BOK Financial Corporation Reports Record Quarterly Earnings of $154 million or $2.19 Per Share in the Third Quarter

TULSA, Okla., Oct. 21, 2020 (GLOBE NEWSWIRE) -- BOK Financial (NASDAQ: BOKF) today reported net earnings applicable to common shareholders for the third quarter of 2020 of $154 million, or $2.19 per diluted common share.

CEO Commentary

"Building off prior quarters, our large percentage of fee-based revenues provided a differentiated earnings outcome compared to many similar-sized financial institutions," said Steven G. Bradshaw, president and chief executive officer. "Both our Wealth Management and Mortgage businesses delivered impressively in a time of compressed net interest margin and unsure credit outcomes across the industry."

Bradshaw continued, "Beyond the financial success we've had this quarter, I'm incredibly proud of the impact we've made in our communities. We have increased our charitable investments from the BOKF Foundation and our employees also stepped up their collective volunteer hours to help address needs across our communities. Our top ranking in the 2020 American Banker reputation survey is a testament to the level of leadership and engagement our employees provide in our banking communities. We have earned the reputation as an organization known for unwavering integrity, and that is demonstrated in everything that we do. Whether it's the role we play in our communities or the financial results for our shareholders - it's more about actions than words at BOK Financial."

Third Quarter 2020 Financial Highlights

• Net income was $154.0 million or $2.19 per diluted share for the third quarter of 2020 and $64.7 million or $0.92 per diluted share for the second quarter of 2020. Pre-provision net revenue was $204.6 million for the third quarter of 2020 compared to $215.0 million for the prior quarter. No provision for expected credit losses was necessary in the third quarter, while the second quarter of 2020 included a pre-tax provision for expected credit losses of $135.3 million. Our forecasts of economic conditions have improved since the previous quarter.
• Net interest revenue totaled $271.8 million, a decrease of $6.4 million. Discount accretion on acquired loans totaled $13.3 million in the third quarter of 2020 and $3.3 million in the prior quarter. Net interest margin was 2.81 percent compared to 2.83 percent in the second quarter of 2020. Excluding discount accretion, net interest margin was 2.67 percent compared to 2.80 percent in the prior quarter.
• Fees and commissions revenue totaled $222.9 million, an increase of $9.2 million. Brokerage and trading revenue increased $7.5 million, largely due to an increase trading revenue and customer hedging revenue.
• Operating expense was $301.3 million, an increase of $5.9 million. Personnel expense increased $3.6 million. Incentive compensation increased $5.6 million, largely related to vesting assumptions regarding the Company's earnings per share growth relative to a defined peer group. Non-personnel expense increased $2.3 million compared to the second quarter of 2020. Increases in net losses and expenses on two repossessed properties, professional fees and data processing and communications expense were partially offset by decreases in occupancy and equipment expense and other expenses. In addition, the second quarter of 2020 included a $3.0 million charitable contribution to the BOKF Foundation.
• Changes in the fair value of mortgage servicing rights and related economic hedges added $6.5 million during the third quarter of 2020 and $9.3 million in the prior quarter.
• Period-end loans decreased $353 million to $23.8 billion at September 30, 2020, primarily due to continued paydowns of commercial loans. Average loans were relatively consistent with the second quarter at $24.1 billion.
• The allowance for loan losses totaled $420 million or 1.76 percent of outstanding loans at September 30, 2020. 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 at September 30, 2020. 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.
• Average deposits increased $2.0 billion to $34.6 billion and period-end deposits increased $1.1 billion to $35.0 billion, largely due to growth in commercial and wealth management balances. Continued deposit growth was due primarily to customers retaining higher balances in the current economic environment.
• The company's common equity Tier 1 capital ratio was 12.07 percent at September 30, 2020. In addition, the company's Tier 1 capital ratio was 12.07 percent, total capital ratio was 14.05 percent, and leverage ratio was 8.39 percent at September 30, 2020. At June 30, 2020, the company's common equity Tier 1 capital ratio was 11.44 percent, Tier 1 capital ratio was 11.44 percent, total capital ratio was 13.43 percent, and leverage ratio was 7.74 percent.

Third Quarter 2020 Business Segment Highlights

• Commercial Banking contributed $75.1 million to net income, a decrease of $5.9 million compared to the second quarter. Net interest revenue increased $4.8 million, including higher discount accretion. Net loans charged off increased $8.8 million. Fees and commissions revenue increased $3.6 million led by increased customer hedging and loan syndication activity. Operating expense increased $3.9 million, largely due to increases in incentive compensation and deposit insurance expense. Net losses and expenses on repossessed assets also increased $4.5 million due to impairment of a set of oil and gas properties and a retail commercial real estate property. Average Commercial Banking loans decreased $585 million due to repayment of defensive draws taken earlier in the year and purposeful deleveraging by our customers. Commercial deposits grew more than 5 percent to $14.6 billion in the third quarter.
• Consumer Banking contributed $26.3 million to net income, a decrease of $5.6 million compared to the second quarter. Net interest revenue decreased $6.1 million, largely due to lower yields on deposits sold to our Funds Management unit and compressed loan spreads. Fees and commissions revenue was largely unchanged compared to the prior quarter. While mortgage production revenue decreased slightly compared to the prior quarter, it was another strong quarter for our mortgage banking business. Low mortgage interest rates continue to result in high volumes and increased margins. Deposit service charges increased in the current quarter as many "stay at home" orders have been lifted and consumer activity starts to return to more normal levels. Changes in the fair value of mortgage servicing rights and related economic hedges provided $6.5 million during the third quarter of 2020 and $9.3 million in the prior quarter.
• Wealth Management contributed $31.2 million to net income, a decrease of $2.2 million compared to the second quarter. This segment produced another record quarter for total revenue. While net interest revenue decreased $3.9 million due to lower yields on deposits sold to our Funds Management unit, fees and commissions grew by $4.9 million. Increases in trading revenue of $3.0 million and other revenue of $2.3 million were partially offset by a decrease in fiduciary and asset management revenue. We continue to maintain an increased trading pipeline to provide greater liquidity to the housing market during this time of low interest rates. Deposit growth remains strong with total average deposits growing $704 million or 8 percent compared to the previous quarter. Assets under management or administration totaled $82.4 billion, up $3.0 billion since June 30.

Net Interest Revenue

Net interest revenue was $271.8 million for the third quarter of 2020, a $6.4 million decrease compared to the second quarter of 2020. Net purchase accounting discount accretion on acquired loans totaled $13.3 million in the third quarter of 2020 and $3.3 million in the second quarter of 2020. Increased accretion was primarily due to early payoffs of acquired loans.

Average earning assets decreased $681 million compared to the second quarter of 2020. Fair value option securities, held as an economic hedge of the changes in fair value of our mortgage servicing rights, decreased $399 million and restricted equity securities decreased $130 million. Residential mortgage loans held for sale decreased $75 million while interest-bearing cash and cash equivalents decreased $67 million. Average loan balances remained largely unchanged. Available for sale securities increased $101 million. Average interest-bearing deposits grew by $1.5 billion, primarily due to interest-bearing transaction deposits. Funds purchased and repurchase agreements decreased $3.0 billion and other borrowings decreased $145 million.

Net interest margin was 2.81 percent compared to 2.83 percent in the second quarter of 2020. Excluding discount accretion on acquired loans, net interest margin was 2.67 percent compared to 2.80 percent in the prior quarter. Recent interest rate cuts continue to compress the net interest margin. While the company has been proactive in reducing deposit costs and implementing LIBOR floors in loan agreements to support the margin, funds received from available for sale securities continue to be reinvested at lower rates.

The yield on average earning assets was 3.04 percent, an 8 basis point decrease from the prior quarter. The yield on the available for sale securities portfolio decreased 18 basis points to 2.11 percent and the loan portfolio yield decreased 3 basis points to 3.60 percent. Excluding loan discount accretion, the yield on average earning assets was 2.91 percent, down 18 basis points and the loan portfolio yield was 3.38 percent, down 20 basis points from the previous quarter. The yield on fair value option securities decreased 8 basis points to 1.92 percent.

Funding costs were 0.31 percent, down 6 basis points. The cost of interest-bearing deposits decreased 8 basis points to 0.26 percent. The cost of other borrowed funds was down 1 basis point to 0.31 percent. The benefit to net interest margin from assets funded by non-interest liabilities was 8 basis points for the third quarter of 2020, consistent with the prior quarter.

Fees and Commissions Revenue

Fees and commissions revenue totaled $222.9 million for the third quarter of 2020, an increase of $9.2 million over the second quarter of 2020, led by continued growth in brokerage and trading revenue.

Brokerage and trading revenue increased $7.5 million to $69.5 million. Trading revenue increased $3.0 million. The low mortgage interest rate environment continues to drive our U.S. agency mortgage-backed securities trading activity. Customer hedging revenue increased $2.4 million as energy customers increased hedging activities in the volatile environment. Investment banking revenue also grew by $1.8 million largely due to loan syndication activity.

Deposit service charges increased $2.2 million compared to the first quarter. As "stay at home" orders have been lifted and customer activity returns to normal, we have seen service charges return to a more normal level as well. Other revenue increased $2.2 million.

Mortgage banking revenue decreased $2.0 million to $52.0 million, primarily due to a reduction of mortgage servicing revenue. During the second quarter of 2020, we completed a sale of mortgage servicing rights on $1.6 billion of unpaid principal balance, primarily related to loans guaranteed by the Veteran's Administration. Mortgage production revenue remained very strong at $38.4 million, decreasing only slightly from the previous quarter.

Fiduciary and asset management revenue decreased $1.3 million compared to the second quarter of 2020, largely due to a decrease from seasonal tax preparation fees earned in the second quarter.

Operating Expense

Total operating expense was $301.3 million for the third quarter of 2020, an increase of $5.9 million compared to the second quarter of 2020.

Personnel expense increased $3.6 million. Stock based incentive compensation increased $5.9 million due to changes related to vesting assumptions regarding the Company's earnings per share growth relative to a defined peer group. Cash based incentive compensation increased $3.1 million, primarily due to increased securities trading activity. Deferred compensation, which is largely offset by a decrease in the value of related investments included in Other gains (losses), decreased $3.5 million. Regular compensation decreased $2.6 million, primarily related to unfilled positions due to attrition.

Non-personnel expense increased $2.3 million over the second quarter of 2020. Net losses and expenses on repossessed assets increased $4.5 million, largely due to write-downs on a set of oil and gas properties and a retail commercial real estate property. Professional fees and services expense increased $1.9 million due mainly to higher legal fees. Data processing and communications expense increased $1.8 million due to continued investment in technology.

Occupancy and equipment expense decreased $2.6 million, primarily related to impairment charges incurred in the second quarter and other expense decreased $1.8 million. We also made a charitable contribution of $3.0 million to the BOKF Foundation in the second quarter.

Income Taxes

The effective tax rate was 24.7 percent for the third quarter of 2020, an increase from 19.7 percent for the second quarter of 2020. An increase in forecasted pre-tax income for 2020 and the completion of 2019 tax returns drove the increase in effective tax rate for the quarter. The effective tax rate excluding these items was 21.7 percent. 

Loans, Deposits and Capital

Loans

Outstanding loans were $23.8 billion at September 30, 2020, a $353 million decrease compared to June 30, 2020, primarily due to commercial loan payoffs.

Outstanding core commercial loan balances decreased $593 million or 4 percent compared to June 30, 2020, primarily due to continued pay downs. 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.

Energy loan balances decreased $257 million to $3.7 billion or 16 percent of total loans. The current commodity price environment is continuing to dampen demand for new loans and borrowers are paying down debt to reduce leverage. 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 67 percent of committed production loans are secured by properties primarily producing oil. The remaining 33 percent is secured by properties primarily producing natural gas. Unfunded energy loan commitments were $2.3 billion at September 30, 2020, a $214 million decrease compared to June 30, 2020, and a $660 million decrease compared to December 31, 2019, largely as a result of the semi-annual borrowing base redetermination process in the second quarter.

Healthcare sector loan balances increased $36 million to $3.3 billion or 14 percent of total loans, primarily due to growth in loans to senior housing and care facilities. Our healthcare sector loans primarily consist of $2.5 billion of senior housing and care facilities, including independent living, assisted living and skilled nursing. Generally we loan to borrowers with a portfolio of multiple facilities 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.

General business loans decreased $138 million to $3.0 billion or 13 percent of total loans. General business loans include $1.7 billion of wholesale/retail loans and $748 million of loans from other commercial industries. Broad pay downs across our core commercial and industrial loan book contracted the portfolio.

Services loan balances decreased $234 million to $3.5 billion or 15 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.

Commercial real estate loan balances were up $140 million over June 30, 2020 and represent 20 percent of total loans at September 30, 2020. Loans secured by office buildings increased $126 million to $1.1 billion. Loans secured by industrial facilities increased $69 million. Loans secured by other commercial real estate properties decreased $26 million to $507 million. Multifamily residential loans, our largest exposure in commercial real estate, decreased $20 million to $1.4 billion at September 30, 2020. Loans secured by retail facilities were $786 million at September 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 $85 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 September 30, 2020.

Deposits

Period-end deposits totaled $35.0 billion at September 30, 2020, a $1.1 billion increase over June 30, 2020. Continued deposit growth was due primarily to customers retaining higher balances in the current economic environment. Interest-bearing transaction account balances grew by $1.3 billion. Average deposits were $34.6 billion at September 30, 2020, a $2.0 billion increase compared to June 30, 2020. Interest-bearing transaction deposits increased $1.7 billion.

Capital

The company's common equity Tier 1 capital ratio was 12.07 percent at September 30, 2020. In addition, the company's Tier 1 capital ratio was 12.07 percent, total capital ratio was 14.05 percent, and leverage ratio was 8.39 percent at September 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 29 basis points to the company's common equity tier 1 capital ratio at September 30. At June 30, 2020, the company's common equity Tier 1 capital ratio was 11.44 percent, Tier 1 capital ratio was 11.44 percent, total capital ratio was 13.43 percent, and leverage ratio was 7.74 percent.

The company's tangible common equity ratio, a non-GAAP measure, was 9.02 percent at September 30, 2020 and 8.79 percent at June 30, 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.

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. Our CECL models 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.

No provision for credit losses was necessary for the third quarter of 2020. A $1.7 million provision related to lending activities was offset by a decrease in the accrual for expected credit losses from 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 on-going 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 grading resulted in a $14.5 million increase in the provision for credit losses from lending activities.

Our base case reasonable and supportable forecast assumes that the COVID-19 pandemic maintains its current trajectory with localized and state-level hotspots. This scenario assumes approval of a vaccine prior to the end of 2020, with a large share of the U.S. population vaccinated by the end of the third quarter of 2021. After a strong increase in GDP in the third quarter, we expect GDP growth to moderate to rates consistent with historical averages and recovering to pre-COVID levels by the end of 2021. We expect a 4 percent increase in GDP over the next twelve months. Our forecasted civilian unemployment rate is 8.0 percent for the fourth quarter of 2020, improving to 6.9 percent by the third quarter of 2021. WTI oil prices are projected to generally follow the NYMEX forward curve that existed at the end of September 2020, averaging $41.65 per barrel over the next twelve months.

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. The combined allowance for credit losses attributed to energy was 4.30 percent of outstanding energy loans at September 30. 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 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 non-accruing loans.

Non-performing assets totaled $417 million or 1.75 percent of outstanding loans and repossessed assets at September 30, 2020, compared to $405 million or 1.68 percent at June 30, 2020. Non-performing assets that are not guaranteed by U.S. government agencies totaled $268 million or 1.25 percent of outstanding loans and repossessed assets at September 30, 2020, down from $285 million or 1.31 percent at June 30, 2020.

Non-accruing loans were $221 million or 1.02 percent of outstanding loans, excluding PPP loans, at September 30, 2020. Non-accruing commercial loans totaled $170 million or 1.25 percent of outstanding commercial loans. Non-accruing commercial real estate loans totaled $13 million or 0.28 percent of outstanding commercial real estate loans. Non-accruing loans to individuals totaled $38 million or 1.11 percent of outstanding loans to individuals.

Non-accruing loans decreased $34 million compared to June 30, 2020, primarily due to a $36 million decrease in non-accruing energy loans. New non-accruing loans identified in the third quarter totaled $45 million, offset by $30 million in payments received, $27 million in charge-offs and $23 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 $623 million at September 30, compared to $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.

Net charge-offs were $22.4 million or 0.41 percent of average loans on an annualized basis for the third quarter of 2020, excluding PPP loans. Net charge-offs were 0.30 percent of average loans over the last four quarters. 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. Gross charge-offs were $26.7 million for the third quarter compared to $15.6 million for the previous quarter. Recoveries totaled $4.2 million for the third quarter of 2020 and $1.5 million for the second quarter of 2020.

Loans in deferral status have dropped to just over 1 percent of total loans from a peak of more than 7 percent. More than 80 percent of the loans that were deferred have now moved back to payment status. Of the loans that remain in deferral, approximately half are in the Commercial Real Estate portfolio.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $12.8 billion at September 30, 2020, a $341 million increase compared to June 30, 2020. At September 30, 2020, the available for sale securities portfolio consisted primarily of $9.4 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 September 30, 2020, the available for sale securities portfolio had a net unrealized gain of $481 million compared to $487 million at June 30, 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 $588 million to $135 million at September 30, 2020.

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.

Conference Call and Webcast

The company will hold a conference call at 9 a.m. Central time on October 21, 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 # 13711391.

About BOK Financial Corporation

BOK Financial Corporation is a $46 billion regional financial services company headquartered in Tulsa, Oklahoma with $82 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 September 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)

	Sept. 30, 2020					June 30, 2020
ASSETS
Cash and due from banks	$	658,612				$	762,453
Interest-bearing cash and cash equivalents	347,759					485,319
Trading securities	2,245,480					1,196,105
Investment securities, net of allowance	256,001					267,988
Available for sale securities	12,817,269					12,475,919
Fair value option securities	134,756					722,657
Restricted equity securities	111,656					125,683
Residential mortgage loans held for sale	295,290					319,357
Loans:
Commercial	13,565,706					14,158,510
Commercial real estate	4,693,700					4,554,144
Paycheck protection program	2,097,325					2,081,428
Loans to individuals	3,446,569					3,361,808
Total loans	23,803,300					24,155,890
Allowance for loan losses	(419,777		)			(435,597		)
Loans, net of allowance	23,383,523					23,720,293
Premises and equipment, net	542,625					550,230
Receivables	245,514					226,934
Goodwill	1,048,091					1,048,091
Intangible assets, net	118,524					123,595
Mortgage servicing rights	97,644					97,971
Real estate and other repossessed assets, net	52,847					35,330
Derivative contracts, net	593,568					651,553
Cash surrender value of bank-owned life insurance	396,497					393,741
Receivable on unsettled securities sales	1,934,495					1,863,719
Other assets	787,073					752,936
TOTAL ASSETS	$	46,067,224				$	45,819,874
LIABILITIES AND EQUITY
Deposits:
Demand	$	12,047,338				$	11,992,165
Interest-bearing transaction	20,196,740					18,850,418
Savings	720,949					696,971
Time	2,007,973					2,352,760
Total deposits	34,973,000					33,892,314
Funds purchased and repurchase agreements	973,652					1,357,602
Other borrowings	2,771,429					3,173,563
Subordinated debentures	275,986					275,973
Accrued interest, taxes and expense	335,914					365,634
Due on unsettled securities purchases	641,817					599,510
Derivative contracts, net	446,328					610,020
Other liabilities	422,989					440,835
TOTAL LIABILITIES	40,841,115					40,715,451
Shareholders' equity:
Capital, surplus and retained earnings	4,853,617					4,726,679
Accumulated other comprehensive gain	365,170					370,316
TOTAL SHAREHOLDERS' EQUITY	5,218,787					5,096,995
Non-controlling interests	7,322					7,428
TOTAL EQUITY	5,226,109					5,104,423
TOTAL LIABILITIES AND EQUITY	$	46,067,224				$	45,819,874

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

	Three Months Ended
	Sept. 30, 2020					June 30, 2020					Mar. 31, 2020					Dec. 31, 2019					Sept. 30, 2019
ASSETS
Interest-bearing cash and cash equivalents	$	553,070				$	619,737				$	721,659				$	573,203				$	500,823
Trading securities	1,834,160					1,871,647					1,690,104					1,672,426					1,696,568
Investment securities, net of allowance	258,965					268,947					282,265					298,567					308,090
Available for sale securities	12,580,850					12,480,065					11,664,521					11,333,524					10,747,439
Fair value option securities	387,784					786,757					1,793,480					1,521,528					1,553,879
Restricted equity securities	144,415					273,922					429,133					479,687					476,781
Residential mortgage loans held for sale	213,125					288,588					129,708					203,535					203,319
Loans:
Commercial	13,772,217					14,502,652					14,452,851					14,344,534					14,507,185
Commercial real estate	4,754,269					4,543,511					4,346,886					4,532,649					4,652,534
Paycheck protection program	2,092,933					1,699,369					—					—					—
Loans to individuals	3,491,044					3,353,960					3,143,286					3,358,817					3,253,199
Total loans	24,110,463					24,099,492					21,943,023					22,236,000					22,412,918
Allowance for loan losses	(441,831		)			(367,583		)			(250,338		)			(205,417		)			(201,714		)
Loans, net of allowance	23,668,632					23,731,909					21,692,685					22,030,583					22,211,204
Total earning assets	39,641,001					40,321,572					38,403,555					38,113,053					37,698,103
Cash and due from banks	723,826					678,878					669,369					690,806					717,338
Derivative contracts, net	581,839					642,969					376,621					311,542					331,834
Cash surrender value of bank-owned life insurance	394,680					391,951					390,009					388,012					385,190
Receivable on unsettled securities sales	4,563,301					4,626,307					3,046,111					1,973,604					1,742,794
Other assets	3,027,108					3,095,354					2,834,953					2,736,337					2,705,089
TOTAL ASSETS	$	48,931,755				$	49,757,031				$	45,720,618				$	44,213,354				$	43,580,348
LIABILITIES AND EQUITY
Deposits:
Demand	$	11,929,694				$	11,489,322				$	9,232,859				$	9,612,533				$	9,759,710
Interest-bearing transaction	19,752,106					18,040,170					16,159,654					14,685,385					13,131,542
Savings	707,121					656,669					563,821					554,605					557,122
Time	2,251,012					2,464,793					2,239,234					2,247,717					2,251,800
Total deposits	34,639,933					32,650,954					28,195,568					27,100,240					25,700,174
Funds purchased and repurchase agreements	2,782,150					5,816,484					3,815,941					4,120,610					3,106,163
Other borrowings	3,382,688					3,527,303					6,542,325					6,247,194					8,125,023
Subordinated debentures	275,980					275,949					275,932					275,916					275,900
Derivative contracts, net	458,390					836,667					379,342					276,078					300,051
Due on unsettled securities purchases	1,516,880					887,973					960,780					784,174					745,893
Other liabilities	712,674					690,087					642,764					561,654					547,144
TOTAL LIABILITIES	43,768,695					44,685,417					40,812,652					39,365,866					38,800,348
Total equity	5,163,060					5,071,614					4,907,966					4,847,488					4,780,000
TOTAL LIABILITIES AND EQUITY	$	48,931,755				$	49,757,031				$	45,720,618				$	44,213,354				$	43,580,348

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

	Three Months Ended										Nine Months Ended
	September 30,										September 30,
	2020					2019					2020					2019
Interest revenue	$	294,659				$	395,207				$	949,980				$	1,162,101
Interest expense	22,909					116,111					138,766					319,471
Net interest revenue	271,750					279,096					811,214					842,630
Provision for credit losses	—					12,000					229,092					25,000
Net interest revenue after provision for credit losses	271,750					267,096					582,122					817,630
Other operating revenue:
Brokerage and trading revenue	69,526					43,840					182,327					115,983
Transaction card revenue	23,465					22,015					68,286					64,668
Fiduciary and asset management revenue	39,931					43,621					125,646					132,004
Deposit service charges and fees	24,286					28,837					72,462					85,154
Mortgage banking revenue	51,959					30,180					143,062					82,145
Other revenue	13,698					17,626					37,486					42,825
Total fees and commissions	222,865					186,119					629,269					522,779
Other gains, net	6,265					4,544					2,292					11,000
Gain on derivatives, net	2,354					3,778					42,659					19,595
Gain (loss) on fair value option securities, net	(754		)			4,597					53,180					24,115
Change in fair value of mortgage servicing rights	3,441					(12,593		)			(85,800		)			(62,814		)
Gain (loss) on available for sale securities, net	(12		)			5					5,571					1,110
Total other operating revenue	234,159					186,450					647,171					515,785
Other operating expense:
Personnel	179,860					162,573					512,276					492,143
Business promotion	2,633					8,859					10,783					26,875
Charitable contributions to BOKF Foundation	—					—					3,000					1,000
Professional fees and services	14,074					12,312					39,183					41,453
Net occupancy and equipment	28,111					27,558					84,847					83,959
Insurance	5,848					4,220					15,984					15,513
Data processing and communications	34,751					31,915					100,436					93,099
Printing, postage and supplies	3,482					3,825					11,256					12,817
Net losses and operating expenses of repossessed assets	6,244					1,728					9,541					4,304
Amortization of intangible assets	5,071					5,064					15,355					15,393
Mortgage banking costs	15,803					14,975					41,946					36,426
Other expense	5,388					6,263					20,669					20,604
Total other operating expense	301,265					279,292					865,276					843,586
Net income before taxes	204,644					174,254					364,017					489,829
Federal and state income taxes	50,552					32,396					83,655					99,926
Net income	154,092					141,858					280,362					389,903
Net income (loss) attributable to non-controlling interests	58					(373		)			(444		)			(503		)
Net income attributable to BOK Financial Corporation shareholders	$	154,034				$	142,231				$	280,806				$	390,406
Average shares outstanding:
Basic	69,877,866					70,596,307					69,958,944					70,953,544
Diluted	69,879,290					70,609,924					69,962,053					70,968,845
Net income per share:
Basic	$	2.19				$	2.00				$	3.99				$	5.47
Diluted	$	2.19				$	2.00				$	3.99				$	5.47

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

	Three Months Ended
	Sept. 30, 2020				June 30, 2020				Mar. 31, 2020				Dec. 31, 2019				Sept. 30, 2019
Capital:
Period-end shareholders' equity	$	5,218,787			$	5,096,995			$	5,026,248			$	4,855,795			$	4,829,016
Risk weighted assets	$	31,529,826			$	32,180,602			$	32,973,242			$	31,673,425			$	32,159,139
Risk-based capital ratios:
Common equity tier 1	12.07		%		11.44		%		10.98		%		11.39		%		11.06		%
Tier 1	12.07		%		11.44		%		10.98		%		11.39		%		11.06		%
Total capital	14.05		%		13.43		%		12.65		%		12.94		%		12.56		%
Leverage ratio	8.39		%		7.74		%		8.15		%		8.40		%		8.41		%
Tangible common equity ratio1	9.02		%		8.79		%		8.39		%		8.98		%		8.72		%
Common stock:
Book value per share	$	74.23			$	72.50			$	71.49			$	68.80			$	68.15
Tangible book value per share	57.64				55.83				54.85				52.17				51.60
Market value per share:
High	$	62.86			$	67.62			$	87.40			$	88.28			$	84.35
Low	$	48.41			$	37.80			$	34.57			$	71.85			$	72.96
Cash dividends paid	$	35,799			$	35,769			$	35,949			$	36,011			$	35,472
Dividend payout ratio	23.24		%		55.29		%		57.91		%		32.63		%		24.94		%
Shares outstanding, net	70,305,833				70,306,690				70,308,532				70,579,598				70,858,010
Stock buy-back program:
Shares repurchased	—				—				442,000				280,000				336,713
Amount	$	—			$	—			$	33,380			$	22,844			$	25,937
Average price per share	$	—			$	—			$	75.52			$	81.59			$	77.03
Performance ratios (quarter annualized):
Return on average assets	1.25		%		0.52		%		0.55		%		0.99		%		1.29		%
Return on average equity	11.89		%		5.14		%		5.10		%		9.05		%		11.83		%
Net interest margin	2.81		%		2.83		%		2.80		%		2.88		%		3.01		%
Efficiency ratio	60.41		%		59.57		%		58.62		%		63.65		%		59.31		%
Reconciliation of non-GAAP measures:
1     Tangible common equity ratio:
Total shareholders' equity	$	5,218,787			$	5,096,995			$	5,026,248			$	4,855,795			$	4,829,016
Less: Goodwill and intangible assets, net	1,166,615				1,171,686				1,169,898				1,173,362				1,172,411
Tangible common equity	$	4,052,172			$	3,925,309			$	3,856,350			$	3,682,433			$	3,656,605
Total assets	$	46,067,224			$	45,819,874			$	47,119,162			$	42,172,021			$	43,127,205
Less: Goodwill and intangible assets, net	1,166,615				1,171,686				1,169,898				1,173,362				1,172,411
Tangible assets	$	44,900,609			$	44,648,188			$	45,949,264			$	40,998,659			$	41,954,794
Tangible common equity ratio	9.02		%		8.79		%		8.39		%		8.98		%		8.72		%

	Three Months Ended
	Sept. 30, 2020				June 30, 2020				Mar. 31, 2020				Dec. 31, 2019				Sept. 30, 2019
Pre-provision net revenue:
Net income before taxes	$	204,644			$	80,089			$	79,284			$	141,039			$	174,254
Provision for expected credit losses	—				135,321				93,771				19,000				12,000
Net income (loss) attributable to non-controlling interests	58				(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			$	2,936
Net 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			$	13,814
Mortgage loans funded for sale	$	1,032,472			$	1,184,249			$	548,956			$	855,643			$	877,280
Add: current period-end outstanding commitments	560,493				546,304				657,570				158,460				379,377
Less: prior period end outstanding commitments	546,304				657,570				158,460				379,377				344,087
Total mortgage production volume	$	1,046,661			$	1,072,983			$	1,048,066			$	634,726			$	912,570
Mortgage loan refinances to mortgage loans funded for sale	54		%		71		%		57		%		57		%		56		%
Gain on sale margin	3.67		%		3.65		%		2.06		%		1.44		%		1.51		%
Mortgage servicing revenue	$	13,528			$	14,751			$	15,597			$	16,227			$	16,366
Average outstanding principal balance of mortgage loans serviced for others	17,434,215				19,319,872				20,416,546				20,856,446				21,172,874
Average mortgage servicing revenue rates	0.31		%		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	)		$	3,742
Gain (loss) on fair value option securities, net	(754		)		(14,459		)		68,393				(8,328		)		4,597
Gain (loss) on economic hedge of mortgage servicing rights	1,541				7,356				86,764				(13,042		)		8,339
Gain (loss) on changes in fair value of mortgage servicing rights	3,441				(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 revenue	4,982				6,595				(1,716		)		(3,745		)		(4,254		)
Net interest revenue on fair value option securities2	1,565				2,702				4,268				1,544				1,245
Total 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.

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

	Three Months Ended
	Sept. 30, 2020				June 30, 2020				Mar. 31, 2020				Dec. 31, 2019				Sept. 30, 2019
Interest revenue	$	294,659			$	306,384			$	348,937			$	369,857			$	395,207
Interest expense	22,909				28,280				87,577				99,608				116,111
Net interest revenue	271,750				278,104				261,360				270,249				279,096
Provision for credit losses	—				135,321				93,771				19,000				12,000
Net interest revenue after provision for credit losses	271,750				142,783				167,589				251,249				267,096
Other operating revenue:
Brokerage and trading revenue	69,526				62,022				50,779				43,843				43,840
Transaction card revenue	23,465				22,940				21,881				22,548				22,015
Fiduciary and asset management revenue	39,931				41,257				44,458				45,021				43,621
Deposit service charges and fees	24,286				22,046				26,130				27,331				28,837
Mortgage banking revenue	51,959				53,936				37,167				25,396				30,180
Other revenue	13,698				11,479				12,309				15,283				17,626
Total fees and commissions	222,865				213,680				192,724				179,422				186,119
Other gains (losses), net	6,265				6,768				(10,741		)		(1,649		)		4,544
Gain (loss) on derivatives, net	2,354				21,885				18,420				(4,644		)		3,778
Gain (loss) on fair value option securities, net	(754		)		(14,459		)		68,393				(8,328		)		4,597
Change in fair value of mortgage servicing rights	3,441				(761		)		(88,480		)		9,297				(12,593		)
Gain (loss) on available for sale securities, net	(12		)		5,580				3				4,487				5
Total other operating revenue	234,159				232,693				180,319				178,585				186,450
Other operating expense:
Personnel	179,860				176,235				156,181				168,422				162,573
Business promotion	2,633				1,935				6,215				8,787				8,859
Charitable contributions to BOKF Foundation	—				3,000				—				2,000				—
Professional fees and services	14,074				12,161				12,948				13,408				12,312
Net occupancy and equipment	28,111				30,675				26,061				26,316				27,558
Insurance	5,848				5,156				4,980				5,393				4,220
Data processing and communications	34,751				32,942				32,743				31,884				31,915
Printing, postage and supplies	3,482				3,502				4,272				3,700				3,825
Net losses and operating expenses of repossessed assets	6,244				1,766				1,531				2,403				1,728
Amortization of intangible assets	5,071				5,190				5,094				5,225				5,064
Mortgage banking costs	15,803				15,598				10,545				14,259				14,975
Other expense	5,388				7,227				8,054				6,998				6,263
Total other operating expense	301,265				295,387				268,624				288,795				279,292
Net income before taxes	204,644				80,089				79,284				141,039				174,254
Federal and state income taxes	50,552				15,803				17,300				30,257				32,396
Net income	154,092				64,286				61,984				110,782				141,858
Net income (loss) attributable to non-controlling interests	58				(407		)		(95		)		430				(373		)
Net income attributable to BOK Financial Corporation shareholders	$	154,034			$	64,693			$	62,079			$	110,352			$	142,231
Average shares outstanding:
Basic	69,877,866				69,876,043				70,123,685				70,295,899				70,596,307
Diluted	69,879,290				69,877,467				70,130,166				70,309,644				70,609,924
Net income per share:
Basic	$	2.19			$	0.92			$	0.88			$	1.56			$	2.00
Diluted	$	2.19			$	0.92			$	0.88			$	1.56			$	2.00

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

		Sept. 30, 2020				June 30, 2020				Mar. 31, 2020				Dec. 31, 2019				Sept. 30, 2019
Commercial:
Energy		$	3,717,101			$	3,974,174			$	4,111,676			$	3,973,377			$	4,114,269
Services		3,545,825				3,779,881				3,955,748				3,832,031				4,011,089
Healthcare		3,325,790				3,289,343				3,165,096				3,033,916				3,032,968
General business		2,976,990				3,115,112				3,563,455				3,192,326				3,266,299
Total commercial		13,565,706				14,158,510				14,795,975				14,031,650				14,424,625
Commercial real estate:
Multifamily		1,387,461				1,407,107				1,282,457				1,265,562				1,324,839
Office		1,099,563				973,995				962,004				928,379				1,014,275
Retail		786,211				780,467				774,198				775,521				799,169
Industrial		792,389				723,005				728,026				856,117				873,536
Residential construction and land development		121,258				136,911				138,958				150,879				135,361
Other commercial real estate		506,818				532,659				564,442				457,325				478,877
Total commercial real estate		4,693,700				4,554,144				4,450,085				4,433,783				4,626,057
Paycheck protection program		2,097,325				2,081,428				—				—				—
Loans to individuals:
Residential mortgage		1,849,144				1,813,442				1,844,555				1,886,378				1,925,539
Residential mortgages guaranteed by U.S. government agencies		384,247				322,269				197,889				197,794				191,764
Personal		1,213,178				1,226,097				1,175,466				1,201,382				1,117,382
Total loans to individuals		3,446,569				3,361,808				3,217,910				3,285,554				3,234,685
Total		$	23,803,300			$	24,155,890			$	22,463,970			$	21,750,987			$	22,285,367

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

	Sept. 30, 2020				June 30, 2020				Mar. 31, 2020				Dec. 31, 2019				Sept. 30, 2019
Texas:
Commercial	$	5,545,158			$	5,771,691			$	6,350,690			$	6,174,894			$	6,220,227
Commercial real estate	1,499,630				1,389,547				1,296,266				1,259,117				1,292,116
Paycheck protection program	614,970				612,133				—				—				—
Loans to individuals	792,994				748,474				756,634				727,175				749,361
Total Texas	8,452,752				8,521,845				8,403,590				8,161,186				8,261,704
Oklahoma:
Commercial	4,901,666				5,086,934				3,886,086				3,454,825				3,690,100
Commercial real estate	647,228				636,021				593,473				631,026				679,786
Paycheck protection program	487,247				442,518				—				—				—
Loans to individuals	2,036,452				1,967,665				1,788,518				1,854,864				1,753,698
Total Oklahoma	8,072,593				8,133,138				6,268,077				5,940,715				6,123,584
Colorado:
Commercial	1,501,821				1,600,382				2,181,309				2,169,598				2,247,798
Commercial real estate	890,746				937,742				955,608				927,826				975,066
Paycheck protection program	494,910				488,279				—				—				—
Loans to individuals	257,345				264,872				268,674				276,939				303,605
Total Colorado	3,144,822				3,291,275				3,405,591				3,374,363				3,526,469
Arizona:
Commercial	956,047				1,036,862				1,396,582				1,307,073				1,276,534
Commercial real estate	692,987				689,121				714,161				728,832				771,425
Paycheck protection program	272,114				318,961				—				—				—
Loans to individuals	166,115				177,066				181,821				186,539				170,815
Total Arizona	2,087,263				2,222,010				2,292,564				2,222,444				2,218,774
Kansas/Missouri:
Commercial	414,038				404,860				556,255				527,872				566,969
Commercial real estate	352,241				314,504				310,799				322,541				374,795
Paycheck protection program	80,230				76,724				—				—				—
Loans to individuals	96,358				102,577				116,734				131,069				146,522
Total Kansas/Missouri	942,867				898,665				983,788				981,482				1,088,286
New Mexico:
Commercial	157,322				182,688				327,164				305,320				335,409
Commercial real estate	471,505				455,574				434,150				402,148				374,331
Paycheck protection program	133,244				128,058				—				—				—
Loans to individuals	79,890				83,470				87,110				90,257				92,270
Total New Mexico	841,961				849,790				848,424				797,725				802,010
Arkansas:
Commercial	89,654				75,093				97,889				92,068				87,588
Commercial real estate	139,363				131,635				145,628				162,293				158,538
Paycheck protection program	14,610				14,755				—				—				—
Loans to individuals	17,415				17,684				18,419				18,711				18,414
Total Arkansas	261,042				239,167				261,936				273,072				264,540
TOTAL BOK FINANCIAL	$	23,803,300			$	24,155,890			$	22,463,970			$	21,750,987			$	22,285,367

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)

	Sept. 30, 2020				June 30, 2020				Mar. 31, 2020				Dec. 31, 2019				Sept. 30, 2019
Oklahoma:
Demand	$	4,493,691			$	4,378,559			$	3,669,558			$	3,257,337			$	3,515,312
Interest-bearing:
Transaction	12,586,401				11,438,489				9,955,697				8,574,912				7,447,799
Savings	401,062				387,557				329,631				306,194				308,103
Time	1,081,176				1,330,619				1,137,802				1,125,446				1,198,170
Total interest-bearing	14,068,639				13,156,665				11,423,130				10,006,552				8,954,072
Total Oklahoma	18,562,330				17,535,224				15,092,688				13,263,889				12,469,384
Texas:
Demand	3,152,393				3,070,955				2,767,399				2,757,376				2,867,915
Interest-bearing:
Transaction	3,482,603				3,358,090				2,874,362				2,911,731				2,589,063
Savings	136,787				128,892				115,039				102,456				100,597
Time	438,337				476,867				505,565				495,343				464,264
Total interest-bearing	4,057,727				3,963,849				3,494,966				3,509,530				3,153,924
Total Texas	7,210,120				7,034,804				6,262,365				6,266,906				6,021,839
Colorado:
Demand	2,057,603				2,096,075				1,579,764				1,729,674				1,694,044
Interest-bearing:
Transaction	1,861,763				1,816,604				1,759,384				1,769,037				1,910,874
Savings	68,230				67,477				58,000				53,307				60,107
Time	226,780				254,845				279,105				283,517				273,622
Total interest-bearing	2,156,773				2,138,926				2,096,489				2,105,861				2,244,603
Total Colorado	4,214,376				4,235,001				3,676,253				3,835,535				3,938,647
New Mexico:
Demand	964,908				965,877				750,052				623,722				645,698
Interest-bearing:
Transaction	713,418				752,565				563,891				558,493				539,260
Savings	85,463				80,242				67,553				63,999				62,863
Time	200,525				222,370				235,778				238,140				236,135
Total interest-bearing	999,406				1,055,177				867,222				860,632				838,258
Total New Mexico	1,964,314				2,021,054				1,617,274				1,484,354				1,483,956
Arizona:
Demand	928,671				985,757				665,396				681,268				705,895
Interest-bearing:
Transaction	771,319				780,500				729,603				684,929				600,103
Savings	11,498				15,669				8,832				10,314				12,487
Time	36,929				42,318				47,081				49,676				44,347
Total interest-bearing	819,746				838,487				785,516				744,919				656,937
Total Arizona	1,748,417				1,824,244				1,450,912				1,426,187				1,362,832

	Sept. 30, 2020				June 30, 2020				Mar. 31, 2020				Dec. 31, 2019				Sept. 30, 2019
Kansas/Missouri:
Demand	405,360				427,795				318,985				384,533				376,020
Interest-bearing:
Transaction	616,797				526,635				537,552				784,574				284,940
Savings	15,520				15,033				12,888				12,169				11,689
Time	16,430				17,746				19,137				17,877				19,126
Total interest-bearing	648,747				559,414				569,577				814,620				315,755
Total Kansas/Missouri	1,054,107				987,209				888,562				1,199,153				691,775
Arkansas:
Demand	44,712				67,147				70,428				27,381				39,513
Interest-bearing:
Transaction	164,439				177,535				175,803				108,076				149,506
Savings	2,389				2,101				1,862				1,837				1,747
Time	7,796				7,995				8,005				7,850				7,877
Total interest-bearing	174,624				187,631				185,670				117,763				159,130
Total Arkansas	219,336				254,778				256,098				145,144				198,643
TOTAL BOK FINANCIAL	$	34,973,000			$	33,892,314			$	29,244,152			$	27,621,168			$	26,167,076

NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION

	Three Months Ended
	Sept. 30, 2020			June 30, 2020			Mar. 31, 2020			Dec. 31, 2019			Sept. 30, 2019
TAX-EQUIVALENT ASSETS YIELDS
Interest-bearing cash and cash equivalents	0.12	%		0.07	%		1.33	%		1.62	%		2.42	%
Trading securities	1.92	%		2.46	%		2.89	%		3.19	%		3.49	%
Investment securities, net of allowance	4.85	%		4.77	%		4.73	%		4.69	%		4.46	%
Available for sale securities	2.11	%		2.29	%		2.48	%		2.52	%		2.60	%
Fair value option securities	1.92	%		2.00	%		2.67	%		2.62	%		2.79	%
Restricted equity securities	2.53	%		2.75	%		5.49	%		5.37	%		6.34	%
Residential mortgage loans held for sale	3.01	%		3.10	%		3.50	%		3.55	%		3.73	%
Loans	3.60	%		3.63	%		4.50	%		4.75	%		5.12	%
Allowance for loan losses
Loans, net of allowance	3.67	%		3.69	%		4.55	%		4.80	%		5.17	%
Total tax-equivalent yield on earning assets	3.04	%		3.12	%		3.73	%		3.93	%		4.25	%
COST OF INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest-bearing transaction	0.17	%		0.21	%		0.89	%		1.00	%		1.08	%
Savings	0.05	%		0.05	%		0.09	%		0.11	%		0.14	%
Time	1.13	%		1.36	%		1.83	%		1.94	%		1.94	%
Total interest-bearing deposits	0.26	%		0.34	%		0.98	%		1.09	%		1.17	%
Funds purchased and repurchase agreements	0.17	%		0.14	%		1.14	%		1.56	%		2.01	%
Other borrowings	0.43	%		0.56	%		1.66	%		2.01	%		2.42	%
Subordinated debt	4.89	%		5.16	%		5.30	%		5.40	%		5.48	%
Total cost of interest-bearing liabilities	0.31	%		0.37	%		1.19	%		1.40	%		1.68	%
Tax-equivalent net interest revenue spread	2.73	%		2.75	%		2.54	%		2.53	%		2.57	%
Effect of noninterest-bearing funding sources and other	0.08	%		0.08	%		0.26	%		0.35	%		0.44	%
Tax-equivalent net interest margin	2.81	%		2.83	%		2.80	%		2.88	%		3.01	%

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

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

	Three Months Ended
	Sept. 30, 2020					June 30, 2020					Mar. 31, 2020					Dec. 31, 2019					Sept. 30, 2019
Nonperforming assets:
Nonaccruing loans:
Commercial:
Energy	$	126,816				$	162,989				$	96,448				$	91,722				$	88,894
Healthcare	3,645					3,645					4,070					4,480					5,978
Services	25,817					21,032					8,425					7,483					6,119
General business	13,675					14,333					9,681					11,731					10,715
Total commercial	169,953					201,999					118,624					115,416					111,706
Commercial real estate	12,952					13,956					8,545					27,626					23,185
Loans to individuals:
Permanent mortgage	31,599					33,098					30,721					31,522					30,972
Permanent mortgage guaranteed by U.S. government agencies	6,397					6,110					5,005					6,100					6,332
Personal	252					233					277					287					271
Total loans to individuals	38,248					39,441					36,003					37,909					37,575
Total nonaccruing loans	$	221,153				$	255,396				$	163,172				$	180,951				$	172,466
Accruing renegotiated loans guaranteed by U.S. government agencies	142,770					114,571					91,757					92,452					92,718
Real estate and other repossessed assets	52,847					35,330					36,744					20,359					21,026
Total nonperforming assets	$	416,770				$	405,297				$	291,673				$	293,762				$	286,210
Total nonperforming assets excluding those guaranteed by U.S. government agencies	267,603					284,616					194,911					195,210					187,160
Accruing loans 90 days past due1	7,684					10,992					3,706					7,680					1,541
Gross charge-offs	$	26,661				$	15,570				$	18,917				$	14,268				$	11,707
Recoveries	(4,232		)			(1,491		)			(1,696		)			(1,816		)			(1,066		)
Net charge-offs	$	22,429				$	14,079				$	17,221				$	12,452				$	10,641
Provision for loan losses	$	6,609				$	134,365				$	95,964				$	18,779				$	12,539
Provision for credit losses from off-balance sheet unfunded loan commitments	(4,950		)			4,405					3,377					221					(539		)
Provision for expected credit losses from mortgage banking acitivities2	(770		)			(3,575		)			(6,020		)			—					—
Provision for credit losses related to held-to maturity (investment) securities portfolio2	(889		)			126					450					—					—
Total provision for credit losses	$	—				$	135,321				$	93,771				$	19,000				$	12,000

	Three Months Ended
	Sept. 30, 2020			June 30, 2020			Mar. 31, 2020			Dec. 31, 2019			Sept. 30, 2019
Allowance for loan losses to period end loans	1.76	%		1.80	%		1.40	%		0.97	%		0.92	%
Allowance for loan losses to period end loans excluding PPP loans3	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 loans	1.88	%		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 loans3	2.06	%		2.12	%		1.53	%		0.98	%		0.92	%
Nonperforming assets to period end loans and repossessed assets	1.75	%		1.68	%		1.30	%		1.35	%		1.28	%
Net charge-offs (annualized) to average loans	0.37	%		0.23	%		0.31	%		0.22	%		0.19	%
Net charge-offs (annualized) to average loans excluding PPP loans3	0.41	%		0.25	%		0.31	%		0.22	%		0.19	%
Allowance for loan losses to nonaccruing loans1	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 loans1	208.49	%		187.94	%		217.38	%		121.44	%		123.87	%

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		Sept. 30, 2020				June 30, 2020				Sept. 30, 2019				3Q20 vs 2Q20			3Q20 vs 3Q19
Net interest revenue		$	149,946			$	145,109			$	178,960			3.3	%		(16.2	)%
Fees and commissions revenue		50,085				46,515				46,159				7.7	%		8.5	%
Other operating expense		66,846				62,933				69,127				6.2	%		(3.3	)%
Corporate expense allocations		5,172				5,437				11,772				(4.9	)%		(56.1	)%
Net income		75,097				80,992				100,986				(7.3	)%		(25.6	)%
Average assets		28,000,183				27,575,652				23,973,925				1.5	%		16.8	%
Average loans		18,677,401				19,262,827				19,226,347				(3.0	)%		(2.9	)%
Average deposits		15,375,450				14,599,225				10,833,057				5.3	%		41.9	%
Consumer Banking
Net interest revenue		$	33,130			$	39,270			$	48,462			(15.6	)%		(31.6	)%
Fees and commissions revenue		67,974				67,192				51,461				1.2	%		32.1	%
Other operating expense		59,839				58,936				59,699				1.5	%		0.2	%
Corporate expense allocations		10,812				10,812				11,776				—	%		(8.2	)%
Net income		26,256				31,900				16,640				(17.7	)%		57.8	%
Average assets		9,898,119				9,920,005				9,827,130				(0.2	)%		0.7	%
Average loans		1,825,865				1,679,164				1,773,831				8.7	%		2.9	%
Average deposits		7,940,973				7,587,246				6,983,018				4.7	%		13.7	%
Wealth Management
Net interest revenue		$	22,985			$	26,880			$	23,066			(14.5	)%		(0.4	)%
Fees and commissions revenue		111,655				106,757				89,422				4.6	%		24.9	%
Other operating expense		82,868				80,567				71,619				2.9	%		15.7	%
Corporate expense allocations		9,397				8,204				9,416				14.5	%		(0.2	)%
Net income		31,212				33,394				23,206				(6.5	)%		34.5	%
Average assets		16,206,522				15,721,452				10,391,225				3.1	%		56.0	%
Average loans		1,777,008				1,709,363				1,671,102				4.0	%		6.3	%
Average deposits		9,090,116				8,385,681				6,590,332				8.4	%		37.9	%
Fiduciary assets		52,935,646				50,560,584				49,259,697				4.7	%		7.5	%
Assets under management or administration		82,419,932				79,452,502				80,796,949				3.7	%		2.0	%