BOK Financial: Quarterly Earnings of $75 Million

BOKFinancialToday BOK Financial Corp. reported net income of $74.9 million or $1.09 per diluted share for the third quarter of 2015.

Net income was $79.2 million or $1.15 per diluted share for the second quarter of 2015 and $75.6 million or $1.09 per diluted share for the third quarter of 2014.

Steven G. Bradshaw, president and chief executive officer, stated, “BOK Financial posted solid earnings in the third quarter despite lower revenue from certain fee-generating businesses. Annualized loan growth was in the mid-single digits as expected, credit quality across our loan portfolio remained strong, and we continue to carefully manage expenses. We deployed $109 million of excess capital through dividends and share buybacks while we work to identify quality acquisition targets. To that end, our board of directors has authorized a 2.4 percent increase in our quarterly dividend and a new 5 million share buyback authorization. During the third quarter, we repurchased 1.25 million shares in the open market at a weighted average price of $63.79.”

Highlights of third quarter of 2015 included:

  • Net interest revenue totaled $178.6 million for the third quarter of 2015, up $2.9 million over the second quarter of 2015. Net interest margin was 2.61 percent for the third quarter of 2015, unchanged compared to the second quarter of 2015. Average earning assets increased $203 million during the third quarter of 2015, primarily related to a $287 million increase in average loan balances.
  • ArenaRains4Fees and commissions revenue totaled $164.7 million for the third quarter of 2015, a decrease of $7.9 million compared to the prior quarter. Brokerage and trading revenue decreased $4.4 million and mortgage banking revenue decreased $3.7 million.
  • Changes in the fair value of mortgage servicing rights, net of economic hedges, decreased pre-tax net income by $4.4 million in the third quarter of 2015 and $1.1 million in the second quarter of 2015.
  • Operating expense was $224.6 million for the third quarter, a decrease of $2.5 million compared to the previous quarter, primarily due to lower incentive compensation expense.
  • A $7.5 million provision for credit losses was recorded in the third quarter of 2015 compared to a $4.0 million provision in the second quarter of 2015. The additional provision was primarily due to credit migration and loan portfolio growth during the third quarter. Net loans charged off totaled $1.8 million in the third quarter of 2015, compared to $671 thousand in the previous quarter.
  • The combined allowance for credit losses totaled $208 million or 1.35 percent of outstanding loans at September 30, 2015 compared to $202 million or 1.34 percent of outstanding loans at June 30, 2015. The portion of the combined allowance attributed to the energy portfolio totaled 2.05 percent of outstanding energy loans at September 30, an increase from 1.74 percent of outstanding energy loans at June 30.
  • Nonperforming assets that are not guaranteed by U.S. government agencies totaled $119 million or 0.78 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at September 30, 2015 and $123 million or 0.82 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at June 30, 2015.
  • Average loans increased by $287 million over the previous quarter, primarily due to growth in commercial real estate loans. Commercial and personal loans also grew over the previous quarter. Period-end outstanding loan balances also increased $243 million to $15.4 billion at September 30, 2015.
  • Average deposits decreased $401 million compared to the previous quarter, primarily due to a decrease in interest-bearing transaction accounts and time deposits. Period-end deposits were $20.6 billion at September 30, 2015, a decrease of $440 million from June 30, 2015.
  • New regulatory capital rules were effective for BOK Financial on January 1, 2015 and components of these rules will phase in through January 1, 2019. The new capital rules establish a 7 percent threshold for the common equity Tier 1 capital ratio. The common equity Tier 1 capital ratio at September 30 was 12.78 percent. Other ratios measured under the new regulatory capital rules were Tier 1 capital ratio, 12.78 percent, total capital ratio, 13.89 percent and leverage ratio, 9.55 percent. At June 30, 2015, the common equity Tier 1 capital ratio was 13.01 percent, the Tier 1 capital ratio was 13.01 percent, total capital ratio was 14.11 percent, and leverage ratio was 9.75 percent.
  • The company paid a regular quarterly cash dividend of $29 million or $0.42 per common share during the third quarter of 2015. On October 27, 2015, the board of directors approved an increase in the quarterly cash dividend to $0.43 per common share payable on or about November 27, 2015 to shareholders of record as of November 13, 2015.
  • ArenaRains5The company repurchased 1,258,348 common shares at an average price of $63.79 per share during the third quarter of 2015, completing the existing board approval for share repurchases. No shares were repurchased during the second quarter of 2015. On October 27, 2015, the board of directors authorized the Company to purchase up to five million additional common shares, subject to market conditions, securities law and other regulatory compliance limitations.

Net Interest Revenue

Net interest revenue was $178.6 million for the third quarter of 2015, up $2.9 million over the second quarter of 2015.

Net interest margin was 2.61 percent for the third quarter of 2015, unchanged compared to the second quarter of 2015. The yield on average earning assets was 2.83 percent, a decrease of 1 basis point compared to the prior quarter. The loan portfolio yield decreased 11 basis points compared to the previous quarter to 3.54 percent. The second quarter of 2015 included a 6 basis point benefit from $2.3 million of nonaccrual interest recoveries. Competitive loan pricing and low interest rates continue to impact loan yields. The yield on the available for sale securities portfolio increased 7 basis points to 2.01 percent. Funding costs were 0.32 percent, down 3 basis points compared to the prior quarter.

Average earning assets increased $203 million during the third quarter of 2015, primarily related to a $287 million increase in average loan portfolio balances. Trading securities, interest-bearing cash and cash equivalents and restricted equity securities also increased over the prior quarter, partially offset by a decrease in the average balance of loans held for sale. The average balance of the available for sale securities portfolio decreased by $121 million during the quarter. Average deposit balances decreased $401 million compared to the second quarter of 2015. The average balance of borrowed funds increased $684 million. The average balance of subordinated debentures decreased $82 million related to the impact of $122 million of fixed rate subordinated debt that matured on June 1, 2015.

Fees and Commissions Revenue

Fees and commissions revenue totaled $164.7 million for the third quarter of 2015, a decrease of $7.9 million compared to the second quarter of 2015.

Brokerage and trading revenue totaled $31.6 million, a decrease of $4.4 million compared to the prior quarter. Investment banking revenue, including loan syndication and underwriting fees, decreased $2.5 million primarily due to the timing and volume of transactions completed. Customer hedging revenue decreased $2.4 million primarily due to programs provided to our mortgage banking customers. Securities trading revenue increased $303 thousand and retail brokerage fees were up $113 thousand.

TulsaBlueSkyLgMortgage banking revenue totaled $33.2 million for the third quarter of 2015, a decrease of $3.7 million compared to the second quarter of 2015. Revenue from mortgage loan production decreased $4.4 million. Increased average mortgage interest rates reduced mortgage production volume. Total mortgage loans originated during the third quarter decreased $214 million or 12 percent compared to the previous quarter and outstanding mortgage loan commitments at September 30 decreased $107 million or 13 percent from June 30. In addition, mortgage production revenue decreased due to a shift toward lower-margin correspondent lending.

Deposit service charges and fees grew by $1.3 million to $23.6 million for the third quarter, primarily due to increased overdraft fees. Fiduciary and asset management revenue decreased $1.9 million to $30.8 million for the third quarter, primarily due to the seasonal timing of tax service fees which were recognized in the previous quarter and a decrease in the fair value of assets under management.

Operating Expense

Total operating expense was $224.6 million for the third quarter of 2015, a decrease of $2.5 million compared to the second quarter of 2015.

Personnel costs decreased by $3.6 million compared to the second quarter of 2015. Incentive compensation expense decreased $2.7 million and payroll tax expense decreased $1.6 million. Regular compensation expense increased $1.1 million.

Non-personnel expense increased $1.1 million compared to the second quarter of 2015. Non-personnel expense included a $2.6 million charge to settle litigation and a $796 thousand contribution to the BOKF Foundation. Additionally, mortgage banking expense increased $1.2 million and business promotion expense decreased $1.8 million.

Loans, Deposits and Capital

Loans

Outstanding loans were $15.4 billion at September 30, 2015, an increase of $243 million over the previous quarter, primarily due to growth in commercial real estate balances. Personal loan balances grew over the prior quarter, partially offset by a decrease in residential mortgage loan balances.

Outstanding commercial loan balances were largely unchanged compared to June 30, 2015. Healthcare sector loans grew by $96 million, other commercial and industrial loans increased $60 million and service sector loans increased by $25 million over the prior quarter. Wholesale/retail sector loans decreased $72 million. Energy loan balances decreased $64 million compared to June 30, 2015. Unfunded energy loan commitments increased by $147 million during the third quarter to $2.7 billion. All other unfunded commercial loan commitments totaled $4.1 billion at September 30, 2015, a decrease of $80 million compared to June 30, 2015.

Commercial real estate loans grew by $202 million or 7 percent over June 30, 2015. Retail sector loan balances increased $81 million and loans secured by industrial facilities grew by $76 million. Loans secured by office buildings increased $63 million and multifamily residential loans increased $47 million. This growth was partially offset by a $71 million decrease in other commercial real estate balances. Unfunded commercial real estate loan commitments totaled $941 million at September 30, 2015, an increase of $129 million over June 30, 2015.

Norm Bagwell, executive vice president, regional banks, stated, “Loan growth in the third quarter was in line with our expectations, as economic conditions and deal flow remained solid across the footprint. Arizona and Texas continued their recent strong growth track record while our Kansas City market also posted double-digit annualized loan growth for the second consecutive quarter.”

Stacy Kymes, executive vice president, corporate banking, added, “Energy loans outstanding were lower in the third quarter, in line with our expectations; however, healthcare and commercial real estate grew at a double digit rate. Credit quality remains strong, as nonaccrual loans and nonperforming assets were both down on a sequential basis. Also as expected, we are seeing some continued credit migration in our energy book. However, we continue to believe that we are appropriately reserved for losses in the portfolio.”

Deposits

Deposits totaled $20.6 billion at September 30, 2015, a decrease of $440 million compared to June 30, 2015. Demand deposit balances decreased $115 million, interest-bearing transaction deposits decreased $201 million and time deposits decreased $126 million. Among the lines of business, Wealth Management deposits decreased $203 million and Commercial Banking deposits decreased $156 million compared to June 30. Consumer Banking deposits increased $38 million.

Capital

New regulatory capital rules were effective for BOK Financial on January 1, 2015 and established a 7 percent threshold for the common equity Tier 1 ratio. The Company’s common equity Tier 1 capital ratio was 12.78 percent at September 30, 2015. In addition, the Company’s Tier 1 capital ratio was 12.78 percent, total capital ratio was 13.89 percent and leverage ratio was 9.55 percent at September 30, 2015. At June 30, 2015, the Company’s common equity Tier 1 capital ratio was 13.01 percent, Tier 1 capital ratio was 13.01 percent, total capital ratio was 14.11 percent, and leverage ratio was 9.75 percent.

TulsaCapitalismIn addition, the Company’s tangible common equity ratio, a non-GAAP measure, was 9.78 percent at September 30, 2015 and 9.72 percent at June 30, 2015. 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 $204 million or 1.33 percent of outstanding loans and repossessed assets at September 30, 2015 compared to $209 million or 1.38 percent at June 30, 2015. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $119 million or 0.78 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at September 30, 2015 and $123 million or 0.82 percent at June 30, 2015, a decrease of $4.1 million.

Nonaccruing loans totaled $89 million or 0.58 percent of outstanding loans at September 30, 2015, compared to $91 million or 0.60 percent of outstanding loans at June 30, 2015. An $11 million increase in nonaccruing energy loans was largely offset by a $9.2 million decrease in nonaccruing commercial real estate loans. Overall, new nonaccruing loans identified in the third quarter totaled $23 million, offset by $12 million in payments received, $6.4 million in foreclosures and repossessions and $5.3 million in charge-offs. At September 30, 2015, nonaccruing commercial loans totaled $34 million or 0.34 percent of outstanding commercial loans, nonaccruing commercial real estate loans totaled $11 million or 0.34 percent of outstanding commercial real estate loans and nonaccruing residential mortgage loans totaled $44 million or 2.36 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, decreased to $120 million at September 30 from $181 million at June 30. The decrease largely resulted from $64 million of payments received during the third quarter. Potential problem energy loans decreased to $96 million from $124 million.

Net loans charged off totaled $1.8 million for the third quarter of 2015, compared to $671 thousand for the second quarter of 2015. Gross charge-offs totaled $5.3 million for the third quarter, compared to $2.9 million for the previous quarter. Recoveries totaled $3.5 million for the third quarter of 2015 and $2.2 million for the second quarter of 2015.

After evaluating all credit factors, the Company recorded a $7.5 million provision for credit losses during the third quarter of 2015, primarily due to credit migration in the energy portfolio and loan portfolio growth. The Company recorded a $4.0 million provision for credit losses in the previous quarter.

The combined allowance for credit losses totaled $208 million or 1.35 percent of outstanding loans and 232 percent of nonaccruing loans at September 30, 2015. The allowance for loan losses was $204 million and the accrual for off-balance sheet credit losses was $3.6 million. The portion of the combined allowance attributed to the energy portfolio totaled 2.05 percent of outstanding energy loans at September 30, an increase from 1.74 percent of outstanding energy loans at June 30.

Real estate and other repossessed assets totaled $33 million at September 30, 2015, primarily consisting of $16 million of one-to-four family residential properties and $11 million of developed commercial real estate properties.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $8.8 billion at September 30, 2015, a decrease of $199 million compared to June 30, 2015. At September 30, 2015, the available for sale portfolio consisted primarily of $5.8 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 September 30, 2015 the available for sale securities portfolio had a net unrealized gain of $145 million compared to a net unrealized gain of $89 million at June 30, 2015 primarily due to changes in interest rates during the quarter. Net unrealized gains on residential mortgage-backed securities issued by U.S. government agencies at September 30, 2015 increased $26 million during the third quarter to $105 million. Commercial mortgage-backed securities had a net unrealized gain of $27 million at September 30, 2015, compared to a net unrealized loss of $4.1 million at June 30, 2015.

In the third quarter of 2015, the Company recognized a $2.2 million net gain from the sale of $451 million of available for sale securities. Securities were sold either because they had reached their expected maximum potential return or to move into securities that will perform better in the current rate environment. The Company recognized $3.4 million of net gains from sales of $379 million of available for sale securities in the second quarter of 2015.

The Company also maintains a portfolio of residential mortgage-backed securities issued by U.S. government agencies and interest rate derivative contracts designated as an economic hedge of the changes in the fair value of our mortgage servicing rights. The fair value of mortgage servicing rights decreased by $11.8 million during the third quarter of 2015, primarily due to a decrease in the short-term escrow earnings rates and a decrease in the period-end 30 year mortgage interest rates at September 30 compared to June 30. The value of securities and interest rate derivative contracts held as an economic hedge increased by $7.4 million during the quarter. The fair value of mortgage servicing rights, net of economic hedges, decreased $1.1 million in the second quarter of 2015, primarily due to changes in interest rates partially offset by increased mortgage servicing costs.

Conference Call Webcast

The Company hosted a conference call Wednesday, October 28, 2015 to discuss the financial results with investors with live audio webcast and presentation slides available on the company’s website at www.bokf.com.

About BOK Financial Corporation

BOK Financial Corporation is a $31 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, BOSC, Inc. and The Milestone Group, Inc. BOKF, NA operates TransFund, Cavanal Hill Investment Management, MBM Advisors and seven banking divisions: Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, 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 September 30, 2015 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 — UNAUDITED BOK FINANCIAL CORPORATION (In thousands)
Sept. 30, 2015 June 30, 2015 Sept. 30, 2014
ASSETS
Cash and due from banks $ 489,268 $ 443,577 $ 557,658
Interest-bearing cash and cash equivalents 1,830,105 2,119,072 2,007,901
Trading securities 181,131 158,209 169,712
Investment securities 612,384 625,664 655,091
Available for sale securities 8,801,089 9,000,117 9,306,886
Fair value option securities 427,760 436,324 175,761
Restricted equity securities 263,587 231,520 189,587
Residential mortgage loans held for sale 357,414 502,571 373,253
Loans:
Commercial 9,797,422 9,775,721 8,572,038
Commercial real estate 3,235,067 3,033,497 2,724,199
Residential mortgage 1,868,995 1,884,728 1,979,663
Personal 465,957 430,190 407,839
Total loans 15,367,441 15,124,136 13,683,739
Allowance for loan losses (204,116 ) (201,087 ) (191,244 )
Loans, net of allowance 15,163,325 14,923,049 13,492,495
Premises and equipment, net 294,669 284,238 275,718
Receivables 151,451 149,629 114,374
Goodwill 385,461 385,454 377,780
Intangible assets, net 44,999 46,061 35,476
Mortgage servicing rights 200,049 198,694 173,286
Real estate and other repossessed assets, net 33,116 35,499 97,871
Derivative contracts, net 726,159 630,435 360,809
Cash surrender value of bank-owned life insurance 300,981 298,606 291,583
Receivable on unsettled securities sales 30,009 8,693 94,881
Other assets 273,948 248,151 354,898
TOTAL ASSETS $ 30,566,905 $ 30,725,563 $ 29,105,020
LIABILITIES AND EQUITY
Deposits:
Demand $ 8,041,767 $ 8,156,401 $ 8,038,129
Interest-bearing transaction 9,698,849 9,899,777 9,244,709
Savings 380,296 379,172 341,638
Time 2,498,531 2,624,379 2,664,580
Total deposits 20,619,443 21,059,729 20,289,056
Funds purchased 62,297 64,677 85,135
Repurchase agreements 555,677 712,033 1,026,009
Other borrowings 4,635,150 4,332,162 3,484,487
Subordinated debentures 226,314 226,278 347,936
Accrued interest, taxes and expense 158,048 124,568 100,664
Due on unsettled securities purchases 98,351 37,571 8,126
Derivative contracts, net 636,115 620,277 348,687
Other liabilities 159,348 135,435 137,608
TOTAL LIABILITIES 27,150,743 27,312,730 25,827,708
Shareholders’ equity:
Capital, surplus and retained earnings 3,291,450 3,323,840 3,219,798
Accumulated other comprehensive income 85,776 51,792 23,295
TOTAL SHAREHOLDERS’ EQUITY 3,377,226 3,375,632 3,243,093
Non-controlling interests 38,936 37,201 34,219
TOTAL EQUITY 3,416,162 3,412,833 3,277,312
TOTAL LIABILITIES AND EQUITY $ 30,566,905 $ 30,725,563 $ 29,105,020

 

AVERAGE BALANCE SHEETS — UNAUDITED BOK FINANCIAL CORPORATION (in thousands)
Three Months Ended
Sept. 30, 2015 June 30, 2015 March 31, 2015 Dec. 31, 2014 Sept. 30, 2014
ASSETS
Interest-bearing cash and cash equivalents $ 2,038,611 $ 2,002,456 $ 2,089,546 $ 2,090,176 $ 1,217,942
Trading securities 179,098 127,391 140,968 164,502 107,909
Investment securities 616,091 628,489 642,825 650,911 641,375
Available for sale securities 8,942,261 9,063,006 9,101,464 9,161,901 9,526,727
Fair value option securities 429,951 435,294 404,775 221,773 180,268
Restricted equity securities 255,610 221,911 179,385 182,737 142,418
Residential mortgage loans held for sale 401,359 464,269 348,054 321,746 310,924
Loans:
Commercial 9,685,768 9,634,306 9,308,307 8,886,952 8,468,575
Commercial real estate 3,198,200 2,989,615 2,909,565 2,665,547 2,691,318
Residential mortgage 1,847,696 1,857,464 1,909,998 1,904,777 1,955,769
Personal 460,647 423,967 426,712 424,729 402,916
Total loans 15,192,311 14,905,352 14,554,582 13,882,005 13,518,578
Allowance for loan losses (202,829 ) (198,400 ) (194,948 ) (190,787 ) (191,141 )
Total loans, net 14,989,482 14,706,952 14,359,634 13,691,218 13,327,437
Total earning assets 27,852,463 27,649,768 27,266,651 26,484,964 25,455,000
Cash and due from banks 487,283 492,737 513,734 528,595 493,200
Derivative contracts, net 669,264 475,687 447,565 352,565 288,682
Cash surrender value of bank-owned life insurance 299,424 297,022 294,803 292,411 290,044
Receivable on unsettled securities sales 64,591 94,374 99,706 69,109 63,277
Other assets 1,396,708 1,454,484 1,348,245 1,404,553 1,525,354
TOTAL ASSETS $ 30,769,733 $ 30,464,072 $ 29,970,704 $ 29,132,197 $ 28,115,557
LIABILITIES AND EQUITY
Deposits:
Demand $ 7,994,607 $ 7,996,717 $ 7,885,485 $ 7,974,165 $ 7,800,350
Interest-bearing transaction 9,760,839 10,063,589 10,338,396 9,730,564 9,473,575
Savings 379,828 381,833 365,835 346,132 342,488
Time 2,557,874 2,651,820 2,659,323 2,647,147 2,610,561
Total deposits 20,693,148 21,093,959 21,249,039 20,698,008 20,226,974
Funds purchased 70,281 63,312 69,730 71,728 320,817
Repurchase agreements 672,085 773,977 1,000,839 996,308 1,027,206
Other borrowings 4,779,981 4,001,479 3,084,214 3,021,094 2,333,961
Subordinated debentures 226,296 307,903 348,007 347,960 347,914
Derivative contracts, net 597,908 455,431 418,848 321,367 270,998
Due on unsettled securities purchases 90,135 151,369 205,096 137,566 124,952
Other liabilities 240,704 235,173 243,370 228,021 214,306
TOTAL LIABILITIES 27,370,538 27,082,603 26,619,143 25,822,052 24,867,128
Total equity 3,399,195 3,381,469 3,351,561 3,310,145 3,248,429
TOTAL LIABILITIES AND EQUITY $ 30,769,733 $ 30,464,072 $ 29,970,704 $ 29,132,197 $ 28,115,557

 

STATEMENTS OF EARNINGS — UNAUDITED BOK FINANCIAL CORPORATION (in thousands, except per share data)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
2015 2014 2015 2014
Interest revenue $ 193,664 $ 183,868 $ 570,046 $ 545,619
Interest expense 15,028 17,077 47,953 50,089
Net interest revenue 178,636 166,791 522,093 495,530
Provision for credit losses 7,500 11,500
Net interest revenue after provision for credit losses 171,136 166,791 510,593 495,530
Other operating revenue:
Brokerage and trading revenue 31,582 35,263 99,301 103,835
Transaction card revenue 32,514 31,578 96,302 92,222
Fiduciary and asset management revenue 30,807 29,738 94,988 85,003
Deposit service charges and fees 23,606 22,508 67,618 68,330
Mortgage banking revenue 33,170 26,814 109,336 78,988
Bank-owned life insurance 2,360 2,326 6,956 6,706
Other revenue 10,618 10,320 28,694 28,380
Total fees and commissions 164,657 158,547 503,195 463,464
Gain on other assets, net 1,161 1,422 3,373 2,615
Gain (loss) on derivatives, net 1,283 (93 ) 1,162 1,706
Gain (loss) on fair value option securities, net 5,926 (332 ) 443 6,504
Change in fair value of mortgage servicing rights (11,757 ) 5,281 (12,269 ) (5,624 )
Gain on available for sale securities, net 2,166 146 9,926 1,390
Total other-than-temporary impairment losses (781 )
Portion of loss recognized in other comprehensive income 689
Net impairment losses recognized in earnings (92 )
Total other operating revenue 163,436 164,971 505,738 470,055
Other operating expense:
Personnel 129,062 123,043 390,305 351,190
Business promotion 5,922 6,160 19,435 19,151
Charitable contributions to BOKF Foundation 796 796 2,420
Professional fees and services 10,147 14,763 29,766 33,382
Net occupancy and equipment 18,689 18,892 56,660 54,577
Insurance 4,864 4,793 14,960 13,801
Data processing and communications 31,228 29,971 93,311 86,177
Printing, postage and supplies 3,376 3,380 10,390 10,350
Net losses and operating expenses of repossessed assets 267 4,966 1,103 7,516
Amortization of intangible assets 1,089 1,100 3,269 2,865
Mortgage banking costs 8,587 7,734 25,325 19,328
Other expense 10,601 7,032 26,686 20,888
Total other operating expense 224,628 221,834 672,006 621,645
Net income before taxes 109,944 109,928 344,325 343,940
Federal and state income taxes 34,128 33,802 113,142 114,042
Net income 75,816 76,126 231,183 229,898
Net income attributable to non-controlling interests 925 494 2,219 1,781
Net income attributable to BOK Financial Corporation shareholders $ 74,891 $ 75,632 $ 228,964 $ 228,117
Average shares outstanding:
Basic 67,668,076 68,455,866 68,004,508 68,364,549
Diluted 67,762,483 68,609,765 68,104,017 68,520,591
Net income per share:
Basic $ 1.09 $ 1.09 $ 3.33 $ 3.30
Diluted $ 1.09 $ 1.09 $ 3.32 $ 3.29

 

FINANCIAL HIGHLIGHTS — UNAUDITED BOK FINANCIAL CORPORATION (in thousands, except ratio and share data)
Three Months Ended
Sept. 30, 2015 June 30, 2015 March 31, 2015 Dec. 31, 2014 Sept. 30, 2014
Capital:
Period-end shareholders’ equity $ 3,377,226 $ 3,375,632 $ 3,357,161 $ 3,302,179 $ 3,243,093
Risk weighted assets $ 22,706,537 $ 22,533,295 $ 22,053,246 $ 21,290,908 $ 20,491,089
Risk-based capital ratios1:
Common equity tier 1 12.78 % 13.01 % 13.07 % N/A N/A
Tier 1 12.78 % 13.01 % 13.07 % 13.33 % 13.72 %
Total capital 13.89 % 14.11 % 14.39 % 14.66 % 15.11 %
Leverage ratio 9.55 % 9.75 % 9.74 % 9.96 % 10.22 %
Tangible common equity ratio2 9.78 % 9.72 % 9.86 % 10.08 % 9.86 %
Common stock:
Book value per share $ 49.88 $ 48.96 $ 48.71 $ 47.78 $ 46.77
Market value per share:
High $ 70.26 $ 71.66 $ 61.78 $ 68.69 $ 69.56
Low $ 57.04 $ 59.59 $ 52.63 $ 56.87 $ 63.36
Cash dividends paid $ 28,766 $ 28,841 $ 28,952 $ 29,114 $ 27,705
Dividend payout ratio 38.41 % 36.40 % 38.68 % 45.27 % 36.63 %
Shares outstanding, net 67,713,031 68,945,139 68,922,314 69,113,736 69,344,082
Stock buy-back program:
Shares repurchased 1,258,348 502,156 200,000
Amount $ 80,276 $ $ 29,484 $ 12,337 $
Average price per share $ 63.79 $ $ 58.71 $ 61.68 $
Performance ratios (quarter annualized):
Return on average assets 0.97 % 1.04 % 1.01 % 0.88 % 1.07 %
Return on average equity 8.84 % 9.50 % 9.15 % 7.79 % 9.34 %
Net interest margin 2.61 % 2.61 % 2.55 % 2.61 % 2.67 %
Efficiency ratio 64.34 % 64.21 % 64.91 % 67.95 % 67.18 %
1     Risk-based capital ratios March 31, 2015 and thereafter calculated under revised regulatory capital rules issued July 2013 and effective for the Company January 1, 2015. Previous risk-based capital ratios presented are calculated in accordance with then current regulatory capital rules.
Reconciliation of non-GAAP measures:
2     Tangible common equity ratio:
Total shareholders’ equity $ 3,377,226 $ 3,375,632 $ 3,357,161 $ 3,302,179 $ 3,243,093
Less: Goodwill and intangible assets, net 430,460 431,515 411,066 412,156 413,256
Tangible common equity $ 2,946,766 $ 2,944,117 $ 2,946,095 $ 2,890,023 $ 2,829,837
Total assets $ 30,566,905 $ 30,725,563 $ 30,299,978 $ 29,089,698 $ 29,105,020
Less: Goodwill and intangible assets, net 430,460 431,515 411,066 412,156 413,256
Tangible assets $ 30,136,445 $ 30,294,048 $ 29,888,912 $ 28,677,542 $ 28,691,764
Tangible common equity ratio 9.78 % 9.72 % 9.86 % 10.08 % 9.86 %
Other data:
Fiduciary assets $ 37,780,669 $ 38,772,018 $ 37,511,746 $ 35,997,877 $ 34,020,442
Tax equivalent adjustment $ 3,244 $ 3,035 $ 2,956 $ 2,859 $ 2,739
Net unrealized gain on available for sale securities $ 144,884 $ 89,158 $ 152,107 $ 96,955 $ 42,935
FINANCIAL HIGHLIGHTS — UNAUDITED BOK FINANCIAL CORPORATION (in thousands, except ratio and share data)
Three Months Ended
Sept. 30, 2015 June 30, 2015 March 31, 2015 Dec. 31, 2014 Sept. 30, 2014
Mortgage banking:
Mortgage servicing portfolio $ 18,928,726 $ 17,979,623 $ 16,937,128 $ 16,162,887 $ 15,499,653
Mortgage commitments $ 742,742 $ 849,619 $ 824,036 $ 627,505 $ 638,925
Mortgage loans funded for sale $ 1,614,225 $ 1,828,230 $ 1,565,016 $ 1,264,269 $ 1,394,211
Mortgage loan refinances to total fundings 30 % 40 % 56 % 37 % 26 %
Mortgage loans sold $ 1,778,099 $ 1,861,968 $ 1,382,042 $ 1,350,529 $ 1,369,295
Net realized gains on mortgage loans sold $ 18,968 $ 23,856 $ 17,251 $ 17,671 $ 17,100
Change in net unrealized gain on mortgage loans held for sale (251 ) (743 ) 8,789 (482 ) (2,407 )
Total production revenue 18,717 23,113 26,040 17,189 14,693
Servicing revenue 14,453 13,733 13,280 12,916 12,121
Total mortgage banking revenue $ 33,170 $ 36,846 $ 39,320 $ 30,105 $ 26,814
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net $ 1,460 $ (1,005 ) $ 911 $ 1,070 $ (93 )
Gain (loss) on fair value option securities, net 5,926 (8,130 ) 2,647 3,685 (341 )
Gain (loss) on economic hedge of mortgage servicing rights 7,386 (9,135 ) 3,558 4,755 (434 )
Gain (loss) on changes in fair value of mortgage servicing rights (11,757 ) 8,010 (8,522 ) (10,821 ) 5,281
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges $ (4,371 ) $ (1,125 ) $ (4,964 ) $ (6,066 ) $ 4,847
Net interest revenue on fair value option securities $ 2,140 $ 1,985 $ 1,739 $ 912 $ 830

 

QUARTERLY EARNINGS TREND — UNAUDITED BOK FINANCIAL CORPORATION (in thousands, except ratio and per share data)
Three Months Ended
Sept. 30, 2015 June 30, 2015 March 31, 2015 Dec. 31, 2014 Sept. 30, 2014
Interest revenue $ 193,664 $ 191,813 $ 184,569 $ 186,620 $ 183,868
Interest expense 15,028 16,082 16,843 16,956 17,077
Net interest revenue 178,636 175,731 167,726 169,664 166,791
Provision for credit losses 7,500 4,000
Net interest revenue after provision for credit losses 171,136 171,731 167,726 169,664 166,791
Other operating revenue:
Brokerage and trading revenue 31,582 36,012 31,707 30,602 35,263
Transaction card revenue 32,514 32,778 31,010 31,467 31,578
Fiduciary and asset management revenue 30,807 32,712 31,469 30,649 29,738
Deposit service charges and fees 23,606 22,328 21,684 22,581 22,508
Mortgage banking revenue 33,170 36,846 39,320 30,105 26,814
Bank-owned life insurance 2,360 2,398 2,198 2,380 2,326
Other revenue 10,618 9,473 8,603 10,071 10,320
Total fees and commissions 164,657 172,547 165,991 157,855 158,547
Gain on other assets, net 1,161 1,457 755 338 1,422
Gain (loss) on derivatives, net 1,283 (1,032 ) 911 1,070 (93 )
Gain (loss) on fair value option securities, net 5,926 (8,130 ) 2,647 3,685 (332 )
Change in fair value of mortgage servicing rights (11,757 ) 8,010 (8,522 ) (10,821 ) 5,281
Gain on available for sale securities, net 2,166 3,433 4,327 149 146
Total other-than-temporary impairment losses (781 ) (373 )
Portion of loss recognized in other comprehensive income 689
Net impairment losses recognized in earnings (92 ) (373 )
Total other operating revenue 163,436 176,285 166,017 151,903 164,971
Other operating expense:
Personnel 129,062 132,695 128,548 125,741 123,043
Business promotion 5,922 7,765 5,748 7,498 6,160
Charitable contributions to BOKF Foundation 796 1,847
Professional fees and services 10,147 9,560 10,059 11,058 14,763
Net occupancy and equipment 18,689 18,927 19,044 22,655 18,892
Insurance 4,864 5,116 4,980 4,777 4,793
Data processing and communications 31,228 31,463 30,620 30,872 29,971
Printing, postage and supplies 3,376 3,553 3,461 3,168 3,380
Net losses (gains) and operating expenses of repossessed assets 267 223 613 (1,497 ) 4,966
Amortization of intangible assets 1,089 1,090 1,090 1,100 1,100
Mortgage banking costs 8,587 7,419 9,319 10,553 7,734
Other expense 10,601 9,302 6,783 8,105 7,032
Total other operating expense 224,628 227,113 220,265 225,877 221,834
Net income before taxes 109,944 120,903 113,478 95,690 109,928
Federal and state income taxes 34,128 40,630 38,384 30,109 33,802
Net income 75,816 80,273 75,094 65,581 76,126
Net income attributable to non-controlling interests 925 1,043 251 1,263 494
Net income attributable to BOK Financial Corporation shareholders $ 74,891 $ 79,230 $ 74,843 $ 64,318 $ 75,632
Average shares outstanding:
Basic 67,668,076 68,096,341 68,254,780 68,481,630 68,455,866
Diluted 67,762,483 68,210,353 68,344,886 68,615,808 68,609,765
Net income per share:
Basic $ 1.09 $ 1.15 $ 1.08 $ 0.93 $ 1.09
Diluted $ 1.09 $ 1.15 $ 1.08 $ 0.93 $ 1.09

 

LOANS TREND — UNAUDITED BOK FINANCIAL CORPORATION (In thousands)
Sept. 30, 2015 June 30, 2015 March 31, 2015 Dec. 31, 2014 Sept. 30, 2014
Commercial:
Energy $ 2,838,167 $ 2,902,143 $ 2,902,994 $ 2,860,428 $ 2,551,699
Services 2,706,624 2,681,126 2,592,876 2,391,530 2,339,951
Wholesale/retail 1,461,936 1,533,730 1,405,800 1,440,015 1,421,107
Manufacturing 555,677 579,549 560,925 532,594 479,543
Healthcare 1,741,680 1,646,025 1,511,177 1,454,969 1,382,399
Other commercial and industrial 493,338 433,148 417,391 416,134 397,339
Total commercial 9,797,422 9,775,721 9,391,163 9,095,670 8,572,038
Commercial real estate:
Residential construction and land development 153,510 148,574 139,152 143,591 175,228
Retail 769,449 688,447 658,860 666,889 611,265
Office 626,151 563,085 513,862 415,544 438,909
Multifamily 758,658 711,333 749,986 704,298 739,757
Industrial 563,871 488,054 478,584 428,817 371,426
Other commercial real estate 363,428 434,004 395,020 369,011 387,614
Total commercial real estate 3,235,067 3,033,497 2,935,464 2,728,150 2,724,199
Residential mortgage:
Permanent mortgage 937,664 946,324 964,264 969,951 991,107
Permanent mortgages guaranteed by U.S. government agencies 192,712 190,839 200,179 205,950 198,488
Home equity 738,619 747,565 762,556 773,611 790,068
Total residential mortgage 1,868,995 1,884,728 1,926,999 1,949,512 1,979,663
Personal 465,957 430,190 430,510 434,705 407,839
Total $ 15,367,441 $ 15,124,136 $ 14,684,136 $ 14,208,037 $ 13,683,739
Certain commercial loans previously classified as Services in the prior periods have been reclassified to Wholesale / Retail to conform with current classification guidelines.

 

LOANS BY PRINCIPAL MARKET AREA — UNAUDITED BOK FINANCIAL CORPORATION (in thousands)
Sept. 30, 2015 June 30, 2015 March 31, 2015 Dec. 31, 2014 Sept. 30, 2014
Bank of Oklahoma:
Commercial $ 3,514,391 $ 3,529,406 $ 3,276,553 $ 3,142,689 $ 3,106,264
Commercial real estate 677,372 614,995 612,639 603,610 592,865
Residential mortgage 1,405,235 1,413,690 1,442,340 1,467,096 1,481,264
Personal 185,463 190,909 205,496 206,115 193,207
Total Bank of Oklahoma 5,782,461 5,749,000 5,537,028 5,419,510 5,373,600
Bank of Texas:
Commercial 3,752,193 3,738,742 3,709,467 3,549,128 3,169,458
Commercial real estate 1,257,741 1,158,056 1,130,973 1,027,817 1,046,322
Residential mortgage 222,395 228,683 237,985 235,948 247,117
Personal 194,051 156,260 149,827 154,363 148,965
Total Bank of Texas 5,426,380 5,281,741 5,228,252 4,967,256 4,611,862
Bank of Albuquerque:
Commercial 368,027 392,362 388,005 383,439 378,663
Commercial real estate 312,953 291,953 296,696 296,358 313,905
Residential mortgage 121,232 123,376 127,326 127,999 130,045
Personal 10,477 11,939 12,095 10,899 11,714
Total Bank of Albuquerque 812,689 819,630 824,122 818,695 834,327
Bank of Arkansas:
Commercial 76,044 99,086 91,485 95,510 74,866
Commercial real estate 82,225 85,997 87,034 88,301 96,874
Residential mortgage 8,063 6,999 6,807 7,261 7,492
Personal 4,921 5,189 5,114 5,169 5,508
Total Bank of Arkansas 171,253 197,271 190,440 196,241 184,740
Colorado State Bank & Trust:
Commercial 1,029,694 1,019,454 1,008,316 977,961 957,917
Commercial real estate 229,835 229,721 209,272 194,553 190,812
Residential mortgage 50,138 54,135 55,925 57,119 56,705
Personal 30,683 30,373 27,792 27,918 24,812
Total Colorado State Bank & Trust 1,340,350 1,333,683 1,301,305 1,257,551 1,230,246
Bank of Arizona:
Commercial 608,235 572,477 519,767 547,524 500,208
Commercial real estate 482,918 472,061 432,269 355,140 316,698
Residential mortgage 41,722 37,493 36,161 35,872 39,256
Personal 17,609 12,875 12,394 12,883 11,201
Total Bank of Arizona 1,150,484 1,094,906 1,000,591 951,419 867,363
Bank of Kansas City:
Commercial 448,838 424,194 397,570 399,419 384,662
Commercial real estate 192,023 180,714 166,581 162,371 166,723
Residential mortgage 20,210 20,352 20,455 18,217 17,784
Personal 22,753 22,645 17,792 17,358 12,432
Total Bank of Kansas City 683,824 647,905 602,398 597,365 581,601
TOTAL BOK FINANCIAL $ 15,367,441 $ 15,124,136 $ 14,684,136 $ 14,208,037 $ 13,683,739
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)
Sept. 30, 2015 June 30, 2015 March 31, 2015 Dec. 31, 2014 Sept. 30, 2014
Bank of Oklahoma:
Demand $ 3,834,145 $ 4,068,088 $ 3,982,534 $ 3,828,819 $ 3,915,560
Interest-bearing:
Transaction 5,783,258 6,018,381 6,199,468 6,117,886 5,450,692
Savings 225,580 225,694 227,855 206,357 201,690
Time 1,253,137 1,380,566 1,372,250 1,301,194 1,292,738
Total interest-bearing 7,261,975 7,624,641 7,799,573 7,625,437 6,945,120
Total Bank of Oklahoma 11,096,120 11,692,729 11,782,107 11,454,256 10,860,680
Bank of Texas:
Demand 2,689,493 2,565,234 2,511,032 2,639,732 2,636,713
Interest-bearing:
Transaction 1,996,223 2,020,817 2,062,063 2,065,723 2,020,737
Savings 74,674 74,373 76,128 72,037 66,798
Time 554,106 536,844 547,371 547,316 569,929
Total interest-bearing 2,625,003 2,632,034 2,685,562 2,685,076 2,657,464
Total Bank of Texas 5,314,496 5,197,268 5,196,594 5,324,808 5,294,177
Bank of Albuquerque:
Demand 520,785 508,224 537,466 487,819 480,023
Interest-bearing:
Transaction 529,862 537,156 535,791 519,544 502,787
Savings 41,380 41,802 42,088 37,471 36,127
Time 281,426 285,890 290,706 295,798 303,074
Total interest-bearing 852,668 864,848 868,585 852,813 841,988
Total Bank of Albuquerque 1,373,453 1,373,072 1,406,051 1,340,632 1,322,011
Bank of Arkansas:
Demand 25,397 19,731 31,002 35,996 35,075
Interest-bearing:
Transaction 290,728 284,349 253,691 158,115 234,063
Savings 1,573 1,712 1,677 1,936 2,222
Time 26,203 28,220 28,277 28,520 38,811
Total interest-bearing 318,504 314,281 283,645 188,571 275,096
Total Bank of Arkansas 343,901 334,012 314,647 224,567 310,171
Colorado State Bank & Trust:
Demand 430,675 403,491 412,532 445,755 422,044
Interest-bearing:
Transaction 655,206 601,741 604,665 631,874 571,807
Savings 31,398 31,285 31,524 29,811 29,768
Time 320,279 322,432 340,006 353,998 372,401
Total interest-bearing 1,006,883 955,458 976,195 1,015,683 973,976
Total Colorado State Bank & Trust 1,437,558 1,358,949 1,388,727 1,461,438 1,396,020
DEPOSITS BY PRINCIPAL MARKET AREA — UNAUDITED BOK FINANCIAL CORPORATION (in thousands)
Sept. 30, 2015 June 30, 2015 March 31, 2015 Dec. 31, 2014 Sept. 30, 2014
Bank of Arizona:
Demand 306,425 352,024 271,091 369,115 279,811
Interest-bearing:
Transaction 293,319 298,073 295,480 347,214 336,584
Savings 4,121 2,726 2,900 2,545 3,718
Time 26,750 28,165 28,086 36,680 38,842
Total interest-bearing 324,190 328,964 326,466 386,439 379,144
Total Bank of Arizona 630,615 680,988 597,557 755,554 658,955
Bank of Kansas City:
Demand 234,847 239,609 263,920 259,121 268,903
Interest-bearing:
Transaction 150,253 139,260 157,044 273,999 128,039
Savings 1,570 1,580 1,618 1,274 1,315
Time 36,630 42,262 45,082 45,210 48,785
Total interest-bearing 188,453 183,102 203,744 320,483 178,139
Total Bank of Kansas City 423,300 422,711 467,664 579,604 447,042
TOTAL BOK FINANCIAL $ 20,619,443 $ 21,059,729 $ 21,153,347 $ 21,140,859 $ 20,289,056

 

NET INTEREST MARGIN TREND — UNAUDITED BOK FINANCIAL CORPORATION
Three Months Ended
Sept. 30, 2015 June 30, 2015 March 31, 2015 Dec. 31, 2014 Sept. 30, 2014
TAX-EQUIVALENT ASSETS YIELDS
Interest-bearing cash and cash equivalents 0.28 % 0.25 % 0.27 % 0.28 % 0.20 %
Trading securities 2.70 % 1.85 % 2.55 % 2.48 % 2.67 %
Investment securities:
Taxable 5.49 % 5.49 % 5.51 % 5.68 % 5.66 %
Tax-exempt 1.54 % 1.56 % 1.56 % 1.56 % 1.56 %
Total investment securities 3.04 % 3.05 % 3.04 % 3.11 % 3.03 %
Available for sale securities:
Taxable 1.99 % 1.92 % 1.95 % 1.97 % 1.94 %
Tax-exempt 4.15 % 4.21 % 4.40 % 4.23 % 3.14 %
Total available for sale securities 2.01 % 1.94 % 1.98 % 1.99 % 1.95 %
Fair value option securities 2.30 % 2.17 % 2.28 % 2.18 % 2.05 %
Restricted equity securities 5.95 % 5.82 % 5.79 % 5.77 % 5.99 %
Residential mortgage loans held for sale 3.79 % 3.37 % 3.41 % 3.87 % 3.79 %
Loans 3.54 % 3.65 % 3.59 % 3.73 % 3.78 %
Allowance for loan losses
Loans, net of allowance 3.59 % 3.70 % 3.64 % 3.78 % 3.83 %
Total tax-equivalent yield on earning assets 2.83 % 2.84 % 2.80 % 2.86 % 2.93 %
COST OF INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest-bearing transaction 0.08 % 0.09 % 0.10 % 0.09 % 0.10 %
Savings 0.10 % 0.11 % 0.10 % 0.11 % 0.12 %
Time 1.33 % 1.36 % 1.46 % 1.47 % 1.56 %
Total interest-bearing deposits 0.34 % 0.35 % 0.37 % 0.38 % 0.41 %
Funds purchased 0.08 % 0.08 % 0.09 % 0.08 % 0.07 %
Repurchase agreements 0.03 % 0.03 % 0.04 % 0.04 % 0.05 %
Other borrowings 0.30 % 0.31 % 0.32 % 0.32 % 0.34 %
Subordinated debt 1.04 % 2.21 % 2.52 % 2.50 % 2.46 %
Total cost of interest-bearing liabilities 0.32 % 0.35 % 0.38 % 0.39 % 0.41 %
Tax-equivalent net interest revenue spread 2.51 % 2.49 % 2.42 % 2.47 % 2.52 %
Effect of noninterest-bearing funding sources and other 0.10 % 0.12 % 0.13 % 0.14 % 0.15 %
Tax-equivalent net interest margin 2.61 % 2.61 % 2.55 % 2.61 % 2.67 %
Yield calculations are shown on a tax equivalent basis at the statutory federal and state rates for the periods presented. The yield calculations exclude security trades that have been recorded on trade date with no corresponding interest income and the unrealized gains and losses. The yield calculation also includes average loan balances for which the accrual of interest has been discontinued and are net of unearned income. Yield/rate calculations are generally based on the conventions that determine how interest income and expense is accrued.

 

CREDIT QUALITY INDICATORS — UNAUDITED BOK FINANCIAL CORPORATION (in thousands, except ratios)
Three Months Ended
Sept. 30, 2015 June 30, 2015 March 31, 2015 Dec. 31, 2014 Sept. 30, 2014
Nonperforming assets:
Nonaccruing loans:
Commercial $ 33,798 $ 24,233 $ 13,880 $ 13,527 $ 16,404
Commercial real estate 10,956 20,139 19,902 18,557 30,660
Residential mortgage 44,099 45,969 46,487 48,121 48,907
Personal 494 550 464 566 580
Total nonaccruing loans 89,347 90,891 80,733 80,771 96,551
Accruing renegotiated loans guaranteed by U.S. government agencies 81,598 82,368 80,287 73,985 70,459
Real estate and other repossessed assets:
Guaranteed by U.S. government agencies2 49,898 46,809
Other 33,116 35,499 45,551 51,963 51,062
Total real estate and other repossessed assets 33,116 35,499 45,551 101,861 97,871
Total nonperforming assets $ 204,061 $ 208,758 $ 206,571 $ 256,617 $ 264,881
Total nonperforming assets excluding those guaranteed by U.S. government agencies $ 118,578 $ 122,673 $ 123,028 $ 129,022 $ 143,778
Nonaccruing loans by loan class:
Commercial:
Energy $ 17,880 $ 6,841 $ 1,875 $ 1,416 $ 1,508
Services 10,692 10,944 4,744 5,201 3,584
Wholesale / retail 3,058 4,166 4,401 4,149 5,502
Manufacturing 352 379 417 450 3,482
Healthcare 1,218 1,278 1,558 1,380 1,417
Other commercial and industrial 598 625 885 931 911
Total commercial 33,798 24,233 13,880 13,527 16,404
Commercial real estate:
Residential construction and land development 4,748 9,367 9,598 5,299 14,634
Retail 1,648 3,826 3,857 3,926 4,009
Office 684 2,360 2,410 3,420 3,499
Multifamily 185 195
Industrial 76 76 76
Other commercial real estate 3,615 4,315 3,961 5,912 8,518
Total commercial real estate 10,956 20,139 19,902 18,557 30,660
Residential mortgage:
Permanent mortgage 30,660 32,187 33,365 34,845 35,137
Permanent mortgage guaranteed by U.S. government agencies 3,885 3,717 3,256 3,712 3,835
Home equity 9,554 10,065 9,866 9,564 9,935
Total residential mortgage 44,099 45,969 46,487 48,121 48,907
Personal 494 550 464 566 580
Total nonaccruing loans $ 89,347 $ 90,891 $ 80,733 $ 80,771 $ 96,551
CREDIT QUALITY INDICATORS — UNAUDITED BOK FINANCIAL CORPORATION (in thousands, except ratios)
Three Months Ended
Sept. 30, 2015 June 30, 2015 March 31, 2015 Dec. 31, 2014 Sept. 30, 2014
Performing loans 90 days past due1 $ 101 $ 99 $ 523 $ 125 $ 25
Gross charge-offs $ (5,274 ) $ (2,877 ) $ (2,169 ) $ (7,224 ) $ (2,638 )
Recoveries 3,521 2,206 10,523 5,036 3,114
Net recoveries (charge-offs) $ (1,753 ) $ (671 ) $ 8,354 $ (2,188 ) $ 476
Provision for credit losses $ 7,500 $ 4,000 $ $ $
Allowance for loan losses to period end loans 1.33 % 1.33 % 1.35 % 1.33 % 1.40 %
Combined allowance for credit losses to period end loans 1.35 % 1.34 % 1.35 % 1.34 % 1.41 %
Nonperforming assets to period end loans and repossessed assets 1.33 % 1.38 % 1.40 % 1.79 % 1.92 %
Net charge-offs (annualized) to average loans 0.05 % 0.02 % (0.23 )% 0.06 % (0.01 )%
Allowance for loan losses to nonaccruing loans 228.45 % 221.24 % 244.86 % 234.06 % 198.08 %
Combined allowance for credit losses to nonaccruing loans 232.48 % 222.21 % 246.05 % 235.59 % 199.35 %
1  Excludes residential mortgage loans guaranteed by agencies of the U.S. government.
2  Approximately $50 million was reclassified from Real estate and other repossessed assets to Receivables on the balance sheet on January 1, 2015 with the adoption of Financial Accounting Standards Board Update No. 2014-14, Classification of Certain Government-Guaranteed Mortgage Loans Upon Foreclosure (“ASU 2014-14”). Upon foreclosure of loans for which the loan balance is expected to be recovered from the guarantee by a U.S. government agency, the loan balance will be directly reclassified to other receivables without including such foreclosed assets in real estate and other repossessed assets.