Bok Financial Reports Quarterly Earnings Of $76 Million


The following excerpt is from the company's SEC filing.

TULSA, Okla. (Wednesday, July 30, 2014) - BOK Financial Corporation reported net income of $75.9 million or $1.10 per diluted share for the second quarter of 2014. Net income was $76.6 million or $1.11 per diluted share for the first quarter of 2014 and $79.9 million or $1.16 per diluted share for the second quarter of 2013.

Steven G. Bradshaw, President and Chief Executive Officer of BOK Financial Corporation, stated “BOK Financial delivered improved results across the organization in the second quarter. Loan growth exceeded expectations, and each of our fee-generating businesses delivered very strong sequ ential revenue growth. The quarter’s results reflect the earnings power inherent in our diversified business model, as several lines of business grew this quarter, including energy lending, brokerage and trading, and mortgage banking. We are very excited about the bank’s performance in Q2, and we believe our businesses are well-positioned for continued growth for the balance of 2014.”

•Net interest revenue totaled $166.1 million for the second quarter of 2014, up $3.5 million over the first quarter of 2014. Net interest margin was 2.75% for the second quarter of 2014 and 2.71% for the first quarter of 2014.

•Fees and commissions revenue totaled $164.1 million for the second quarter of 2014, growing $23.2 million over the first quarter of 2014. Brokerage and trading, mortgage banking, fiduciary and asset management and transaction card revenues all experienced strong growth in the second quarter.

•Operating expenses were $214.7 million for the second quarter, an increase of $29.6 million over the previous quarter. Personnel expense increased $19.3 million. The first quarter included a $17.2 million benefit from adjustments to accruals for incentive compensation of executive officers of the Company. Non-personnel expense increased $10.3 million.

•No provision for credit losses was recorded in the second or first quarter of 2014. BOK Financial had net recoveries of $2.0 million for the second quarter of 2014 and $2.5 million in the previous quarter.

•The combined allowance for credit losses totaled $192 million or 1.43% of outstanding loans at June 30, 2014 compared to $190 million or 1.45% of outstanding loans at March 31, 2014. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $145 million or 1.09% of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at June 30, 2014 and $153 million or 1.18% of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at March 31, 2014.

•Average loans increased by $317 million over the previous quarter due primarily to growth in commercial loans. Average commercial loans were up $295 million, average consumer loans grew by $19 million and average commercial real estate loans increased $18 million. Period-end outstanding loan balances were $13.4 billion at June 30, 2014, a $349 million increase over March 31, 2014. Commercial loan balances increased $316 million and commercial real estate loans increased $24 million.

•Average deposits increased $262 million over the previous quarter. Growth in demand deposit balances was partially offset by a decrease in interest-bearing transaction accounts and time deposit balances. Period-end deposits were $20.6 billion at June 30, 2014, a $182 million increase over March 31, 2014, primarily due to growth in demand deposit balances.

•The Company's Tier 1 common equity ratio, as defined by banking regulations, was 13.46% at June 30, 2014 and 13.59% at March 31, 2014. The Company and its subsidiary bank continue to exceed the regulatory definition of well capitalized. The Company's Tier 1 capital ratio was 13.63% at June 30, 2014 and 13.77% at March 31, 2014. Total capital ratio was 15.38% at June 30, 2014 and 15.55% at March 31, 2014. The Company's leverage ratio was 10.26% at June 30, 2014 and 10.17% at March 31, 2014.

•The Company paid a regular quarterly cash dividend of $28 million or $0.40 per common share during the second quarter of 2014. On July 29, 2014, the board of directors approved a quarterly cash dividend of $0.40 per common share payable on or about August 29, 2014 to shareholders of record as of August 15, 2014.

Net interest revenue increased $3.5 million compared to the first quarter of 2014. Net interest margin was 2.75% for the second quarter of 2014, up 4 basis points over the first quarter of 2014.

The yield on average earning assets was 3.02%, an increase of 3 basis points over the prior quarter. The yield on the available for sale securities portfolio increased 5 basis points to 1.96%. Excess cash flows continue to be reinvested in short-duration securities that yield around 2%. The loan portfolio yield decreased 4 basis points from the previous quarter to 3.85% primarily due to continued market pricing pressure. Funding costs increased 1 basis point over the prior quarter to 0.42%.

Average earning assets increased $180 million during the second quarter of 2014. Growth in average loan balances of $317 million over the previous quarter was partially offset by a $276 million decrease in the available for sale securities portfolio. Cash flows received from payments on the securities portfolio funded loan growth or reduced short-term borrowings. The average balance of interest-bearing cash and cash equivalents, trading securities, restricted equity securities and residential mortgage loans held for sale all increased compared to the prior quarter. Average deposits increased $262 million and the average balance of borrowed funds decreased $49 million compared to the first quarter of 2014.

Steven Nell, Chief Financial Officer, added, "We remain on track with our plans to better position the balance sheet for a rising rate environment. Year-to-date, the amortized cost of our securities portfolio decreased by $599 million, while total loans have increased by $635 million. Our goal is to allow the securities portfolio to decrease by an additional $600 million by the end of 2014, replacing those securities with high-quality loans to commercial borrowers."

Fees and commissions revenue totaled $164.1 million for the second quarter of 2014, an increase of $23.2 million over the first quarter of 2014.

Brokerage and trading revenue increased $9.5 million over the prior quarter. Securities trading revenue increased $3.5 million. Customer hedging revenue increased by $2.2 million primarily due to $1.6 million of recoveries received from the Lehman Brothers and MF Global bankruptcies during the second quarter. Investment banking had strong growth in the second quarter, increasing $3.0 million over the previous quarter. In addition, retail brokerage revenue was also up over the prior quarter.

Mortgage banking revenue totaled $29.3 million for the second quarter of 2014, an increase of $6.5 million over the first quarter of 2014. Revenue from mortgage loan production was up $6.3 million. Outstanding commitments to originate mortgage loans grew by $159 million over March 31 to $547 million at June 30. Residential mortgage loans funded for sale totaled $1.1 billion, an increase of $363 million over the previous quarter. Approximately 41% of loans originated in the second quarter were through correspondent channels, compared to 38% in the previous quarter. Origination from the recently added Home Direct mortgage origination channel was 7% of loans originated in the second quarter, unchanged from the prior quarter. Refinanced mortgage loans represented 25% of loans originated for sale in the second quarter of 2014 compared to 32% in the first quarter of 2014. Revenue from mortgage loan servicing grew by $211 thousand due to an increase in the volume of loans serviced.

Fiduciary and asset management revenue grew by $3.8 million over the first quarter of 2014. The acquisition of MBM Advisors in the second quarter and a full quarter of revenue from the acquisition of GTRUST Financial Corporation in the first quarter added approximately $1.5 million in fiduciary and asset management revenue over the first quarter of 2014. The remainder of the increase was primarily due to the seasonal timing of tax service fees and an increase in the fair value of assets managed.

Transaction card revenue increased $2.4 million over the prior quarter. Revenue increased from processing transactions on behalf of members of our TransFund electronic funds transfer network and from merchant services fees primarily due to growth in transaction volumes. Interchange fees paid on debit cards issued by the Company also increased over the prior quarter due to increased transaction volumes.

Total operating expenses were $214.7 million for the second quarter of 2014, an increase of $29.6 million over the first quarter of 2014.

Personnel costs were $19.3 million higher than the first quarter of 2014. The first quarter included a $17.2 million benefit from adjustments to accruals for incentive compensation of certain executive officers of the Company. Cash-based incentive compensation, which rewards employees as they generate business opportunities for the Company by growing loans, deposits, customer relationships or other measurable metrics, was up $4.3 million over the first quarter.

Non-personnel expense increased $10.3 million over the first quarter of 2014. Mortgage banking costs increased $4.3 million compared to the prior quarter. The Company finalized hold-back claims related to purchased mortgage loan servicing rights which reduced expenses by $1.3 million in the first quarter. Accruals for mortgage loan servicing costs were higher in the second quarter. Professional fees and services expense increased $3.5 million largely due to increased risk management and regulatory compliance costs. Data processing, net occupancy expense and business promotion expense all increased over the prior quarter. BOK Financial made a $2.4 million discretionary contribution of appreciated stock to the BOKF Foundation during the first quarter. This contribution also resulted in a $1.2 million reduction in income tax expense in the first quarter.

Outstanding loans were $13.4 billion at June 30, 2014, an increase of $349 million over the previous quarter. Commercial, commercial real estate and consumer balances all grew over the prior quarter, partially offset by a decrease in residential mortgage loan balances.

Outstanding commercial loan balances increased $316 million or 4% over March 31, 2014. Service sector loans grew by $145 million over the prior quarter. Wholesale/retail sector loans were up $92 million and energy loans grew by $76 million over the prior quarter. Unfunded energy loan commitments increased by $171 million in the second quarter to $2.8 billion. All other unfunded commercial loan commitments totaled $3.7 billion at June 30, 2014, a decrease of $129 million compared to March 31, 2014.

Commercial real estate loans grew by $24 million or 1% over March 31, 2014 led by a $37 million increase in loan balances secured by industrial facilities. Loans secured by multifamily residential properties were up $15 million and other commercial real estate loan balances increased $12 million. Loans secured by office buildings decreased $42 million. Residential construction and land development loan balances were largely unchanged compared to March 31, 2014. Unfunded commercial real estate loan commitments totaled $603 million at June 30, 2014, an $80 million increase from March 31, 2014.

Dan Ellinor, Chief Operating Officer, added, “We continue to win in the competitive commercial lending market due to our reputation as a stable and reliable business partner for commercial borrowers. In the second quarter, energy, services, and wholesale/retail lending were our best performers with double-digit sequential loan growth, and Oklahoma was our fastest-growing market, contributing over 90% of total quarterly loan growth. The healthcare business, which generated strong growth for the past several quarters, was flat due to a significant number of borrowers moving to the permanent market late in the quarter. Our pipelines across the business remain healthy at present, and we expect low double-digit quarterly loan growth for the balance of the year.”

Deposits totaled $20.6 billion at June 30, 2014, an increase of $182 million over March 31, 2014. Demand deposit balances grew by $436 million over the prior quarter. Interest-bearing transaction account balances decreased $201 million and time deposits decreased $46 million. Among the lines of business, commercial deposits increased $377 million, partially offset by a $76 million decrease in consumer deposits and a $95 million decrease in wealth management deposits. Growth in commercial deposit balances was primarily due to growth in balances attributed to energy and commercial & industrial customers during the second quarter.

The Company and its subsidiary bank exceeded the regulatory definition of well capitalized at June 30, 2014. The Company's Tier 1 capital ratio was 13.63% at June 30, 2014 and 13.77% at March 31, 2014. The total capital ratio was 15.38% at June 30, 2014 and 15.55% at March 31, 2014. In addition, the Company's tangible common equity ratio, a non-GAAP measure, was 10.20% at June 30, 2014 and 10.06% at March 31, 2014.

In July 2013, banking regulators issued the final rule revising regulatory capital rules for substantially all U.S. banking organizations. The new capital rule will be effective for BOK Financial on January 1, 2015. The new capital rule establishes a 7% threshold for the Tier 1 common equity ratio consisting of a minimum level plus a capital conservation buffer. The Company expects to exclude unrealized gains and losses from available for sale securities from its calculation of Tier 1 capital, consistent with the treatment under current capital rules. BOK Financial's Tier 1 common equity ratio based on the existing Basel I standards was 13.46% as of June 30, 2014. Based on our interpretation of the new capital rule, our estimated Tier 1 common equity ratio on a fully phased-in basis would be 12.35%, 535 basis points above the 7% regulatory threshold.

Nonperforming assets totaled $255 million or 1.88% of outstanding loans and repossessed assets at June 30, 2014 compared to $256 million or 1.94% of outstanding loans and repossessed assets at March 31, 2014. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $145 million or 1.09% of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at June 30, 2014 and $153 million or 1.18% at March 31, 2014, a decrease of $7.9 million.

Nonaccruing loans totaled $97 million or 0.72% of outstanding loans at June 30, 2014 compared to $105 million or 0.80% of outstanding loans at March 31, 2014. New nonaccruing loans identified in the second quarter totaled $14 million, offset by $13 million in payments received, $5.9 million in foreclosures and repossessions and $3.5 million in charge-offs. At June 30, 2014, nonaccruing commercial loans totaled $17 million or 0.20% of outstanding commercial loans, nonaccruing commercial real estate loans totaled $34 million or 1.30% of outstanding commercial real estate loans and nonaccruing residential mortgage loans totaled $44 million or 2.21% of outstanding residential mortgage loans.

BOK Financial had net recoveries of $2.0 million for the second quarter of 2014 and $2.5 million for the first quarter of 2014. Gross charge-offs totaled $3.5 million for the second quarter, compared to $2.8 million for the previous quarter. Recoveries totaled $5.5 million for the second quarter of 2014 and $5.4 million for the first quarter of 2014.

After evaluating all credit factors, the Company determined that no provision for credit losses was necessary during the second quarter of 2014. The combined allowance for credit losses totaled $192 million or 1.43% of outstanding loans and 199% of nonaccruing loans at June 30, 2014. The allowance for loan losses was $191 million and the accrual for off-balance sheet credit losses was $1.3 million.

Real estate and other repossessed assets totaled $100 million at June 30, 2014, primarily consisting of $65 million of 1-4 family residential properties (including $50 million guaranteed by U.S. government agencies), $17 million of developed commercial real estate properties, $12 million of undeveloped land and $6.1 million of residential land and land development properties.

The fair value of the available for sale securities portfolio totaled $9.7 billion at June 30, 2014 and $9.9 billion at March 31, 2014. At June 30, 2014, the available for sale portfolio consisted primarily of $7.3 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $2.1 billion of commercial mortgage-backed securities fully backed by U.S. government agencies.

At June 30, 2014 the available for sale securities portfolio had a net unrealized gain of $85 million compared to a net unrealized gain of $15 million at March 31, 2014. Net unrealized gains on residential mortgage-backed securities issued by U.S. government agencies at June 30, 2014 increased $47 million during the second quarter to $85 million . Commercial mortgage-backed securities had a net unrealized loss of $14 million at June 30, 2014, compared to a net unrealized loss of $36 million at March 31, 2014.

In the second quarter of 2014, the Company recognized a minimal net gain from sales of $800 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 a rising rate environment. Net gains from sales of $531 million of available for sale securities in the first quarter of 2014 totaled $1.2 million.

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. Due to fluctuations in residential mortgage interest rates during the second quarter of 2014, the value of our mortgage servicing rights decreased by $6.4 million. The value of securities and interest rate derivative contracts held as an economic hedge increased by $4.9 million.

The Company will hold a conference call at 9:00 a.m. central time on Wednesday, July 30, 2014 to discuss the financial results with investors. The live audio webcast and presentation slides will be available on the company’s website at www.bokf.com. The conference call can also be accessed by dialing 1-412-902-6611. A conference call and webcast replay will also be available shortly after conclusion of the live call at www.bokf.com or by dialing 1-412-317-0088 and referencing conference ID # 10049802.

BOK Financial is a $28 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., The Milestone Group, Inc. and Cavanal Hill Investment Management, Inc. BOKF, NA operates the TransFund electronic funds network 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 June 30, 2014 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 -- UNAUDITEDBOK FINANCIAL CORPORATION(In thousands)  June 30, 2014 March 31, 2014 June 30, 2013ASSETS      Cash and due from banks $615,479 $645,435 $507,551Interest-bearing cash and cash equivalents 732,395 708,571 570,836Trading securities 101,097 86,571 190,591Investment securities 649,937 668,976 615,790Available for sale securities 9,699,146 9,933,723 10,698,074Fair value option securities 185,674 160,884 205,756Restricted equity securities 91,213 85,643 157,847Residential mortgage loans held for sale 325,875 226,512 301,057Loans:      Commercial 8,367,661 8,051,706 7,708,120Commercial real estate 2,654,978 2,631,407 2,317,096Residential mortgage 2,008,215 2,018,675 2,039,785Consumer 396,004 376,066 375,781Total loans 13,426,858 13,077,854 12,440,782Allowance for loan losses (190,690) (188,318) (203,124)Loans, net of allowance 13,236,168 12,889,536 12,237,658Premises and equipment, net 280,286 279,257 271,191Receivables 115,991 114,437 136,605Goodwill 377,780 364,570 359,759Intangible assets, net 36,576 31,561 26,242Mortgage servicing rights 155,740 153,774 132,889Real estate and other repossessed assets, net 100,111 95,515 110,112Derivative contracts, net 357,680 218,507 546,206Cash surrender value of bank-owned life insurance 289,231 286,932 280,047Receivable on unsettled securities sales 14,025 18,199 182,147Other assets 479,366 396,111 277,842TOTAL ASSETS $27,843,770 $27,364,714 $27,808,200       LIABILITIES AND EQUITY      Deposits:      Demand $7,908,005 $7,472,287 $7,145,323Interest-bearing transaction 9,698,404 9,899,656 9,266,560Savings 349,629 355,596 316,375Time 2,615,826 2,662,174 2,767,972Total deposits 20,571,864 20,389,713 19,496,230Funds purchased 705,573 1,166,178 747,165Repurchase agreements 1,072,375 777,108 845,106Other borrowings 1,231,662 1,031,693 2,481,644Subordinated debentures 347,890 347,846 347,716Accrued interest, taxes, and expense 100,227 160,351 175,677Due on unsettled securities purchases 124,537 39,641 49,369Derivative contracts, net 297,851 185,499 521,991Other liabilities 144,145 122,086 150,420TOTAL LIABILITIES 24,596,124 24,220,115 24,815,318Shareholders' equity:      Capital, surplus and retained earnings 3,163,101 3,103,130 2,938,623Accumulated other comprehensive income 49,416 6,795 19,014TOTAL SHAREHOLDERS' EQUITY 3,212,517 3,109,925 2,957,637Non-controlling interests 35,129 34,674 35,245TOTAL EQUITY 3,247,646 3,144,599 2,992,882TOTAL LIABILITIES AND EQUITY $27,843,770 $27,364,714 $27,808,200

AVERAGE BALANCE SHEETS -- UNAUDITEDBOK FINANCIAL CORPORATION(in thousands) Three Months Ended June 30, 2014 March 31, 2014 December 31, 2013 September 30, 2013 June 30, 2013ASSETS         Interest-bearing cash and cash equivalents$635,140 $549,473 $559,918 $654,591 $408,224Trading securities116,186 92,409 127,011 124,689 181,866Investment securities658,793 671,756 672,722 621,104 610,940Available for sale securities9,800,934 10,076,942 10,434,810 10,558,677 11,060,700Fair value option securities164,684 165,515 167,490 169,299 216,312Restricted equity securities97,016 85,234 123,009 155,938 144,332Residential mortgage loans held for sale219,308 185,196 217,811 225,789 261,977Loans:           Commercial8,266,455 7,971,712 7,737,883 7,602,950 7,606,919  Commercial real estate2,622,866 2,605,264 2,352,915 2,359,120 2,286,674  Residential mortgage1,983,926 1,998,620 1,998,980 2,043,332 2,013,004  Consumer391,214 372,330 371,798 396,694 370,847Total loans13,264,461 12,947,926 12,461,576 12,402,096 12,277,444Allowance for loan losses(189,329) (186,979) (193,309) (201,616) (206,807)Total loans, net13,075,132 12,760,947 12,268,267 12,200,480 12,070,637Total earning assets24,767,193 24,587,472 24,571,038 24,710,567 24,954,988Cash and due from banks481,944 473,758 324,349 386,331 546,558Derivative contracts, net291,325 287,363 314,530 377,664 401,485Cash surrender value of bank-owned life insurance287,725 285,592 283,289 280,909 278,501Receivable on unsettled securities sales108,825 114,708 83,016 90,014 135,964Other assets1,549,809 1,489,875 1,526,566 1,409,247 1,341,828TOTAL ASSETS$27,486,821 $27,238,768 $27,102,788 $27,254,732 $27,659,324          LIABILITIES AND EQUITY         Deposits:           Demand$7,654,225 $7,312,076 $7,356,063 $7,110,079 $6,888,983  Interest-bearing transaction9,850,991 9,900,823 9,486,136 9,276,136 9,504,128  Savings355,459 336,576 323,123 317,912 315,421  Time2,636,444 2,686,041 2,710,019 2,742,970 2,818,533Total deposits20,497,119 20,235,516 19,875,341 19,447,097 19,527,065Funds purchased574,926 1,021,755 748,074 776,356 789,302Repurchase agreements914,892 773,127 752,286 799,175 819,373Other borrowings1,294,932 1,038,747 1,551,591 2,175,747 2,172,417Subordinated debentures347,868 347,824 347,781 347,737 347,695Derivative contracts, net243,619 258,729 294,315 330,819 334,877Due on unsettled securities purchases166,521 116,295 152,078 111,998 330,926Other liabilities270,220 341,701 327,519 300,880 310,015TOTAL LIABILITIES24,310,097 24,133,694 24,048,985 24,289,809 24,631,670Total equity3,176,724 3,105,074 3,053,803 2,964,923 3,027,654TOTAL LIABILITIES AND EQUITY$27,486,821 $27,238,768 $27,102,788 $27,254,732 $27,659,324

STATEMENTS OF EARNINGS -- UNAUDITEDBOK FINANCIAL CORPORATION(in thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, 2014 2013 2014 2013        Interest revenue$182,631 $186,777 $361,751 $376,823Interest expense16,534 17,885 33,012 36,479Net interest revenue166,097 168,892 328,739 340,344Provision for credit losses— — — (8,000)Net interest revenue after provision for credit losses166,097 168,892 328,739 348,344Other operating revenue:       Brokerage and trading revenue39,056 32,874 68,572 64,625Transaction card revenue31,510 29,942 60,644 57,633Fiduciary and asset management revenue29,543 24,803 55,265 47,116Deposit service charges and fees23,133 23,962 45,822 46,928Mortgage banking revenue29,330 36,596 52,174 76,572Bank-owned life insurance2,274 2,236 4,380 5,462Other revenue9,208 8,760 18,060 17,902Total fees and commissions164,054 159,173 304,917 316,238Loss on other assets, net(52) (1,666) (4,316) (1,199)Gain (loss) on derivatives, net831 (2,527) 1,799 (3,468)Gain (loss) on fair value option securities, net4,176 (9,156) 6,836 (12,327)Change in fair value of mortgage servicing rights(6,444) 14,315 (10,905) 16,973Gain on available for sale securities, net4 3,753 1,244 8,608Total other-than-temporary impairment losses— (1,138) — (1,138)Portion of loss recognized in (reclassified from) other comprehensive income— 586 — 339Net impairment losses recognized in earnings— (552) — (799)Total other operating revenue162,569 163,340 299,575 324,026Other operating expense:       Personnel123,714 128,110 228,147 253,765Business promotion7,150 5,770 12,991 11,223Charitable contributions to BOKF Foundation— — 2,420 —Professional fees and services11,054 8,381 18,619 15,366Net occupancy and equipment18,789 16,909 35,685 33,390Insurance4,467 4,044 9,008 7,789Data processing and communications29,071 26,734 56,206 52,184Printing, postage and supplies3,429 3,580 6,970 7,254Net losses and operating expenses of repossessed assets1,118 282 2,550 1,528Amortization of intangible assets949 875 1,765 1,751Mortgage banking costs7,960 7,910 11,594 15,264Other expense7,006 8,326 13,856 15,390Total other operating expense214,707 210,921 399,811 414,904        Net income before taxes113,959 121,311 228,503 257,466Federal and state income taxes37,230 41,423 74,731 88,519        Net income76,729 79,888 153,772 168,947Net income (loss) attributable to non-controlling interests834 (43) 1,287 1,052Net income attributable to BOK Financial Corporation shareholders$75,895 $79,931 $152,485 $167,895        Average shares outstanding:       Basic68,359,945 67,993,822 68,318,689 67,904,599Diluted68,511,378 68,212,497 68,475,802 68,126,751        Net income per share:       Basic$1.10 $1.16 $2.21 $2.45Diluted$1.10 $1.16 $2.20 $2.44

FINANCIAL HIGHLIGHTS -- UNAUDITEDBOK FINANCIAL CORPORATION(in thousands, except ratio and share data) Three Months Ended June 30, 2014 March 31, 2014 December 31, 2013 September 30, 2013 June 30, 2013Capital:         Period-end shareholders' equity$3,212,517 $3,109,925 $3,020,049 $2,991,244 $2,957,637Risk weighted assets$20,224,135 $19,720,418 $19,389,381 $19,366,620 $19,157,978Risk-based capital ratios:         Tier 113.63% 13.77% 13.77% 13.51% 13.37%Total capital15.38% 15.55% 15.56% 15.35% 15.28%Leverage ratio10.26% 10.17% 10.05% 9.80% 9.43%Tangible common equity ratio110.20% 10.06% 9.90% 9.73% 9.38%Tier 1 common equity ratio13.46% 13.59% 13.59% 13.33% 13.19%          Common stock:         Book value per share$46.39 $45.00 $43.88 $43.49 $43.03Market value per share:         High$70.66 $69.69 $66.32 $69.36 $65.95Low$61.64 $62.34 $60.81 $62.93 $60.52Cash dividends paid$27,706 $27,637 $27,523 $26,135 $26,118Dividend payout ratio36.51% 36.08% 37.72% 34.51% 32.68%Shares outstanding, net69,256,958 69,111,167 68,829,450 68,787,584 68,739,208          Performance ratios (quarter annualized):Return on average assets1.11% 1.14% 1.07% 1.10% 1.16%Return on average equity9.58% 10.00% 9.48% 10.13% 10.59%Net interest margin2.75% 2.71% 2.74% 2.75% 2.80%Efficiency ratio63.62% 59.69% 68.50% 66.03% 63.11%          Reconciliation of non-GAAP measures:1      Tangible common equity ratio:         Total shareholders' equity$3,212,517 $3,109,925 $3,020,049 $2,991,244 $2,957,637Less: Goodwill and intangible assets, net(414,356) (396,131) (384,323) (385,166) (386,001)Tangible common equity$2,798,161 $2,713,794 $2,635,726 $2,606,078 $2,571,636          Total assets$27,843,770 $27,364,714 $27,015,432 $27,166,367 $27,808,200Less: Goodwill and intangible assets, net(414,356) (396,131) (384,323) (385,166) (386,001)Tangible assets$27,429,414 $26,968,583 $26,631,109 $26,781,201 $27,422,199          Tangible common equity ratio10.20% 10.06% 9.90% 9.73% 9.38%

FINANCIAL HIGHLIGHTS -- UNAUDITEDBOK FINANCIAL CORPORATION(in thousands, except ratio and share data) Three Months Ended June 30, 2014 March 31, 2014 December 31, 2013 September 30, 2013 June 30, 2013          Other data:         Fiduciary assets$32,716,648 $31,296,565 $30,137,092 $29,593,140 $28,280,214Mortgage servicing portfolio$14,626,291 $14,045,642 $13,718,942 $13,298,479 $12,741,651Mortgage commitments$546,864 $387,755 $258,873 $351,196 $547,508Mortgage loans funded for sale$1,090,629 $727,516 $848,870 $1,080,167 $1,196,038Mortgage loan refinances to total fundings25% 32% 29% 30% 48%Tax equivalent adjustment$2,803 $2,551 $2,467 $2,565 $2,647Net unrealized gain (loss) on available for sale securities$85,480 $15,446 $(37,929) $7,425 $42,233          Gain (loss) on mortgage servicing rights, net of economic hedge:Gain (loss) on mortgage hedge derivative contracts, net$831 $968 $(931) $31 $(2,526)Gain (loss) on fair value option securities, net4,074 2,585 (3,013) (89) (9,102)Gain (loss) on economic hedge of mortgage servicing rights4,905 3,553 (3,944) (58) (11,628)Gain (loss) on changes in fair value of mortgage servicing rights(6,444) (4,461) 6,093 (346) 14,315Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges$(1,539) $(908) $2,149 $(404) $2,687          Net interest revenue on fair value option securities$721 $790 $811 $741 $910

QUARTERLY EARNINGS TREND -- UNAUDITEDBOK FINANCIAL CORPORATION(in thousands, except ratio and per share data) Three Months Ended June 30, 2014 March 31, 2014 December 31, 2013 September 30, 2013 June 30, 2013          Interest revenue$182,631 $179,120 $183,120 $185,428 $186,777Interest expense16,534 16,478 16,876 17,539 17,885Net interest revenue166,097 162,642 166,244 167,889 168,892Provision for credit losses— — (11,400) (8,500) —Net interest revenue after provision for credit losses166,097 162,642 177,644 176,389 168,892Other operating revenue:         Brokerage and trading revenue39,056 29,516 28,515 32,338 32,874Transaction card revenue31,510 29,134 29,134 30,055 29,942Fiduciary and asset management revenue29,543 25,722 25,074 23,892 24,803Deposit service charges and fees23,133 22,689 23,440 24,742 23,962Mortgage banking revenue29,330 22,844 21,876 23,486 36,596Bank-owned life insurance2,274 2,106 2,285 2,408 2,236Other revenue9,208 8,852 12,048 8,314 8,760Total fees and commissions164,054 140,863 142,372 145,235 159,173Gain (loss) on other assets, net(52) (4,264) 651 (377) (1,666)Gain (loss) on derivatives, net831 968 (930) 31 (2,527)Gain (loss) on fair value option securities, net4,176 2,660 (2,805) (80) (9,156)Change in fair value of mortgage servicing rights(6,444) (4,461) 6,093 (346) 14,315Gain on available for sale securities, net4 1,240 1,634 478 3,753Total other-than-temporary impairment losses— — — (1,436) (1,138)Portion of loss recognized in (reclassified from) other comprehensive income— — — (73) 586Net impairment losses recognized in earnings— — — (1,509) (552)Total other operating revenue162,569 137,006 147,015 143,432 163,340Other operating expense:         Personnel123,714 104,433 125,662 125,799 128,110Business promotion7,150 5,841 6,020 5,355 5,770Charitable contributions to BOKF Foundation— 2,420 — 2,062 —Professional fees and services11,054 7,565 10,003 7,183 8,381Net occupancy and equipment18,789 16,896 19,103 17,280 16,909Insurance4,467 4,541 4,394 3,939 4,044Data processing and communications29,071 27,135 28,196 25,695 26,734Printing, postage and supplies3,429 3,541 3,126 3,505 3,580Net losses and operating expenses of repossessed assets1,118 1,432 1,618 2,014 282Amortization of intangible assets949 816 842 835 875Mortgage banking costs7,960 3,634 7,071 8,753 7,910Other expense7,006 6,850 9,384 7,878 8,326Total other operating expense214,707 185,104 215,419 210,298 210,921Net income before taxes113,959 114,544 109,240 109,523 121,311Federal and state income taxes37,230 37,501 35,318 33,461 41,423Net income76,729 77,043 73,922 76,062 79,888Net income (loss) attributable to non-controlling interests834 453 946 324 (43)Net income attributable to BOK Financial Corporation shareholders$75,895 $76,590 $72,976 $75,738 $79,931          Average shares outstanding:         Basic$1.10 $1.11 $1.06 $1.10 $1.16Diluted$1.10 $1.11 $1.06 $1.10 $1.16Net income per share:         Basic68,359,945 68,273,685 68,095,254 68,049,179 67,993,822Diluted68,511,378 68,436,478 68,293,758 68,272,861 68,212,497

LOANS TREND -- UNAUDITEDBOK FINANCIAL CORPORATION(In thousands)  June 30, 2014 March 31, 2014 December 31, 2013 September 30, 2013 June 30, 2013Commercial:          Energy $2,419,788 $2,344,072 $2,351,760 $2,311,991 $2,384,746Services 2,377,065 2,232,471 2,282,210 2,148,551 2,204,253Wholesale/retail 1,318,151 1,225,990 1,201,364 1,181,806 1,175,543Manufacturing 452,866 444,215 391,751 382,460 386,133Healthcare 1,394,156 1,396,562 1,274,246 1,160,212 1,118,810Other commercial and industrial 405,635 408,396 441,890 386,055 438,635Total commercial 8,367,661 8,051,706 7,943,221 7,571,075 7,708,120           Commercial real estate:          Residential construction and land development 184,779 184,820 206,258 216,456 225,654Retail 642,110 640,506 586,047 556,918 553,412Office 394,217 436,264 411,499 422,043 459,558Multifamily 677,403 662,674 576,502 520,454 500,452Industrial 342,080 305,207 243,877 245,022 253,990Other commercial real estate 414,389 401,936 391,170 388,336 324,030Total commercial real estate 2,654,978 2,631,407 2,415,353 2,349,229 2,317,096           Residential mortgage:          Permanent mortgage 1,020,928 1,033,572 1,062,744 1,078,661 1,095,871Permanent mortgages guaranteed by U.S. government agencies 188,087 184,822 181,598 163,919 156,887Home equity 799,200 800,281 807,684 792,185 787,027Total residential mortgage 2,008,215 2,018,675 2,052,026 2,034,765 2,039,785           Consumer 396,004 376,066 381,664 395,031 375,781           Total $13,426,858 $13,077,854 $12,792,264 $12,350,100 $12,440,782

NET INTEREST MARGIN TREND -- UNAUDITEDBOK FINANCIAL CORPORATION Three Months Ended June 30, 2014 March 31, 2014 December 31, 2013 September 30, 2013 June 30, 2013          TAX-EQUIVALENT ASSETS YIELDS         Interest-bearing cash and cash equivalents0.24% 0.20% 0.18% 0.22% 0.27%Trading securities2.40% 2.85% 1.73% 2.25% 2.40%Investment securities:             Taxable5.64% 5.64% 5.75% 5.78% 5.88%    Tax-exempt1.63% 1.67% 1.66% 1.60% 1.88%Total investment securities3.01% 3.04% 3.12% 3.22% 3.58%Available for sale securities:             Taxable1.94% 1.90% 1.89% 1.92% 1.94%    Tax-exempt4.44% 3.11% 2.74% 2.81% 3.59%Total available for sale securities1.96% 1.91% 1.89% 1.93% 1.96%Fair value option securities1.94% 1.99% 2.06% 1.80% 1.92%Restricted equity securities5.26% 4.68% 5.06% 3.05% 4.05%Residential mortgage loans held for sale4.63% 3.46% 4.16% 3.87% 3.54%Loans3.85% 3.89% 4.01% 4.06% 4.12%Allowance for loan losses         Loans, net of allowance3.91% 3.95% 4.07% 4.13% 4.19%Total tax-equivalent yield on earning assets3.02% 2.99% 3.02% 3.03% 3.10%          COST OF INTEREST-BEARING LIABILITIES         Interest-bearing deposits:           Interest-bearing transaction0.10% 0.10% 0.11% 0.11% 0.12%  Savings0.12% 0.12% 0.12% 0.13% 0.15%  Time1.55% 1.56% 1.55% 1.55% 1.57%Total interest-bearing deposits0.40% 0.41% 0.42% 0.43% 0.44%Funds purchased0.07% 0.06% 0.08% 0.07% 0.10%Repurchase agreements0.08% 0.08% 0.06% 0.06% 0.06%Other borrowings0.40% 0.40% 0.31% 0.28% 0.27%Subordinated debt2.52% 2.52% 2.48% 2.52% 2.54%Total cost of interest-bearing liabilities0.42% 0.41% 0.42% 0.42% 0.43%Tax-equivalent net interest revenue spread2.60% 2.58% 2.60% 2.61% 2.67%Effect of noninterest-bearing funding sources and other0.15% 0.13% 0.14% 0.14% 0.13%Tax-equivalent net interest margin2.75% 2.71% 2.74% 2.75% 2.80%

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.

CREDIT QUALITY INDICATORSBOK FINANCIAL CORPORATION(in thousands, except ratios) Three Months Ended June 30, 2014 March 31, 2014 December 31, 2013 September 30, 2013 June 30, 2013Nonperforming assets:         Nonaccruing loans:         Commercial$17,103 $19,047 $16,760 $19,522 $20,869Commercial real estate34,472 39,305 40,850 52,502 58,693Residential mortgage44,340 45,380 42,320 39,256 40,534Consumer765 974 1,219 1,624 2,037Total nonaccruing loans96,680 104,706 101,149 112,904 122,133Accruing renegotiated loans guaranteed by U.S. government agencies57,818 55,507 54,322 50,099 48,733Real estate and other repossessed assets:         Guaranteed by U.S. government agencies49,720 45,638 37,431 37,906 32,155Other50,391 49,877 54,841 70,216 77,957Total real estate and other repossessed assets100,111 95,515 92,272 108,122 110,112Total nonperforming assets$254,609 $255,728 $247,743 $271,125 $280,978Total nonperforming assets excluding those guaranteed by U.S. government agencies$145,124 $153,011 $155,213 $182,543 $200,007          Nonaccruing loans by loan portfolio sector:         Commercial:         Energy$1,619 $1,759 $1,860 $1,953 $2,277Services3,669 4,581 4,922 6,927 7,448Wholesale / retail5,885 6,854 6,969 7,223 6,700Manufacturing3,507 3,565 592 843 876Healthcare1,422 1,443 1,586 1,733 2,670Other commercial and industrial1,001 845 831 843 898Total commercial17,103 19,047 16,760 19,522 20,869Commercial real estate:         Residential construction and land development15,146 16,547 17,377 20,784 21,135Retail4,199 4,626 4,857 7,914 8,406Office3,591 6,301 6,391 6,838 7,828Multifamily— — 7 4,350 6,447Industrial631 886 252 — —Other commercial real estate10,905 10,945 11,966 12,616 14,877Total commercial real estate34,472 39,305 40,850 52,502 58,693Residential mortgage:         Permanent mortgage32,952 36,342 34,279 31,797 32,747Permanent mortgage guaranteed by U.S. government agencies1,947 1,572 777 577 83Home equity9,441 7,466 7,264 6,882 7,704Total residential mortgage44,340 45,380 42,320 39,256 40,534Consumer765 974 1,219 1,624 2,037Total nonaccruing loans$96,680 $104,706 $101,149 $112,904 $122,133          

CREDIT QUALITY INDICATORSBOK FINANCIAL CORPORATION(in thousands, except ratios) Three Months Ended June 30, 2014 March 31, 2014 December 31, 2013 September 30, 2013 June 30, 2013          Performing loans 90 days past due1$67 $1,991 $1,415 $188 $2,460          Gross charge-offs$(3,522) $(2,848) $(3,113) $(4,708) $(8,552)Recoveries5,524 5,360 6,068 4,409 6,210Net recoveries (charge-offs)$2,002 $2,512 $2,955 $(299) $(2,342)          Provision for credit losses$— $— $(11,400) $(8,500) $—          Allowance for loan losses to period end loans1.42 % 1.44 % 1.45 % 1.57% 1.63%Combined allowance for credit losses to period end loans1.43 % 1.45 % 1.47 % 1.59% 1.65%Nonperforming assets to period end loans and repossessed assets1.88 % 1.94 % 1.92 % 2.18% 2.24%Net charge-offs (annualized) to average loans(0.06)% (0.08)% (0.09)% 0.01% 0.08%Allowance for loan losses to nonaccruing loans197.24 % 179.86 % 183.29 % 172.12% 166.31%Combined allowance for credit losses to nonaccruing loans198.59 % 181.46 % 185.35 % 173.54% 167.63%          1   Excludes residential mortgage loans guaranteed by agencies of the U.S. government.

The above information was disclosed in a filing to the SEC. To see this filing in its entirety, click here. BOK Financial Corporation next reports earnings on July 30, 2014.

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