BOK Financial Corporation's (BOKF) CEO Steve Bradshaw on Q3 2020 Results - Earnings Call Transcript (2022)

BOK Financial Corporation (NASDAQ:BOKF) Q3 2020 Earnings Conference Call October 21, 2020 10:00 AM ET

Company Participants

Steven Nell - EVP and CFO

Steve Bradshaw - President and CEO

Stacy Kymes - EVP, Corporate Banking

Scott Grauer - EVP, Wealth Management

Marc Maun - Chief Credit Officer

Conference Call Participants

Ken Zerbe - Morgan Stanley

Brady Gailey - KBW

Jon Arfstrom - RBC Capital Markets

Brandon King - Truist Securities

Gary Tenner - D.A. Davidson

Peter Winter - Wedbush Securities

Operator

Greetings. I would now like to turn the presentation over to Steven Nell, Chief Financial Officer for BOK Financial Corporation. Please proceed.

Steven Nell

Good morning, and thanks for joining us. Today our CEO, Steve Bradshaw, will provide opening comments, and Stacy Kymes, Executive Vice President of Corporate Banking, will cover our loan portfolio and credit metrics. Lastly, I'll provide third quarter details regarding net interest income, net interest margin, fee revenues, expenses and our overall balance sheet position from a liquidity and capital standpoint.

Joining us for the question-and-answer session are Marc Maun, our Chief Credit Officer, who can answer detailed questions regarding credit metrics and loan deferral status; and also Scott Grauer, Executive Vice President of Wealth Management, who can expand on our differentiating capabilities within wealth management, which have led to another fantastic quarter for the company.

PDFs of the slide presentation and third quarter press release are available on our website at bokf.com. We refer you to the disclaimers on Slide 2 as it pertains to any forward looking statements we make during this call.

I'll now turn the call over to Steve Bradshaw.

Steve Bradshaw

Thanks for joining us to discuss the third quarter of 2020 financial results. This quarter was another, which our fee businesses highlighted the effectiveness of our diversified revenue strategy, as we eclipsed $150 million in net income for the first time in the history of our company.

Shown on Slide 4, third quarter net income was $154 million or $2.19 per diluted share. That represents EPS growth of over 9% from the same quarter a year ago, a remarkable outcome given today's very different economic environment.

The key items that drove our success this quarter were, a fourth consecutive record revenue quarter from our Wealth Management business, another exceedingly strong production and margin quarter from our mortgage team, no credit loss provision was needed this quarter, net interest margin was stable due primarily to an accretion acceleration that we will detail momentarily, but additional support from highly disciplined deposit pricing and an increase in the effectiveness of force in our commercial loan book.

And lastly, we have diligently controlled expenses from the outset of the business impact brought about by COVID-19.

Turning to Slide 5, while average lows were flat this quarter, average deposits were up over 6% linked quarter and up nearly 35% from the same quarter a year ago, due primarily to customers retaining higher balances in this current economic environment.

Assets under management or in custody were up nearly 4% linked quarter, and 2% year-over-year, again topping $80 billion. We attribute the growth to positive market movement along with better results in the quarter from active sales and asset retention efforts. I'll provide some additional perspective on the results before the start of the Q&A session, but now Stacy Kymes, will review the loan portfolio and our credit metrics in more detail.

I'll turn the call over now to Stacy.

Stacy Kymes

Thanks, Steve. Turning to Slide 7, period end loans were $23.8 billion, down 1.5% for the quarter. Small pockets of growth in our healthcare book was offset by pay downs in energy and across our core commercial and industrial loan book. Some of this was continued repayment of defensive draws, and some of this was through the organic decline in economic activity and purposeful deleveraging by our customers.

Looking specifically at energy loans, they contracted 6.5% for the quarter. Commodity prices, while improving still make new deals difficult to source in the current environment, that we remain optimistic about our ability to enhance market share long-term. Energy borrowers continue to pay down debt to reduce leverage at this point in the cycle.

Despite these factors, we remain open for business and continue to support our customers in the energy industry. This business is more than just lending activities, as evidenced by the record energy derivatives revenue this quarter, as customers continue to aggressively manage their commodity risk.

Commercial real estate loan balances were up 3.1% from the previous quarter, largely due to continued friction in a permanent financing market, slowing the level of pay down activity.

Looking forward, our outlook for loan growth for the rest of the year remains tempered. The speed and shape of the broader economic recovery will be the determining factor in restarting loan growth. We are optimistic that once pre-COVID normalcy returns to the economy, we're well-positioned in our commercial lending portfolio to grow loans.

Turning to Slide 8, we supply the look into the loan deferral status across BOK as a portfolio. As you can see, just 1.2% of total loans remain and the deferral status of any type. At the peak, that figure was 7.5% of total loans, so we are happy to say that more than 80% of the loans that were deferred, have now moved back to regular payment status.

Of the loans that remained in deferral status, roughly half are in the commercial real estate portfolio. These are being closely monitored, but short-term the credit quality has held in better than our original expectations. Long-term outcomes will be dependent on the pace of economic recovery and the impact of any additional fiscal stimulus.

Also on Slide 8, we begin compile the list of loan segments, we consider more exposed to the economic impact of the pandemic. This group of loans is highly diversified with over 550 loans for an average loan size of less than $3 million. Clearly, the $596 million retail portion of this portfolio remains the most vulnerable today, and we'll continue monitoring these exposures closely in the coming months. While office and multifamily may see impacts here, we believe our geographic footprint will help us in these segments in the long-term, because of the strong in migration over time.

Turning to Slide 9, you can see that credit quality remained stable, as witnessed by our lack of credit loss provision this quarter. As we mentioned last quarter, we felt the material reserve build would be largely complete, assuming our economic forecast is in line going forward.

Looking at the underlying components, a $1.7 million provision related to lending activities was offset by a decrease in the accrual for expected credit losses for mortgage banking activities, and allowance for credit losses from investment securities.

Changes in our reasonable and supportable forecasts of macroeconomic variables, primarily due to an improved economic outlook related to the anticipated impact of the ongoing COVID-19 pandemic, and other assumptions resulted in a $12.8 million decrease in the provision for credit losses from lending activities.

Changes in the loan portfolio characteristics, including specific impairment and losses, loan balances and risk rating resulted in a $14.5 million increase in the provision for credit losses from lending activities.

Net charge-offs of $22.4 million or 37 basis point annualized is slightly above last quarter. Excluding PPP loans, net charge-offs were 41 basis points annualized. Year-to-date net charge-offs totaled $53.7 million or 30 basis points annualized, well within our company's historical loss experience.

The combined allowance for loan losses totaled $448 million, a 1.88% of outstanding loans at September 30, compared to $469 million or 1.94% of outstanding loans last quarter. The combined allowance for credit losses attributed to energy was 4.3% of outstanding energy loans at September the 30.

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Non-accruing energy loans decreased $34 million this quarter, attributed almost entirely to a decrease in non-accruing energy loans. Potential problem loans totaled $623 million at quarter end, down slightly from $626 million at June 30, a decrease in potential problem energy loans was partially offset by an increase in general business loans and commercial real estate loans.

Just a quick note on energy credit, as that is currently the largest driver of overall asset quality for the company. The second quarter of 2020 was an imperfect storm for the semi-annual borrowing base redetermination process, given the impacts to supply from OPEC plus, and demand from COVID-19 all hit in the midst of this process, before borrowers even had time to react to manage their response. The result was a higher level of negative credit migration.

While commodity prices rose in the third quarter to a level that we expect to improve the credit outlook, we do not upgrade credit in a wholesale manner solely based on commodity price changes. As we go through the semi-annual redetermination process in the fourth quarter, we would expect positive credit migration, if prices remain stable at these levels.

I'll now turn the call over to highlight our NIM dynamics, fee revenues and the important balance sheet items for the quarter.

Steven Nell

Thanks, Stacy. With record net income this quarter, was clearly another fantastic one for the company. Pre-provision net revenue topped $200 million for the second consecutive time, demonstrating the full earnings power of the company.

Net interest revenue strength, net interest margin defense, outsized fee revenue and diligent expense management all contributed to our success this quarter.

As noted on Slide 11, net interest income was $272 million, down just over $6 million from last quarter. PPP loan fee recognition contributed $11 million this quarter versus $13 million last quarter.

Additionally, due to loan payoffs and adjustments for required loans, this kind accretion was $13 million this quarter versus only $3 million last quarter.

Net interest margin was 2.81%, compared to 2.83% in the previous quarter. Lower loan yields in the near zero rate environment were offset, primarily by the acceleration of discount accretion from CoBiz acquired loans, which supported net interest margin by 11 basis points versus last quarter, and is expected to normalize next quarter.

Additional support was provided by an 8 basis point reduction in interest bearing deposit costs, down to 26 basis points and increased effectiveness of floors in our commercial loan book, as average LIBOR continue to fall in the current quarter.

Turning to Slide 12, clearly, earnings this quarter was bolstered dramatically by $223 million in revenues from our fee businesses, as our wealth management and mortgage teams have continued their momentum to post outstanding quarters. Elevated margin in mortgage reflect the continued lack of industry capacity, given the strong demand in the current low rate environment. Mortgage production revenue remains high, just slightly below the prior quarter. Refinances accounted for 54% of total originated this quarter, down from 71%.

Our wealth management team put together a fourth consecutive record total revenue quarter, predating the low rate environment we find ourselves in today. This quarter, with a host of complementary business units, we saw incredible deposit growth of over 8% linked quarter, significant financial market based investment management fees and risk management revenues and great synergies with commercial banking, through the insurance arm acquired by CoBiz. Altogether, exceptional performance, and Scott can provide additional detail during the question-and-answer session.

Brokerage and trading revenue increased $7.5 million, with commissions increasing $3 million. We continue to see elevated mortgage backed security trading activity out of our Connecticut office. Derivative fees and commissions increased $2.4 million, primarily due to increased hedging activity from our energy clients, a result of our expertise in that lending vertical.

Investment banking revenue increased $1.8 million, primarily due to increased syndication fees. As we look forward to 2021, the team is adjusting strategy to overcome the decline in fees from traditional cash investments that are now paying close to zero, providing further optimism for continued growth.

Fee revenue now represents 45% of total revenue, up from 40% in the same quarter last year. This once again demonstrates an important differentiating characteristic of BOK Financial. We have long had a diverse revenue mix that provides an earnings buffer in economic downturns because of the counter cyclical nature of some of these fee revenue streams.

The net economic benefit of changes in the fair value of mortgage servicing rights and related economic hedges was $6.5 million during the quarter, including a $3.4 million increase in the fair value of mortgage servicing rights, $1.5 million increase in the fair value of securities and derivative contracts held as an economic hedge, and $1.6 million related net interest revenue.

Turning to Slide 13, expense management remains prudent with an increase of just under $6 million. We have managed personnel costs by holding the line on adding new positions and challenged the need to fill open positions. Together, these actions worked to decrease regular compensation about $2.6 million this quarter. While this will moderate a bit as our branch network has now opened, we've revised our branch strategy to a hybrid model. This new model will continue to meet the needs of our client, but recognizes that the pandemic has accelerated customer behavior adoption of technology, and we will need fewer staff and locations to meet future need.

This is a change we recognized early in the pandemic, and we were able to make real steps towards efficiency. In fact, looking at headcount, we have absorbed approximately 140 positions companywide. We're almost 3% of our personnel base since March, simply through attrition and increased efficiency.

Elsewhere in personnel expense, incentive compensation increased $5.6 million, due to $3.1 million increase in cash based incentive compensation resulting from higher fee revenues, and $5.9 million largely related to vesting assumptions regarding the company's earnings per share growth relative to a defined peer group. These increases were offset partially by $3.5 million increase in deferred compensation.

Looking at the $2.3 million increase in non-personnel expense, there were several offsetting components. Write-downs on a set of oil and gas properties and a retail commercial real estate property, professional fees and data processing expense were partially offset by decreases in occupancy and equipment expense and other expenses. In addition, the second quarter included a charitable contribution to the BOKF Foundation of $3 million.

On Slide 14, our liquidity position remains very strong, given the continued inflow of deposit balances. Our loan-to-deposit ratio is now 68% compared to 71% at June 30, providing significant on balance sheet liquidity to meet future customer needs. Our capital position levels remain strong as well, with a common equity Tier 1 ratio of 12.1%, an improvement from 11.4% last quarter, and well ahead of our internal operating range minimum.

On Slide 15, I'll leave you with some general outlook for the near and mid-term that might be helpful. Our loan growth is expected to be soft in the near-term. However, as we put together our budget with the expectation of economic recovery, we'll be looking for opportunities to grow loan once again in 2021.

Our available for sale securities portfolio, which is largely agency mortgage backed securities yielded 2.11% during the third quarter, given the sustained low rate environment, prepayments could reach approximately $750 million per quarter. We can currently reinvest those cash flows at rates around 70 basis points to 90 basis points.

As we noted, we have had success during the third quarter driving deposit cost down further. We are now below the low point reached during the last near zero rate environment. We believe there is room to push a bit lower over the next couple of quarters, though we feel we are nearing a bottom to deposit cost.

The combination of the normalization of elevated discount accretion, pressure on asset yields and less room to lower deposit cost will put some pressure on net interest margin. Our diverse portfolio of fee revenue stream should continue to provide some mitigating impact to overall revenue pressure being felt in the spread businesses.

We expect our brokerage and trading activity to continue at elevated levels, given our ability to monetize every part of the fixed income space. Our mortgage business should remain solid from continued low rates and housing demand, with perhaps some normal seasonal slowdown in the fourth quarter.

Our disciplined approach to controlling personnel and non-personnel cost will continue. As noted earlier, we've made good progress through the pandemic. We have no plans for a direct reduction of workforce or any corporate wide program to cut existing capabilities or products for our customers. We will have our look for all opportunities to gain efficiency through automation and process improvement.

Although there remains uncertainty in the economic environment, we continue to believe the loan loss reserve building is behind us. As I mentioned a moment ago, we feel good about our capital strength. We will maintain our quarterly cash dividends and have plans to restart opportunistic share buybacks.

I’ll now turn the call back over to Steve Bradshaw for closing commentary.

Steve Bradshaw

Thank you. The differentiated earnings outcome that our strict credit discipline and heavily fee based revenue model produces during times of uncertainty, can’t be overstated here. As you’ve seen our fee income strains have produced over $600 million in revenue so far this year, and we believe that strength will continue as we have never seen clients with higher appreciation for advice, than in today’s uncertain economy.

Business owners, mortgage holders, wealth management clients, corporations, all are facing significant financial decisions as they plan for 2021. Our relationship driven business model is really in a sweet spot between high touch and high tech, it is perfectly in touch with the needs of clients today.

We continue to expand existing relationships and acquire new customers, as we believe individuals and companies are clearly evaluating how well their financial partners did or did not help during the last eight months. BOK Financial is uniquely positioned to win incremental market share, and that will be our focus heading into 2021.

With that, we’re pleased to take your questions. Operator?

Question-and-Answer Session

Operator

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first questions come from the line of Ken Zerbe with Morgan Stanley. Please proceed with your question.

Ken Zerbe

Okay, thanks. Good morning, everyone.

Steve Bradshaw

Good morning.

Ken Zerbe

My first question is for Stacy. If you do seek positive credit migration in the fall redetermination process as you expect, would that actually lead to a release of reserves? Or is that already in your CECL expectations?

Stacy Kymes

There are so many different assumptions that go into how -- I mean, part of that would be what do our updated economic outlook look like, what other credit migration may be happening in other aspects of the portfolio. I think it’s difficult at this point to try to have conjecture around what we think positive credit migration would do to reserve levels as we think about the fourth quarter.

I think generally speaking, if you think about the allowance you probably want to get into some level of post-COVID or vaccine environment. We have a lot more transparency around what environment is going to look like, because you think it’d be difficult to try to do something there and then have the economic environment turn against you.

I think we feel very good about where we are today, obviously, but I think it would be early to summarize what could happen with the positive credit migration and energy.

Ken Zerbe

Got it. Okay, that helps. And then in terms of the brokerage and trading side, obviously your fee income guidance implies the fees are going to remain strong. I think, Steven, you mentioned that brokerage is going to remain high. I guess that’s been kind of going straight up over the last couple quarters. It's been very strong results. What is it about brokerage and trading that keeps it high at this level going forward?

Scott Grauer

Hi, Ken. This is Scott Grauer. So, let me take a stab at that, when you think about our trading and brokerage activity, while we get probably a lot of headline attention to our mortgage backed securities piece, which is a significant component. It's roughly a third of that revenue.

That being said, our activity with mortgage originators is really only about -- its 25% or so. We've had real strong activity in our downstream correspondent financial institution business. Our activity to asset managers has been very strong.

And then our other component pieces, we've had significant momentum building in our CMO activity from a product standpoint. We've had good activity with our investment banking, our municipal underwriting. And as Stacey mentioned, our hedging activity has been very strong.

So, it's been really across the board in all of our activities in the brokerage and trading piece. Our asset values have rebounded, since the recovery in the equity markets, our recurring fee business, which is roughly 50-50, even on the brokerage side, are back to pre-March levels. So, it's strong across the board.

Ken Zerbe

All right, great. And just one really quick last question. In terms of your expense guidance, you said it's going to be roughly at the same level of sort of last few quarters. If I got my numbers right, it looks like expenses are kind of going up quite a bit over the last few quarters. Are you talking more in line with 3Q or in line sort of with the average, which is lower than 3Q?

Steven Nell

Given the kind of change in revenue mix more towards the fee side relative to the spread businesses, you're just going to have a slightly higher expense base to support that revenue stream. So, I think going forward, you'll see it similar to what we had in the third quarter here. Ken, we did have one item where we caught up, if you will, our incentive compensation accruals because of our positioning around where we fall within the peer group, so we needed to catch that accrual up.

But also we didn't put any dollars into our community foundation or, and so we may do that in the fourth quarter. You may not have the catch up on the incentive comp component for the stock based compensation, but you may have a little bit higher contribution to our foundation. So all those things may wash out and end up at an expense level similar to what you had in the third quarter.

Ken Zerbe

All right, perfect. Thank you very much.

Operator

Thank you. Our next question has come from the line of Brady Gailey with KBW. Please proceed with your questions.

Brady Gailey

Hey, thanks. Good morning, guys. So, I wanted to ask about share buybacks. It sounds like you guys will be active in that headed into yearend, stocks at one times tangible. You have a decent amount of excess capital. I mean, I'm looking back at where you guys have repurchased stock in the past. And it's over $80 a share stock. The stock now sub $60. So, how aggressive do you think you'll be on the buyback front this quarter and into next year?

Steven Nell

Yes. Well, you're exactly right. Brady, when I look back, the three quarters preceding the last two where we didn't buy any stock back, and we averaged about 350,000 shares at $78. So, you would have to expect we would be as aggressive if not more, given the current stock price. And given the capital levels, we're stronger now than they were back then. And we feel pretty comfortable with the credit side as Stacy mentioned.

So, I think you would expect us to be at that level or more aggressive in the fourth quarter, and then we'll just see where we roll out in the 2021. I don't want to make any extra -- provide any guidance around what we would do in 2021. But, certainly, I think you'll see us back in the market.

Brady Gailey

Okay. And then moving on to the margin. I mean, you talked about seeing some pressure on the margin, obviously, with the accredible yield from CoBiz normalizing, that will push the margin down on its own. But excluding any sort of movements from accredible yield, how much pressure would you expect on the net interest margin going forward?

Steven Nell

Well, let me just take a few of the components. I really think our loan pricing is kind of adjusted. I don't expect that to go down any further. Also, our lending groups, Stacy, Norm Bagwell, others have been able to get some floors in on about 10% to 15% or so of our portfolio, and that's supporting the margins some. So, I feel pretty good about where our loan pricing is.

I mentioned deposit costs, I think we can push those down a little bit more. I don't know how far, I wouldn't commit that we could pass through 20 basis points, but we're at 26 average for the third quarter. The last month of the quarter was a little better than that. I think we can keep pushing there some.

I think, where you'll see the margin pressure is from our available for sale securities portfolio where you've got, as you would expect some pretty sizable cash flows from that portfolio. I mentioned, I think $750 million a quarter that will come out of a portfolio yield of 2.11 [ph] and roll into securities that we reinvest between 70 and 90 basis points.

So, you can kind of do the math around that, and figure out that you've got some roll down in net interest margin in the next few quarters. So maybe I'll leave it at that.

Brady Gailey

Okay, that's helpful. And then finally for me, I just wanted to ask about the expense base. I'm guessing, at some point all the success you're having on the fee income side will start to decline. So maybe next year, as you start to see fees not be as strong, are their continued opportunities you have on the expense base to help offset any pressure on profitability?

I know you mentioned, you've already allowed the workforce to be reduced by 3%. Do you think there's more work to be done on the expense side next year?

Steve Bradshaw

Yes. Brady, this is Steve Bradshaw. I'd say that that's an absolute focus for us. And it became significant for us really going all the way back to mid-March, when we returned to a near zero rate environment. We understand the implications of that. We had a playbook from that in the not too distant past when we had the same scenario.

And you're right, we've used attrition to bring that workforce down. We've done some targeted reductions, where we've seen efficiencies, currently doing that in our branch network. There's other areas that that we're focused on as well. So that is going to be critical, I think for us in 2021.

And the good work we've done, it's been a little bit of math, because to Steven's point, when you see outsized performance for mortgage, you see outsized performance from brokerage and trading. Those are both commission-based compensation businesses. You're going to pay for that, and we're happy to pay for that. And that's going to be reflected in personnel costs.

When you strip that away and we've got a very positive trend line in reducing some of our costs in that fashion, if we're going to continue that into 2021. So it's not like we're just waking up today to address that. This is something that we've been working on as a management team for seven months.

Brady Gailey

Okay, got it. Thanks, guys.

Operator

Thank you. Our next question has come from the line of Jon Arfstrom of RBC Capital Markets. Please proceed with your question.

Jon Arfstrom

Hey, thanks. Good morning.

Stacy Kymes

Good morning.

Jon Arfstrom

Stacey for you, back on Slide 9. Can you talk a little bit about how granular the energy non-accruals are and also some of the potential problem loans? Is it a handful of larger credits? Or is it more broad-based than that?

Stacy Kymes

No, I mean, energy overall tends to queue to a higher average loan size, and so there is probably a higher average loan size embedded in both potential problem loans, to a lesser extent than non-accruals, generally, by the time they make it that far, you've had a couple of borrowing base reductions and they tend to be a little bit smaller by the time they get to that point.

But we're very optimistic about kind of this fall redetermination season. We feel good about potential loss content embedded here. We fared exceptionally well. If you look at, I think, year-to-date, the last five quarters we’ve kind of been in that 27 basis point range. That feels very good, particularly given what we've been through. But even without that, that would be a good number for us.

So I feel good about kind of where we are from a loss content perspective there. There doesn't mean there won't be more. I certainly would expect there to be some level of additional loss content embedded there as we work through those problems. But we feel good about the outlook for sure.

Jon Arfstrom

Okay, that helps. And then, Steven, maybe another way of getting back at Ken's earlier question. What would have to happen to drive a higher provision or to get you back into positive territory? It seems like, loan balances are maybe a little flattish in the near-term and we've got some credit improvement. But what would have to happen, you guys, to go back to a positive provision?

Steven Nell

Well, I think you'd have to have an economic outlook that deteriorates more than -- we have a base case, upside case and a downside case. And I think you would have to have much more the downside case out in expectation for next year, or early part of next year that would throw you back into a scenario where you needed to provide for expected losses in a scenario like that. Perhaps some more deterioration on the energy side, but we're not seeing that at this stage.

So, I think it really drives more around the economic outlook, backing up and deteriorating significantly from what we have in our estimates today.

Jon Arfstrom

Okay, that's helpful. And then one last small one, I don't know if you've touched on it. But do you have the mortgage pipeline and maybe how that looks today?

Steven Nell

No, I don't have that in front of me. I've got what the origination activity was, third quarter versus second. It was just slightly lower, not much, but a little bit lower. There's always some seasonality, even in these very low rates that have driven a lot of origination activity. You still have a slowdown in the fourth quarter, generally. That's what we've seen in the past, that's why I noted that. We think mortgage will stay relatively strong, but with some seasonal kind of slowdown.

The margins have held up very, very well, in fact, they were up 2 basis points, all the way to 367, I believe, for this quarter. I don't know if that will hold up forever, but certainly, we're seeing still very good activity in the mortgage company during the fourth quarter here.

Jon Arfstrom

Okay. All right. Thanks a lot, guys. I appreciate it.

Operator

Thank you. Our next questions come from the line of Jennifer Demba with Truist Securities. Please proceed with your question.

Brandon King

Hi, this is Brandon King on for Jenny. How you guys doing?

Steven Nell

Hi, Brandon.

Brandon King

Hey, so most of my questions have been answered, but I wanted to touch on loan growth. And I saw that there was growth in the healthcare, senior housing, and senior care. And I was wondering if you could provide more details on underlying trends of that, and expectations for the fourth quarter and possibly even in 2021?

Stacy Kymes

Sure. So healthcare has been an obviously a strong focus for our company for a long time. We got a fantastic team that's focused there. The two really three areas that we focus on are our hospital systems, and that's generally large, high-end credit hospital systems, medical and physicians practice groups and senior housing. And we see opportunity for growth, really, particularly in the latter two.

We saw growth in hospital systems in the first-half of the year, as they worked to obtain additional liquidity to work through the pandemic. I think what we would expect to see over the next year or so is that need lessens that their need for liquidity would lessen. And so their need for credit would probably lessen as well, or at least their draw downs. We see good opportunity inside of our healthcare group, both the medical physicians group, as well as the senior housing group.

I think that what we've seen in the growth in the near-term has been, as we've talked about in the past, some of the large REITs that have struggled, may divest of certain property sets, and so we have some clients who are the operators of those properties, maybe they sold them their REIT originally many years ago. They continue to operate them. They know the facility, they know the health dynamics of that facility. So they're very comfortable purchasing that facility out of the REIT. And so that's created some opportunities for growth from us, with existing clients with existing properties that they operate. And so that's been part of the growth that we've seen here in the third quarter.

And we think, particularly once we get through the pandemic, that will continue to be a very strong opportunity for growth for us, and we're very happy with our growth in our medical physicians practice group. We really -- that was a big part of the acquisition from CoBiz for us on the healthcare front, and they really exceeded expectations and continued to have high expectations from that team as we move forward.

Brandon King

Awesome. And other than the healthcare, are there any other areas of growth that you could be looking to capitalize on going into next year? I know loan demand is pretty soft right now. But are there any particular areas outside of healthcare that you could be looking to take any market share opportunity there?

Stacy Kymes

Look, I think that from our perspective, growth will be tempered until such time is people are very comfortable in the economic environment. And I think that probably is, into a widely available vaccine.

But I will tell you, I think that the response that we've seen from our customer base around our customer service and responsiveness, particularly around PPP, I think our opportunities to grow in all aspects of our lending, once the economy begins to grow. I mean, if we were growing loans in a big way right now, you guys would probably be questioning and challenging how we were doing that, where that growth was coming from.

But I think when the economy turns, we're exceptionally well-positioned, because our customers have realized that having a trusted adviser and having a person I can talk to, when they need credit, and when they need to work through an issue is worth a lot to them. And so I'm very optimistic about our growth prospects, once we get to the kind of proverbial other side of this pandemic.

Brandon King

Okay, that is great. That's all I had. Thank you very much.

Steven Nell

Thank you.

Operator

Thank you. Our next questions come from the line of Gary Tenner with D.A. Davidson. Please proceed with your questions.

Gary Tenner

Thanks, guys. Good morning.

Steven Nell

Good morning.

Gary Tenner

I wanted to ask a question on energy and I appreciate the positive comments regarding the upcoming redetermination season. But I was curious, in terms of borrowers that may have had shortfalls after the spring redetermination, how successful have they been in correcting those? Or is really, maybe some increase in the borrowing basin in the fall going to be the more positive driver of that?

Stacy Kymes

Well, I mean, it's hard to answer that, because we've probably only been through about 15% to 20% of the redeterminations at this point. And so in many cases, the last time we saw them was in the spring when the prices were significantly lower. In the meantime, they've done things to manage their business reduced costs. In some cases, they've shut in wells, in the early stages that they'll bring back online.

So, I think it's a little bit premature to answer that with a lot of clarity, until we've been through this fall redetermination cycle. But based on the credits that we have seen through that process, I think we're optimistic that between a positive price movement and actions of the borrower, that we're going to work through this in a very positive manner, and we don't see lost content in that portfolio. That's inconsistent with what you've seen from us in the past.

Gary Tenner

Okay. Thank you. And then just on PPP, unless I missed it in the press release anywhere. Can you tell us what the fees that were recognized in the third quarter?

Steven Nell

Yes. Gary, this is Steven. The fees were $11.3 million that we recognized in the third quarter for PPP.

Gary Tenner

Thank you.

Steven Nell

You're welcome.

Operator

Thank you. Our next questions come from the line of Peter Winter with Wedbush Securities. Please proceed with your questions.

Peter Winter

Good morning.

Steven Nell

Good morning.

Peter Winter

Obviously, credit is a good story. I was just wondering if you could give a little bit more color on the retail side that you guys called out that you're watching a little bit more closely.

Stacy Kymes

Yes. I'd certainly invite Marc to provide color here as well. Today, we're not seeing real big issues there. We're calling in it out as a risk area, because it's intuitive and we see that from that perspective. But I think in my comments I mentioned that it's held up better than we would have expected, knowing what we know now and given the depth of the pandemic in various markets.

So, we're not necessarily seeing credit migration there today, as much as we are calling it out as a potential risk area. In fact, as we dig through that, and as you can imagine, we spent a lot of time in the last 90 days doing that, we actually feel much better about it than we did, when this all kind of started, and we began to kind of call out some of these higher risk areas.

Marc Maun

Yes, this is Marc. What I'd only add is that, from a loan deferral standpoint, we've had two-thirds of our consumer loans and mortgage loans exit from that deferral program. So, they tend to have a little longer request and a little longer ability than most, so we've had very good success in having those migrate back to regular payment.

Peter Winter

Got it. And then, if I can just confirm on the provision expense outlook, Steven. So the way to think about it is kind of a zero provision for the next several quarters, assuming no further deterioration in the economy?

Steven Nell

Well, that's kind of what we see. I mean, we've made the statement that we feel like the reserve build is behind us. We made that statement last quarter, that if the economic environment stayed relatively stable, which it did, in fact, it improved a little bit that we've felt like we wouldn't have to build a reserve anymore. That's kind of the stance we have.

Now, who knows what will change. And I answered the question earlier, in this call that, if the economic environment and outlook deteriorate significantly, then yes, we got to go back and run our models and determine if there's more expected loss there. But today, we're not seeing that.

Peter Winter

Got it. And just my final question for Steve. I was just wondering if you can give an update on what your thoughts are of M&A, bank M&A in this environment?

Steve Bradshaw

Yes, Peter. I don't think our stance really changes there. We're always interested in quality organizations, especially areas that we can expand within our existing footprint. As you know, we like the market that we're in very much. We've got some good growth markets where we don't have substantial market share. We could benefit from extra scale.

I think realistically, in this environment high quality banks are not as likely to be sellers, with the uncertain credit outlook, with low rates, and maybe calling margin. If you were an owner of a good quality bank, you probably don't see that as the greatest opportunity to maximize the value of your bank. You're probably going to see more scratch and dent type transactions.

And while we look at those from time-to-time, we've typically not gone down that route, because our belief -- and I'd say this with confidence, and not arrogance is that I'd rather have the management team focused on growing our own organization, which we've had great success doing and trying to turn around a bad situation in an uncertain environment.

So, we are very interested and focused on that as we think about going forward, but I think that the opportunity that we have will probably be limited here in near-term.

Peter Winter

Excellent. Thanks for taking my questions.

Steve Bradshaw

Thank you.

Operator

Thank you. There are no further questions at this time, I would like to hand the call back over to Steven now for any closing costs.

Steven Nell

Okay, thank you. Thanks, everyone, for joining us. I appreciate all your questions and interest in the BOKF. If you have any further questions, you can call me at 918-595-3030, or you can email us at ir@bokf.com. Everybody, have a great day. Thank you.

Operator

This does conclude today's conference. Thank you for your participation. You may disconnect your lines at this time. We hope everyone has a great day.

Good morning and thanks for joining us today.. Joining us for the question and answer session are Marchmont, our chief credit officer, who can answer detailed questions regarding credit metrics and loan deferral status, and also Scott Grauer, executive vice president of wealth management, who can expand on our differentiating capabilities within wealth management, which have led to another fantastic quarter for the company.. Despite these factors, we remain open for business and continue to support our customers in the energy industry.. Changes in the loan portfolio characteristics including specific impairment and losses, loan balances and risk ratings resulted in a fourteen point five million increase in the provision for credit losses from lending activities that charge offs of twenty two point four million or thirty seven basis point annualized is slightly above last quarter, excluding triple Pillans.. Net interest margin was two point eight one percent, compared to two point eighty three percent in the previous quarter, lower loan yields in the near zero rate environment were offset primarily by the acceleration of discount accretion from Cobus acquired loans, which supported net interest margin by 11 basis points versus last quarter and is expected to normalize next quarter.. Our loan growth is expected to be soft in the near term, however, as we put together our budget with the expectation of economic recovery, we'll be looking for opportunities to grow loans once again and 2021.. Although there remains uncertainty in the economic environment, we continue to believe the loan loss reserve building is behind us.. [00:22:07] God helps them in terms of the brokerage and trading side, obviously your fee income guidance implies the fees are going to remain strong.. If I got my numbers right, it looks like expenses are kind of going up quite a bit over the last few quarters.. [00:24:24] You know, given the kind of change in revenue mix more towards the fee side relative to the spread businesses, you're just going to have a slightly higher expense base to support that revenue stream.. I mentioned, I think 750 million a quarter that will come out of a portfolio yield of 211 and roll into securities that we reinvest between 70 and 90 basis points.. [00:35:43] Sure, so health care has been an obviously a strong focus for our company for a long time.. And we So, think, you know, particularly once we get through the pandemic, that will continue to be a very strong opportunity for growth for us.. And I answered the question earlier in this call that, you know, if the economic environment and outlook deteriorate significantly, then, yeah, we've got to go back and run our models and determine if there's more expected loss there.. There are no further questions at this time.

Joining us for the question-and-answer session are Marc Maun, our Chief Credit Officer, who can answer detailed questions regarding credit metrics; and Scott Grauer, Executive Vice President of Wealth Management, who can expand on our wealth management capabilities that have led to another fantastic quarter for the company.. We'll dive a little deeper into the record year our Wealth Management team produced in 2020, as well as a shift of some brokerage and trading fee revenue to net interest revenue due to an increase in trading securities balances and settlement timing in the fourth quarter.. Turning to Slide 11, fourth quarter net interest revenue was $297 million, up more than $25 million from last quarter.. When viewed holistically, our Wealth Management team put together another outstanding quarter, with total revenue of $131.5 million, off slightly from the third quarter, but still represents the third highest quarter on record, and for the full year surpassed $500 million in total revenue for the first time.. And then if you look at loan balances, ex PPP, it seems like for the last three quarters or so those kind of core loan balances have been down in between kind of 5% to 8% annualized.. We are seeing new deals there, but it's just not outpacing the level of deleveraging or paydowns that are happening within that book, but a lot of good activity that we've gotten out of the work that we did around the PPP program.. We think we're well positioned there, but I think you see, you need economic growth, and I think you also need some of this liquidity to work its way off the balance sheet before you really get the core loan growth.. So, we see good opportunity there, its just at some point the pace of deleveraging from energy borrowers will slow, and we'll really see all the hard work that our energy team is doing to grow that really come to the surface.. Question for you, Stacy, on Slide 7.. I think it's -- I think, I mean -- I think until we begin to work some of this liquidity off, I don't think you're going to see huge C&I loan growth.. Davidson & Co -- Analyst. But just as it relates again to the loan growth side of things, I understand, obviously a stabilization in the energy book with certainly positive for loan growth next year or this year.. Davidson & Co -- Analyst. Davidson & Co -- Analyst. Davidson & Co -- Analyst

The contribution from our wealth management team continues to grow and impact results, achieving a new quarterly record for total revenues of 153 million for this quarter.. Total wealth management revenues were 153 million for the quarter, up nearly 17% from the linked quarter and 14% above the previous record set in the third quarter of 2020.. The total loan portfolio surpassed 2 billion in balances this quarter and is up 12% or 221 million compared to the same quarter a year ago.. On Slide 13, our liquidity position remains very strong.. And so, as we think about the fourth quarter, we think the trading aspect of that business will be probably somewhere between what we saw in the second quarter and the third quarter, probably not as strong as the third quarter probably maybe a little bit better than what we saw in the second quarter.

This increase largely comes from the energy portfolio as the recent oil price declines, coupled with the capital markets environment requiring certain customers to work through their liquidity needs weighed on some energy borrowers.. Mortgage banking saw a significant surge in production revenue this quarter, growing $11.8 million or over 46% relative to last quarter, and almost 56% from the same quarter a year ago.. So, we feel very good about the level of hedging that we have within our customer base.. So I think they'll be very supportive in the second quarter as they were in the first quarter.. That's not a portfolio that we're going know today what exactly the impact is.. So I had a question on energy hedging.

Excluding Paycheck Protection Program (PPP) loans, the allowance for loan losses was 1.93 percent of outstanding loans and the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was 2.06 percent.. Excluding PPP loans, the allowance for loan losses was $436 million or 1.97 percent of outstanding loans and the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $469 million or 2.12 percent of outstanding loans at June 30, 2020.. The allowance for loan losses totaled $420 million or 1.76 percent of outstanding loans and 195 percent of non-accruing loans at September 30, 2020, excluding residential mortgage loans guaranteed by U.S. government agencies.. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $448 million or 1.88 percent of outstanding loans and 208 percent of non-accruing loans at September 30, 2020.. Excluding PPP loans, the allowance for loan losses was 1.93 percent of outstanding loans and the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was 2.06 percent.. At June 30, 2020, the allowance for loan losses was $436 million or 1.80 percent of outstanding loans and 175 percent of non-accruing loans, excluding loans guaranteed by U.S. government agencies.. The net economic benefit of the changes in the fair value of mortgage servicing rights and related economic hedges was $6.5 million during the third quarter of 2020, including a $3.4 million increase in the fair value of mortgage servicing rights, $1.5 million increase in the fair value of securities and derivative contracts held as an economic hedge, and $1.6 million of related net interest revenue.. Sept. 30, 2020June 30, 2020ASSETS Cash and due from banks$658,612$762,453Interest-bearing cash and cash equivalents347,759485,319Trading securities2,245,4801,196,105Investment securities, net of allowance256,001267,988Available for sale securities12,817,26912,475,919Fair value option securities134,756722,657Restricted equity securities111,656125,683Residential mortgage loans held for sale295,290319,357Loans:Commercial13,565,70614,158,510Commercial real estate4,693,7004,554,144Paycheck protection program2,097,3252,081,428Loans to individuals3,446,5693,361,808Total loans23,803,30024,155,890Allowance for loan losses(419,777)(435,597)Loans, net of allowance23,383,52323,720,293Premises and equipment, net542,625550,230Receivables245,514226,934Goodwill1,048,0911,048,091Intangible assets, net118,524123,595Mortgage servicing rights97,64497,971Real estate and other repossessed assets, net52,84735,330Derivative contracts, net593,568651,553Cash surrender value of bank-owned life insurance396,497393,741Receivable on unsettled securities sales1,934,4951,863,719Other assets787,073752,936 TOTAL ASSETS$46,067,224$45,819,874LIABILITIES AND EQUITY Deposits:Demand$12,047,338$11,992,165Interest-bearing transaction20,196,74018,850,418Savings720,949696,971Time2,007,9732,352,760Total deposits34,973,00033,892,314Funds purchased and repurchase agreements973,6521,357,602Other borrowings2,771,4293,173,563Subordinated debentures275,986275,973Accrued interest, taxes and expense335,914365,634Due on unsettled securities purchases641,817599,510Derivative contracts, net446,328610,020Other liabilities422,989440,835TOTAL LIABILITIES40,841,11540,715,451Shareholders' equity:Capital, surplus and retained earnings4,853,6174,726,679Accumulated other comprehensive gain365,170370,316TOTAL SHAREHOLDERS' EQUITY5,218,7875,096,995Non-controlling interests7,3227,428TOTAL EQUITY5,226,1095,104,423 TOTAL LIABILITIES AND EQUITY$46,067,224$45,819,874AVERAGE BALANCE SHEETS -- UNAUDITEDBOK FINANCIAL CORPORATION (in thousands). 30, 2019ASSETS Interest-bearing cash and cash equivalents$553,070$619,737$721,659$573,203$500,823Trading securities1,834,1601,871,6471,690,1041,672,4261,696,568Investment securities, net of allowance258,965268,947282,265298,567308,090Available for sale securities12,580,85012,480,06511,664,52111,333,52410,747,439Fair value option securities387,784786,7571,793,4801,521,5281,553,879Restricted equity securities144,415273,922429,133479,687476,781Residential mortgage loans held for sale213,125288,588129,708203,535203,319Loans:Commercial13,772,21714,502,65214,452,85114,344,53414,507,185Commercial real estate4,754,2694,543,5114,346,8864,532,6494,652,534Paycheck protection program2,092,9331,699,369———Loans to individuals3,491,0443,353,9603,143,2863,358,8173,253,199Total loans24,110,46324,099,49221,943,02322,236,00022,412,918Allowance for loan losses(441,831)(367,583)(250,338)(205,417)(201,714)Loans, net of allowance23,668,63223,731,90921,692,68522,030,58322,211,204Total earning assets39,641,00140,321,57238,403,55538,113,05337,698,103Cash and due from banks723,826678,878669,369690,806717,338Derivative contracts, net581,839642,969376,621311,542331,834Cash surrender value of bank-owned life insurance394,680391,951390,009388,012385,190Receivable on unsettled securities sales4,563,3014,626,3073,046,1111,973,6041,742,794Other assets3,027,1083,095,3542,834,9532,736,3372,705,089 TOTAL ASSETS$48,931,755$49,757,031$45,720,618$44,213,354$43,580,348LIABILITIES AND EQUITY Deposits:Demand$11,929,694$11,489,322$9,232,859$9,612,533$9,759,710Interest-bearing transaction19,752,10618,040,17016,159,65414,685,38513,131,542Savings707,121656,669563,821554,605557,122Time2,251,0122,464,7932,239,2342,247,7172,251,800Total deposits34,639,93332,650,95428,195,56827,100,24025,700,174Funds purchased and repurchase agreements2,782,1505,816,4843,815,9414,120,6103,106,163Other borrowings3,382,6883,527,3036,542,3256,247,1948,125,023Subordinated debentures275,980275,949275,932275,916275,900Derivative contracts, net458,390836,667379,342276,078300,051Due on unsettled securities purchases1,516,880887,973960,780784,174745,893Other liabilities712,674690,087642,764561,654547,144TOTAL LIABILITIES43,768,69544,685,41740,812,65239,365,86638,800,348Total equity5,163,0605,071,6144,907,9664,847,4884,780,000 TOTAL LIABILITIES AND EQUITY$48,931,755$49,757,031$45,720,618$44,213,354$43,580,348STATEMENTS OF EARNINGS -- UNAUDITEDBOK FINANCIAL CORPORATION (in thousands, except per share data). Three Months EndedNine Months EndedSeptember 30,September 30,2020201920202019 Interest revenue$294,659$395,207$949,980$1,162,101Interest expense22,909116,111138,766319,471Net interest revenue271,750279,096811,214842,630Provision for credit losses—12,000229,09225,000 Net interest revenue after provision for credit losses271,750267,096582,122817,630 Other operating revenue:Brokerage and trading revenue69,52643,840182,327115,983Transaction card revenue23,46522,01568,28664,668Fiduciary and asset management revenue39,93143,621125,646132,004Deposit service charges and fees24,28628,83772,46285,154Mortgage banking revenue51,95930,180143,06282,145Other revenue13,69817,62637,48642,825 Total fees and commissions222,865186,119629,269522,779 Other gains, net6,2654,5442,29211,000Gain on derivatives, net2,3543,77842,65919,595Gain (loss) on fair value option securities, net(754)4,59753,18024,115Change in fair value of mortgage servicing rights3,441(12,593)(85,800)(62,814)Gain (loss) on available for sale securities, net(12)55,5711,110 Total other operating revenue234,159186,450647,171515,785 Other operating expense:Personnel179,860162,573512,276492,143Business promotion2,6338,85910,78326,875Charitable contributions to BOKF Foundation——3,0001,000Professional fees and services14,07412,31239,18341,453Net occupancy and equipment28,11127,55884,84783,959Insurance5,8484,22015,98415,513Data processing and communications34,75131,915100,43693,099Printing, postage and supplies3,4823,82511,25612,817Net losses and operating expenses of repossessed assets6,2441,7289,5414,304Amortization of intangible assets5,0715,06415,35515,393Mortgage banking costs15,80314,97541,94636,426Other expense5,3886,26320,66920,604 Total other operating expense301,265279,292865,276843,586Net income before taxes204,644174,254364,017489,829 Federal and state income taxes50,55232,39683,65599,926 Net income154,092141,858280,362389,903 Net income (loss) attributable to non-controlling interests58(373)(444)(503) Net income attributable to BOK Financial Corporation shareholders$154,034$142,231$280,806$390,406Average shares outstanding: Basic69,877,86670,596,30769,958,94470,953,544Diluted69,879,29070,609,92469,962,05370,968,845 Net income per share: Basic$2.19$2.00$3.99$5.47Diluted$2.19$2.00$3.99$5.47 FINANCIAL HIGHLIGHTS -- UNAUDITEDBOK FINANCIAL CORPORATION (in thousands, except ratio and share data). 30, 2019Pre-provision net revenue: Net income before taxes$204,644$80,089$79,284$141,039$174,254Provision for expected credit losses—135,32193,77119,00012,000Net income (loss) attributable to non-controlling interests58(407)(95)430(373)Pre-provision net revenue$204,586$215,817$173,150$159,609$186,627 Other data: Tax equivalent interest$2,457$2,630$2,715$2,726$2,936Net unrealized gain (loss) on available for sale securities$480,563$487,334$435,989$138,149$178,060 Mortgage banking: Mortgage production revenue$38,431$39,185$21,570$9,169$13,814Mortgage loans funded for sale$1,032,472$1,184,249$548,956$855,643$877,280Add: current period-end outstanding commitments560,493546,304657,570158,460379,377Less: prior period end outstanding commitments546,304657,570158,460379,377344,087Total mortgage production volume$1,046,661$1,072,983$1,048,066$634,726$912,570Mortgage loan refinances to mortgage loans funded for sale54%71%57%57%56%Gain on sale margin3.67%3.65%2.06%1.44%1.51%Mortgage servicing revenue$13,528$14,751$15,597$16,227$16,366Average outstanding principal balance of mortgage loans serviced for others17,434,21519,319,87220,416,54620,856,44621,172,874Average mortgage servicing revenue rates0.31%0.31%0.31%0.31%0.31% Gain (loss) on mortgage servicing rights, net of economic hedge: Gain (loss) on mortgage hedge derivative contracts, net$2,295$21,815$18,371$(4,714)$3,742Gain (loss) on fair value option securities, net(754)(14,459)68,393(8,328)4,597Gain (loss) on economic hedge of mortgage servicing rights1,5417,35686,764(13,042)8,339Gain (loss) on changes in fair value of mortgage servicing rights3,441(761)(88,480)9,297(12,593)Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue4,9826,595(1,716)(3,745)(4,254)Net interest revenue on fair value option securities21,5652,7024,2681,5441,245Total economic benefit (cost) of changes in the fair value of mortgage servicing rights, net of economic hedges$6,547$9,297$2,552$(2,201)$(3,009) 2 Actual interest earned on fair value option securities less internal transfer-priced cost of funds.. 30, 2019 Interest revenue$294,659$306,384$348,937$369,857$395,207Interest expense22,90928,28087,57799,608116,111Net interest revenue271,750278,104261,360270,249279,096Provision for credit losses—135,32193,77119,00012,000 Net interest revenue after provision for credit losses271,750142,783167,589251,249267,096 Other operating revenue:Brokerage and trading revenue69,52662,02250,77943,84343,840Transaction card revenue23,46522,94021,88122,54822,015Fiduciary and asset management revenue39,93141,25744,45845,02143,621Deposit service charges and fees24,28622,04626,13027,33128,837Mortgage banking revenue51,95953,93637,16725,39630,180Other revenue13,69811,47912,30915,28317,626 Total fees and commissions222,865213,680192,724179,422186,119 Other gains (losses), net6,2656,768(10,741)(1,649)4,544Gain (loss) on derivatives, net2,35421,88518,420(4,644)3,778Gain (loss) on fair value option securities, net(754)(14,459)68,393(8,328)4,597Change in fair value of mortgage servicing rights3,441(761)(88,480)9,297(12,593)Gain (loss) on available for sale securities, net(12)5,58034,4875 Total other operating revenue234,159232,693180,319178,585186,450 Other operating expense:Personnel179,860176,235156,181168,422162,573Business promotion2,6331,9356,2158,7878,859Charitable contributions to BOKF Foundation—3,000—2,000—Professional fees and services14,07412,16112,94813,40812,312Net occupancy and equipment28,11130,67526,06126,31627,558Insurance5,8485,1564,9805,3934,220Data processing and communications34,75132,94232,74331,88431,915Printing, postage and supplies3,4823,5024,2723,7003,825Net losses and operating expenses of repossessed assets6,2441,7661,5312,4031,728Amortization of intangible assets5,0715,1905,0945,2255,064Mortgage banking costs15,80315,59810,54514,25914,975Other expense5,3887,2278,0546,9986,263 Total other operating expense301,265295,387268,624288,795279,292Net income before taxes204,64480,08979,284141,039174,254 Federal and state income taxes50,55215,80317,30030,25732,396 Net income154,09264,28661,984110,782141,858 Net income (loss) attributable to non-controlling interests58(407)(95)430(373) Net income attributable to BOK Financial Corporation shareholders$154,034$64,693$62,079$110,352$142,231Average shares outstanding: Basic69,877,86669,876,04370,123,68570,295,89970,596,307Diluted69,879,29069,877,46770,130,16670,309,64470,609,924 Net income per share: Basic$2.19$0.92$0.88$1.56$2.00Diluted$2.19$0.92$0.88$1.56$2.00 LOANS TREND -- UNAUDITEDBOK FINANCIAL CORPORATION (In thousands). 30, 2019 Nonperforming assets:Nonaccruing loans:Commercial:Energy$126,816$162,989$96,448$91,722$88,894Healthcare3,6453,6454,0704,4805,978Services25,81721,0328,4257,4836,119General business13,67514,3339,68111,73110,715Total commercial169,953201,999118,624115,416111,706Commercial real estate12,95213,9568,54527,62623,185Loans to individuals:Permanent mortgage31,59933,09830,72131,52230,972Permanent mortgage guaranteed by U.S. government agencies6,3976,1105,0056,1006,332Personal252233277287271Total loans to individuals38,24839,44136,00337,90937,575Total nonaccruing loans$221,153$255,396$163,172$180,951$172,466Accruing renegotiated loans guaranteed by U.S. government agencies142,770114,57191,75792,45292,718Real estate and other repossessed assets52,84735,33036,74420,35921,026Total nonperforming assets$416,770$405,297$291,673$293,762$286,210Total nonperforming assets excluding those guaranteed by U.S. government agencies267,603284,616194,911195,210187,160Accruing loans 90 days past due 1 7,68410,9923,7067,6801,541Gross charge-offs$26,661$15,570$18,917$14,268$11,707Recoveries(4,232)(1,491)(1,696)(1,816)(1,066)Net charge-offs$22,429$14,079$17,221$12,452$10,641Provision for loan losses$6,609$134,365$95,964$18,779$12,539Provision for credit losses from off-balance sheet unfunded loan commitments(4,950)4,4053,377221(539)Provision for expected credit losses from mortgage banking acitivities 2 (770)(3,575)(6,020)——Provision for credit losses related to held-to maturity (investment) securities portfolio 2 (889)126450——Total provision for credit losses$—$135,321$93,771$19,000$12,000 Three Months EndedSept.. 30, 2019 Allowance for loan losses to period end loans1.76%1.80%1.40%0.97%0.92%Allowance for loan losses to period end loans excluding PPP loans 3 1.93%1.97%1.40%0.97%0.92%Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans1.88%1.94%1.53%0.98%0.92%Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans excluding PPP loans 3 2.06%2.12%1.53%0.98%0.92%Nonperforming assets to period end loans and repossessed assets1.75%1.68%1.30%1.35%1.28%Net charge-offs (annualized) to average loans0.37%0.23%0.31%0.22%0.19%Net charge-offs (annualized) to average loans excluding PPP loans 3 0.41%0.25%0.31%0.22%0.19%Allowance for loan losses to nonaccruing loans 1 195.47%174.74%199.35%120.54%123.05%Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to nonaccruing loans 1 208.49%187.94%217.38%121.44%123.87% 1 Excludes residential mortgage loans guaranteed by agencies of the U.S. government.

I'd now like to turn the conference over to your host Mr. Steven Nell, Chief Financial Officer of BOK Financial Corporation.. Joining us for the question-and-answer session are Marc Maun, our Chief Credit Officer, who can answer detailed questions regarding credit metrics; and Scott Grauer, Executive Vice President of Wealth Management, who can expand on our wealth management activities.. PPP loan balances increased to $166 million or nearly 10% and represent 8% of total loans.. First quarter net interest revenue was $280 million, down about $17 million from last quarter.. And so once there is core economic activity that returns, I think there's going to be some really good line utilization increases that will -- beyond new customer acquisition will help us grow our loans in the second half of the year.. Well, I think if you look at what we're calling the core loan portfolio.. Yeah, I think that even the rising commodity prices in my view in the first quarter had a higher level -- resulted in a higher level of paydown activity than even what we were anticipating and forecasting, because those borrowers weren't using that cash flow for capex, they were using that to continue to pay down revolver.. That's great color and it's really good to hear the optimism on energy, hope that plays well.. Scott B. Grauer -- Executive Vice President, Wealth Management and Chief Executive Officer of BOK Financial Securities. Our next question comes from the line of Gary Tenner with D.A.. I don't think there's a better energy team in the country than at BOK Financial.. Scott B. Grauer -- Executive Vice President, Wealth Management and Chief Executive Officer of BOK Financial Securities

Operating expenses were higher than expected for the reasons outlined on slide four, a $5 million unplanned legal settlement, higher amortization on mortgage servicing rights given the strong refi market in the third quarter, higher FDIC expense, including the surcharge on banks greater than $10 billion in assets, and $1.2 million of Mobank-related expenses.. Loan yields were in turn driven by a combination of factors including higher 30 and 90-day LIBOR rates, higher yields on energy loans, an increased mix of commercial real estate loans which provides a better yield than the corporate average, as well as a strong quarter for loan fees.. Mortgage banking cost increased this quarter but was largely due to our mortgage servicing right amortization, which was up $1.7 million from the second quarter, and is up $4.7 million year-over-year.. Energy charge-offs were $6.3 million in the third quarter, down from 7.1 million last quarter.. Well, there'll be normal expense levels in 2017, and we think quarterly expenses will come in somewhere around $260 million mark per quarter, including Mobank next year, as well as the benefit of the $20 million over the course of the year.. Just to put the $20 million to bed, so those -- that headcount reduction is fully reflected as of October 1, and so we'll have that severance charge in fourth quarter but we'll also get the corresponding quarterly benefit of a $20 million run rate in 4Q quarter expenses, is that correct?. There is seasonality in the fourth quarter relative to the previous quarters, and also as you mentioned the exit of the correspondent business is going to impact revenue somewhere in the $4 million to $5 million range in the fourth quarter.

The company’s board of. directors is expected to appoint a successor in the coming months,. ensuring a smooth transition prior to April 1, 2022.Bradshaw joined the company in 1991 after selling his wholly. owned retail brokerage business to BOK Financial.. He held numerous. leadership positions at the company before being named the. company’s chief executive in 2014.. Bradshaw has also been very active in the Tulsa community,. serving as board chair for the Tulsa Metropolitan Chamber, and a. board member for the University of Tulsa, Tulsa Community. Foundation and many other organizations over the years.. After retirement, Bradshaw plans to stay in Tulsa and remain. active in the community.. He has been with BOK Financial for almost 25 years and. has a broad understanding of the company, having served as chief. auditor, director of mergers and acquisitions, and chief credit. officer.. I look forward to becoming the company’s number one. advocate as I move into the next phase of my life.”. BOK Financial Corporation is a more than $47 billion regional. financial services company headquartered in Tulsa, Okla. with more. than $90 billion in assets under management and administration.. BOK Financial Corporation's holdings. include BOKF, NA; BOK Financial Securities, Inc., BOK Financial. Private Wealth, and BOK Financial Insurance, Inc. BOKF, NA operates. TransFund, Cavanal Hill Investment Management and BOK Financial. Asset 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 Nebraska,. Milwaukee and Connecticut.. For more information, visit www.bokf.com.. See More Message Board Posts

Net interest revenue totaled $166.1 million for the second quarter of. 2014, up $3.5 million over the first quarter of 2014.. Average loans increased by $317 million over the previous quarter due. primarily to growth in commercial loans.. Net interest revenue increased $3.5 million compared to the first. quarter of 2014.. Securities trading revenue increased $3.5 million.. 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.. Mortgage banking costs increased $4.3 million compared to the. prior quarter.. Outstanding commercial loan balances increased $316 million or 4% over. March 31, 2014.. June 30, 2014March 31, 2014June 30, 2013ASSETS Cash and due from banks. $. 615,479. $. 645,435. $. 507,551. Interest-bearing cash and cash equivalents. 732,395. 708,571. 570,836. Trading securities. 101,097. 86,571. 190,591. Investment securities. 649,937. 668,976. 615,790. Available for sale securities. 9,699,146. 9,933,723. 10,698,074. Fair value option securities. 185,674. 160,884. 205,756. Restricted equity securities. 91,213. 85,643. 157,847. Residential mortgage loans held for sale. 325,875. 226,512. 301,057. Loans:. Commercial. 8,367,661. 8,051,706. 7,708,120. Commercial real estate. 2,654,978. 2,631,407. 2,317,096. Residential mortgage. 2,008,215. 2,018,675. 2,039,785. Consumer. 396,004. 376,066. 375,781. Total loans. 13,426,858. 13,077,854. 12,440,782. Allowance for loan losses. (190,690. ). (188,318. ). (203,124. ). Loans, net of allowance. 13,236,168. 12,889,536. 12,237,658. Premises and equipment, net. 280,286. 279,257. 271,191. Receivables. 115,991. 114,437. 136,605. Goodwill. 377,780. 364,570. 359,759. Intangible assets, net. 36,576. 31,561. 26,242. Mortgage servicing rights. 155,740. 153,774. 132,889. Real estate and other repossessed assets, net. 100,111. 95,515. 110,112. Derivative contracts, net. 357,680. 218,507. 546,206. Cash surrender value of bank-owned life insurance. 289,231. 286,932. 280,047. Receivable on unsettled securities sales. 14,025. 18,199. 182,147. Other assets. 479,366. 396,111. 277,842 TOTAL ASSETS$27,843,770$27,364,714$27,808,200LIABILITIES AND EQUITY Deposits:. Demand. $. 7,908,005. $. 7,472,287. $. 7,145,323. Interest-bearing transaction. 9,698,404. 9,899,656. 9,266,560. Savings. 349,629. 355,596. 316,375. Time. 2,615,826. 2,662,174. 2,767,972. Total deposits. 20,571,864. 20,389,713. 19,496,230. Funds purchased. 705,573. 1,166,178. 747,165. Repurchase agreements. 1,072,375. 777,108. 845,106. Other borrowings. 1,231,662. 1,031,693. 2,481,644. Subordinated debentures. 347,890. 347,846. 347,716. Accrued interest, taxes, and expense. 100,227. 160,351. 175,677. Due on unsettled securities purchases. 124,537. 39,641. 49,369. Derivative contracts, net. 297,851. 185,499. 521,991. Other liabilities. 144,145. 122,086. 150,420. TOTAL LIABILITIES. 24,596,124. 24,220,115. 24,815,318. Shareholders' equity:. Capital, surplus and retained earnings. 3,163,101. 3,103,130. 2,938,623. Accumulated other comprehensive income. 49,416. 6,795. 19,014. TOTAL SHAREHOLDERS' EQUITY. 3,212,517. 3,109,925. 2,957,637. Non-controlling interests. 35,129. 34,674. 35,245. TOTAL EQUITY. 3,247,646. 3,144,599. 2,992,882 TOTAL LIABILITIES AND EQUITY$27,843,770$27,364,714$27,808,200AVERAGE BALANCE SHEETS -- UNAUDITEDBOK FINANCIAL CORPORATION (in thousands). Three Months EndedJune 30, 2014March 31, 2014December 31, 2013September 30, 2013June 30, 2013ASSETS Interest-bearing cash and cash equivalents. $. 635,140. $. 549,473. $. 559,918. $. 654,591. $. 408,224. Trading securities. 116,186. 92,409. 127,011. 124,689. 181,866. Investment securities. 658,793. 671,756. 672,722. 621,104. 610,940. Available for sale securities. 9,800,934. 10,076,942. 10,434,810. 10,558,677. 11,060,700. Fair value option securities. 164,684. 165,515. 167,490. 169,299. 216,312. Restricted equity securities. 97,016. 85,234. 123,009. 155,938. 144,332. Residential mortgage loans held for sale. 219,308. 185,196. 217,811. 225,789. 261,977. Loans:. Commercial. 8,266,455. 7,971,712. 7,737,883. 7,602,950. 7,606,919. Commercial real estate. 2,622,866. 2,605,264. 2,352,915. 2,359,120. 2,286,674. Residential mortgage. 1,983,926. 1,998,620. 1,998,980. 2,043,332. 2,013,004. Consumer. 391,214. 372,330. 371,798. 396,694. 370,847. Total loans. 13,264,461. 12,947,926. 12,461,576. 12,402,096. 12,277,444. Allowance for loan losses. (189,329. ). (186,979. ). (193,309. ). (201,616. ). (206,807. ). Total loans, net. 13,075,132. 12,760,947. 12,268,267. 12,200,480. 12,070,637. Total earning assets. 24,767,193. 24,587,472. 24,571,038. 24,710,567. 24,954,988. Cash and due from banks. 481,944. 473,758. 324,349. 386,331. 546,558. Derivative contracts, net. 291,325. 287,363. 314,530. 377,664. 401,485. Cash surrender value of bank-owned life insurance. 287,725. 285,592. 283,289. 280,909. 278,501. Receivable on unsettled securities sales. 108,825. 114,708. 83,016. 90,014. 135,964. Other assets. 1,549,809. 1,489,875. 1,526,566. 1,409,247. 1,341,828 TOTAL ASSETS$27,486,821$27,238,768$27,102,788$27,254,732$27,659,324LIABILITIES AND EQUITY Deposits:. Demand. $. 7,654,225. $. 7,312,076. $. 7,356,063. $. 7,110,079. $. 6,888,983. Interest-bearing transaction. 9,850,991. 9,900,823. 9,486,136. 9,276,136. 9,504,128. Savings. 355,459. 336,576. 323,123. 317,912. 315,421. Time. 2,636,444. 2,686,041. 2,710,019. 2,742,970. 2,818,533. Total deposits. 20,497,119. 20,235,516. 19,875,341. 19,447,097. 19,527,065. Funds purchased. 574,926. 1,021,755. 748,074. 776,356. 789,302. Repurchase agreements. 914,892. 773,127. 752,286. 799,175. 819,373. Other borrowings. 1,294,932. 1,038,747. 1,551,591. 2,175,747. 2,172,417. Subordinated debentures. 347,868. 347,824. 347,781. 347,737. 347,695. Derivative contracts, net. 243,619. 258,729. 294,315. 330,819. 334,877. Due on unsettled securities purchases. 166,521. 116,295. 152,078. 111,998. 330,926. Other liabilities. 270,220. 341,701. 327,519. 300,880. 310,015. TOTAL LIABILITIES. 24,310,097. 24,133,694. 24,048,985. 24,289,809. 24,631,670. Total equity. 3,176,724. 3,105,074. 3,053,803. 2,964,923. 3,027,654 TOTAL LIABILITIES AND EQUITY$27,486,821$27,238,768$27,102,788$27,254,732$27,659,324STATEMENTS OF EARNINGS -- UNAUDITEDBOK FINANCIAL CORPORATION (in thousands, except per share data). Three Months EndedSix Months EndedJune 30,June 30,2014201320142013 Interest revenue. $. 182,631. $. 186,777. $. 361,751. $. 376,823. Interest expense. 16,534. 17,885. 33,012. 36,479. Net interest revenue. 166,097. 168,892. 328,739. 340,344. Provision for credit losses. —. —. —. (8,000. ) Net interest revenue after provision for credit losses166,097168,892328,739348,344 Other operating revenue:. Brokerage and trading revenue. 39,056. 32,874. 68,572. 64,625. Transaction card revenue. 31,510. 29,942. 60,644. 57,633. Fiduciary and asset management revenue. 29,543. 24,803. 55,265. 47,116. Deposit service charges and fees. 23,133. 23,962. 45,822. 46,928. Mortgage banking revenue. 29,330. 36,596. 52,174. 76,572. Bank-owned life insurance. 2,274. 2,236. 4,380. 5,462. Other revenue. 9,208. 8,760. 18,060. 17,902 Total fees and commissions164,054159,173304,917316,238 Loss on other assets, net. (52. ). (1,666. ). (4,316. ). (1,199. ). Gain (loss) on derivatives, net. 831. (2,527. ). 1,799. (3,468. ). Gain (loss) on fair value option securities, net. 4,176. (9,156. ). 6,836. (12,327. ). Change in fair value of mortgage servicing rights. (6,444. ). 14,315. (10,905. ). 16,973. Gain on available for sale securities, net. 4. 3,753. 1,244. 8,608. Total other-than-temporary impairment losses. —. (1,138. ). —. (1,138. ). Portion of loss recognized in (reclassified from) other. comprehensive income. —. 586. —. 339. Net impairment losses recognized in earnings. —. (552. ). —. (799. ) Total other operating revenue162,569163,340299,575324,026 Other operating expense:. Personnel. 123,714. 128,110. 228,147. 253,765. Business promotion. 7,150. 5,770. 12,991. 11,223. Charitable contributions to BOKF Foundation. —. —. 2,420. —. Professional fees and services. 11,054. 8,381. 18,619. 15,366. Net occupancy and equipment. 18,789. 16,909. 35,685. 33,390. Insurance. 4,467. 4,044. 9,008. 7,789. Data processing and communications. 29,071. 26,734. 56,206. 52,184. Printing, postage and supplies. 3,429. 3,580. 6,970. 7,254. Net losses and operating expenses of repossessed assets. 1,118. 282. 2,550. 1,528. Amortization of intangible assets. 949. 875. 1,765. 1,751. Mortgage banking costs. 7,960. 7,910. 11,594. 15,264. Other expense. 7,006. 8,326. 13,856. 15,390 Total other operating expense214,707210,921399,811414,904Net income before taxes113,959121,311228,503257,466 Federal and state income taxes. 37,230. 41,423. 74,731. 88,519 Net income76,72979,888153,772168,947 Net income (loss) attributable to non-controlling interests. 834. (43. ). 1,287. 1,052 Net income attributable to BOK Financial Corporation shareholders$75,895$79,931$152,485$167,895Average shares outstanding: Basic. 68,359,945. 67,993,822. 68,318,689. 67,904,599. Diluted. 68,511,378. 68,212,497. 68,475,802. 68,126,751 Net income per share: Basic. $. 1.10. $. 1.16. $. 2.21. $. 2.45. Diluted. $. 1.10. $. 1.16. $. 2.20. $. 2.44 FINANCIAL HIGHLIGHTS -- UNAUDITEDBOK FINANCIAL CORPORATION (in thousands, except ratio and share data). Three Months EndedJune 30, 2014March 31, 2014December 31, 2013September 30, 2013June 30, 2013 Interest revenue. $. 182,631. $. 179,120. $. 183,120. $. 185,428. $. 186,777. Interest expense. 16,534. 16,478. 16,876. 17,539. 17,885. Net interest revenue. 166,097. 162,642. 166,244. 167,889. 168,892. Provision for credit losses. —. —. (11,400. ). (8,500. ). — Net interest revenue after provision for credit losses166,097162,642177,644176,389168,892 Other operating revenue:. Brokerage and trading revenue. 39,056. 29,516. 28,515. 32,338. 32,874. Transaction card revenue. 31,510. 29,134. 29,134. 30,055. 29,942. Fiduciary and asset management revenue. 29,543. 25,722. 25,074. 23,892. 24,803. Deposit service charges and fees. 23,133. 22,689. 23,440. 24,742. 23,962. Mortgage banking revenue. 29,330. 22,844. 21,876. 23,486. 36,596. Bank-owned life insurance. 2,274. 2,106. 2,285. 2,408. 2,236. Other revenue. 9,208. 8,852. 12,048. 8,314. 8,760 Total fees and commissions164,054140,863142,372145,235159,173 Gain (loss) on other assets, net. (52. ). (4,264. ). 651. (377. ). (1,666. ). Gain (loss) on derivatives, net. 831. 968. (930. ). 31. (2,527. ). Gain (loss) on fair value option securities, net. 4,176. 2,660. (2,805. ). (80. ). (9,156. ). Change in fair value of mortgage servicing rights. (6,444. ). (4,461. ). 6,093. (346. ). 14,315. Gain on available for sale securities, net. 4. 1,240. 1,634. 478. 3,753. Total other-than-temporary impairment losses. —. —. —. (1,436. ). (1,138. ). Portion of loss recognized in (reclassified from) other. comprehensive income. —. —. —. (73. ). 586. Net impairment losses recognized in earnings. —. —. —. (1,509. ). (552. ) Total other operating revenue162,569137,006147,015143,432163,340 Other operating expense:. Personnel. 123,714. 104,433. 125,662. 125,799. 128,110. Business promotion. 7,150. 5,841. 6,020. 5,355. 5,770. Charitable contributions to BOKF Foundation. —. 2,420. —. 2,062. —. Professional fees and services. 11,054. 7,565. 10,003. 7,183. 8,381. Net occupancy and equipment. 18,789. 16,896. 19,103. 17,280. 16,909. Insurance. 4,467. 4,541. 4,394. 3,939. 4,044. Data processing and communications. 29,071. 27,135. 28,196. 25,695. 26,734. Printing, postage and supplies. 3,429. 3,541. 3,126. 3,505. 3,580. Net losses and operating expenses of repossessed assets. 1,118. 1,432. 1,618. 2,014. 282. Amortization of intangible assets. 949. 816. 842. 835. 875. Mortgage banking costs. 7,960. 3,634. 7,071. 8,753. 7,910. Other expense. 7,006. 6,850. 9,384. 7,878. 8,326 Total other operating expense214,707185,104215,419210,298210,921Net income before taxes113,959114,544109,240109,523121,311 Federal and state income taxes. 37,230. 37,501. 35,318. 33,461. 41,423 Net income76,72977,04373,92276,06279,888 Net income (loss) attributable to non-controlling interests. 834. 453. 946. 324. (43. ) Net income attributable to BOK Financial Corporation shareholders$75,895$76,590$72,976$75,738$79,931Average shares outstanding: Basic. $. 1.10. $. 1.11. $. 1.06. $. 1.10. $. 1.16. Diluted. $. 1.10. $. 1.11. $. 1.06. $. 1.10. $. 1.16 Net income per share: Basic. 68,359,945. 68,273,685. 68,095,254. 68,049,179. 67,993,822. Diluted. 68,511,378. 68,436,478. 68,293,758. 68,272,861. 68,212,497 LOANS TREND -- UNAUDITEDBOK FINANCIAL CORPORATION (In thousands)

And lastly, expense management remains excellent with total expenses relatively flat linked quarter when you exclude the $4 billion charitable contribution we made in the first quarter that did not reoccur in the second quarter.. Average deposits were up nearly 3% this quarter and nearly 15% from the same quarter a year ago as the growth trend we've seen there for the past 18 months continues.. The deposit portfolio, ending the quarter at $3.7 billion grew 5% linked quarter and was up 13% compared to the same quarter a year ago.. A portion of the linked quarter growth is due to the annual [Indecipherable] fees that are charged in the second quarter, but we still saw a strong growth in assets under management.. Increasing average mortgage interest rates in particular were a factor this quarter as that moves the mix between refi and purchase funding from 65% refi last quarter to 48% refi this quarter.. Obviously, some trends are improving, but it seems like there is still some pressure on loan growth and I'm just wondering if you could talk about the third quarter because it does seem like average loans could still be down in the third quarter.. We've had growth in our wealth lending platform for a while now and that was a real strong story for this quarter and we think that will continue into next year, but if we can get past the pay downs in energy and commercial real estate, I think you're going to see that core C&I begin to grow as we get into the latter half of this year.. third quarter, four quarter, we were predicting a lot of deposit balances would move out of the banking system that hasn't happened.. So, in the first quarter of 2021, it was $4.5 million and this quarter it was $3.8 million and we have about $38 million remaining of accretable yield that will come in over the course of couple of years, I would say.. Well, the first, I'm sorry, the first quarter PPP fees were $11.2 million and in the second quarter it was $11.1 million.. The interest that we recorded, net interest revenue on the PPP dollars was $2.4 million in the first quarter and about $1.7 million in the second quarter.. There's seasonality embedded in mortgage and so I think third quarter tends to be a good quarter, second quarter and third quarter tend to be a better quarters there.. And I think we'll have a better quarter in the third quarter.. I think that fourth quarter would be different depending on the rate environment and there is seasonality that moves against you a little bit in the fourth quarter there, but I think it's relative to second quarter.

Net interest revenue totaled $279.1 million, a decrease of $6.3 million.. The combined allowance for credit losses totaled $206 million or 0.92 percent of outstanding loans compared to $204 million or 0.92 percent in the previous quarter.. Net interest revenue decreased $4.3 million, fee revenue increased $2.6 million and operating expense increased $2.0 million.. Net interest revenue decreased $3.9 million, fees and commissions revenue increased $3.5 million and operating expense increased $2.2 million.. Net interest revenue was $279.1 million for the third quarter of 2019, a $6.3 million decrease compared to the second quarter of 2019.. Available for sale securities increased $1.3 billion during the third quarter as the balance sheet was repositioned to reduce the Company's exposure to further interest rate decreases.. Mortgage production volume increased $102 million and the gain on sale margin increased 5 basis points over the second quarter of 2019.Fees and commissions revenue totaled $186.1 million for the third quarter of 2019, an increase of $10.0 million over the second quarter of 2019.. Total operating expense was $279.3 million for the third quarter of 2019, an increase of $2.2 million over the second quarter of 2019.. The combined allowance for credit losses totaled $206 million or 0.92 percent of outstanding loans and 124 percent of nonaccruing loans at September 30, 2019, excluding residential mortgage loans guaranteed by U.S. government agencies.. Net income for Commercial Banking was $101.6 million for the third quarter of 2019, a decrease of $5.4 million compared to the second quarter of 2019.. 30, 2018ASSETS Interest-bearing cash and cash equivalents$500,823$535,491$537,903$563,132$688,872Trading securities1,696,5681,757,3351,968,3991,929,6011,762,794Investment securities308,090328,482343,282364,737379,566Available for sale securities10,747,4399,435,6688,883,0548,704,9638,129,214Fair value option securities1,553,879898,772594,349277,575469,398Restricted equity securities476,781413,812395,432362,729328,842Residential mortgage loans held for sale203,319192,102145,040179,553207,488Loans:Commercial14,507,18514,175,05713,966,52113,587,34411,484,200Commercial real estate4,652,5344,656,8614,602,1494,747,7843,774,470Residential mortgage2,129,4212,146,3152,193,3342,222,0631,956,089Personal1,123,7781,026,1721,004,0611,022,140989,026Total loans22,412,91822,004,40521,766,06521,579,33118,203,785Allowance for loan losses(201,714)(205,532)(206,092)(209,613)(214,160)Total loans, net22,211,20421,798,87321,559,97321,369,71817,989,625Total earning assets37,698,10335,360,53534,427,43233,752,00829,955,799Cash and due from banks717,338703,294705,411731,700578,905Derivative contracts, net331,834328,802262,927299,319294,126Cash surrender value of bank-owned life insurance385,190384,974382,538379,893322,038Receivable on unsettled securities sales1,742,7941,437,4621,224,700799,548768,785Other assets2,705,0892,629,7102,669,6732,423,2751,776,164 TOTAL ASSETS$43,580,348$40,844,777$39,672,681$38,385,743$33,695,817LIABILITIES AND EQUITY Deposits:Demand$9,759,710$9,883,965$9,988,088$10,648,683$9,325,002Interest-bearing transaction13,131,54212,512,28211,931,53911,773,65110,010,031Savings557,122558,738541,575526,275503,821Time2,251,8002,207,3912,153,2772,146,7862,097,441Total deposits25,700,17425,162,37624,614,47925,095,39521,936,295Funds purchased and repurchase agreements3,106,1632,066,9502,033,0361,205,5681,193,583Other borrowings8,125,0237,175,6177,040,2796,361,1415,765,440Subordinated debentures275,900275,887275,882276,378144,702Derivative contracts, net300,051283,484273,786268,848185,029Due on unsettled securities purchases745,893821,688453,937493,887544,263Other liabilities547,144460,732501,788341,438311,605TOTAL LIABILITIES38,800,34836,246,73435,193,18734,042,65530,080,917Total equity4,780,0004,598,0434,479,4944,343,0883,614,900 TOTAL LIABILITIES AND EQUITY$43,580,348$40,844,777$39,672,681$38,385,743$33,695,817STATEMENTS OF EARNINGS -- UNAUDITEDBOK FINANCIAL CORPORATION (in thousands, except per share data) Three Months EndedNine Months EndedSeptember 30,September 30,2019201820192018 Interest revenue$395,207$303,247$1,162,101$862,834Interest expense116,11162,364319,471163,653Net interest revenue279,096240,883842,630699,181Provision for credit losses12,0004,00025,000(1,000) Net interest revenue after provision for credit losses267,096236,883817,630700,181 Other operating revenue:Brokerage and trading revenue43,84023,086115,98380,222Transaction card revenue22,01521,39664,66863,361Fiduciary and asset management revenue43,62157,514132,004141,038Deposit service charges and fees28,83727,76585,15482,760Mortgage banking revenue30,18023,53682,14575,907Other revenue17,62612,90042,82539,781 Total fees and commissions186,119166,197522,779483,069 Other gains, net4,5442,75411,0006,040Gain (loss) on derivatives, net3,778(2,847)19,595(11,589)Gain (loss) on fair value option securities, net4,597(4,385)24,115(25,290)Change in fair value of mortgage servicing rights(12,593)5,972(62,814)28,901Gain (loss) on available for sale securities, net52501,110(802) Total other operating revenue186,450167,941515,785480,329 Other operating expense:Personnel162,573143,531492,143422,425Business promotion8,8597,62026,87521,316Charitable contributions to BOKF Foundation——1,000—Professional fees and services12,31213,20941,45338,387Net occupancy and equipment27,55823,39483,95970,201Insurance4,2206,23215,51319,070Data processing and communications31,91531,66593,09987,221Printing, postage and supplies3,8253,83712,81711,937Net losses and operating expenses of repossessed assets1,7284,0444,30414,471Amortization of intangible assets5,0641,60315,3934,289Mortgage banking costs14,97511,74136,42634,780Other expense6,2635,74120,60419,426 Total other operating expense279,292252,617843,586743,523Net income before taxes174,254152,207489,829436,987 Federal and state income taxes32,39634,66299,92698,940 Net income141,858117,545389,903338,047 Net income (loss) attributable to non-controlling interests(373)289(503)857 Net income attributable to BOK Financial Corporation shareholders$142,231$117,256$390,406$337,190Average shares outstanding: Basic70,596,30764,901,09570,953,54464,883,319Diluted70,609,92464,934,35170,968,84564,919,728 Net income per share: Basic$2.00$1.79$5.47$5.15Diluted$2.00$1.79$5.47$5.15 FINANCIAL HIGHLIGHTS -- UNAUDITEDBOK FINANCIAL CORPORATION (in thousands, except ratio and share data) Three Months EndedSept.. 30, 2018 Interest revenue$395,207$390,820$376,074$365,592$303,247Interest expense116,111105,38897,97279,90662,364Net interest revenue279,096285,432278,102285,686240,883Provision for credit losses12,0005,0008,0009,0004,000 Net interest revenue after provision for credit losses267,096280,432270,102276,686236,883 Other operating revenue:Brokerage and trading revenue43,84040,52631,61728,10123,086Transaction card revenue22,01521,91520,73820,66421,396Fiduciary and asset management revenue43,62145,02543,35843,66557,514Deposit service charges and fees28,83728,07428,24329,39327,765Mortgage banking revenue30,18028,13123,83421,88023,536Other revenue17,62612,43712,76216,40412,900 Total fees and commissions186,119176,108160,552160,107166,197 Other gains (losses), net4,5443,4802,976(8,305)2,754Gain (loss) on derivatives, net3,77811,1504,66711,167(2,847)Gain (loss) on fair value option securities, net4,5979,8539,665(282)(4,385)Change in fair value of mortgage servicing rights(12,593)(29,555)(20,666)(24,233)5,972Gain (loss) on available for sale securities, net51,02976(1,999)250 Total other operating revenue186,450172,065157,270136,455167,941 Other operating expense:Personnel162,573160,342169,228160,706143,531Business promotion8,85910,1427,8749,2077,620Charitable contributions to BOKF Foundation—1,000—2,846—Professional fees and services12,31213,00216,13920,71213,209Net occupancy and equipment27,55826,88029,52127,78023,394Insurance4,2206,4544,8394,2486,232Data processing and communications31,91529,73531,44927,57531,665Printing, postage and supplies3,8254,1074,8855,2323,837Net losses and operating expenses of repossessed assets1,7285801,9962,5814,044Amortization of intangible assets5,0645,1385,1915,3311,603Mortgage banking costs14,97511,5459,90611,51811,741Other expense6,2638,2126,1296,9075,741 Total other operating expense279,292277,137287,157284,643252,617Net income before taxes174,254175,360140,215128,498152,207 Federal and state income taxes32,39637,58029,95020,12134,662 Net income141,858137,780110,265108,377117,545 Net income (loss) attributable to non-controlling interests(373)217(347)(79)289 Net income attributable to BOK Financial Corporation shareholders$142,231$137,563$110,612$108,456$117,256Average shares outstanding: Basic70,596,30770,887,06371,387,07071,808,02964,901,095Diluted70,609,92470,902,03371,404,38871,833,33464,934,351 Net income per share: Basic$2.00$1.93$1.54$1.50$1.79Diluted$2.00$1.93$1.54$1.50$1.79 LOANS TREND -- UNAUDITEDBOK FINANCIAL CORPORATION (In thousands) Sept. 30, 2019June 30, 2019Mar.

December 01 2021 - 04:00PM. GlobeNewswire Inc.. Chief Operating Officer Stacy Kymes, who was. previously announced as the incoming president and CEO, will assume. the company’s leadership role as of Jan. 1, 2022.“It has been an extreme honor to serve BOK Financial and to play. a role in the company’s 100-plus years of growth,” said Bradshaw.. Bradshaw joined the company in 1991 after selling his wholly. owned retail brokerage business to BOK Financial.. He has been with BOK. Financial for almost 25 years and has a broad understanding of the. company, having served as chief auditor, director of mergers and. acquisitions, and chief credit officer.. George B. Kaiser, BOK Financial Corporation board chair,. previously noted that “Stacy has had deep and varied experience. with the company’s lines of business and supporting functions. during his career.. BOK Financial Corporation is a more than $47 billion regional. financial services company headquartered in Tulsa, Okla. with more. than $90 billion in assets under management and administration.. BOK Financial Corporation's holdings. include BOKF, NA; BOK Financial Securities, Inc.; BOK Financial. Private Wealth, Inc.; and BOK Financial Insurance, Inc. BOKF, NA. operates TransFund, Cavanal Hill Investment Management and BOK. Financial Asset 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 Nebraska, Milwaukee and Connecticut.. Through its. subsidiaries, BOK Financial Corporation provides commercial and. consumer banking, brokerage trading, investment, trust and. insurance services, mortgage origination and servicing, and an. electronic funds transfer network.. For more information,. visit www.bokf.com.. Media Contact:. Sue. Hermann. shermann@bokf.com. 303.312.3488. {{bbMessage.M_Alias}} {{bbMessage.MSG_Date}}{{bbMessage.HowLongAgo}}{{bbMessage.MSG_ID}} {{bbMessage.MSG_Subject}} Share on Facebook Share on Twitter Share on Email

TULSA, Okla., Dec. 08, 2015 (GLOBE NEWSWIRE) -- BOK Financial Corporation (NASDAQ:BOKF) today announced the signing of a definitive purchase agreement with MBT Bancshares (“MBT”).. and is the parent company of Missouri Bank and Trust of Kansas City (“mobank”).. mobank operates four banking branches in the Kansas City, Mo.. BOK Financial currently provides full-service banking in the Kansas City area under the Bank of Kansas City brand with branches in Overland Park, Kan. and Lee’s Summit, Mo., and employs nearly 240 people throughout the region.. Under terms of the definitive agreement, BOK Financial will pay $102.5 million in an all-cash deal for all outstanding shares of MBT stock, subject to certain conditions and potential adjustments.. Burcham and Viazzoli will partner to continue to build BOK Financial’s combined operations in the Kansas City market.. About BOK Financial Corporation. BOK Financial Corporation is a $31 billion regional financial services company based in Tulsa, Oklahoma.. Missouri Bank (mobank) is a financial services institution headquartered in Kansas City, Mo., with $578 million in assets as of Sept. 30, 2015.. Founded in 1891, mobank provides professional banking services, including business services and lending, personal banking, mortgage lending and home improvement loans, and international banking services.. 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.. Therefore, actual results and outcomes may materially differ from what is expected, implied or forecasted in such forward-looking statements.. 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.

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