BOK Financial Corporation Reports Quarterly Earnings of $65 million or $0.92 Per Share in the Second Quarter

TULSA, Okla., July 22, 2020 (GLOBE NEWSWIRE) -- BOK Financial (NASDAQ: BOKF) today reported net earnings applicable to common shareholders for the second quarter of 2020 of $65 million, or $0.92 per diluted common share.

"The second quarter, unlike any in recent memory, demonstrated the effectiveness of our diversified revenue model," said Steven G. Bradshaw, president and chief executive officer. "Record quarters from both our Wealth Management and Mortgage businesses added more than $150 million to fee revenue this quarter, eclipsing our pre-provision net revenue from the same quarter a year ago. In fact, this quarter generated the highest level of pre-provision net revenue in the history of our company, even after normalizing for the impact of the Paycheck Protection Program. Considering the economic environment we find ourselves in today, this is truly a remarkable outcome."

Bradshaw continued, "With more than 40 percent of our company's revenues derived from a host of fee-based businesses, we have the proven ability to generate positive outcomes through all parts of the economic cycle. In this time of margin compression and credit concerns, financial institutions like BOK Financial demonstrate the real power of a diversified business model and sound underwriting methods."

• Net income was $64.7 million or $0.92 per diluted share for the second quarter of 2020 and $62.1 million or $0.88 per diluted share for the first quarter of 2020. Pre-provision net revenue was $215.8 million for the second quarter of 2020 compared to $173.0 million for the prior quarter. The second quarter of 2020 included a pre-tax provision for expected credit losses of $135.3 million compared to $93.8 million in the prior quarter.
  
  
• Net interest revenue totaled $278.1 million, an increase of $16.7 million, largely due to the addition of loans related to the Small Business Administration's ("SBA") Paycheck Protection Program ("PPP") that began on April 3, 2020. Net interest margin was 2.83 percent compared to 2.80 percent in the first quarter of 2020. Our ability to move deposit costs down, along with LIBOR remaining elevated early in the second quarter relative to recent Federal Reserve rate cuts and the strategic positioning of our balance sheet, has allowed us to combat much of the market pressure on our margin.
  
  
• Fees and commissions revenue totaled $213.7 million, an increase of $21.0 million. Low mortgage interest rates continued to drive increases in mortgage banking revenue of $16.8 million and related bond trading activity of $9.5 million over the first quarter of 2020. These increases were partially offset by a reduction in service charges, largely due to "shelter in place" impacts coupled with proactive waivers of fees that were extended as a courtesy to our customers during the COVID-19 pandemic.
  
  
• Operating expense was $295.4 million, an increase of $26.8 million. Personnel expense increased $20.1 million, including an $11.0 million increase in incentive compensation expense reflecting the growth in our trading activity. Non-personnel expense increased $6.7 million compared to the first quarter of 2020. Increases in mortgage banking costs and occupancy and equipment expense were partially offset by a decrease in business promotion expense.
  
  
• Changes in the fair value of mortgage servicing rights and related economic hedges provided $9.3 million during the second quarter of 2020. A $7.4 million increase in the fair value of securities and derivative contracts held as an economic hedge and $2.7 million of related net interest revenue, were partially offset by a $761 thousand decrease in the fair value of mortgage servicing rights.  
  
  
• We have implemented programs to help our customers through this uncertain time. We are actively participating in programs initiated by the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"), including the SBA's PPP. Average loans for the second quarter increased $2.2 billion to $24.1 billion with $1.7 billion of those being PPP loans. Period-end loans increased $1.7 billion to $24.2 billion. Period-end PPP loans were $2.1 billion. We have also granted $1.2 billion in forbearance requests from customers as of June 30, including $704 million of commercial loans, $398 million in commercial real estate loans and $143 million in loans to individuals.
  
  
• The allowance for loan losses totaled $436 million or 1.80 percent of outstanding loans at June 30, 2020. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $469 million or 1.94 percent of outstanding loans at June 30, 2020. Excluding PPP loans, the allowance for loan losses was 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 2.12 percent. At March 31, 2020, the allowance for loan losses was $315 million or 1.40 percent of outstanding loans. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $344 million or 1.53 percent of outstanding loans.
  
  
• Average deposits increased $4.5 billion to $32.7 billion and period-end deposits increased $4.6 billion to $33.9 billion. An estimated $2.7 billion of this growth was related to CARES Act funding, with the remainder due to growth from our broader customer base.
  
  
• The company's common equity Tier 1 capital ratio was 11.41 percent at June 30, 2020. In addition, the company's Tier 1 capital ratio was 11.41 percent, total capital ratio was 13.40 percent, and leverage ratio was 7.74 percent at June 30, 2020. At March 31, 2020, the company's common equity Tier 1 capital ratio was 10.98 percent, Tier 1 capital ratio was 10.98 percent, total capital ratio was 12.65 percent, and leverage ratio was 8.15 percent.

Second Quarter 2020 Business Segment Highlights

• Commercial Banking contributed $81.0 million to net income, an increase of $6.0 million over the first quarter. While net interest revenue decreased $6.3 million, fees and commissions revenue increased $5.1 million. Customer reaction to the volatile price environment drove an increase of $4.4 million in customer hedging revenue this quarter. Other gains (losses), net also increased $4.6 million, primarily related to an impairment of an alternative investment in the first quarter. Operating expense increased $2.2 million, largely due to incentive compensation.
  
  
• Consumer Banking contributed $31.9 million to net income, an increase of $9.0 million over the first quarter. Net interest revenue decreased $4.7 million; however, fees and commissions revenue increased $12.1 million. Mortgage banking revenue increased $16.8 million following another strong quarter for mortgage loan production. Low mortgage interest rates continue to increase volume, particularly around refinances, which is responsible for 71 percent of the volume in the second quarter. The large increase in refinance demand, which reduced industry-wide capacity, has led to the ability to increase margins. Gain on sale margin increased 159 basis points to 3.65 percent. This increase was partially offset by a decrease in service charges as we waived certain fees in the second quarter to help customers throughout this uncertain time. Changes in the fair value of mortgage servicing rights and related economic hedges provided $9.3 million during the second quarter of 2020. Operating expense increased $4.1 million, primarily due to an increase in mortgage banking costs.
  
  
• Wealth Management contributed $33.4 million to net income, an increase of $10.8 million over the first quarter. Net interest revenue increased $8.0 million and fees and commissions increased $8.9 million. Lower interest rates drove record increases in industry-wide mortgage loan production volume during the second quarter. We increased our trading pipeline to provide greater liquidity to the housing market. As a result, trading revenue increased $9.5 million. Trust fees and commissions decreased $3.2 million as we waived certain fees for our customers and market conditions led to reduction in trust revenue. Operating expense increased $2.4 million, primarily due to incentive compensation costs related to increased trading activity partially offset by lower business promotion expense.

Net Interest Revenue

Net interest revenue was $278.1 million for the second quarter of 2020, a $16.7 million increase compared to the first quarter of 2020. PPP loans added $13.6 million to net interest revenue in the second quarter.

Average earning assets increased $1.9 billion compared to the first quarter of 2020. Average loan balances increased $2.2 billion, largely due to the influx of PPP loans. Available for sale securities increased $816 million as we have adjusted our balance sheet for the current rate environment. Fair value option securities, held as an economic hedge of the changes in fair value of our mortgage servicing rights, decreased $1.0 billion. In addition, receivables from unsettled securities sales, primarily related to our U.S. agency residential mortgage-backed trading operations, increased $1.6 billion. Growth in average earning assets and non-interest bearing receivables was largely funded by a $2.2 billion increase in interest-bearing deposits. Other borrowings decreased $3.0 billion, primarily due to a decrease in funds borrowed from the Federal Home Loan Bank, partially offset by an increase in PPP loans funded through the Federal Reserve's PPP Liquidity Facility. Funds purchased and repurchase agreements increased $2.0 billion.

Net interest margin was 2.83 percent compared to 2.80 percent in the previous quarter. The reduction in deposit costs, LIBOR remaining elevated early in the second quarter, and the strategic positioning of our balance sheet, have combined to reduce the pressure on margin. PPP loans added one basis point to net interest margin.

The yield on average earning assets was 3.12 percent, a 61 basis point decrease from the prior quarter as we start to see the effects of the recent Federal Reserve rate cuts. The loan portfolio yield was 3.63 percent, down 87 basis points. The yield on the available for sale securities portfolio decreased 19 basis points to 2.29 percent.

Funding costs were 0.37 percent, down 82 basis points. The cost of interest-bearing deposits decreased 64 basis points to 0.34 percent. The cost of other borrowed funds was down 117 basis points to 0.30 percent. The benefit to net interest margin from assets funded by non-interest liabilities was 8 basis points for the second quarter of 2020 compared to 26 basis points for the first quarter of 2020.

Fees and Commissions Revenue

Fees and commissions revenue totaled $213.7 million for the second quarter of 2020, an increase of $21.0 million over the first quarter of 2020, led by significant growth in mortgage banking and brokerage and trading revenue.

Declining interest rates have propelled mortgage production, particularly refinance activities, and have allowed for margin expansion. Mortgage banking revenue increased $16.8 million to $53.9 million compared to the prior quarter. Mortgage loan production volume was $1.1 billion for the second quarter of 2020, an increase of 2 percent over an already very strong first quarter. Refinances grew to 71 percent of our production volume compared to 57 percent in the prior quarter. Gain on sale margin increased 159 basis points to 3.65 percent as industry-wide capacity constraints have eased pricing competition.

Brokerage and trading revenue increased $11.2 million to $62.0 million. We continue to grow our relationships with mortgage originators by providing liquidity and financial instruments to help them manage their pipeline risk. Trading revenue, primarily related to sales of residential mortgage-backed securities guaranteed by U.S. government agencies and related derivative instruments, increased $9.5 million. Industry-wide mortgage loan production increased in the second quarter driven by the lower rates as the Federal Reserve stepped in to provide market stability. We increased our bond trading pipeline to provide greater liquidity to the housing market during a time of record loan production volumes. Customer hedging revenue also increased $3.0 million as existing customers increased hedging activities in the volatile environment.

Deposit service charges decreased $4.1 million compared to the first quarter. In order to help our customers during uncertain times, we proactively waived certain fees during the second quarter.

Fiduciary and asset management revenue decreased $3.2 million compared to the first quarter of 2020. As a result of the significant decline in interest rates, we provided $1.1 million in fee waivers during the second quarter. In addition, asset volumes and market conditions have affected our trust revenues. These decreases were partially offset by an increase in seasonal tax preparation fees.

Operating Expense

Total operating expense was $295.4 million for the second quarter of 2020, an increase of $26.8 million compared to the first quarter of 2020.

Personnel expense increased $20.1 million. Incentive compensation increased $22.3 million. Cash based incentive compensation increased $11.0 million, primarily due to increased residential mortgage-backed securities trading activity. Deferred compensation, which is largely offset by an increase in the value of related investments included in Other gains (losses), net, increased $11.6 million. Regular compensation increased $1.5 million. Employee benefits decreased $3.8 million, primarily due to a seasonal decrease in payroll taxes.

Non-personnel expense increased $6.7 million compared to the first quarter of 2020. Mortgage banking costs increased $5.1 million. Accruals related to default servicing and loss mitigation costs on loans serviced for others increased $2.8 million due to changes in our portfolio and loan counts, delinquency levels, and additional accruals related to losses on loans in forbearance. Increased amortization of mortgage servicing rights from actual prepayments also added $1.7 million to mortgage banking costs during the second quarter of 2020. Occupancy and equipment expense increased $4.6 million as impairment charges were incurred on two leases where assumptions regarding subleasing changed due to deteriorating economic conditions. We also made a charitable contribution of $3.0 million to the BOKF Foundation in the second quarter. These increases were partially offset by a decrease of $4.3 million in business promotion costs, largely related to reduced travel and entertainment expenses.

Loans, Deposits and Capital

Loans

Outstanding loans were $24.2 billion at June 30, 2020, up $1.7 billion over March 31, 2020, primarily due to a $2.1 billion increase from PPP loans, partially offset by paydowns in the commercial portfolio.

Outstanding core commercial loan balances decreased $637 million or 4 percent compared to March 31, 2020, primarily due to paydowns during the second quarter. Although the primary source of repayment of our commercial loan portfolio is the on-going cash flow from operations of the customer's business, loans are generally governed by a borrowing base and secured by the customer’s assets.

General business loans decreased $448 million to $3.1 billion or 13 percent of total loans. General business loans include $1.7 billion of wholesale/retail loans and $780 million of loans from other commercial industries. Broad paydowns across our core commercial and industrial loan book contracted the portfolio.

Services loan balances decreased $176 million to $3.8 billion or 16 percent of total loans. Services loans consist of a large number of loans to a variety of businesses, including Native American tribal and state and local municipal government entities, Native American tribal casino operations, educational services, consumer services and commercial services.

Although not a significant portion of our commercial portfolio, our services and general business loans also include areas we consider to be more exposed to the economic slowdown as a result of the social distancing measures in place to combat the COVID-19 pandemic such as entertainment and recreation, retail, hotels, churches, airline travel, and higher education that are dependent on large social gatherings to remain profitable. This represents less than 7 percent of our total portfolio. Some of these borrowers have participated in the PPP, which has provided some measure of relief. We will continue to monitor these areas closely in the coming months.

Energy loan balances decreased $138 million to $4.0 billion or 16 percent of total loans as the current commodity price environment dampened demand for new loans and borrowers focused on paying down debt to reduce leverage. Supporting the energy industry has been a hallmark of the Company for over a century. The majority of this portfolio is first lien, senior secured, reserve-based lending to oil and gas producers, which we believe is the lowest risk form of energy lending. Approximately 62 percent of committed production loans are secured by properties primarily producing oil. The remaining 38 percent is secured by properties primarily producing natural gas. Unfunded energy loan commitments were $2.5 billion at June 30, 2020, a $222 million decrease compared to March 31, 2020, primarily due to semi-annual borrowing base redeterminations completed during the second quarter.

Healthcare sector loan balances increased $124 million to $3.3 billion or 14 percent of total loans, primarily due to growth in balances from hospital systems. Our healthcare sector loans primarily consist of $2.4 billion of senior housing and care facilities, including independent living, assisted living and skilled nursing. Generally we loan to borrowers with a portfolio of multiple facilities that serves to help diversify risks specific to a single facility. The remaining balance is composed of hospitals and other medical service providers impacted by a deferral of elective procedures. The CARES Act does include multiple revenue enhancement measures for both hospitals and skilled nursing facilities as they manage through the risks of the virus.

Commercial real estate loan balances were up $104 million over March 31, 2020 and represent 19 percent of total loans at June 30, 2020. Multifamily residential loans, our largest exposure in commercial real estate, increased $125 million to $1.4 billion at June 30, 2020. Paydowns from refinances into the permanent market slowed during the second quarter. Loans secured by office buildings increased $12 million to $974 million. Loans secured by other commercial real estate properties decreased $32 million to $533 million. Loans secured by retail facilities were $780 million at June 30, 2020, largely unchanged from the prior quarter. Loans secured by retail facilities and office buildings may be impacted by measures being taken to hinder the spread of the virus as well as changes in consumer behavior.

Loans to individuals increased $144 million, primarily due to an increase in residential mortgage loans guaranteed by U.S. government agencies. The Company may repurchase loans previously sold into GNMA mortgage pools when certain defined delinquency criteria are met. Because of this repurchase right, the Company is deemed to have regained effective control over these loans and must include them on the Consolidated Balance Sheet. Loans to individuals represent 14 percent of total loans at June 30, 2020.

Deposits

Period-end deposits totaled $33.9 billion at June 30, 2020, a $4.6 billion increase over March 31, 2020. Inflows resulting from PPP loans and government stimulus payments during the pandemic, along with additional core deposit growth as customers maintain higher balances, have all contributed to the significant increase in deposits. Interest-bearing transaction account balances grew by $2.3 billion and demand deposit balances increased $2.2 billion. Average deposits were $32.7 billion at June 30, 2020, a $4.5 billion increase compared to March 31, 2020. Average demand deposit balances grew by $2.3 billion and interest-bearing transaction deposits increased $1.9 billion.

Capital

The company's common equity Tier 1 capital ratio was 11.41 percent at June 30, 2020. In addition, the company's Tier 1 capital ratio was 11.41 percent, total capital ratio was 13.40 percent, and leverage ratio was 7.74 percent at June 30, 2020. We have elected to delay the regulatory capital impact of the transition of the allowance for credit losses from the incurred loss methodology to CECL for two years, followed by a three-year transition period, which added 30 basis points to the company's common equity tier 1 capital ratio at June 30. At March 31, 2020, the company's common equity Tier 1 capital ratio was 10.98 percent, Tier 1 capital ratio was 10.98 percent, total capital ratio was 12.65 percent, and leverage ratio was 8.15 percent.

The company's tangible common equity ratio, a non-GAAP measure, was 8.79 percent at June 30, 2020 and 8.39 percent at March 31, 2020. The tangible common equity ratio is primarily based on total shareholders' equity, which includes unrealized gains and losses on available for sale securities. The company has elected to exclude unrealized gains and losses from available for sale securities from its calculation of Tier 1 capital for regulatory capital purposes, consistent with the treatment under the previous capital rules.

The company paused share repurchases through the second quarter of 2020. The company repurchased 442,000 shares at an average price of $75.52 in the first quarter of 2020. We view share buybacks opportunistically, but within the context of maintaining our strong capital position.

Credit Quality

The Company adopted FASB Accounting Standard Update No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Assets Measured at Amortized Cost ("CECL") on January 1, 2020. CECL requires recognition of expected credit losses on assets carried at amortized cost over their expected lives. The previous incurred loss model incorporated only known information as of the balance sheet date. CECL uses models to measure the probability of default and loss given default over a 12-month reasonable and supportable forecast period. Models incorporate base case, downside and upside macroeconomic variables such as real gross domestic product ("GDP") growth, civilian unemployment rate and West Texas Intermediate ("WTI") oil prices on a probability weighted basis.

The provision for credit losses was $135.3 million for the second quarter of 2020, with $138.8 million related to lending activities. Changes in our reasonable and supportable forecasts of macroeconomic variables, primarily due to the anticipated impact of the on-going COVID-19 pandemic, and other assumptions, required a provision of $54.6 million. All other changes totaled $84.2 million, which included $14.4 million primarily due to increased specific impairment of energy loans, portfolio changes of $55.7 million primarily due to changes in risk grades related to energy loans, partially offset by the impact of a decrease in loan balances, and net charge-offs of $14.1 million. The provision related to lending activities was partially offset by a $3.6 million decrease in the accrual for expected credit losses from mortgage banking activities. During the second quarter, the Company sold certain mortgage servicing rights related to residential mortgage loans transferred to mortgage-backed securities. These servicing rights expose the Company to credit risk for amounts that exceed the U.S. government agency guarantees.

Our base case reasonable and supportable forecast includes an 18 percent increase in GDP and an 8.4 percent civilian unemployment rate in the third quarter of 2020, as adjusted for the impact of government stimulus programs. Our forward twelve month forecast through the second quarter of 2021 assumes a 5.0 percent increase in GDP and an 8.5 percent civilian unemployment rate. WTI oil prices are projected to generally follow the NYMEX forward curve that existed at the end of June 2020, $38.99 per barrel for delivery in the third quarter of 2020 and increasing to $40.13 per barrel for delivery in the second quarter of 2021. Our downside reasonable and supportable forecast reflects a more severe and prolonged disruption in economic activity than the base case and includes a 6.0 percent increase in GDP and a 9.7 percent adjusted civilian unemployment rate in the third quarter of 2020. Our forward twelve month forecast through the second quarter of 2021 assumes a 6.0 percent increase in GDP and a 10.0 percent civilian unemployment rate. WTI oil prices are projected to range from $33.99 per barrel for delivery in the third quarter of 2020 to $34.63 per barrel for delivery in the second quarter of 2021.

The allowance for loan losses totaled $436 million or 1.80 percent of outstanding loans and 175 percent of nonaccruing loans at June 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 $469 million or 1.94 percent of outstanding loans and 188 percent of nonaccruing loans at June 30, 2020. The combined allowance for credit losses attributed to energy was 4.44 percent of outstanding energy loans at June 30. Excluding PPP loans, the allowance for loan losses was 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 2.12 percent.

At March 31, 2020, the allowance for loan losses was $315 million or 1.40 percent of outstanding loans and 199 percent of nonaccruing loans, excluding 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 $344 million or 1.53 percent of outstanding loans and 217 percent of nonaccruing loans.

Nonperforming assets totaled $405 million or 1.68 percent of outstanding loans and repossessed assets at June 30, 2020, compared to $292 million or 1.30 percent at March 31, 2020. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $285 million or 1.19 percent of outstanding loans and repossessed assets at June 30, 2020, compared to $195 million or 0.87 percent at March 31, 2020.

Nonaccruing loans were $255 million or 1.16 percent of outstanding loans at June 30, 2020. Nonaccruing commercial loans totaled $202 million or 1.43 percent of outstanding commercial loans. Nonaccruing commercial real estate loans totaled $14.0 million or 0.31 percent of outstanding commercial real estate loans. Nonaccruing loans to individuals totaled $39 million or 1.17 percent of outstanding loans to individuals. 

Nonaccruing loans increased $92 million from March 31, 2020, primarily due to a $67 million increase in nonaccruing energy loans and a $13 million increase in nonaccruing services loans. New nonaccruing loans identified in the second quarter totaled $124 million, offset by $16 million in payments received, $16 million in charge-offs and $1.1 million of foreclosures.

Potential problem loans, which are defined as performing loans that, based on known information, cause management concern as to the borrowers' ability to continue to perform, totaled $626 million at June 30, compared to $293 million at March 31. The increase largely resulted from energy and service sector loans. Oil prices remained depressed during April and May during our semi-annual borrowing base redeterminations resulting in credit quality migration in the energy portfolio. While prices have subsequently improved, the pricing environment remains fragile and tied to the continued economic recovery.

Net charge-offs were $14.1 million or 0.25 percent of average loans on an annualized basis for the second quarter of 2020, excluding PPP loans. Net charge-offs were $17.2 million or 0.31 percent of average loans on an annualized basis for the first quarter of 2020. Gross charge-offs were $15.6 million for the second quarter compared to $18.9 million for the previous quarter. Recoveries totaled $1.5 million for the second quarter of 2020 and $1.7 million for the first quarter of 2020.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $12.5 billion at June 30, 2020, a $218 million decrease compared to March 31, 2020. At June 30, 2020, the available for sale securities portfolio consisted primarily of $9.1 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $3.3 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. At June 30, 2020, the available for sale securities portfolio had a net unrealized gain of $487 million compared to $436 million at March 31, 2020.

The company also maintains a portfolio of residential mortgage-backed securities issued by U.S. government agencies and interest rate derivative contracts as an economic hedge of the changes in the fair value of our mortgage servicing rights. This portfolio of fair value option securities decreased $981 million to $723 million at June 30, 2020.

The net economic benefit of the changes in the fair value of mortgage servicing rights and related economic hedges was $9.3 million during the second quarter of 2020, including a $7.4 million increase in the fair value of securities and derivative contracts held as an economic hedge, $761 thousand decrease in the fair value of mortgage servicing rights, and $2.7 million of related net interest revenue. The completion of a sale of mortgage servicing rights on $1.6 billion of unpaid principal balance, primarily related to loans guaranteed by the Veteran's Administration, was a large contributor to the increase in the fair value of contracts held as an economic hedge. Interest rate movements between the date we established the transaction price and the closing date of the sale produced positive results.

Conference Call and Webcast

The company will hold a conference call at 9 a.m. Central time on July 22, 2020 to discuss the financial results with investors. The live audio webcast and presentation slides will be available on the company’s website at www.bokf.com. The conference call can also be accessed by dialing 1-201-689-8471. A conference call and webcast replay will also be available shortly after conclusion of the live call at www.bokf.com or by dialing 1-412-317-6671 and referencing conference ID # 13706496.

About BOK Financial Corporation

BOK Financial Corporation is a $46 billion regional financial services company headquartered in Tulsa, Oklahoma with $79 billion in assets under management and administration. The company's stock is publicly traded on NASDAQ under the Global Select market listings (BOKF). BOK Financial Corporation's holdings include BOKF, NA; BOK Financial Securities, Inc., 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 in 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.

The company will continue to evaluate critical assumptions and estimates, such as the appropriateness of the allowance for credit losses and asset impairment as of June 30, 2020 through the date its financial statements are filed with the Securities and Exchange Commission and will adjust amounts reported if necessary.

This news release contains forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about BOK Financial Corporation, the financial services industry, the economy generally and the expected or potential impact of the novel coronavirus (COVID-19) pandemic, and the related responses of the government, consumers, and others, on our business, financial condition and results of operations. Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “plans,” “projects,” “will,” “intends,” variations of such words and similar expressions are intended to identify such forward-looking statements. Management judgments relating to and discussion of the provision and allowance for credit losses, allowance for uncertain tax positions, accruals for loss contingencies and valuation of mortgage servicing rights involve judgments as to expected events and are inherently forward-looking statements. Assessments that acquisitions and growth endeavors will be profitable are necessary statements of belief as to the outcome of future events based in part on information provided by others which BOK Financial has not independently verified. These various forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions which are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what is expected, implied or forecasted in such forward-looking statements. Internal and external factors that might cause such a difference include, but are not limited to changes in government, consumer or business responses to, and ability to treat or prevent further outbreak of the COVID-19 pandemic, changes in commodity prices, interest rates and interest rate relationships, inflation, demand for products and services, the degree of competition by traditional and nontraditional competitors, changes in banking regulations, tax laws, prices, levies and assessments, the impact of technological advances, and trends in customer behavior as well as their ability to repay loans. BOK Financial Corporation and its affiliates undertake no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events, or otherwise.

BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)

	June 30, 2020					Mar. 31, 2020
ASSETS
Cash and due from banks	$	762,453				$	670,500
Interest-bearing cash and cash equivalents	485,319					302,577
Trading securities	1,196,105					2,110,585
Investment securities, net of allowance	267,988					272,576
Available for sale securities	12,475,919					12,694,277
Fair value option securities	722,657					1,703,238
Restricted equity securities	125,683					390,042
Residential mortgage loans held for sale	319,357					204,720
Loans:
Commercial	14,158,510					14,795,975
Commercial real estate	4,554,144					4,450,085
Paycheck protection program	2,081,428					—
Loans to individuals	3,361,808					3,217,910
Total loans	24,155,890					22,463,970
Allowance for loan losses	(435,597		)			(315,311		)
Loans, net of allowance	23,720,293					22,148,659
Premises and equipment, net	550,230					546,093
Receivables	226,934					207,341
Goodwill	1,048,091					1,048,091
Intangible assets, net	123,595					121,807
Mortgage servicing rights	97,971					110,828
Real estate and other repossessed assets, net	35,330					36,744
Derivative contracts, net	651,553					922,716
Cash surrender value of bank-owned life insurance	393,741					391,006
Receivable on unsettled securities sales	1,863,719					2,171,881
Other assets	752,936					1,065,481
TOTAL ASSETS	$	45,819,874				$	47,119,162
LIABILITIES AND EQUITY
Deposits:
Demand	$	11,992,165				$	9,821,582
Interest-bearing transaction	18,850,418					16,596,292
Savings	696,971					593,805
Time	2,352,760					2,232,473
Total deposits	33,892,314					29,244,152
Funds purchased and repurchase agreements	1,357,602					4,583,768
Other borrowings	3,173,563					5,529,554
Subordinated debentures	275,973					275,942
Accrued interest, taxes and expense	365,634					309,236
Due on unsettled securities purchases	599,510					537,709
Derivative contracts, net	610,020					1,213,445
Other liabilities	440,835					391,196
TOTAL LIABILITIES	40,715,451					42,085,002
Shareholders' equity:
Capital, surplus and retained earnings	4,726,679					4,694,956
Accumulated other comprehensive gain	370,316					331,292
TOTAL SHAREHOLDERS' EQUITY	5,096,995					5,026,248
Non-controlling interests	7,428					7,912
TOTAL EQUITY	5,104,423					5,034,160
TOTAL LIABILITIES AND EQUITY	$	45,819,874				$	47,119,162

AVERAGE BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)

	Three Months Ended
	June 30, 2020					Mar. 31, 2020					Dec. 31, 2019					Sept. 30, 2019					June 30, 2019
ASSETS
Interest-bearing cash and cash equivalents	$	619,737				$	721,659				$	573,203				$	500,823				$	535,491
Trading securities	1,871,647					1,690,104					1,672,426					1,696,568					1,757,335
Investment securities, net of allowance	268,947					282,265					298,567					308,090					328,482
Available for sale securities	12,480,065					11,664,521					11,333,524					10,747,439					9,435,668
Fair value option securities	786,757					1,793,480					1,521,528					1,553,879					898,772
Restricted equity securities	273,922					429,133					479,687					476,781					413,812
Residential mortgage loans held for sale	288,588					129,708					203,535					203,319					192,102
Loans:
Commercial	14,502,652					14,452,851					14,344,534					14,507,185					14,175,057
Commercial real estate	4,543,511					4,346,886					4,532,649					4,652,534					4,656,861
Paycheck protection program	1,699,369					—					—					—					—
Loans to individuals	3,353,960					3,143,286					3,358,817					3,253,199					3,172,487
Total loans	24,099,492					21,943,023					22,236,000					22,412,918					22,004,405
Allowance for loan losses	(367,583		)			(250,338		)			(205,417		)			(201,714		)			(205,532		)
Loans, net of allowance	23,731,909					21,692,685					22,030,583					22,211,204					21,798,873
Total earning assets	40,321,572					38,403,555					38,113,053					37,698,103					35,360,535
Cash and due from banks	678,878					669,369					690,806					717,338					703,294
Derivative contracts, net	642,969					376,621					311,542					331,834					328,802
Cash surrender value of bank-owned life insurance	391,951					390,009					388,012					385,190					384,974
Receivable on unsettled securities sales	4,626,307					3,046,111					1,973,604					1,742,794					1,437,462
Other assets	3,095,354					2,834,953					2,736,337					2,705,089					2,629,710
TOTAL ASSETS	$	49,757,031				$	45,720,618				$	44,213,354				$	43,580,348				$	40,844,777
LIABILITIES AND EQUITY
Deposits:
Demand	$	11,489,322				$	9,232,859				$	9,612,533				$	9,759,710				$	9,883,965
Interest-bearing transaction	18,040,170					16,159,654					14,685,385					13,131,542					12,512,282
Savings	656,669					563,821					554,605					557,122					558,738
Time	2,464,793					2,239,234					2,247,717					2,251,800					2,207,391
Total deposits	32,650,954					28,195,568					27,100,240					25,700,174					25,162,376
Funds purchased and repurchase agreements	5,816,484					3,815,941					4,120,610					3,106,163					2,066,950
Other borrowings	3,527,303					6,542,325					6,247,194					8,125,023					7,175,617
Subordinated debentures	275,949					275,932					275,916					275,900					275,887
Derivative contracts, net	836,667					379,342					276,078					300,051					283,484
Due on unsettled securities purchases	887,973					960,780					784,174					745,893					821,688
Other liabilities	690,087					642,764					561,654					547,144					460,732
TOTAL LIABILITIES	44,685,417					40,812,652					39,365,866					38,800,348					36,246,734
Total equity	5,071,614					4,907,966					4,847,488					4,780,000					4,598,043
TOTAL LIABILITIES AND EQUITY	$	49,757,031				$	45,720,618				$	44,213,354				$	43,580,348				$	40,844,777

STATEMENTS OF EARNINGS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except per share data)

	Three Months Ended										Six Months Ended
	June 30,										June 30,
	2020					2019					2020					2019
Interest revenue	$	306,384				$	390,820				$	655,321				$	766,894
Interest expense	28,280					105,388					115,857					203,360
Net interest revenue	278,104					285,432					539,464					563,534
Provision for credit losses	135,321					5,000					229,092					13,000
Net interest revenue after provision for credit losses	142,783					280,432					310,372					550,534
Other operating revenue:
Brokerage and trading revenue	62,022					40,526					112,801					72,143
Transaction card revenue	22,940					21,915					44,821					42,653
Fiduciary and asset management revenue	41,257					45,025					85,715					88,383
Deposit service charges and fees	22,046					28,074					48,176					56,317
Mortgage banking revenue	53,936					28,131					91,103					51,965
Other revenue	11,479					12,437					23,788					25,199
Total fees and commissions	213,680					176,108					406,404					336,660
Other gains (losses), net	6,768					3,480					(3,973		)			6,456
Gain on derivatives, net	21,885					11,150					40,305					15,817
Gain (loss) on fair value option securities, net	(14,459		)			9,853					53,934					19,518
Change in fair value of mortgage servicing rights	(761		)			(29,555		)			(89,241		)			(50,221		)
Gain on available for sale securities, net	5,580					1,029					5,583					1,105
Total other operating revenue	232,693					172,065					413,012					329,335
Other operating expense:
Personnel	176,235					160,342					332,416					329,570
Business promotion	1,935					10,142					8,150					18,016
Professional fees and services	12,161					13,002					25,109					29,141
Net occupancy and equipment	30,675					26,880					56,736					56,401
Insurance	5,156					6,454					10,136					11,293
Data processing and communications	32,942					29,735					65,685					61,184
Printing, postage and supplies	3,502					4,107					7,774					8,992
Net losses and operating expenses of repossessed assets	1,766					580					3,297					2,576
Amortization of intangible assets	5,190					5,138					10,284					10,329
Mortgage banking costs	15,598					11,545					26,143					21,451
Other expense	7,227					8,212					15,281					14,341
Total other operating expense	295,387					277,137					564,011					564,294
Net income before taxes	80,089					175,360					159,373					315,575
Federal and state income taxes	15,803					37,580					33,103					67,530
Net income	64,286					137,780					126,270					248,045
Net income (loss) attributable to non-controlling interests	(407		)			217					(502		)			(130		)
Net income attributable to BOK Financial Corporation shareholders	$	64,693				$	137,563				$	126,772				$	248,175
Average shares outstanding:
Basic	69,876,043					70,887,063					69,999,865					71,135,414
Diluted	69,877,467					70,902,033					70,003,817					71,151,558
Net income per share:
Basic	$	0.92				$	1.93				$	1.80				$	3.47
Diluted	$	0.92				$	1.93				$	1.80				$	3.46

FINANCIAL HIGHLIGHTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and share data)

	Three Months Ended
	June 30, 2020					Mar. 31, 2020					Dec. 31, 2019					Sept. 30, 2019					June 30, 2019
Capital:
Period-end shareholders' equity	$	5,096,995				$	5,026,248				$	4,855,795				$	4,829,016				$	4,709,438
Risk weighted assets	$	32,258,548				$	32,973,242				$	31,673,425				$	32,159,139				$	32,040,741
Risk-based capital ratios:
Common equity tier 1	11.41		%			10.98		%			11.39		%			11.06		%			10.84		%
Tier 1	11.41		%			10.98		%			11.39		%			11.06		%			10.84		%
Total capital	13.40		%			12.65		%			12.94		%			12.56		%			12.34		%
Leverage ratio	7.74		%			8.15		%			8.40		%			8.41		%			8.75		%
Tangible common equity ratio1	8.79		%			8.39		%			8.98		%			8.72		%			8.69		%
Common stock:
Book value per share	$	72.50				$	71.49				$	68.80				$	68.15				$	66.15
Tangible book value per share	55.83					54.85					52.17					51.60					49.68
Market value per share:
High	$	67.62				$	87.40				$	88.28				$	84.35				$	88.17
Low	$	37.80				$	34.57				$	71.85				$	72.96				$	72.60
Cash dividends paid	$	35,769				$	35,949				$	36,011				$	35,472				$	35,631
Dividend payout ratio	55.29		%			57.91		%			32.63		%			24.94		%			25.90		%
Shares outstanding, net	70,306,690					70,308,532					70,579,598					70,858,010					71,193,770
Stock buy-back program:
Shares repurchased	—					442,000					280,000					336,713					250,000
Amount	$	—				$	33,380				$	22,844				$	25,937				$	20,125
Average price per share	$	—				$	75.52				$	81.59				$	77.03				$	80.50
Performance ratios (quarter annualized):
Return on average assets	0.52		%			0.55		%			0.99		%			1.29		%			1.35		%
Return on average equity	5.14		%			5.10		%			9.05		%			11.83		%			12.02		%
Net interest margin	2.83		%			2.80		%			2.88		%			3.01		%			3.30		%
Efficiency ratio	59.57		%			58.62		%			63.65		%			59.31		%			59.51		%
Reconciliation of non-GAAP measures:
1   Tangible common equity ratio:
Total shareholders' equity	$	5,096,995				$	5,026,248				$	4,855,795				$	4,829,016				$	4,709,438
Less: Goodwill and intangible assets, net	1,171,686					1,169,898					1,173,362					1,172,411					1,172,564
Tangible common equity	$	3,925,309				$	3,856,350				$	3,682,433				$	3,656,605				$	3,536,874
Total assets	$	45,819,874				$	47,119,162				$	42,172,021				$	43,127,205				$	41,893,073
Less: Goodwill and intangible assets, net		1,171,686					1,169,898					1,173,362					1,172,411					1,172,564
Tangible assets	$	44,648,188				$	45,949,264				$	40,998,659				$	41,954,794				$	40,720,509
Tangible common equity ratio	8.79		%			8.39		%			8.98		%			8.72		%			8.69		%
Pre-provision net revenue:
Net income before taxes	$	80,089				$	79,284				$	141,039				$	174,254				$	175,360
Provision for expected credit losses	135,321					93,771					19,000					12,000					5,000
Net income (loss) attributable to non-controlling interests	(407		)			(95		)			430					(373		)			217
Pre-provision net revenue	$	215,817				$	173,150				$	159,609				$	186,627				$	180,143
Other data:
Tax equivalent interest	$	2,630				$	2,715				$	2,726				$	2,936				$	3,481
Net unrealized gain (loss) on available for sale securities	$	487,334				$	435,989				$	138,149				$	178,060				$	131,780
Mortgage banking:
Mortgage production revenue	$	39,185				$	21,570				$	9,169				$	13,814				$	11,869
Mortgage loans funded for sale	$	1,184,249				$	548,956				$	855,643				$	877,280				$	729,841
Add: current period-end outstanding commitments	546,304					657,570					158,460					379,377					344,087
Less: prior period end outstanding commitments	657,570					158,460					379,377					344,087					263,434
Total mortgage production volume	$	1,072,983				$	1,048,066				$	634,726				$	912,570				$	810,494
Mortgage loan refinances to mortgage loans funded for sale	71		%			57		%			57		%			56		%			31		%
Gain on sale margin	3.65		%			2.06		%			1.44		%			1.51		%			1.46		%
Mortgage servicing revenue	$	14,751				$	15,597				$	16,227				$	16,366				$	16,262
Average outstanding principal balance of mortgage loans serviced for others	19,319,872					20,416,546					20,856,446					21,172,874					21,418,690
Average mortgage servicing revenue rates	0.31		%			0.31		%			0.31		%			0.31		%			0.30		%
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net	$	21,815				$	18,371				$	(4,714	)			$	3,742				$	11,128
Gain (loss) on fair value option securities, net	(14,459		)			68,393					(8,328		)			4,597					9,853
Gain (loss) on economic hedge of mortgage servicing rights	7,356					86,764					(13,042		)			8,339					20,981
Gain (loss) on changes in fair value of mortgage servicing rights	(761		)			(88,480		)			9,297					(12,593		)			(29,555		)
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue	6,595					(1,716		)			(3,745		)			(4,254		)			(8,574		)
Net interest revenue on fair value option securities2	2,702					4,268					1,544					1,245					1,296
Total economic benefit (cost) of changes in the fair value of mortgage servicing rights, net of economic hedges	$	9,297				$	2,552				$	(2,201	)			$	(3,009	)			$	(7,278	)

² Actual interest earned on fair value option securities less internal transfer-priced cost of funds.

QUARTERLY EARNINGS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and per share data)

	Three Months Ended
	June 30, 2020					Mar. 31, 2020					Dec. 31, 2019					Sept. 30, 2019					June 30, 2019
Interest revenue	$	306,384				$	348,937				$	369,857				$	395,207				$	390,820
Interest expense	28,280					87,577					99,608					116,111					105,388
Net interest revenue	278,104					261,360					270,249					279,096					285,432
Provision for credit losses	135,321					93,771					19,000					12,000					5,000
Net interest revenue after provision for credit losses	142,783					167,589					251,249					267,096					280,432
Other operating revenue:
Brokerage and trading revenue	62,022					50,779					43,843					43,840					40,526
Transaction card revenue	22,940					21,881					22,548					22,015					21,915
Fiduciary and asset management revenue	41,257					44,458					45,021					43,621					45,025
Deposit service charges and fees	22,046					26,130					27,331					28,837					28,074
Mortgage banking revenue	53,936					37,167					25,396					30,180					28,131
Other revenue	11,479					12,309					15,283					17,626					12,437
Total fees and commissions	213,680					192,724					179,422					186,119					176,108
Other gains (losses), net	6,768					(10,741		)			(1,649		)			4,544					3,480
Gain (loss) on derivatives, net	21,885					18,420					(4,644		)			3,778					11,150
Gain (loss) on fair value option securities, net	(14,459		)			68,393					(8,328		)			4,597					9,853
Change in fair value of mortgage servicing rights	(761		)			(88,480		)			9,297					(12,593		)			(29,555		)
Gain on available for sale securities, net	5,580					3					4,487					5					1,029
Total other operating revenue	232,693					180,319					178,585					186,450					172,065
Other operating expense:
Personnel	176,235					156,181					168,422					162,573					160,342
Business promotion	1,935					6,215					8,787					8,859					10,142
Charitable contributions to BOKF Foundation	3,000					—					2,000					—					1,000
Professional fees and services	12,161					12,948					13,408					12,312					13,002
Net occupancy and equipment	30,675					26,061					26,316					27,558					26,880
Insurance	5,156					4,980					5,393					4,220					6,454
Data processing and communications	32,942					32,743					31,884					31,915					29,735
Printing, postage and supplies	3,502					4,272					3,700					3,825					4,107
Net losses and operating expenses of repossessed assets	1,766					1,531					2,403					1,728					580
Amortization of intangible assets	5,190					5,094					5,225					5,064					5,138
Mortgage banking costs	15,598					10,545					14,259					14,975					11,545
Other expense	7,227					8,054					6,998					6,263					8,212
Total other operating expense	295,387					268,624					288,795					279,292					277,137
Net income before taxes	80,089					79,284					141,039					174,254					175,360
Federal and state income taxes	15,803					17,300					30,257					32,396					37,580
Net income	64,286					61,984					110,782					141,858					137,780
Net income (loss) attributable to non-controlling interests	(407		)			(95		)			430					(373		)			217
Net income attributable to BOK Financial Corporation shareholders	$	64,693				$	62,079				$	110,352				$	142,231				$	137,563
Average shares outstanding:
Basic	69,876,043					70,123,685					70,295,899					70,596,307					70,887,063
Diluted	69,877,467					70,130,166					70,309,644					70,609,924					70,902,033
Net income per share:
Basic	$	0.92				$	0.88				$	1.56				$	2.00				$	1.93
Diluted	$	0.92				$	0.88				$	1.56				$	2.00				$	1.93

LOANS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)

		June 30, 2020				Mar. 31, 2020				Dec. 31, 2019				Sept. 30, 2019				June 30, 2019
Commercial:
Energy		$	3,974,174			$	4,111,676			$	3,973,377			$	4,114,269			$	3,921,353
Services		3,779,881				3,955,748				3,832,031				4,011,089				4,105,117
Healthcare		3,289,343				3,165,096				3,033,916				3,032,968				2,926,510
General business		3,115,112				3,563,455				3,192,326				3,266,299				3,383,928
Total commercial		14,158,510				14,795,975				14,031,650				14,424,625				14,336,908
Commercial real estate:
Multifamily		1,407,107				1,282,457				1,265,562				1,324,839				1,300,372
Office		973,995				962,004				928,379				1,014,275				1,056,306
Retail		780,467				774,198				775,521				799,169				825,399
Industrial		723,005				728,026				856,117				873,536				828,569
Residential construction and land development		136,911				138,958				150,879				135,361				141,509
Other commercial real estate		532,659				564,442				457,325				478,877				557,878
Total commercial real estate		4,554,144				4,450,085				4,433,783				4,626,057				4,710,033
Paycheck protection program		2,081,428				—				—				—				—
Loans to individuals:
Permanent mortgage		1,813,442				1,844,555				1,886,378				1,925,539				1,975,449
Permanent mortgages guaranteed by U.S. government agencies		322,269				197,889				197,794				191,764				195,373
Personal		1,226,097				1,175,466				1,201,382				1,117,382				1,037,889
Total loans to individuals		3,361,808				3,217,910				3,285,554				3,234,685				3,208,711
Total		$	24,155,890			$	22,463,970			$	21,750,987			$	22,285,367			$	22,255,652

LOANS MANAGED BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)

	June 30, 2020				Mar. 31, 2020				Dec. 31, 2019				Sept. 30, 2019				June 30, 2019
Texas:
Commercial	$	5,771,691			$	6,350,690			$	6,174,894			$	6,220,227			$	5,877,265
Commercial real estate	1,389,547				1,296,266				1,259,117				1,292,116				1,341,609
Paycheck protection program	612,133				—				—				—				—
Loans to individuals	748,474				756,634				727,175				749,361				673,463
Total Texas	8,521,845				8,403,590				8,161,186				8,261,704				7,892,337
Oklahoma:
Commercial	5,086,934				3,886,086				3,454,825				3,690,100				3,762,234
Commercial real estate	636,021				593,473				631,026				679,786				717,970
Paycheck protection program	442,518				—				—				—				—
Loans to individuals	1,967,665				1,788,518				1,854,864				1,753,698				1,786,162
Total Oklahoma	8,133,138				6,268,077				5,940,715				6,123,584				6,266,366
Colorado:
Commercial	1,600,382				2,181,309				2,169,598				2,247,798				2,325,742
Commercial real estate	937,742				955,608				927,826				975,066				1,023,410
Paycheck protection program	488,279				—				—				—				—
Loans to individuals	264,872				268,674				276,939				303,605				314,317
Total Colorado	3,291,275				3,405,591				3,374,363				3,526,469				3,663,469
Arizona:
Commercial	1,036,862				1,396,582				1,307,073				1,276,534				1,330,415
Commercial real estate	689,121				714,161				728,832				771,425				761,243
Paycheck protection program	318,961				—				—				—				—
Loans to individuals	177,066				181,821				186,539				170,815				168,019
Total Arizona	2,222,010				2,292,564				2,222,444				2,218,774				2,259,677
Kansas/Missouri:
Commercial	404,860				556,255				527,872				566,969				602,836
Commercial real estate	314,504				310,799				322,541				374,795				331,443
Paycheck protection program	76,724				—				—				—				—
Loans to individuals	102,577				116,734				131,069				146,522				155,453
Total Kansas/Missouri	898,665				983,788				981,482				1,088,286				1,089,732
New Mexico:
Commercial	182,688				327,164				305,320				335,409				350,520
Commercial real estate	455,574				434,150				402,148				374,331				385,058
Paycheck protection program	128,058				—				—				—				—
Loans to individuals	83,470				87,110				90,257				92,270				92,626
Total New Mexico	849,790				848,424				797,725				802,010				828,204
Arkansas:
Commercial	75,093				97,889				92,068				87,588				87,896
Commercial real estate	131,635				145,628				162,293				158,538				149,300
Paycheck protection program	14,755				—				—				—				—
Loans to individuals	17,684				18,419				18,711				18,414				18,671
Total Arkansas	239,167				261,936				273,072				264,540				255,867
TOTAL BOK FINANCIAL	$	24,155,890			$	22,463,970			$	21,750,987			$	22,285,367			$	22,255,652

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

DEPOSITS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)

	June 30, 2020				Mar. 31, 2020				Dec. 31, 2019				Sept. 30, 2019				June 30, 2019
Oklahoma:
Demand	$	4,378,559			$	3,669,558			$	3,257,337			$	3,515,312			$	3,279,360
Interest-bearing:
Transaction	11,438,489				9,955,697				8,574,912				7,447,799				7,020,484
Savings	387,557				329,631				306,194				308,103				307,785
Time	1,330,619				1,137,802				1,125,446				1,198,170				1,253,804
Total interest-bearing	13,156,665				11,423,130				10,006,552				8,954,072				8,582,073
Total Oklahoma	17,535,224				15,092,688				13,263,889				12,469,384				11,861,433
Texas:
Demand	3,070,955				2,767,399				2,757,376				2,867,915				2,970,340
Interest-bearing:
Transaction	3,358,090				2,874,362				2,911,731				2,589,063				2,453,187
Savings	128,892				115,039				102,456				100,597				103,125
Time	476,867				505,565				495,343				464,264				425,253
Total interest-bearing	3,963,849				3,494,966				3,509,530				3,153,924				2,981,565
Total Texas	7,034,804				6,262,365				6,266,906				6,021,839				5,951,905
Colorado:
Demand	2,096,075				1,579,764				1,729,674				1,694,044				1,621,820
Interest-bearing:
Transaction	1,816,604				1,759,384				1,769,037				1,910,874				1,800,271
Savings	67,477				58,000				53,307				60,107				57,263
Time	254,845				279,105				283,517				273,622				246,198
Total interest-bearing	2,138,926				2,096,489				2,105,861				2,244,603				2,103,732
Total Colorado	4,235,001				3,676,253				3,835,535				3,938,647				3,725,552
New Mexico:
Demand	965,877				750,052				623,722				645,698				630,861
Interest-bearing:
Transaction	752,565				563,891				558,493				539,260				557,881
Savings	80,242				67,553				63,999				62,863				62,636
Time	222,370				235,778				238,140				236,135				232,569
Total interest-bearing	1,055,177				867,222				860,632				838,258				853,086
Total New Mexico	2,021,054				1,617,274				1,484,354				1,483,956				1,483,947
Arizona:
Demand	985,757				665,396				681,268				705,895				704,144
Interest-bearing:
Transaction	780,500				729,603				684,929				600,103				560,861
Savings	15,669				8,832				10,314				12,487				11,966
Time	42,318				47,081				49,676				44,347				43,099
Total interest-bearing	838,487				785,516				744,919				656,937				615,926
Total Arizona	1,824,244				1,450,912				1,426,187				1,362,832				1,320,070

	June 30, 2020				Mar. 31, 2020				Dec. 31, 2019				Sept. 30, 2019				June 30, 2019
Kansas/Missouri:
Demand	427,795				318,985				384,533				376,020				431,856
Interest-bearing:
Transaction	526,635				537,552				784,574				284,940				310,774
Savings	15,033				12,888				12,169				11,689				13,125
Time	17,746				19,137				17,877				19,126				19,205
Total interest-bearing	559,414				569,577				814,620				315,755				343,104
Total Kansas/Missouri	987,209				888,562				1,199,153				691,775				774,960
Arkansas:
Demand	67,147				70,428				27,381				39,513				29,176
Interest-bearing:
Transaction	177,535				175,803				108,076				149,506				148,485
Savings	2,101				1,862				1,837				1,747				1,783
Time	7,995				8,005				7,850				7,877				7,810
Total interest-bearing	187,631				185,670				117,763				159,130				158,078
Total Arkansas	254,778				256,098				145,144				198,643				187,254
TOTAL BOK FINANCIAL	$	33,892,314			$	29,244,152			$	27,621,168			$	26,167,076			$	25,305,121

NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION

	Three Months Ended
	June 30, 2020			Mar. 31, 2020			Dec. 31, 2019			Sept. 30, 2019			June 30, 2019
TAX-EQUIVALENT ASSETS YIELDS
Interest-bearing cash and cash equivalents	0.07	%		1.33	%		1.62	%		2.42	%		2.57	%
Trading securities	2.46	%		2.89	%		3.19	%		3.49	%		3.59	%
Investment securities, net of allowance	4.77	%		4.73	%		4.69	%		4.46	%		4.41	%
Available for sale securities	2.29	%		2.48	%		2.52	%		2.60	%		2.63	%
Fair value option securities	2.00	%		2.67	%		2.62	%		2.79	%		3.34	%
Restricted equity securities	2.75	%		5.49	%		5.37	%		6.34	%		6.30	%
Residential mortgage loans held for sale	3.10	%		3.50	%		3.55	%		3.73	%		3.65	%
Loans	3.63	%		4.50	%		4.75	%		5.12	%		5.39	%
Allowance for loan losses
Loans, net of allowance	3.69	%		4.55	%		4.80	%		5.17	%		5.45	%
Total tax-equivalent yield on earning assets	3.12	%		3.73	%		3.93	%		4.25	%		4.51	%
COST OF INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest-bearing transaction	0.21	%		0.89	%		1.00	%		1.08	%		1.04	%
Savings	0.05	%		0.09	%		0.11	%		0.14	%		0.12	%
Time	1.36	%		1.83	%		1.94	%		1.94	%		1.90	%
Total interest-bearing deposits	0.34	%		0.98	%		1.09	%		1.17	%		1.13	%
Funds purchased and repurchase agreements	0.14	%		1.14	%		1.56	%		2.01	%		2.08	%
Other borrowings	0.56	%		1.66	%		2.01	%		2.42	%		2.67	%
Subordinated debt	5.16	%		5.30	%		5.40	%		5.48	%		5.53	%
Total cost of interest-bearing liabilities	0.37	%		1.19	%		1.40	%		1.68	%		1.70	%
Tax-equivalent net interest revenue spread	2.75	%		2.54	%		2.53	%		2.57	%		2.81	%
Effect of noninterest-bearing funding sources and other	0.08	%		0.26	%		0.35	%		0.44	%		0.49	%
Tax-equivalent net interest margin	2.83	%		2.80	%		2.88	%		3.01	%		3.30	%

Yield calculations are shown on a tax equivalent basis at the statutory federal and state rates for the periods presented. The yield calculations exclude security trades that have been recorded on trade date with no corresponding interest income and the unrealized gains and losses. The yield calculation also includes average loan balances for which the accrual of interest has been discontinued and are net of unearned income. Yield/rate calculations are generally based on the conventions that determine how interest income and expense is accrued.

CREDIT QUALITY INDICATORS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratios)

	Three Months Ended
	June 30, 2020					Mar. 31, 2020					Dec. 31, 2019					Sept. 30, 2019					June 30, 2019
Nonperforming assets:
Nonaccruing loans:
Commercial:
Energy	$	162,989				$	96,448				$	91,722				$	88,894				$	71,632
Healthcare	3,645					4,070					4,480					5,978					16,148
Services	21,032					8,425					7,483					6,119					10,087
General business	14,333					9,681					11,731					10,715					25,528
Total commercial	201,999					118,624					115,416					111,706					123,395
Commercial real estate	13,956					8,545					27,626					23,185					21,670
Loans to individuals:
Permanent mortgage	33,098					30,721					31,522					30,972					31,734
Permanent mortgage guaranteed by U.S. government agencies	6,110					5,005					6,100					6,332					6,743
Personal	233					277					287					271					237
Total loans to individuals	39,441					36,003					37,909					37,575					38,714
Total nonaccruing loans	$	255,396				$	163,172				$	180,951				$	172,466				$	183,779
Accruing renegotiated loans guaranteed by U.S. government agencies	114,571					91,757					92,452					92,718					95,989
Real estate and other repossessed assets	35,330					36,744					20,359					21,026					16,940
Total nonperforming assets	$	405,297				$	291,673				$	293,762				$	286,210				$	296,708
Total nonperforming assets excluding those guaranteed by U.S. government agencies	284,616					194,911					195,210					187,160					193,976
Accruing loans 90 days past due1	11,316					3,706					7,680					1,541					2,698
Gross charge-offs	$	15,570				$	18,917				$	14,268				$	11,707				$	13,227
Recoveries	(1,491		)			(1,696		)			(1,816		)			(1,066		)			(5,503		)
Net charge-offs	$	14,079				$	17,221				$	12,452				$	10,641				$	7,724
Provision for loan losses	$	134,365				$	95,964				$	18,779				$	12,539				$	4,918
Provision for credit losses from off-balance sheet unfunded loan commitments	4,405					3,377					221					(539		)			82
Provision for expected credit losses from mortgage banking activities2	(3,575		)			(6,020		)			—					—					—
Provision for credit losses related to held-to maturity (investment) securities portfolio2	126					450					—					—					—
Total provision for credit losses	$	135,321				$	93,771				$	19,000				$	12,000				$	5,000
Allowance for loan losses to period end loans	1.80		%			1.40		%			0.97		%			0.92		%			0.91		%
Allowance for loan losses to period end loans excluding PPP loans3	1.97		%			1.40		%			0.97		%			0.92		%			0.91		%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans	1.94		%			1.53		%			0.98		%			0.92		%			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 loans3	2.12		%			1.53		%			0.98		%			0.92		%			0.92		%
Nonperforming assets to period end loans and repossessed assets	1.68		%			1.30		%			1.35		%			1.28		%			1.33		%
Net charge-offs (annualized) to average loans	0.23		%			0.31		%			0.22		%			0.19		%			0.14		%
Net charge-offs (annualized) to average loans excluding PPP loans3	0.25		%			0.31		%			0.22		%			0.19		%			0.14		%
Allowance for loan losses to nonaccruing loans1	174.74		%			199.35		%			120.54		%			123.05		%			114.40		%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to nonaccruing loans1	187.94		%			217.38		%			121.44		%			123.87		%			115.48		%

¹   Excludes residential mortgage loans guaranteed by agencies of the U.S. government.
²   Included in Provision for credit losses effective with implementation of CECL on January 1, 2020.
³   Represents a non-GAAP measure meaningful due to the unique characteristics and short-term nature of the PPP loans.

SEGMENTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratios)

		Three Months Ended												Change
Commercial Banking		June 30, 2020				Mar. 31, 2020				June 30, 2019				2Q20 vs 1Q20				2Q20 vs 2Q19
Net interest revenue		$	145,109			$	151,407			$	184,471			(4.2)%				(21.3)%
Fees and commissions revenue		46,515				41,459				41,105				12.2%				13.2 %
Other operating expense		62,933				60,752				63,415				3.6%				(0.8)%
Corporate expense allocations		5,437				8,905				10,652				(38.9)%				(49.0)%
Net income		80,992				74,975				106,280				8.0%				(23.8)%
Average assets		27,575,652				24,687,976				22,910,724				11.7%				20.4%
Average loans		19,262,827				18,812,015				18,812,800				2.4%				2.4%
Average deposits		14,599,225				11,907,386				10,724,206				22.6%				36.1%
Consumer Banking
Net interest revenue		$	39,270			$	43,932			$	52,715			(10.6)%				(25.5)%
Fees and commissions revenue		67,192				55,062				48,830				22.0%				37.6%
Other operating expense		58,936				54,793				57,694				7.6%				2.2%
Corporate expense allocations		10,812				10,487				11,695				3.1%				(7.6)%
Net income		31,900				22,921				16,342				39.2%				95.2%
Average assets		9,920,005				9,850,853				9,212,667				0.7%				7.7%
Average loans		1,679,164				1,711,703				1,796,823				(1.9)%				(6.5)%
Average deposits		7,587,246				6,869,481				6,998,677				10.4%				8.4%
Wealth Management
Net interest revenue		$	26,880			$	18,904			$	26,941			42.2%				(0.2)%
Fees and commissions revenue		106,757				97,881				85,925				9.1%				24.2%
Other operating expense		80,567				78,192				69,452				3.0%				16.0%
Corporate expense allocations		8,204				8,265				9,168				(0.7)%				(10.5)%
Net income		33,394				22,573				25,544				47.9%				30.7%
Average assets		15,721,452				12,723,412				9,849,396				23.6%				59.6%
Average loans		1,709,363				1,705,735				1,647,680				0.2%				3.7%
Average deposits		8,385,681				7,623,986				6,220,848				10.0%				34.8%
Fiduciary assets		50,560,584				47,053,101				49,296,896				7.5%				2.6%
Assets under management or administration		79,452,502				75,783,829				81,774,602				4.8%				(2.8)%

Contact:

Cody McAlester
Vice President, Investor Relations
918-595-3030