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BOK Financial Corporation Reports Quarterly Earnings of $84 million, or $1.29 Per Share, in the First Quarter

Wednesday, 24 April 2024 07:55 AM

BOK Financial Corp

Topic:
Earnings

TULSA, OK / ACCESSWIRE / April 24, 2024 /

First quarter 2024 financial highlights1

  • Net income was $83.7 million or $1.29 per diluted share compared to $82.6 million or $1.26 per diluted share. Excluding the loss from repositioning of the available for sale securities portfolio and the additional FDIC special assessment expense, net income would have been $123.2 million or $1.91 per share for the first quarter of 2024.
  • Net interest revenue totaled $293.6 million, a decrease of $3.1 million. Net interest margin was 2.61% compared to 2.64%.
  • Fees and commissions revenue was $200.6 million, an increase of $3.8 million. Higher mortgage banking and fiduciary and asset management revenue was partially offset by lower brokerage and trading and transaction card revenue.
  • Operating expense decreased $43.7 million to $340.4 million, primarily due to a reduction in non-personnel expense resulting from the FDIC special assessment recognized in the fourth quarter of 2023. Personnel expense was relatively consistent with the prior quarter.
  • Period end loans grew by $268 million to $24.2 billion at March 31, 2024, mostly driven by growth in commercial loans, partially offset by a reduction in commercial real estate loans. Average outstanding loan balances were $23.9 billion, a $243 million increase.
  • Nonperforming assets totaled $122 million or 0.51% of outstanding loans and repossessed assets at March 31, 2024, compared to $148 million or 0.62% at December 31, 2023. Net charge-offs were $5.5 million or 0.09% of average loans on an annualized basis in the first quarter.
  • Period end deposits increased $1.4 billion to $35.4 billion while average deposits increased $1.3 billion to $35.0 billion. Average interest-bearing deposits increased $2.1 billion while average demand deposits declined by $747 million. The loan to deposit ratio was 68% at March 31, 2024 compared to 70% at December 31, 2023.
  • Tangible common equity ratio was 8.21% compared to 8.29% at December 31, 2023. Tier 1 capital ratio was 12.00%, Common equity Tier 1 capital ratio was 11.99%, and total capital ratio was 13.15%.

1 Comparisons are to prior quarter unless otherwise noted.

CEO Commentary

First quarter results were characterized by a stabilizing net interest margin, strong asset quality, continued strong operating revenue growth, and well-managed expenses. It is also another reflection of our long-term focus and efforts to create sustainable earnings. While many banks sold their VISA B shares at a considerable discount, we chose to retain the shares we received in 2008 and expect to receive full value in VISA's announced exchange offer. Given our perception of market spreads, we took an opportunity to reposition the securities portfolio in the first quarter in anticipation of a gain in the second quarter this year from monetizing our VISA B shares. The net result is expected to further improve our net interest margin and net interest revenue outlook in future periods. Commercial loans grew almost 9% annualized as we focus on growth to utilize our strong capital and liquidity levels as others retrench. Our credit metrics remain very strong and are a direct reflection of the focus we put on disciplined risk management. I am also exceptionally proud we were recognized as one of only 60 organizations to receive the 2024 Gallup Exceptional Workplace Award. This is independent validation of our culture of inspiration, ambition, collaboration, and tenacity.

Net Interest Revenue

(In thousands)
Mar. 31, 2024 Dec. 31, 2023 Change % Change
Interest revenue
$645,212 $638,324 $6,888 1.1%
Interest expense
351,640 341,649 9,991 2.9%
Net interest revenue
$293,572 $296,675 $(3,103) (1.0)%

Net interest margin
2.61% 2.64% (0.03)% N/A

Average earning assets
$44,846,886 $44,327,237 $519,649 1.2%
Average trading securities
5,371,209 5,448,403 (77,194) (1.4)%
Average investment securities
2,210,040 2,264,194 (54,154) (2.4)%
Average available for sale securities
12,537,981 12,063,398 474,583 3.9%
Average loans balance
23,948,567 23,705,108 243,459 1.0%
Average interest-bearing deposits
26,394,475 24,297,327 2,097,148 8.6%
Funds purchased and repurchase agreements
1,258,044 2,476,973 (1,218,929) (49.2)%
Other borrowings
6,844,633 7,120,963 (276,330) (3.9)%

Net interest revenue was $293.6 million for the first quarter of 2024 compared to $296.7 million for the prior quarter. Net interest margin was 2.61% compared to 2.64%, reflective of continued demand deposit migration and deposit repricing. For the first quarter of 2024, our core net interest margin excluding trading activities, a non-GAAP measure, was 2.97% compared to 3.03% in the prior quarter.

Average earning assets increased $520 million. Average loan balances increased $243 million, largely due to growth in commercial loans, partially offset by a reduction in commercial real estate loan balances. Average available for sale securities grew $475 million while average trading securities decreased $77 million. Average interest-bearing deposits increased $2.1 billion, primarily from interest-bearing transaction accounts. Funds purchased and repurchase agreements declined $1.2 billion while average other borrowings decreased $276 million.

The yield on average earning assets was 5.73%, up 9 basis points. The yield on the available for sale securities portfolio increased 21 basis points to 3.48% while the loan portfolio yield increased 4 basis points to 7.40%. The yield on trading securities grew 7 basis points to 5.12% and the yield on interest-bearing cash and cash equivalents decreased 34 basis points to 4.96%.

Funding costs were 4.08%, up 10 basis points. The cost of interest-bearing deposits increased 26 basis points to 3.69%. The cost of funds purchased and repurchase agreements decreased 74 basis points to 4.05% from the beneficial mix shift enabled by the growth of interest-bearing deposits. The benefit to net interest margin from assets funded by non-interest liabilities was 96 basis points, a decrease of 2 basis points.

Other Operating Revenue

(In thousands)
Mar. 31, 2024 Dec. 31, 2023 Change % Change
Brokerage and trading revenue
$59,179 $60,896 $(1,717) (2.8)%
Transaction card revenue
25,493 28,847 (3,354) (11.6)%
Fiduciary and asset management revenue
55,305 51,408 3,897 7.6%
Deposit service charges and fees
28,685 27,770 915 3.3%
Mortgage banking revenue
18,967 12,834 6,133 47.8%
Other revenue
12,935 15,035 (2,100) (14.0)%
Total fees and commissions
200,564 196,790 3,774 1.9%
Other gains, net
4,269 40,452 (36,183) N/A
Gain (loss) on derivatives, net
(8,633) 8,592 (17,225) N/A
Gain (loss) on fair value option securities, net
(305) 1,031 (1,336) N/A
Change in fair value of mortgage servicing rights
10,977 (14,356) 25,333 N/A
Loss on available for sale securities, net
(45,171) (27,626) (17,545) N/A
Total other operating revenue
$161,701 $204,883 $(43,182) (21.1)%

Fees and commissions revenue totaled $200.6 million for the first quarter of 2024, an increase of $3.8 million over the prior quarter.

Mortgage banking revenue increased $6.1 million. Mortgage production volume increased $47.6 million and realized margin on funded mortgage loans improved 244 basis points to 1.46%.

Fiduciary and asset management revenue increased $3.9 million to $55.3 million, primarily due to growth in trust business line fees resulting from movement in the equity markets.

Brokerage and trading revenue decreased $1.7 million to $59.2 million. Trading revenue grew $1.9 million to $37.5 million reflecting increased trading activity primarily in U.S. government agency residential mortgage-backed securities.

Insurance brokerage fees decreased $1.8 million in conjunction with the sale of our insurance brokerage and consulting business, BOK Financial Insurance ("BOKFI") in the fourth quarter. Customer hedging revenue decreased $1.3 million, largely as result of reduced energy customer hedging volumes.

Transaction card revenue decreased $3.4 million to $25.5 million, primarily due to seasonally elevated fourth quarter activity and one less day in the quarter.

Other revenue decreased $2.1 million, largely due to a reduction in fees earned on derivative counterparty margin.

Other gains, net decreased $36.2 million to $4.3 million. The fourth quarter of 2023 included a $31.0 million pre-tax gain, before related professional fees, on the sale of BOKFI.

Losses on available for sale securities were $45.2 million in the first quarter of 2024 as we repositioned the available for sale securities portfolio by selling approximately $783 million of lower-yielding debt securities. We expect the gain on conversion of our Visa B shares under the recently announced exchange offer by Visa, Inc. will offset the realized losses on the repositioning. The Visa Exchange Offer opened on April 8 and is scheduled to expire at end of day on May 3, 2024.

Operating Expenses

(In thousands)
Mar. 31, 2024 Dec. 31, 2023 Change % Change
Personnel
$202,653 $203,022 $(369) (0.2)%
Business promotion
7,978 8,629 (651) (7.5)%
Charitable contributions to BOKF Foundation
- 1,542 (1,542) (100.0)%
Professional fees and services
12,010 16,288 (4,278) (26.3)%
Net occupancy and equipment
30,293 30,355 (62) (0.2)%
FDIC and other insurance
8,740 8,495 245 2.9%
FDIC special assessment
6,454 43,773 (37,319) (85.3)%
Data processing and communications
45,564 45,584 (20) -%
Printing, postage and supplies
3,997 3,844 153 4.0%
Amortization of intangible assets
3,003 3,543 (540) (15.2)%
Mortgage banking costs
6,355 8,085 (1,730) (21.4)%
Other expense
13,337 10,923 2,414 22.1%
Total operating expense
$340,384 $384,083 $(43,699) (11.4)%

Total operating expense was $340.4 million for the first quarter of 2024, a decrease of $43.7 million compared to the fourth quarter of 2023.

Personnel expense was $202.7 million, consistent with the prior quarter. Higher seasonal employee benefits costs were offset by reduced incentive compensation expense while regular compensation remained flat compared to the prior quarter.

Non-personnel expense was $137.7 million, a decrease of $43.3 million. In the fourth quarter of 2023, we recognized $43.8 million of expense related to the FDIC special assessment. During the first quarter of 2024, we received notification from the FDIC that the previous assessed losses attributable to the protection of Silicon Valley Bank and Signature Bank uninsured depositors had increased, so an additional $6.5 million of estimated expense related to the special assessment was recognized.

Professional fees and services expense decreased $4.3 million. The previous quarter included $2.2 million in expenses related to the sale of BOKFI.

Other expense was up $2.4 million, primarily due to increased operational losses.

Loans

(In thousands)
Mar. 31, 2024 Dec. 31, 2023 Change % Change
Commercial:
Healthcare
$4,245,939 $4,143,233 $102,706 2.5%
Services
3,529,421 3,576,223 (46,802) (1.3)%
Energy
3,443,719 3,437,101 6,618 0.2%
General business
3,913,788 3,647,212 266,576 7.3%
Total commercial
15,132,867 14,803,769 329,098 2.2%

Commercial Real Estate:
Multifamily
1,960,839 1,872,760 88,079 4.7%
Industrial
1,343,970 1,475,165 (131,195) (8.9)%
Office
901,105 909,442 (8,337) (0.9)%
Retail
543,735 592,632 (48,897) (8.3)%
Residential construction and land development
83,906 95,052 (11,146) (11.7)%
Other real estate loans
403,122 392,596 10,526 2.7%
Total commercial real estate
5,236,677 5,337,647 (100,970) (1.9)%

Loans to individuals:
Residential mortgage
2,192,584 2,160,640 31,944 1.5%
Residential mortgages guaranteed by U.S. government agencies
139,456 149,807 (10,351) (6.9)%
Personal
1,470,976 1,453,105 17,871 1.2%
Total loans to individuals
3,803,016 3,763,552 39,464 1.0%

Total loans
$24,172,560 $23,904,968 $267,592 1.1%

Outstanding loans were $24.2 billion at March 31, 2024, growing $268 million over December 31, 2023, largely due to growth in commercial loans, partially offset by a reduction in commercial real estate loans. Unfunded loan commitments decreased $359 million compared to the fourth quarter of 2023.

Outstanding commercial loan balances, which includes healthcare, services, energy and general business loans, increased $329 million over the prior quarter.

Healthcare sector loan balances increased $103 million, totaling $4.2 billion or 18% of total loans. Our healthcare sector loans primarily consist of $3.5 billion of senior housing and care facilities, including independent living, assisted living and skilled nursing. Generally, we loan to borrowers with a portfolio of multiple facilities, which serves to help diversify risks specific to a single facility.

General business loans increased $267 million to $3.9 billion or 16% of total loans. General business loans include $2.4 billion of wholesale/retail loans and $1.5 billion of loans from other commercial industries.

Services sector loan balances decreased $47 million to $3.5 billion or 15% of total loans. Services loans consist of a large number of loans to a variety of businesses, including Native American tribal and state and local municipal government entities, Native American tribal casino operations, foundations and not-for-profit organizations, educational services and specialty trade contractors.

Energy loan balances were largely unchanged compared to the prior quarter at $3.4 billion or 14% of total loans. The majority of this portfolio is first lien, senior secured, reserve-based lending to oil and gas producers, which we believe is the lowest risk form of energy lending. Approximately 70% of committed production loans are secured by properties primarily producing oil. The remaining 30% is secured by properties primarily producing natural gas. Unfunded energy loan commitments were $4.3 billion at March 31, 2024, a $147 million decrease compared to December 31, 2023.

Commercial real estate loan balances decreased $101 million to $5.2 billion and represent 22% of total loans. Loans secured by industrial facilities decreased $131 million to $1.3 billion and loans secured by retail facilities decreased $49 million to $544 million. These decreases were partially offset by an $88 million increase in loans secured by multifamily properties. Unfunded commercial real estate loan commitments were $1.7 billion at March 31, 2024, a decrease of $147 million compared to December 31, 2023. We take a disciplined approach to managing our concentration of commercial real estate loan commitments as a percentage of capital.

Loans to individuals increased $39 million and represent 16% of total loans. Residential mortgage loans increased $22 million while personal loans increased $18 million.

Period End & Average Deposits

(In thousands)
Mar. 31, 2024 Dec. 31, 2023 Change % Change
Period end deposits
Demand
$8,414,056 $9,196,493 $(782,437) (8.5)%
Interest-bearing transaction
22,748,185 20,964,101 1,784,084 8.5%
Savings
854,397 847,085 7,312 0.9%
Time
3,366,909 3,012,022 354,887 11.8%
Total deposits
$35,383,547 $34,019,701 $1,363,846 4.0%

Average deposits
Demand
$8,631,416 $9,378,886 $(747,470) (8.0)%
Interest-bearing transaction
22,264,259 20,449,370 1,814,889 8.9%
Savings
843,037 845,705 (2,668) (0.3)%
Time
3,287,179 3,002,252 284,927 9.5%
Total average deposits
$35,025,891 $33,676,213 $1,349,678 4.0%

Our funding sources, which primarily include deposits and wholesale borrowings, provide adequate liquidity to meet our needs. The loan to deposit ratio was 68% at March 31, 2024, compared to 70% at December 31, 2023, providing significant on-balance sheet liquidity to meet future loan demand and contractual obligations.

Period end deposits totaled $35.4 billion at March 31, 2024, a $1.4 billion increase. Interest-bearing transaction account balances increased $1.8 billion while time deposits increased $355 million. Demand deposits decreased $782 million.

Average deposits were $35.0 billion at March 31, 2024, a $1.3 billion increase. Average interest-bearing transaction account balances increased $1.8 billion and average time deposits increased $285 million. Average demand deposit account balances decreased $747 million.

Average Commercial Banking deposits increased $237 million to $15.7 billion or 45% of total deposits. Our commercial deposit portfolio is highly diversified across industries and customers. The highest concentration by industry within our commercial deposit portfolio is with our energy customers representing 8% of our total deposits. Wealth Management deposits increased $1.2 billion to $9.2 billion or 26% of total deposits. Consumer Banking deposits were largely unchanged at $7.9 billion or 23% of total deposits.

Capital


Minimum Capital Requirement Capital Conservation Buffer Minimum Capital Requirement Including Capital Conservation Buffer Mar. 31, 2024 Dec. 31, 2023
Common equity Tier 1
4.50% 2.50% 7.00% 11.99% 12.06%
Tier 1 capital
6.00% 2.50% 8.50% 12.00% 12.07%
Total capital
8.00% 2.50% 10.50% 13.15% 13.16%
Tier 1 Leverage
4.00% N/A 4.00% 9.42% 9.45%
Tangible common equity ratio1
8.21% 8.29%
Adjusted common tangible equity ratio1
7.92% 8.02%

Common stock repurchased (shares)
616,630 700,237
Average price per share repurchased
$83.89 $70.99

1 See Explanation and Reconciliation of Non-GAAP Measures following.

The company's common equity Tier 1 capital ratio was 11.99% at March 31, 2024. In addition, the company's Tier 1 capital ratio was 12.00%, total capital ratio was 13.15%, and leverage ratio was 9.42% at March 31, 2024. At the beginning of 2020, we elected to delay the regulatory capital impact of the transition of the allowance for credit losses from the incurred loss methodology to CECL for two years, followed by a three-year transition period. This election added 3 basis points to the company's common equity tier 1 capital ratio at March 31, 2024. At December 31, 2023, the company's common equity Tier 1 capital ratio was 12.06%, Tier 1 capital ratio was 12.07%, total capital ratio was 13.16%, and leverage ratio was 9.45%.

The company's tangible common equity ratio, a non-GAAP measure, was 8.21% at March 31, 2024 and 8.29% at December 31, 2023. The tangible common equity ratio is primarily based on total shareholders' equity, which includes unrealized gains and losses on available for sale securities. Adjusted for all unrealized securities portfolio gains and losses, including those in the investment portfolio, the tangible common equity ratio would be 7.92%. The company has elected to exclude unrealized gains and losses from available for sale securities from its calculation of Tier 1 capital for regulatory capital purposes, consistent with the treatment under the previous capital rules.

The company repurchased 616,630 shares of common stock at an average price paid of $83.89 a share in the first quarter of 2024. We view share buybacks opportunistically, but within the context of maintaining our strong capital position.

Credit Quality

Nonperforming assets totaled $122 million or 0.51% of outstanding loans and repossessed assets at March 31, 2024, compared to $148 million or 0.62% at December 31, 2023. Excluding loans guaranteed by U.S. government agencies, nonperforming assets totaled $113 million or 0.47% of outstanding loans and repossessed assets at March 31, 2024, compared to $139 million or 0.58% at December 31, 2023.

Nonaccruing loans decreased $26 million compared to December 31, 2023. New nonaccruing loans identified in the first quarter totaled $24 million, offset by $34 million of loans that returned to accruing status, $8.6 million in payments received and $7.1 million of charge-offs. Nonaccruing healthcare loans decreased $32 million, partially offset by a $15 million increase in nonaccruing commercial real estate loans.

Net charge-offs were $5.5 million or 0.09% of average loans on an annualized basis in the first quarter. Charge-offs for the first quarter were primarily composed of a $3.2 million general business loan and a $1.3 million commercial real estate loan.

The provision for credit losses of $8.0 million in the first quarter of 2024 reflects continued loan growth and a stable economic forecast. The provision for credit losses was $6.0 million in the fourth quarter of 2023.

At March 31, 2024, the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $329 million or 1.36% of outstanding loans and 298% of nonaccruing loans. At December 31, 2023, the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $326 million or 1.36% of outstanding loans and 240% of nonaccruing loans.

Securities & Derivatives

The fair value of the available for sale securities portfolio totaled $12.7 billion at March 31, 2024, a $366 million increase compared to December 31, 2023. At March 31, 2024, the available for sale securities portfolio consisted primarily of $7.8 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $3.7 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. At March 31, 2024, the available for sale securities portfolio had a net unrealized loss of $643 million compared to $617 million at December 31, 2023.

We hold an inventory of trading securities in support of sales to a variety of customers. At March 31, 2024, the trading securities portfolio totaled $5.4 billion compared to $5.2 billion at December 31, 2023.

The company also maintains a portfolio of residential mortgage-backed securities issued by U.S. government agencies and interest rate derivative contracts as an economic hedge of the changes in the fair value of our mortgage servicing rights. This portfolio of fair value option securities decreased $866 thousand to $19.8 million at March 31, 2024.

Derivative contracts are carried at fair value. At March 31, 2024, the net fair values of derivative contracts, before consideration of cash margin, reported as assets under our customer derivative programs totaled $463 million compared to $593 million at December 31, 2023. The aggregate net fair value of derivative contracts, before consideration of cash margin, held under these programs reported as liabilities totaled $460 million at March 31, 2024 and $587 million at December 31, 2023.

The net benefit of the changes in the fair value of mortgage servicing rights and related economic hedges was $1.2 million during the first quarter of 2024, including an $11.0 million increase in the fair value of mortgage servicing rights, a $9.7 million decrease in the fair value of securities and derivative contracts held as an economic hedge and $155 thousand of related net interest expense.

First Quarter 2024 Segment Highlights

Commercial Banking Consumer Banking Wealth Management
(In thousands)
Mar. 31, 2024 Dec. 31, 2023 Mar. 31, 2024 Dec. 31, 2023 Mar. 31, 2024 Dec. 31, 2023
Net interest revenue and fee revenue
$295,751 $328,816 $138,356 $144,471 $158,813 $161,515
Net loans charged-off
4,160 2,987 1,808 1,443 (15) 10
Personnel expense
45,319 53,066 25,236 23,051 63,777 66,151
Non-personnel expense
24,776 28,833 28,211 32,028 35,758 30,124
Net income
153,250 171,084 53,804 53,695 34,165 62,690

Average loans
20,067,170 19,928,602 1,913,586 1,877,303 2,198,803 2,154,416
Average deposits
15,730,241 15,493,326 7,901,167 7,890,032 9,237,965 8,085,643
Assets under management or administration
- - - - 105,530,903 104,736,999

Commercial Banking contributed $153.3 million to net income in the first quarter of 2024, a decrease of $17.8 million compared to the fourth quarter of 2023. Combined net interest revenue and fee revenue decreased $33.1 million. Net interest revenue declined due to a shift in deposit balances from demand to interest-bearing transaction accounts along with decreased spreads due to a change in market conditions. Customer hedging revenue fell due to a reduction in customer energy hedging and transaction card revenue decreased following elevated fourth quarter transaction activity. Net loans charged-off increased $1.2 million to $4.2 million in the first quarter of 2024. Personnel expense decreased $7.7 million primarily due to lower incentive compensation costs. Non-personnel expense decreased $4.1 million due to decreases in other expense and professional fees. Average loans increased $139 million or 1% to $20.1 billion. Average deposits increased $237 million or 2% to $15.7 billion.

Consumer Banking contributed $53.8 million to net income in the first quarter of 2024, consistent with the prior quarter. Combined net interest revenue and fee revenue decreased $6.1 million, largely due to increased customer demand for time deposits and a reduction in deposit spreads from a change in market conditions, partially offset by an increase in mortgage banking revenue from higher production volumes. Operating expense decreased $1.6 million. The net benefit of the changes in the fair value of mortgage servicing rights and related economic hedges was $1.2 million compared to a net cost of $5.2 million for the fourth quarter of 2023. Average loans increased $36 million or 2% to $1.9 billion. Average deposits were mostly unchanged from the previous quarter.

Wealth Management contributed $34.2 million to net income in the first quarter of 2024, a decrease of $28.5 million compared to the fourth quarter of 2023. The prior quarter included a pre-tax gain of $31.0 million, before related professional fees, on the sale of our insurance brokerage and consulting business, BOKFI. Combined net interest and fee revenue decreased $2.7 million due to declining spread on deposits. Total revenue from institutional trading activities increased $1.4 million, primarily in U.S. government residential mortgage-backed securities trading activity. Personnel expense decreased $2.4 million as the prior quarter included transaction related employee costs on the BOKFI sale. Non-personnel expense increased $5.6 million, primarily due to an increased level of operational losses, partially offset by a $2.7 milliondecrease in professional fees. Average loans increased $44 million or 2% to $2.2 billion. Average deposits increased $1.2 billion or 14% to $9.2 billion. Assets under management or administration were $105.5 billion, an increase of $794 million.

Conference Call & Webcast

The company will hold a conference call at 9 a.m. Central time on Wednesday, April 24, 2024 to discuss the financial results with investors. The live audio webcast and presentation slides will be available on the company's website at bokf.com. The conference call can also be accessed by dialing 1-800-715-9871 toll free, or 1-646-307-1963, conference ID: 5365153. A webcast replay will also be available shortly after conclusion of the live call at bokf.com or by dialing 1-800-770-2030 and referencing playback ID: 5365153 followed by # key.

About BOK Financial Corporation

BOK Financial Corporation is a $50 billion regional financial services company headquartered in Tulsa, Oklahoma with $106 billion in assets under management or administration. The company's stock is publicly traded on NASDAQ under the Global Select market listings (BOKF). BOK Financial Corporation's holdings include BOKF, NA; BOK Financial Securities, Inc.; and BOK Financial Private Wealth, Inc. BOKF, NA's holdings include TransFund and Cavanal Hill Investment Management, Inc. BOKF, NA operates banking divisions across eight states as: Bank of Albuquerque; Bank of Oklahoma; Bank of Texas; and BOK Financial in Arizona, Arkansas, Colorado, Kansas and Missouri; as well as having limited purpose offices in Nebraska, Wisconsin, Connecticut and Tennessee. Through its subsidiaries, BOK Financial Corporation provides commercial and consumer banking, brokerage trading, investment and trustservices, mortgage origination and servicing, and an electronic funds transfer network. For more information, visit www.bokf.com.

The company will continue to evaluate critical assumptions and estimates, such as the appropriateness of the allowance for credit losses and asset impairment as of March 31, 2024 through the date its financial statements are filed with the Securities and Exchange Commission and will adjust amounts reported if necessary.

This news release contains forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about BOK Financial Corporation, the financial services industry and the economy generally. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "plans," "outlook," "projects," "will," "intends," variations of such words and similar expressions are intended to identify such forward-looking statements. Management judgments relating to and discussion of the provision and allowance for credit losses, allowance for uncertain tax positions, accruals for loss contingencies and valuation of mortgage servicing rights involve judgments as to expected events and are inherently forward-looking statements. Assessments that acquisitions and growth endeavors will be profitable are necessary statements of belief as to the outcome of future events based in part on information provided by others which BOK Financial has not independently verified. These various forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions which are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what is expected, implied or forecasted in such forward-looking statements. Internal and external factors that might cause such a difference include, but are not limited to changes in government, changes in commodity prices, interest rates and interest rate relationships, inflation, demand for products and services, the degree of competition by traditional and nontraditional competitors, changes in banking regulations, tax laws, prices, levies and assessments, the impact of technological advances, and trends in customer behavior as well as their ability to repay loans. BOK Financial Corporation and its affiliates undertake no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events, or otherwise.

BALANCE SHEETS - UNAUDITED
BOK FINANCIAL CORPORATION

(In thousands)
Mar. 31, 2024 Dec. 31, 2023
Assets
Cash and due from banks
$801,677 $947,613
Interest-bearing cash and cash equivalents
354,070 400,652
Trading securities
5,441,038 5,193,505
Investment securities, net of allowance
2,185,744 2,244,153
Available for sale securities
12,653,088 12,286,681
Fair value option securities
19,805 20,671
Restricted equity securities
382,549 423,099
Residential mortgage loans held for sale
75,449 56,935
Loans:
Commercial
15,132,867 14,803,769
Commercial real estate
5,236,677 5,337,647
Loans to individuals
3,803,016 3,763,552
Total loans
24,172,560 23,904,968
Allowance for loan losses
(281,623) (277,123)
Loans, net of allowance
23,890,937 23,627,845
Premises and equipment, net
628,050 622,223
Receivables
308,736 317,922
Goodwill
1,044,749 1,044,749
Intangible assets, net
56,894 59,979
Mortgage servicing rights
319,330 293,884
Real estate and other repossessed assets, net
2,860 2,875
Derivative contracts, net
263,493 410,304
Cash surrender value of bank-owned life insurance
410,368 409,548
Receivable on unsettled securities sales
67,854 391,910
Other assets
1,253,689 1,070,282
Total assets
$50,160,380 $49,824,830

Liabilities
Deposits:
Demand
$8,414,056 $9,196,493
Interest-bearing transaction
22,748,185 20,964,101
Savings
854,397 847,085
Time
3,366,909 3,012,022
Total deposits
35,383,547 34,019,701
Funds purchased and repurchase agreements
1,261,517 1,122,748
Other borrowings
6,724,652 7,701,552
Subordinated debentures
131,154 131,150
Accrued interest, taxes and expense
318,622 338,996
Due on unsettled securities purchases
264,230 254,057
Derivative contracts, net
438,605 587,473
Other liabilities
506,418 523,734
Total liabilities
45,028,745 44,679,411
Shareholders' equity
Capital, surplus and retained earnings
5,738,879 5,741,542
Accumulated other comprehensive loss
(610,128) (599,100)
Total shareholders' equity
5,128,751 5,142,442
Non-controlling interests
2,884 2,977
Total equity
5,131,635 5,145,419
Total liabilities and equity
$50,160,380 $49,824,830

AVERAGE BALANCE SHEETS - UNAUDITED
BOK FINANCIAL CORPORATION

Three Months Ended
(In thousands)
Mar. 31, 2024 Dec. 31, 2023 Sep. 30, 2023 June 30, 2023 Mar. 31, 2023
Assets
Interest-bearing cash and cash equivalents
$567,680 $605,839 $598,734 $708,475 $616,596
Trading securities
5,371,209 5,448,403 5,444,587 4,274,803 3,031,969
Investment securities, net of allowance
2,210,040 2,264,194 2,331,595 2,408,122 2,473,796
Available for sale securities
12,537,981 12,063,398 11,925,800 12,033,597 11,738,693
Fair value option securities
20,080 20,086 41,741 245,469 300,372
Restricted equity securities
412,376 432,780 445,532 351,944 316,724
Residential mortgage loans held for sale
57,402 61,146 77,208 72,959 65,769
Loans:
Commercial
14,992,639 14,680,001 14,527,676 14,316,474 14,046,237
Commercial real estate
5,188,152 5,293,021 5,172,876 4,896,230 4,757,362
Loans to individuals
3,767,776 3,732,086 3,713,756 3,676,350 3,672,648
Total loans
23,948,567 23,705,108 23,414,308 22,889,054 22,476,247
Allowance for loan losses
(278,449) (273,717) (267,205) (252,890) (238,909)
Loans, net of allowance
23,670,118 23,431,391 23,147,103 22,636,164 22,237,338
Total earning assets
44,846,886 44,327,237 44,012,300 42,731,533 40,781,257
Cash and due from banks
861,319 883,858 799,291 875,280 857,771
Derivative contracts, net
326,564 372,789 412,707 410,793 546,018
Cash surrender value of bank-owned life insurance
409,230 407,665 408,295 409,313 408,124
Receivable on unsettled securities sales
307,389 276,856 268,344 163,903 177,312
Other assets
3,276,184 3,445,265 3,418,615 3,317,285 3,211,986
Total assets
$50,027,572 $49,713,670 $49,319,552 $47,908,107 $45,982,468

Liabilities
Deposits:
Demand
$8,631,416 $9,378,886 $10,157,821 $10,998,201 $12,406,408
Interest-bearing transaction
22,264,259 20,449,370 19,415,599 18,368,592 18,639,900
Savings
843,037 845,705 874,530 926,882 958,443
Time
3,287,179 3,002,252 2,839,947 2,076,037 1,477,720
Total deposits
35,025,891 33,676,213 33,287,897 32,369,712 33,482,471
Funds purchased and repurchase agreements
1,258,044 2,476,973 2,699,027 3,670,994 1,759,237
Other borrowings
6,844,633 7,120,963 6,968,309 5,275,291 4,512,280
Subordinated debentures
131,154 131,151 131,151 131,153 131,166
Derivative contracts, net
537,993 524,101 429,989 576,558 428,023
Due on unsettled securities purchases
499,936 363,358 435,927 436,353 316,738
Other liabilities
574,954 483,934 461,686 503,134 511,530
Total liabilities
44,872,605 44,776,693 44,413,986 42,963,195 41,141,445
Total equity
5,154,967 4,936,977 4,905,566 4,944,912 4,841,023
TOTAL LIABILITIES AND EQUITY
$50,027,572 $49,713,670 $49,319,552 $47,908,107 $45,982,468

STATEMENTS OF EARNINGS - UNAUDITED
BOK FINANCIAL CORPORATION

Three Months Ended
March 31,
(In thousands, except per share data)
2024 2023
Interest revenue
$645,212 $516,729
Interest expense
351,640 164,381
Net interest revenue
293,572 352,348
Provision for credit losses
8,000 16,000
Net interest revenue after provision for credit losses
285,572 336,348
Other operating revenue:
Brokerage and trading revenue
59,179 52,396
Transaction card revenue
25,493 25,621
Fiduciary and asset management revenue
55,305 50,657
Deposit service charges and fees
28,685 25,968
Mortgage banking revenue
18,967 14,367
Other revenue
12,935 16,970
Total fees and commissions
200,564 185,979
Other gains, net
4,269 2,251
Loss on derivatives, net
(8,633) (1,344)
Loss on fair value option securities, net
(305) (2,962)
Change in fair value of mortgage servicing rights
10,977 (6,059)
Loss on available for sale securities, net
(45,171) -
Total other operating revenue
161,701 177,865
Other operating expense:
Personnel
202,653 182,145
Business promotion
7,978 8,569
Professional fees and services
12,010 13,048
Net occupancy and equipment
30,293 28,459
FDIC and other insurance
8,740 7,315
FDIC special assessment
6,454 -
Data processing and communications
45,564 44,802
Printing, postage and supplies
3,997 3,893
Amortization of intangible assets
3,003 3,391
Mortgage banking costs
6,355 5,782
Other expense
13,337 8,408
Total other operating expense
340,384 305,812

Net income before taxes
106,889 208,401
Federal and state income taxes
23,195 45,905

Net income
83,694 162,496
Net income (loss) attributable to non-controlling interests
(9) 128
Net income attributable to BOK Financial Corporation shareholders
$83,703 $162,368

Average shares outstanding:
Basic
64,290,105 66,331,775
Diluted
64,290,105 66,331,775

Net income per share:
Basic
$1.29 $2.43
Diluted
$1.29 $2.43

QUARTERLY EARNINGS TREND - UNAUDITED
BOK FINANCIAL CORPORATION

Three Months Ended
(In thousands, except ratio and per share data)
Mar. 31, 2024 Dec. 31, 2023 Sep. 30, 2023 June 30, 2023 Mar. 31, 2023
Interest revenue
$645,212 $638,324 $617,044 $570,367 $516,729
Interest expense
351,640 341,649 316,148 248,106 164,381
Net interest revenue
293,572 296,675 300,896 322,261 352,348
Provision for credit losses
8,000 6,000 7,000 17,000 16,000
Net interest revenue after provision for credit losses
285,572 290,675 293,896 305,261 336,348
Other operating revenue:
Brokerage and trading revenue
59,179 60,896 62,312 65,006 52,396
Transaction card revenue
25,493 28,847 26,387 26,003 25,621
Fiduciary and asset management revenue
55,305 51,408 52,256 52,997 50,657
Deposit service charges and fees
28,685 27,770 27,676 27,100 25,968
Mortgage banking revenue
18,967 12,834 13,356 15,141 14,367
Other revenue
12,935 15,035 15,865 14,250 16,970
Total fees and commissions
200,564 196,790 197,852 200,497 185,979
Other gains, net
4,269 40,452 1,474 12,618 2,251
Gain (loss) on derivatives, net
(8,633) 8,592 (9,010) (8,159) (1,344)
Gain (loss) on fair value option securities, net
(305) 1,031 (203) (2,158) (2,962)
Change in fair value of mortgage servicing rights
10,977 (14,356) 8,039 9,261 (6,059)
Loss on available for sale securities, net
(45,171) (27,626) - (3,010) -
Total other operating revenue
161,701 204,883 198,152 209,049 177,865
Other operating expense:
Personnel
202,653 203,022 190,791 190,652 182,145
Business promotion
7,978 8,629 6,958 7,640 8,569
Charitable contributions to BOKF Foundation
- 1,542 23 1,142 -
Professional fees and services
12,010 16,288 13,224 12,777 13,048
Net occupancy and equipment
30,293 30,355 32,583 30,105 28,459
FDIC and other insurance
8,740 8,495 7,996 6,974 7,315
FDIC special assessment
6,454 43,773 - - -
Data processing and communications
45,564 45,584 45,672 45,307 44,802
Printing, postage and supplies
3,997 3,844 3,760 3,728 3,893
Amortization of intangible assets
3,003 3,543 3,474 3,474 3,391
Mortgage banking costs
6,355 8,085 8,357 8,300 5,782
Other expense
13,337 10,923 11,475 8,574 8,408
Total other operating expense
340,384 384,083 324,313 318,673 305,812
Net income before taxes
106,889 111,475 167,735 195,637 208,401
Federal and state income taxes
23,195 28,953 33,256 44,001 45,905
Net income
83,694 82,522 134,479 151,636 162,496
Net income (loss) attributable to non-controlling interests
(9) (53) (16) 328 128
Net income attributable to BOK Financial Corporation shareholders
$83,703 $82,575 $134,495 $151,308 $162,368

Average shares outstanding:
Basic
64,290,105 64,750,171 65,548,307 65,994,132 66,331,775
Diluted
64,290,105 64,750,171 65,548,307 65,994,132 66,331,775
Net income per share:
Basic
$1.29 $1.26 $2.04 $2.27 $2.43
Diluted
$1.29 $1.26 $2.04 $2.27 $2.43

FINANCIAL HIGHLIGHTS - UNAUDITED

BOK FINANCIAL CORPORATION

Three Months Ended
(In thousands, except ratio and share data) Mar. 31, Dec. 31, Sep. 30, June 30, Mar. 31,
Capital:
Period-end shareholders' equity
$5,128,751 $5,142,442 $4,814,019 $4,863,854 $4,874,786
Risk weighted assets
$38,952,555 $38,820,979 $38,791,023 $38,218,164 $37,192,197
Risk-based capital ratios:
Common equity tier 1
11.99% 12.06% 12.06% 12.13% 12.19%
Tier 1
12.00% 12.07% 12.07% 12.13% 12.20%
Total capital
13.15% 13.16% 13.16% 13.24% 13.21%
Leverage ratio
9.42% 9.45% 9.52% 9.75% 9.94%
Tangible common equity ratio1
8.21% 8.29% 7.74% 7.79% 8.46%
Adjusted tangible common equity ratio1
7.92% 8.02% 7.35% 7.49% 8.22%

Common stock:
Book value per share
$79.50 $79.15 $73.31 $73.28 $73.19
Tangible book value per share
$62.42 $62.15 $56.40 $56.50 $56.42
Market value per share:
High
$92.08 $87.52 $92.41 $90.91 $106.47
Low
$77.86 $62.42 $77.61 $74.40 $80.00
Cash dividends paid
$35,568 $35,739 $35,655 $35,879 $36,006
Dividend payout ratio
42.49% 43.28% 26.51% 23.71% 22.18%
Shares outstanding, net
64,515,035 64,967,177 65,664,840 66,369,208 66,600,833
Stock buy-back program:
Shares repurchased
616,630 700,237 700,500 266,000 447,071
Amount
$51,727 $49,710 $58,961 $22,366 $44,100
Average price paid per share2
$83.89 $70.99 $84.17 $84.08 $98.64

Performance ratios (quarter annualized):
Return on average assets
0.67% 0.66% 1.08% 1.27% 1.43%
Return on average equity
6.53% 6.64% 10.88% 12.28% 13.61%
Return on average tangible common equity1
8.31% 8.56% 14.08% 15.86% 17.71%
Net interest margin
2.61% 2.64% 2.69% 3.00% 3.45%
Efficiency ratio1,3
67.13% 71.62% 64.01% 58.75% 56.79%

Other data:
Tax equivalent interest
$2,100 $2,112 $2,214 $2,200 $2,285
Net unrealized loss on available for sale securities
$(643,259) $(616,624) $(1,034,520) $(898,906) $(741,508)
Mortgage banking:
Mortgage production revenue
$3,525 $(2,535) $(1,887) $(284) $(633)

Mortgage loans funded for sale
$139,176 $139,255 $173,727 $214,785 $138,624
Add: Current period-end outstanding commitments
67,951 34,783 49,284 55,031 71,693
Less: Prior period end outstanding commitments
34,783 49,284 55,031 71,693 45,492
Total mortgage production volume
$172,344 $124,754 $167,980 $198,123 $164,825

Mortgage loan refinances to mortgage loans funded for sale
10% 10% 9% 8% 9%
Realized margin on funded mortgage loans
1.46% (0.98)% (0.94)% (0.14)% (1.25)%
Production revenue as a percentage of production volume
2.05% (2.03)% (1.12)% (0.14)% (0.38)%

Mortgage servicing revenue
$15,442 $15,369 $15,243 $15,425 $15,000
Average outstanding principal balance of mortgage loans serviced for others
$21,088,898 $20,471,030 $20,719,116 $20,807,044 $21,121,319
Average mortgage servicing revenue rates
0.29% 0.30% 0.29% 0.30% 0.29%

Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net
$(9,357) $8,275 $(8,980) $(8,099) $(1,711)
Gain (loss) on fair value option securities, net
(305) 1,031 (203) (2,158) (2,962)
Gain (loss) on economic hedge of mortgage servicing rights
(9,662) 9,306 (9,183) (10,257) (4,673)
Gain (loss) on changes in fair value of mortgage servicing rights
10,977 (14,356) 8,039 9,261 (6,059)
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue
1,315 (5,050) (1,144) (996) (10,732)
Net interest revenue (expense) on fair value option securities4
(155) (101) (112) (232) 187
Total economic benefit (cost) of changes in the fair value of mortgage servicing rights, net of economic hedges
$1,160 $(5,151) $(1,256) $(1,228) $(10,545)

1 See Reconciliation of Non-GAAP Measures following.
2 Excludes 1% excise tax on corporate stock repurchases.
3 Prior period ratios have been adjusted to be consistent with the current period presentation.
4 Actual interest earned on fair value option securities less internal transfer-priced cost of funds.

EXPLANATION AND RECONCILIATION OF NON-GAAP MEASURES - UNAUDITED

BOK FINANCIAL CORPORATION

Three Months Ended
(In thousands, except ratio and share data) Mar. 31, 2024 Dec. 31, 2023 Sep. 30, 2023 June 30, 2023 Mar. 31, 2023
Reconciliation of tangible common equity ratio and adjusted tangible common equity ratio:
Total shareholders' equity
$5,128,751 $5,142,442 $4,814,019 $4,863,854 $4,874,786
Less: Goodwill and intangible assets, net
1,101,643 1,104,728 1,110,553 1,113,995 1,117,438
Tangible common equity
4,027,108 4,037,714 3,703,466 3,749,859 3,757,348
Add: Unrealized gain (loss) on investment securities, net
(185,978) (171,903) (246,395) (189,152) (140,947)
Add: Tax effect on unrealized gain (loss) on investment securities, net
43,740 40,430 57,949 44,486 33,149
Adjusted tangible common equity
$3,884,870 $3,906,241 $3,515,020 $3,605,193 $3,649,550

Total assets
$50,160,380 $49,824,830 $48,931,397 $49,237,920 $45,524,122
Less: Goodwill and intangible assets, net
1,101,643 1,104,728 1,110,553 1,113,995 1,117,438
Tangible assets
$49,058,737 $48,720,102 $47,820,844 $48,123,925 $44,406,684

Tangible common equity ratio
8.21% 8.29% 7.74% 7.79% 8.46%
Adjusted tangible common equity ratio
7.92% 8.02% 7.35% 7.49% 8.22%

Reconciliation of return on average tangible common equity:
Total average shareholders' equity
$5,152,061 $4,933,917 $4,902,119 $4,941,352 $4,837,567
Less: Average goodwill and intangible assets, net
1,103,090 1,107,949 1,112,217 1,115,652 1,119,123
Average tangible common equity
$4,048,971 $3,825,968 $3,789,902 $3,825,700 $3,718,444

Net Income
$83,703 $82,575 $134,495 $151,308 $162,368

Return on average tangible common equity
8.31% 8.56% 14.08% 15.86% 17.71%

Calculation of efficiency ratio and efficiency ratio excluding adjustments:
Total other operating expense
$340,384 $384,083 $324,313 $318,673 $305,812
Less: Amortization of intangible assets
3,003 3,543 3,474 3,474 3,391
Numerator for efficiency ratio
337,381 380,540 320,839 315,199 302,421
Less: FDIC special assessment
6,454 43,773 - - -
Less: Expenses related to sale of BOKF Insurance
- 3,436 - - -
Adjusted numerator for efficiency ratio
$330,927 $333,331 $320,839 $315,199 $302,421

Net interest revenue
$293,572 $296,675 $300,896 $322,261 $352,348
Tax-equivalent adjustment
2,100 2,112 2,214 2,200 2,285
Tax-equivalent net interest revenue
295,672 298,787 303,110 324,461 354,633
Total other operating revenue
161,701 204,883 198,152 209,049 177,865
Less: Loss on available for sale securities, net
(45,171) (27,626) - (3,010) -
Denominator for efficiency ratio
502,544 531,296 501,262 536,520 532,498
Less: Gain on sale of BOKF Insurance
- 31,007 - - -
Adjusted denominator for efficiency ratio
$502,544 $500,289 $501,262 $536,520 $532,498

Efficiency ratio
67.13% 71.62% 64.01% 58.75% 56.79%
Efficiency ratio excluding adjustments
65.85% 66.63% 64.01% 58.75% 56.79%



Information on net interest revenue and net interest margin excluding trading activities:
Net interest revenue
$293,572 $296,675 $300,896 $322,261 $352,348
Less: Trading activities net interest revenue
(498) (3,305) (7,343) (3,461) 70
Net interest revenue excluding trading activities
294,070 299,980 308,239 325,722 352,278
Tax-equivalent adjustment
2,100 2,112 2,214 2,200 2,285
Tax-equivalent net interest revenue excluding trading activities
$296,170 $302,092 $310,453 $327,922 $354,563

Average interest-earning assets
$44,846,886 $44,327,237 $44,012,300 $42,731,533 $40,781,257
Less: Average trading activities interest-earning assets
5,371,209 5,448,403 5,444,587 4,274,803 3,031,969
Average interest-earning assets excluding trading activities
$39,475,677 $38,878,834 $38,567,713 $38,456,730 $37,749,288

Net interest margin on average interest-earning assets
2.61% 2.64% 2.69% 3.00% 3.45%
Net interest margin on average trading activities interest-earning assets
(0.07)% (0.20)% (0.49)% (0.34)% -%
Net interest margin on average interest-earning assets excluding trading activities
2.97% 3.03% 3.14% 3.36% 3.72%

Reconciliation of pre-provision net revenue:
Net income before taxes
$106,889 $111,475 $167,735 $195,637 $208,401
Provision for expected credit losses
8,000 6,000 7,000 17,000 16,000
Net income (loss) attributable to non-controlling interests
(9) (53) (16) 328 128
Pre-provision net revenue
$114,898 $117,528 $174,751 $212,309 $224,273

Reconciliation of adjusted net income and earnings per share:
Net income
$83,703 $82,575 $134,495 $151,308 $162,368
Add: FDIC special assessment, net of tax
4,936 33,478 - - -
Less: Loss on repositioning of available for sale securities, net of tax
(34,547) (21,129) - (2,302) -
Less: Gain on sale of BOKF Insurance, net of tax
- 23,715 - - -
Adjusted net income
$123,186 $113,467 $134,495 $153,610 $162,368

Earnings per share
$1.29 $1.26 $2.04 $2.27 $2.43
Add: FDIC special assessment, net of tax
0.08 0.52 - - -
Less: Loss on repositioning of available for sale securities, net of tax
(0.54) (0.33) - (0.03) -
Less: Gain on sale of BOKF Insurance, net of tax
- 0.37 - - -
Adjusted earnings per share
$1.91 $1.74 $2.04 $2.30 $2.43

Explanation of Non-GAAP Measures

The tangible common equity ratio and return on average tangible common equity are primarily based on total shareholders' equity, which includes unrealized gains and losses on available for sale securities, less intangible assets and equity that does not benefit common shareholders. The adjusted tangible common equity ratio also includes unrealized gains and losses on the investment portfolio. These measures are valuable indicators of a financial institution's capital strength since they eliminate intangible assets from shareholders' equity and retain the effect of unrealized losses on securities and other components of accumulated other comprehensive income in shareholders' equity.

The efficiency ratio measures the company's ability to use its assets and manage its liabilities effectively in the current period.

Net interest revenue and net interest margin excluding trading activities removes the effect of trading activities on these metrics allowing management and investors to assess the performance of the company's core lending and deposit activities without the associated volatility from trading activities.

Pre-provision net revenue is a measure of revenue less expenses and is calculated before provision for credit losses and income tax expense. This financial measure is frequently used by investors and analysts and enables them to assess a company's ability to generate earnings to cover credit losses through a credit cycle. It also provides an additional basis for comparing the results of operations between periods by isolating the impact of the provision for credit losses, which can vary significantly between periods.

We believe adjusting net income and earnings per share for notable non-core items enhances comparability of results with prior periods, demonstrates the impact of significant items and provides a useful measure for determining the company's expenses that are core to our business operations and are expected to recur over time.

LOANS TREND - UNAUDITED
BOK FINANCIAL CORPORATION

(In thousands)
Mar. 31, 2024 Dec. 31, 2023 Sep. 30, 2023 June 30, 2023 Mar. 31, 2023
Commercial:
Healthcare
$4,245,939 $4,143,233 $4,083,134 $3,991,387 $3,899,341
Services
3,529,421 3,576,223 3,566,361 3,585,169 3,563,702
Energy
3,443,719 3,437,101 3,490,602 3,508,752 3,398,057
General business
3,913,788 3,647,212 3,579,742 3,449,208 3,356,249
Total commercial
15,132,867 14,803,769 14,719,839 14,534,516 14,217,349

Commercial real estate:
Multifamily
1,960,839 1,872,760 1,734,688 1,502,971 1,363,881
Industrial
1,343,970 1,475,165 1,432,629 1,349,709 1,309,435
Office
901,105 909,442 981,876 1,005,660 1,045,700
Retail
543,735 592,632 608,073 617,886 618,264
Residential construction and land development
83,906 95,052 100,465 106,370 102,828
Other commercial real estate
403,122 392,596 383,569 388,205 375,208
Total commercial real estate
5,236,677 5,337,647 5,241,300 4,970,801 4,815,316

Loans to individuals:
Residential mortgage
2,192,584 2,160,640 2,090,992 1,993,690 1,926,027
Residential mortgages guaranteed by U.S. government agencies
139,456 149,807 161,092 186,170 224,753
Personal
1,470,976 1,453,105 1,510,795 1,552,482 1,566,608
Total loans to individuals
3,803,016 3,763,552 3,762,879 3,732,342 3,717,388

Total
$24,172,560 $23,904,968 $23,724,018 $23,237,659 $22,750,053

LOANS MANAGED BY PRINCIPAL MARKET AREA - UNAUDITED
BOK FINANCIAL CORPORATION

(In thousands)
Mar. 31, 2024 Dec. 31, 2023 Sep. 30, 2023 June 30, 2023 Mar. 31, 2023
Texas:
Commercial
$7,515,070 $7,384,107 $7,249,963 $7,223,820 $7,103,166
Commercial real estate
1,935,728 1,987,037 1,873,477 1,748,796 1,675,831
Loans to individuals
964,464 914,134 961,299 974,911 992,343
Total Texas
10,415,262 10,285,278 10,084,739 9,947,527 9,771,340

Oklahoma:
Commercial
3,478,146 3,275,907 3,384,627 3,251,547 3,178,934
Commercial real estate
605,419 606,515 601,087 573,559 574,708
Loans to individuals
2,176,268 2,147,782 2,100,974 2,079,311 2,049,472
Total Oklahoma
6,259,833 6,030,204 6,086,688 5,904,417 5,803,114

Colorado:
Commercial
2,244,416 2,273,179 2,219,460 2,179,473 2,148,066
Commercial real estate
766,100 769,329 710,552 683,973 646,537
Loans to individuals
221,291 228,257 227,569 223,200 231,368
Total Colorado
3,231,807 3,270,765 3,157,581 3,086,646 3,025,971

Arizona:
Commercial
1,149,394 1,143,682 1,173,491 1,177,778 1,115,973
Commercial real estate
1,007,972 1,003,331 1,014,151 926,750 881,465
Loans to individuals
218,664 248,873 260,282 242,102 240,556
Total Arizona
2,376,030 2,395,886 2,447,924 2,346,630 2,237,994

Kansas/Missouri:
Commercial
320,609 331,179 307,725 309,148 318,782
Commercial real estate
497,036 511,947 547,708 516,299 489,951
Loans to individuals
141,767 144,958 132,137 138,960 129,580
Total Kansas/Missouri
959,412 988,084 987,570 964,407 938,313

New Mexico:
Commercial
317,651 291,736 297,714 287,443 280,945
Commercial real estate
352,559 389,106 405,989 425,472 449,715
Loans to individuals
67,814 67,485 69,418 64,803 65,770
Total New Mexico
738,024 748,327 773,121 777,718 796,430

Arkansas:
Commercial
107,581 103,979 86,859 105,307 71,483
Commercial real estate
71,863 70,382 88,336 95,952 97,109
Loans to individuals
12,748 12,063 11,200 9,055 8,299
Total Arkansas
192,192 186,424 186,395 210,314 176,891

Total BOK Financial
$24,172,560 $23,904,968 $23,724,018 $23,237,659 $22,750,053

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

DEPOSITS BY PRINCIPAL MARKET AREA - UNAUDITED
BOK FINANCIAL CORPORATION

(In thousands) Mar. 31, 2024 Dec. 31, 2023 Sep. 30, 2023 June 30, 2023 Mar. 31, 2023
Oklahoma:
Demand
$3,365,529 $3,586,091 $4,019,019 $4,273,136 $4,369,944
Interest-bearing:
Transaction
12,362,193 10,929,704 9,970,955 9,979,534 9,468,100
Savings
509,775 500,313 508,619 531,536 564,829
Time
2,136,583 1,984,336 2,019,749 1,945,916 942,787
Total interest-bearing
15,008,551 13,414,353 12,499,323 12,456,986 10,975,716
Total Oklahoma
18,374,080 17,000,444 16,518,342 16,730,122 15,345,660

Texas:
Demand
2,201,561 2,306,334 2,599,998 2,876,568 3,154,789
Interest-bearing:
Transaction
5,125,834 5,035,856 5,046,288 4,532,093 4,366,932
Savings
157,108 155,652 154,863 162,704 175,012
Time
605,526 492,753 436,218 377,424 321,774
Total interest-bearing
5,888,468 5,684,261 5,637,369 5,072,221 4,863,718
Total Texas
8,090,029 7,990,595 8,237,367 7,948,789 8,018,507

Colorado:
Demand
1,316,971 1,633,672 1,598,622 1,726,130 1,869,194
Interest-bearing:
Transaction
1,951,232 1,921,605 1,888,026 1,825,295 2,126,435
Savings
63,675 67,646 63,129 66,968 72,548
Time
237,656 201,393 185,030 148,840 128,583
Total interest-bearing
2,252,563 2,190,644 2,136,185 2,041,103 2,327,566
Total Colorado
3,569,534 3,824,316 3,734,807 3,767,233 4,196,760

New Mexico:
Demand
683,643 794,467 853,571 912,218 997,364
Interest-bearing:
Transaction
1,085,946 886,089 1,049,903 712,541 674,328
Savings
95,944 95,453 97,753 102,729 111,771
Time
298,556 258,195 217,535 179,548 137,875
Total interest-bearing
1,480,446 1,239,737 1,365,191 994,818 923,974
Total New Mexico
2,164,089 2,034,204 2,218,762 1,907,036 1,921,338

Arizona:
Demand
502,143 524,167 522,142 592,144 780,051
Interest-bearing:
Transaction
1,181,539 1,174,715 903,535 800,970 687,527
Savings
12,024 11,636 12,340 14,489 16,993
Time
46,962 41,884 36,689 31,248 27,755
Total interest-bearing
1,240,525 1,228,235 952,564 846,707 732,275
Total Arizona
1,742,668 1,752,402 1,474,706 1,438,851 1,512,326


Kansas/Missouri:
Demand
316,041 326,496 351,236 363,534 393,321
Interest-bearing:
Transaction
985,706 966,166 981,091 1,014,247 1,040,009
Savings
13,095 13,821 14,331 16,316 18,292
Time
30,411 23,955 22,437 16,176 13,061
Total interest-bearing
1,029,212 1,003,942 1,017,859 1,046,739 1,071,362
Total Kansas/Missouri
1,345,253 1,330,438 1,369,095 1,410,273 1,464,683

Arkansas:
Demand
28,168 25,266 29,635 38,818 42,312
Interest-bearing:
Transaction
55,735 49,966 57,381 43,301 71,158
Savings
2,776 2,564 2,898 3,195 3,228
Time
11,215 9,506 9,559 7,225 4,775
Total interest-bearing
69,726 62,036 69,838 53,721 79,161
Total Arkansas
97,894 87,302 99,473 92,539 121,473

Total BOK Financial
$35,383,547 $34,019,701 $33,652,552 $33,294,843 $32,580,747

NET INTEREST MARGIN TREND - UNAUDITED
BOK FINANCIAL CORPORATION

Three Months Ended
Mar. 31, 2024 Dec. 31, 2023 Sep. 30, 2023 June 30, 2023 Mar. 31, 2023
Tax-equivalent asset yields:
Interest-bearing cash and cash equivalents
4.96% 5.30% 5.43% 5.41% 4.28%
Trading securities
5.12% 5.05% 4.76% 4.50% 4.52%
Investment securities, net of allowance
1.42% 1.42% 1.43% 1.44% 1.46%
Available for sale securities
3.48% 3.27% 3.11% 3.00% 2.87%
Fair value option securities
3.59% 3.57% 4.61% 5.07% 5.17%
Restricted equity securities
8.59% 8.01% 7.88% 7.31% 7.34%
Residential mortgage loans held for sale
6.25% 6.59% 6.27% 5.85% 5.79%
Loans
7.40% 7.36% 7.25% 7.03% 6.67%
Allowance for loan losses
Loans, net of allowance
7.48% 7.45% 7.33% 7.10% 6.74%
Total tax-equivalent yield on earning assets
5.73% 5.64% 5.49% 5.29% 5.06%

Cost of interest-bearing liabilities:
Interest-bearing deposits:
Interest-bearing transaction
3.68% 3.44% 3.18% 2.60% 1.91%
Savings
0.57% 0.53% 0.47% 0.21% 0.10%
Time
4.54% 4.13% 3.96% 3.27% 1.95%
Total interest-bearing deposits
3.69% 3.43% 3.17% 2.56% 1.83%
Funds purchased and repurchase agreements
4.05% 4.79% 4.81% 4.58% 3.33%
Other borrowings
5.56% 5.55% 5.48% 5.12% 4.73%
Subordinated debt
7.09% 7.09% 7.02% 6.79% 6.40%
Total cost of interest-bearing liabilities
4.08% 3.98% 3.81% 3.27% 2.43%
Tax-equivalent net interest revenue spread
1.65% 1.66% 1.68% 2.02% 2.63%
Effect of noninterest-bearing funding sources and other
0.96% 0.98% 1.01% 0.98% 0.82%
Tax-equivalent net interest margin
2.61% 2.64% 2.69% 3.00% 3.45%

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

Three Months Ended
(In thousands, except ratios) Mar. 31, 2024 Dec. 31, 2023 Sep. 30, 2023 June 30, 2023 Mar. 31, 2023
Nonperforming assets:
Nonaccruing loans:
Commercial:
Healthcare
$49,307 $81,529 $41,836 $36,753 $37,247
Energy
14,991 17,843 19,559 20,037 127
Services
3,319 3,616 2,820 4,541 8,097
General business
7,003 7,143 6,483 11,946 8,961
Total commercial
74,620 110,131 70,698 73,277 54,432

Commercial real estate
22,087 7,320 7,418 17,395 21,668

Loans to individuals:
Permanent mortgage
13,449 18,056 30,954 29,973 29,693
Permanent mortgage guaranteed by U.S. government agencies
9,217 9,709 10,436 11,473 14,302
Personal
142 253 79 133 200
Total loans to individuals
22,808 28,018 41,469 41,579 44,195

Total nonaccruing loans
119,515 145,469 119,585 132,251 120,295
Real estate and other repossessed assets
2,860 2,875 3,753 4,227 12,651
Total nonperforming assets
$122,375 $148,344 $123,338 $136,478 $132,946

Total nonperforming assets excluding those guaranteed by U.S. government agencies
$113,158 $138,635 $112,902 $125,005 $118,644

Accruing loans 90 days past due1
$- $170 $64 $220 $76

Gross charge-offs
$7,060 $5,007 $10,593 $8,049 $3,667
Recoveries
(1,600) (911) (4,062) (1,346) (2,898)
Net charge-offs
$5,460 $4,096 $6,531 $6,703 $769

Provision for loan losses
$9,960 $9,105 $15,931 $19,957 $14,525
Provision for credit losses from off-balance sheet unfunded loan commitments
(1,658) (3,627) (7,336) (3,003) 2,024
Provision for expected credit losses from mortgage banking activities
(265) 530 (1,474) 78 (488)
Provision for credit losses related to held-to maturity (investment) securities portfolio
(37) (8) (121) (32) (61)
Total provision for credit losses
$8,000 $6,000 $7,000 $17,000 $16,000




Allowance for loan losses to period end loans
1.17% 1.16% 1.15% 1.13% 1.10%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans
1.36% 1.36% 1.37% 1.39% 1.37%
Nonperforming assets to period end loans and repossessed assets
0.51% 0.62% 0.52% 0.59% 0.58%
Net charge-offs (annualized) to average loans
0.09% 0.07% 0.11% 0.12% 0.01%
Allowance for loan losses to nonaccruing loans2
255.33% 204.13% 249.31% 217.52% 235.36%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to nonaccruing loans2
298.23% 240.20% 297.50% 267.15% 294.74%

1 Excludes residential mortgage loans guaranteed by agencies of the U.S. government.

SEGMENTS - UNAUDITED
BOK FINANCIAL CORPORATION

Three Months Ended 1Q24 vs 4Q23 1Q24 vs 1Q23
(In thousands, except ratios) Mar. 31, 2024 Dec. 31, 2023 Mar. 31, 2023 Change % Change Change % Change
Commercial Banking:
Net interest revenue
$245,121 $267,879 $284,056 $(22,758) (8.5)%$(38,935) (13.7)%
Fees and commissions revenue
50,630 60,937 55,835 (10,307) (16.9)% (5,205) (9.3)%
Combined net interest and fee revenue
295,751 328,816 339,891 (33,065) (10.1)% (44,140) (13.0)%
Other operating expense
70,095 81,899 73,134 (11,804) (14.4)% (3,039) (4.2)%
Corporate expense allocations
18,397 18,040 17,718 357 2.0% 679 3.8%
Net income
153,250 171,084 190,231 (17,834) (10.4)% (36,981) (19.4)%

Average assets
29,806,817 29,346,459 28,162,934 460,358 1.6% 1,643,883 5.8%
Average loans
20,067,170 19,928,602 18,750,426 138,568 0.7% 1,316,744 7.0%
Average deposits
15,730,241 15,493,326 15,861,285 236,915 1.5% (131,044) (0.8)%

Consumer Banking:
Net interest revenue
$102,149 $114,396 $109,381 $(12,247) (10.7)%$(7,232) (6.6)%
Fees and commissions revenue
36,207 30,075 30,581 6,132 20.4% 5,626 18.4%
Combined net interest and fee revenue
138,356 144,471 139,962 (6,115) (4.2)% (1,606) (1.1)%
Other operating expense
53,447 55,079 50,198 (1,632) (3.0)% 3,249 6.5%
Corporate expense allocations
14,172 12,705 11,622 1,467 11.5% 2,550 21.9%
Net income
53,804 53,695 50,683 109 0.2% 3,121 6.2%

Average assets
9,391,981 9,342,840 9,934,511 49,141 0.5% (542,530) (5.5)%
Average loans
1,913,586 1,877,303 1,747,237 36,283 1.9% 166,349 9.5%
Average deposits
7,901,167 7,890,032 8,248,541 11,135 0.1% (347,374) (4.2)%

Wealth Management:
Net interest revenue
$40,109 $41,643 $54,106 $(1,534) (3.7)%$(13,997) (25.9)%
Fees and commissions revenue
118,704 119,872 108,911 (1,168) (1.0)% 9,793 9.0%
Combined net interest and fee revenue
158,813 161,515 163,017 (2,702) (1.7)% (4,204) (2.6)%
Other operating expense
99,535 96,275 82,039 3,260 3.4% 17,496 21.3%
Corporate expense allocations
14,558 14,198 12,360 360 2.5% 2,198 17.8%
Net income
34,165 62,690 52,447 (28,525) (45.5)% (18,282) (34.9)%

Average assets
15,759,328 14,879,450 11,663,096 879,878 5.9% 4,096,232 35.1%
Average loans
2,198,803 2,154,416 2,201,622 44,387 2.1% (2,819) (0.1)%
Average deposits
9,237,965 8,085,643 7,432,413 1,152,322 14.3% 1,805,552 24.3%
Fiduciary assets
60,365,292 59,798,693 57,457,925 566,599 0.9% 2,907,367 5.1%
Assets under management or administration
105,530,903 104,736,999 102,310,126 793,904 0.8% 3,220,777 3.1%

SOURCE: BOK Financial Corp


Topic:
Earnings
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