262,305
mortgage
Consumer 214,134 212,820 214,133 204,081 168,949
Total Texas 3,645,194 3,707,887 3,580,610 3,560,366 3,394,227
New Mexico:
Commercial 393,180 418,732 442,644 451,225 472,543
Commercial 315,511 286,574 281,061 271,177 258,731
real estate
Residential 99,805 98,018 95,165 89,469 85,834
mortgage
Consumer 19,900 18,616 18,296 16,977 14,977
Total New 828,396 821,940 837,166 828,848 832,085
Mexico
Arkansas:
Commercial 99,955 103,446 104,630 96,775 100,489
Commercial 133,227 134,015 127,925 124,049 130,956
real estate
Residential 17,145 16,875 16,941 19,527 16,621
mortgage
Consumer 168,971 175,647 183,543 197,979 180,551
Total 419,298 429,983 433,039 438,330 428,617
Arkansas
Colorado:
Commercial 675,223 660,546 598,519 489,844 486,525
Commercial 267,035 261,820 266,739 276,062 261,099
real estate
Residential 59,120 53,875 49,676 38,517 31,011
mortgage
Consumer 14,599 16,141 18,328 16,367 17,552
Total 1,015,977 992,382 933,262 820,790 796,187
Colorado
Arizona:
Commercial 211,953 211,356 213,861 207,173 174,360
Commercial 285,841 319,525 326,615 351,058 361,567
real estate
Residential 61,605 62,123 58,800 53,321 50,719
mortgage
Consumer 5,261 6,075 5,551 5,315 6,815
Total 564,660 599,079 604,827 616,867 593,461
Arizona
Kansas:
Commercial 324,671 307,143 340,156 398,452 350,325
Commercial 32,017 29,969 30,642 40,241 40,104
real estate
Residential 10,814 9,321 7,650 7,490 2,397
mortgage
Consumer 1,469 1,473 2,161 2,468 1,665
Total 368,971 347,906 380,609 448,651 394,491
Kansas
TOTAL BOK $ 12,639,916 $ 12,876,006 $ 12,679,970 $ 12,518,038 $ 12,295,755
FINANCIAL
DEPOSITS BY PRINCIPAL MARKET AREA - UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
Quarter Ended
March 31, December 31, September June 30, March 31,
30,
2009 2008 2008 2008 2008
Oklahoma:
Demand $ 1,651,111 $ 1,683,374 $ 1,681,325 $ 1,455,997 $ 1,464,258
Interest-bearing:
Transaction 4,089,838 4,117,729 4,151,430 3,997,136 3,659,002
Savings 95,827 86,476 86,900 90,100 88,141
Time 2,876,313 3,104,933 3,036,297 2,672,401 2,230,110
Total 7,061,978 7,309,138 7,274,627 6,759,637 5,977,253
interest-bearing
Total Oklahoma 8,713,089 8,992,512 8,955,952 8,215,634 7,441,511
Texas:
Demand 1,021,424 1,067,456 956,846 1,046,651 940,141
Interest-bearing:
Transaction 1,527,399 1,460,576 1,543,974 1,713,131 1,708,424
Savings 33,867 32,071 32,400 33,207 32,191
Time 1,054,632 857,416 794,911 723,146 759,892
Total 2,615,898 2,350,063 2,371,285 2,469,484 2,500,507
interest-bearing
Total Texas 3,637,322 3,417,519 3,328,131 3,516,135 3,440,648
New Mexico:
Demand 180,308 155,345 176,477 168,621 169,449
Interest-bearing:
Transaction 401,000 397,382 376,941 417,607 425,976
Savings 17,858 16,289 16,316 16,432 16,141
Time 561,300 522,894 475,560 445,505 455,861
Total 980,158 936,565 868,817 879,544 897,978
interest-bearing
Total New Mexico 1,160,466 1,091,910 1,045,294 1,048,165 1,067,427
Arkansas:
Demand 16,503 16,293 23,565 21,142 20,493
Interest-bearing:
Transaction 63,924 38,566 19,146 24,524 22,091
Savings 1,100 1,083 865 895 945
Time 150,015 75,579 47,684 39,305 39,803
Total 215,039 115,228 67,695 64,724 62,839
interest-bearing
Total Arkansas 231,542 131,521 91,260 85,866 83,332
Colorado:
Demand 111,048 116,637 115,677 109,697 99,584
Interest-bearing:
Transaction 466,276 480,113 440,888 507,260 529,771
Savings 18,905 17,660 19,300 20,245 22,233
Time 584,971 532,475 428,872 423,014 455,262
Total 1,070,152 1,030,248 889,060 950,519 1,007,266
interest-bearing
Total Colorado 1,181,200 1,146,885 1,004,737 1,060,216 1,106,850
Arizona:
Demand 54,362 39,424 45,725 49,895 46,508
Interest-bearing:
Transaction 66,809 56,985 64,463 73,034 84,648
Savings 970 1,014 1,033 1,233 878
Time 54,923 34,290 14,433 6,364 8,395
Total 122,702 92,289 79,929 80,631 93,921
interest-bearing
Total Arizona 177,064 131,713 125,654 130,526 140,429
Kansas /
Missouri:
Demand 16,140 3,850 5,548 7,157 6,580
Interest-bearing:
Transaction 11,976 10,999 9,780 10,342 8,754
Savings 117 42 33 26 92
Time 141,505 55,656 19,794 51,649 33,837
Total 153,598 66,697 29,607 62,017 42,683
interest-bearing
Total Kansas / 169,738 70,547 35,155 69,174 49,263
Missouri
TOTAL BOK $ 15,270,421 $ 14,982,607 $ 14,586,183 $ 14,125,716 $ 13,329,460
FINANCIAL
NET INTEREST MARGIN TREND - UNAUDITED
BOK FINANCIAL CORPORATION
Quarter Ended
March 31, December September June 30, March 31,
31, 30,
2009 2008 2008 2008 2008
TAX-EQUIVALENT
ASSETS YIELDS
Trading 3.69 % 6.55 % 5.61 % 6.88 % 7.69 %
securities
Funds sold and 0.24 % 0.76 % 1.44 % 1.97 % 4.18 %
resell agreements
Securities:
Taxable 4.90 % 5.12 % 5.09 % 5.08 % 5.11 %
Tax-exempt 6.64 % 6.43 % 6.64 % 6.46 % 6.38 %
Total securities 4.96 % 5.17 % 5.15 % 5.14 % 5.17 %
Total loans 4.56 % 5.27 % 5.69 % 5.79 % 6.59 %
Less Allowance for - - - - -
loan losses
Total loans, net 4.65 % 5.35 % 5.77 % 5.86 % 6.66 %
Total tax-equivalent 4.75 % 5.28 % 5.55 % 5.61 % 6.17 %
yield on earning assets
COST OF
INTEREST-BEARING
LIABILITIES
Interest-bearing
deposits:
Interest-bearing 0.95 % 1.51 % 1.72 % 1.74 % 2.71 %
transaction
Savings 0.28 % 0.37 % 0.37 % 0.37 % 0.61 %
Time 2.83 % 3.28 % 3.39 % 3.77 % 4.35 %
Total
interest-bearing 1.76 % 2.29 % 2.39 % 2.50 % 3.33 %
deposits
Funds purchased and 0.45 % 0.94 % 1.98 % 1.95 % 3.11 %
repurchase agreements
Other borrowings 0.58 % 1.51 % 2.56 % 2.49 % 3.51 %
Subordinated 5.67 % 5.48 % 5.55 % 5.88 % 5.45 %
debt
Total cost of
interest-bearing 1.50 % 2.02 % 2.41 % 2.47 % 3.36 %
liabilities
Tax-equivalent net 3.25 % 3.26 % 3.14 % 3.14 % 2.81 %
interest revenue spread
Effect of
noninterest-bearing 0.22 % 0.31 % 0.34 % 0.30 % 0.50 %
funding sources and
other
Tax-equivalent net 3.47 % 3.57 % 3.48 % 3.44 % 3.31 %
interest margin
CREDIT QUALITY INDICATORS
BOK FINANCIAL CORPORATION
(In thousands, except ratios)
Quarter Ended
March 31, December September June 30, March 31,
31, 30,
2009 2008 2008 2008 2008
Nonperforming
assets:
Nonaccruing
loans(B):
Commercial $ 128,501 $ 134,846 $ 105,757 $ 69,679 $ 41,966
Commercial 175,487 137,279 78,235 60,456 40,399
real estate
Residential 34,182 27,387 27,075 17,861 15,960
mortgage
Consumer 1,065 561 758 611 812
Total
nonaccruing $ 339,235 $ 300,073 $ 211,825 $ 148,607 $ 99,137
loans
Renegotiated 13,623 13,039 12,326 11,840 11,850
loans(A)
Real estate
and other 61,383 29,179 28,088 21,025 15,112
repossessed
assets
Total
nonperforming $ 414,241 $ 342,291 $ 252,239 $ 181,472 $ 126,099
assets
Nonaccruing
loans by
principal
market(B):
Oklahoma $ 105,536 $ 108,367 $ 87,885 $ 57,155 $ 52,211
Texas 55,225 42,934 29,141 20,860 8,157
New Mexico 18,046 16,016 12,293 9,838 7,497
Arkansas 4,078 3,263 3,386 2,924 2,866
Colorado 38,567 32,415 20,980 23,812 8,101
Arizona 111,772 80,994 54,832 33,482 18,811
Kansas 6,011 16,084 3,308 536 1,494
Total
nonaccruing $ 339,235 $ 300,073 $ 211,825 $ 148,607 $ 99,137
loans
- - - - -
Nonaccruing
loans by loan
portfolio
sector(B):
Commercial:
Energy $ 49,618 $ 49,364 $ 49,839 $ 12,342 $ 475
Manufacturing 18,248 7,343 6,479 6,731 9,274
Wholesale / 8,650 18,773 7,806 3,735 3,868
retail
Agriculture 115 680 755 811 1,848
Services 30,226 36,873 26,581 30,080 23,849
Healthcare 14,288 12,118 3,300 3,791 2,079
Other 7,356 9,695 10,997 12,189 573
Total 128,501 134,846 105,757 69,679 41,966
commercial
Commercial
real estate:
Land
development 99,922 76,082 53,624 45,291 29,439
and
construction
Retail 9,893 15,625 13,011 7,591 5,258
Office 23,305 7,637 3,022 3,304 1,985
Multifamily 27,198 24,950 896 896 1,906
Industrial 575 6,287 390 396 -
Other
commercial 14,594 6,698 7,292 2,978 1,811
real estate
Total
commercial 175,487 137,279 78,235 60,456 40,399
real estate
Residential
mortgage:
Permanent 32,848 26,233 26,401 17,039 15,135
mortgage
Home equity 1,334 1,154 674 822 825
Total
residential 34,182 27,387 27,075 17,861 15,960
mortgage
Consumer 1,065 561 758 611 812
Total
nonaccruing $ 339,235 $ 300,073 $ 211,825 $ 148,607 $ 99,137
loans
- - - - -
Performing
loans 90 days $ 46,123 (C) $ 19,123 $ 20,213 $ 10,683 $ 11,266
past due
Gross $ 34,535 $ 35,681 $ 33,926 $ 41,526 $ 11,078
charge-offs
Recoveries 2,664 2,022 13,712 2,535 2,221
Net $ 31,871 $ 33,659 $ 20,214 $ 38,991 $ 8,857
charge-offs
Provision for $ 45,040 $ 73,001 $ 52,711 $ 59,310 $ 17,571
credit losses
Reserve for
loan losses to 1.99 % 1.81 % 1.47 % 1.23 % 1.11 %
period end
loans
Combined
reserves for
credit losses 2.07 % 1.93 % 1.65 % 1.41 % 1.27 %
to period end
loans
Nonperforming
assets to
period end 3.26 % 2.65 % 1.98 % 1.45 % 1.02 %
loans and
repossessed
assets
Net charge-offs
(annualized) to 1.00 % 1.05 % 0.64 % 1.26 % 0.29 %
average loans
Reserve for
loan losses to 73.99 % 77.73 % 88.05 % 103.64 % 137.77 %
nonaccruing
loans
Combined
reserves for
credit losses 77.11 % 82.78 % 98.69 % 118.81 % 157.60 %
to nonaccruing
loans
(A) includes
residential
mortgage loans
guaranteed by
agencies of the
U.S.
government.
These loans $ 10,514 $ 10,396 $ 9,604 $ 8,638 $ 8,386
have been
modified to
extend payment
terms and/or
reduce interest
rates to
current market.
(B) includes
loans subject
to First United $ 11,287 $ 13,181 $ 13,262 $ 11,973 $ 8,101
Bank sellers
escrow
(C) includes a
$23 million
loan that was
paid current
after March 31,
2009.
Source: BOK Financial Corporation
Contact: BOK Financial Corporation
Steven Nell
Chief Financial Officer
918-588-6000
or
Jesse Boudiette
Corporate Communications Manager
918-588-6532