BOK Financial Corporation Reports Quarterly Earnings of $157 million or $2.32 Per Share in the Third Quarter

TULSA, Okla., Oct. 26, 2022 (GLOBE NEWSWIRE) -- BOK Financial Corporation (NASD: BOKF) - 

CEO Commentary

Stacy Kymes, president and chief executive officer, stated, “The third quarter was another very strong quarter as we sustain our momentum around top-line revenue growth. I am proud to see the hard work of our team show up in consistent loan growth, net interest margin improvement and non-interest revenue growth while our efficiency ratio has moved well below 60 percent. Although our asset quality trends remain unsustainably good, we added to our loan loss reserves this quarter in recognition of the loan growth and less certain economic forecast. While the longer-term economic outlook is less certain, we remain optimistic about our ability to grow earnings from current levels in the near-term."

Third Quarter 2022 Financial Highlights
(Unless indicated otherwise, all comparisons are to the prior quarter)

• Net income was $156.5 million or $2.32 per diluted share for the third quarter of 2022 and $132.8 million or $1.96 per diluted share for the second quarter of 2022.
• Net interest revenue totaled $316.3 million, an increase of $42.3 million. Net interest margin was 3.24 percent compared to 2.76 percent. In response to rising inflation, the Federal Reserve increased the federal funds rate another 150 basis points in the third quarter to a total of 300 basis points since the beginning of 2022. The resulting impact on market interest rates has increased net interest margin.
• Fees and commissions revenue increased $19.3 million to $192.6 million. Brokerage and trading revenue increased $17.0 million, largely due to higher margins on trading activity driven by favorable market conditions and increased market volatility. Additionally, the third quarter was a record quarter for investment banking revenue.
• The net cost of the changes in fair value of mortgage servicing rights and related economic hedges was $4.8 million for the third quarter of 2022 compared to a net benefit of $1.9 million for the second quarter of 2022, due to increased market volatility in the third quarter.
• Operating expense increased $21.1 million to $294.8 million. Personnel expense increased $15.4 million, largely driven by higher incentive compensation expense. Non-personnel expense increased $5.7 million, primarily related to project-related professional fees and seasonal occupancy costs.
• Period-end loans increased $499 million to $21.8 billion at September 30, 2022. Of this increase, commercial real estate loans grew $368 million, while loans to individuals increased $125 million. In addition, unfunded loan commitments grew by $1.1 billion. Average outstanding loan balances were $21.6 billion, a $542 million increase.
• A $15.0 million provision for expected credit losses was recorded in the third quarter of 2022, primarily due to loan growth and increased uncertainty in the economic outlook, partially offset by improving credit quality metrics. No provision for expected credit losses was necessary for the second quarter of 2022. The combined allowance for credit losses totaled $298 million or 1.37 percent of outstanding loans at September 30, 2022. The combined allowance for credit losses was $283 million or 1.33 percent of outstanding loans at June 30, 2022.
• Average deposits decreased $1.5 billion to $37.0 billion and period-end deposits decreased $2.2 billion to $36.4 billion, consistent with industry trends as customers redeploy resources following the savings trend during the height of the pandemic. Average interest-bearing deposits decreased $1.4 billion and average demand deposits were reduced by $97 million.
• The company's common equity Tier 1 capital ratio was 11.80 percent at September 30, 2022. In addition, the company's Tier 1 capital ratio was 11.82 percent, total capital ratio was 12.81 percent, and leverage ratio was 9.76 percent at September 30, 2022. At June 30, 2022, the company's common equity Tier 1 capital ratio was 11.61 percent, Tier 1 capital ratio was 11.63 percent, total capital ratio was 12.59 percent, and leverage ratio was 9.12 percent.
• The company repurchased 548,034 shares of common stock at an average price of $91.20 a share in the third quarter of 2022.

Third Quarter 2022 Segment Highlights

• Commercial Banking contributed $132.9 million to net income in the third quarter of 2022, an increase of $28.1 million. Combined net interest revenue and fee revenue increased $38.6 million due to loan growth and increased spreads on deposits sold to the Funds Management unit. Net loans recovered were $976 thousand less than the prior quarter. Personnel expense increased $2.8 million, driven by incentive compensation costs associated with growth in loans. Linked quarter performance also improved due to a $5.8 million write-down of a repossessed equity interest in a midstream energy entity in the prior quarter. Average loans increased $568 million or 3 percent to $17.9 billion. Average deposits decreased $967 million or 5 percent to $18.0 billion.
• Consumer Banking contributed $3.0 million to net income in the third quarter of 2022, an increase of $1.7 million over the prior quarter. The net cost of the changes in fair value of mortgage servicing rights and related economic hedges was $4.8 million for the third quarter of 2022 compared to a net benefit of $1.9 million for the second quarter of 2022. Combined net interest revenue and fee revenue increased $10.3 million, primarily due to an increase in the spread on deposits sold to our Funds Management unit. Fees and commissions revenue and operating expense were consistent with the prior quarter. Both average loans and average deposits were also relatively consistent with the previous quarter.

• Wealth Management contributed $41.8 million to net income in the third quarter of 2022, an increase of $14.5 million over the second quarter of 2022. Our diverse set of investment-focused businesses, which include trading in fixed income securities and other financial instruments and providing wealth management services to institutional and private wealth clients, produced total net interest and fee revenues of $146.7 million, an increase of $22.2 million. Total revenue from trading activities increased $5.0 million, primarily due to higher margins on residential mortgage-backed securities trading activity. Investment banking revenue grew $3.2 million due to increased underwriting fees and financial advisory fees. Other revenue increased $8.3 million, largely due to higher derivative margin use fees. Operating expense increased $2.8 million, mainly due to increased volume-driven incentive compensation costs. Average loans were consistent with the prior quarter. Average deposits decreased $484 million or 6 percent to $8.0 billion. Assets under management were $95.4 billion, a decrease of $580 million.

Net Interest Revenue

Net interest revenue was $316.3 million for the third quarter of 2022 compared to $274.0 million for the second quarter of 2022. Net interest margin was 3.24 percent compared to 2.76 percent. In response to rising inflation, the Federal Reserve increased the federal funds rate 150 basis points in the third quarter bringing the year-to-date total rate increases to 300 basis points. The resulting impact on market interest rates has increased net interest margin as our earning assets, led by our significant percentage of variable-rate commercial loans, reprice at a higher rate and faster pace than our interest-bearing liabilities.

Average earning assets decreased $534 million. Average trading securities decreased $989 million in response to lower origination volumes in the residential mortgage industry driven by increases in interest rates. Average loan balances increased $542 million, largely due to growth in commercial real estate loans and loans to individuals. Average available for sale securities decreased $2.0 billion while investment securities increased $2.0 billion. Late in the second quarter, $2.4 billion in U.S. government agency mortgage-backed securities were transferred from available for sale to investment securities to limit the effect of future rate increases on the tangible common equity ratio. Average interest bearing cash and cash equivalents decreased $95 million. Average interest-bearing deposits decreased $2.2 billion as customers redeploy resources following the height of the pandemic. Average funds purchased and repurchase agreements decreased $423 million while other borrowings increased $228 million.

The yield on average earning assets was 3.71 percent, up 75 basis points. The loan portfolio yield increased 97 basis points to 4.89 percent while the yield on trading securities was up 72 basis points to 2.72 percent. The yield on the available for sale securities portfolio increased 37 basis points to 2.21 percent. The yield on investment securities decreased 93 basis points due to the transfer of securities from the available for sale portfolio to the investment portfolio. The yield on interest-bearing cash and cash equivalents increased 104 basis points.

Funding costs were 0.76 percent, a 45 basis point increase. The cost of interest-bearing deposits increased 39 basis points to 0.63 percent. The cost of other borrowings was up 132 basis points to 2.33 percent while the cost of funds purchased and repurchase agreements increased 19 basis points to 0.72 percent. The benefit to net interest margin from assets funded by non-interest liabilities was 29 basis points, an increase of 18 basis points.

Operating Revenue

Fees and commissions revenue totaled $192.6 million for the third quarter of 2022, up $19.3 million, led by a $17.0 million increase in brokerage and trading revenue. Trading revenue increased $14.5 million, largely due to higher margins on residential mortgage-backed securities trading activity driven by favorable market conditions and increased market volatility. Total investment banking revenue increased $2.4 million, primarily due to growth in the size and number of municipal bond transactions.

Mortgage banking revenue remained consistent with the prior quarter with growth in mortgage servicing revenue offsetting a reduction in mortgage production revenue. Two acquisitions of mortgage servicing rights at the end of the second quarter led to an increase in mortgage servicing revenue of $1.8 million. Mortgage production revenue decreased $1.9 million as rising mortgage interest rates and inventory constraints continue to place pressure on mortgage loan originations. Mortgage production volume decreased $76.0 million to $230.0 million. Refinance activity as percentage of total production declined to 10 percent, the lowest in recent history.

All other fee revenue was relatively consistent with the prior quarter, increasing $2.4 million in total.

Other gains and losses, net, increased $8.6 million, primarily driven by a write-down of a repossessed equity interest in a midstream entity in the prior quarter combined with a change in the value of deferred compensation investments, which are held to offset the cost of various employee benefit programs.

Operating Expense

Total operating expense was $294.8 million for the third quarter of 2022, an increase of $21.1 million compared to the second quarter of 2022.

Personnel expense increased $15.4 million. Deferred compensation expense increased $6.0 million and share-based incentive compensation expense increased $4.3 million. These expenses are influenced by market valuations and forecasted annual results compared to a peer group, both of which can be volatile. Strong sales results in our Commercial and Wealth segments led to a $4.9 million increase in cash-based incentive compensation.

Non-personnel expense was $124.4 million, up $5.7 million. Higher seasonal operating costs on leases led to a $1.8 million increase in net occupancy and equipment expense while project-related professional fees led to a $1.6 million increase in professional fees and services.

Loans, Deposits and Capital

Loans

Outstanding loans were $21.8 billion at September 30, 2022, growing $499 million over June 30, 2022, due to growth in commercial real estate loans and loans to individuals. Unfunded loan commitments also were up $1.1 billion over the second quarter.

Outstanding commercial loan balances were largely unchanged compared to the prior quarter. Growth in healthcare and general business loans were offset by a decrease in services and energy loan balances.

Healthcare sector loan balances increased $130 million, totaling $3.8 billion or 18 percent of total loans. Our healthcare sector loans primarily consist of $3.1 billion of senior housing and care facilities, including independent living, assisted living and skilled nursing. Generally, we loan to borrowers with a portfolio of multiple facilities, which serves to help diversify risks specific to a single facility.

General business loans increased $61 million to $3.1 billion or 14 percent of total loans. General business loans include $1.8 billion of wholesale/retail loans and $1.3 billion of loans from other commercial industries.

Services sector loan balances decreased $141 million to $3.3 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, foundations and not-for-profit organizations, educational services and specialty trade contractors.

Energy loan balances decreased $21 million to $3.4 billion or 15 percent of total loans. The majority of this portfolio is first lien, senior secured, reserve-based lending to oil and gas producers, which we believe is the lowest risk form of energy lending. Approximately 72 percent of committed production loans are secured by properties primarily producing oil. The remaining 28 percent is secured by properties primarily producing natural gas. Unfunded energy loan commitments were $3.5 billion at September 30, 2022, an increase of $107 million over June 30, 2022.

Commercial real estate loan balances grew $368 million and represent 21 percent of total loans. Loans secured by multifamily residential properties increased $248 million to 1.1 billion. Loans secured by industrial facilities increased $150 million to $1.1 billion. This growth was partially offset by a $20 million decrease in construction and land development loans and a $14 million decrease in loans secured by office buildings.

PPP loan balances decreased $23 million to $20 million, or less than 1 percent of the total loans balance.

Loans to individuals increased $125 million and represent 17 percent of total loans. Total residential mortgage loans increased $36 million while personal loans increased $90 million.

Deposits

Period-end deposits totaled $36.4 billion at September 30, 2022, a $2.2 billion decrease, consistent with industry trends as customers redeploy cash resources following the savings trend during the pandemic. Interest-bearing transaction account balances decreased $1.5 billion while demand deposits decreased $735 million. Period-end Commercial Banking deposits decreased $1.8 billion, Wealth Management deposits decreased $237 million, and Consumer Banking deposits were largely unchanged. Average deposits were $37.0 billion at September 30, 2022, a $1.5 billion decrease. Average interest-bearing transaction account balances decreased $1.5 billion and average demand deposit account balances decreased $97 million.

Capital

The company's common equity Tier 1 capital ratio was 11.80 percent at September 30, 2022. In addition, the company's Tier 1 capital ratio was 11.82 percent, total capital ratio was 12.81 percent, and leverage ratio was 9.76 percent at September 30, 2022. At the beginning of 2020, we elected to delay the regulatory capital impact of the transition of the allowance for credit losses from the incurred loss methodology to CECL for two years, followed by a three-year transition period. This election added 9 basis points to the company's common equity tier 1 capital ratio at September 30, 2022. At June 30, 2022, the company's common equity Tier 1 capital ratio was 11.61 percent, Tier 1 capital ratio was 11.63 percent, total capital ratio was 12.59 percent, and leverage ratio was 9.12 percent.

The company's tangible common equity ratio, a non-GAAP measure, was 7.96 percent at September 30, 2022 and 8.16 percent at June 30, 2022. 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 repurchased 548,034 shares of common stock at an average price of $91.20 a share in the third quarter of 2022. We view share buybacks opportunistically, but within the context of maintaining our strong capital position.

Credit Quality

Expected credit losses on assets carried at amortized cost are recognized over their projected lives based on models that measure the probability of default and loss given default over a 12-month reasonable and supportable forecast period. Our models incorporate base case, downside and upside macroeconomic variables such as real gross domestic product ("GDP") growth, civilian unemployment rates and West Texas Intermediate ("WTI") oil prices on a probability weighted basis.

A $15.0 million provision for credit losses was necessary for the third quarter of 2022, primarily related to strong loan growth in loans and unfunded commitments during the quarter. The level of uncertainty in the economic outlook of our reasonable and supportable forecast continued to increase, offset by the impact of a sustained trend of improving credit quality metrics.

Our base case reasonable and supportable forecast assumes inflation peaks in the third quarter of 2022 and begins to slowly normalize thereafter. We expect the Russian-Ukraine conflict remains isolated and conditions improve in the fourth quarter of 2022. GDP is projected to grow by 1.4 percent over the next twelve months as labor force participants will continue to re-enter the job market to help meet record job openings. Inflation pressures cause modest declines in real household income compared to pre-pandemic levels, resulting in below-trend GDP growth. Our forecasted civilian unemployment rate is 3.9 percent for the fourth quarter of 2022, increasing to 4.1 percent by the third quarter of 2023. Our base case also assumes the Federal Reserve increases federal funds rates resulting in a target range of 4.00 percent to 4.25 percent by December 2022. No additional rate increases in 2023 are anticipated. WTI oil prices are projected to generally follow the NYMEX forward curve that existed at the end of September 2022, averaging $81.86 per barrel over the next twelve months.

The probability weighting of our base case reasonable and supportable forecast decreased to 50 percent in the third quarter of 2022 compared to 55 percent in the second quarter of 2022 as the level of uncertainty in economic forecasts continued to increase. Our downside case, probability weighted at 40 percent, assumes the Russia-Ukraine conflict persists through the third quarter of 2023, but does remain isolated. Higher levels of inflation force the Federal Reserve to adopt a more aggressive monetary policy to combat the inflationary environment. This results in a federal funds target range of 4.75 percent to 5.00 percent by September 2023. The United States economy is pushed into a recession, with a contraction in economic activity and a sharp increase in the unemployment rate from 4.5 percent in the fourth quarter of 2022 to 6.4 percent in the third quarter of 2023. In this scenario, real GDP is expected to contract 1.3 percent over the next four quarters. WTI oil prices are projected to average $72.58 per barrel over the next twelve months, peaking at $92.87 in the fourth quarter of 2022 and falling 39 percent over the following three quarters.

Nonperforming assets totaled $336 million or 1.54 percent of outstanding loans and repossessed assets at September 30, 2022, compared to $333 million or 1.56 percent at June 30, 2022. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $144 million or 0.67 percent of outstanding loans and repossessed assets at September 30, 2022, compared to $118 million or 0.56 percent at June 30, 2022.

Nonaccruing loans were $131 million or 0.60 percent of outstanding loans at September 30, 2022. Nonaccruing commercial loans totaled $76 million or 0.56 percent of outstanding commercial loans. Nonaccruing commercial real estate loans totaled $8.0 million or 0.18 percent of outstanding commercial real estate loans. Nonaccruing loans to individuals totaled $47 million or 1.28 percent of outstanding loans to individuals.

Nonaccruing loans increased $17 million over June 30, 2022, primarily related to nonaccruing healthcare and services loans, partially offset by a decrease in nonaccruing energy loans. New nonaccruing loans identified in the third quarter totaled $54 million, offset by $24 million in payments received, $8.2 million in foreclosures and $1.8 million in gross charge-offs.

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 $95 million at September 30, 2022, down from $131 million at June 30. Potential problem healthcare loans decreased $27 million and potential problem services loans decreased $10 million.

At September 30, 2022, the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $298 million or 1.37 percent of outstanding loans and 262 percent of nonaccruing loans. The allowance for loan losses totaled $242 million or 1.11 percent of outstanding loans and 212 percent of nonaccruing loans. At June 30, 2022, the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $283 million or 1.33 percent of outstanding loans and 295 percent of nonaccruing loans. The allowance for loan losses was $241 million or 1.13 percent of outstanding loans and 251 percent of nonaccruing loans. Allowance percentages referenced above omit residential mortgage loans guaranteed by U.S. government agencies.

Gross charge-offs were $1.8 million for the third quarter compared to $1.4 million for the second quarter of 2022. Recoveries totaled $1.3 million for the third quarter of 2022 and $2.2 million for the prior quarter. Net charge-offs were $457 thousand or 0.01 percent of average loans on an annualized basis in the third quarter compared to net recoveries of $799 thousand or (0.02) percent of average loans on an annualized basis in the second quarter. Net charge-offs were 0.02 percent of average loans over the last four quarters.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $10.0 billion at September 30, 2022, a $112 million decrease compared to June 30, 2022. At September 30, 2022, the available for sale securities portfolio consisted primarily of $4.9 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $4.0 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. At September 30, 2022, the available for sale securities portfolio had a net unrealized loss of $936 million compared to $523 million at June 30, 2022.

We hold an inventory of trading securities in support of sales to a variety of customers. At September 30, 2022, the trading securities portfolio totaled $2.2 billion compared to $2.9 billion at June 30, 2022.

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 $4.0 million to $34 million at September 30, 2022.

Derivative contracts are carried at fair value. At September 30, 2022, the net fair values of derivative contracts, before consideration of cash margin, reported as assets under our customer derivative programs totaled $1.5 billion compared to $2.0 billion at June 30, 2022. The aggregate net fair value of derivative contracts, before consideration of cash margin, held under these programs reported as liabilities totaled $1.5 billion at September 30, 2022 and $2.0 billion at June 30, 2022.

The net cost of the changes in the fair value of mortgage servicing rights and related economic hedges was $4.8 million during the third quarter of 2022, including a $16.6 million increase in the fair value of mortgage servicing rights, $21.4 million decrease in the fair value of securities and derivative contracts held as an economic hedge, and $29 thousand of related net interest revenue.

Conference Call and Webcast

The company will hold a conference call at 9 a.m. Central time on Wednesday, October 26, 2022 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 1-877-407-4018 and referencing conference ID # 13733709.

About BOK Financial Corporation

BOK Financial Corporation is a $44 billion regional financial services company headquartered in Tulsa, Oklahoma with $95 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's holdings include TransFund, Cavanal Hill Investment Management, Inc. 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, Wisconsin 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, 2022 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)

	Sep. 30, 2022				June 30, 2022
ASSETS
Cash and due from banks	$	804,110			$	1,313,563
Interest-bearing cash and cash equivalents		804,799				723,787
Trading securities		2,194,618				2,859,444
Investment securities, net of allowance		2,572,360				2,637,345
Available for sale securities		10,040,894				10,152,663
Fair value option securities		33,966				37,927
Restricted equity securities		100,356				95,130
Residential mortgage loans held for sale		148,121				182,726
Loans:
Commercial		13,607,686				13,578,697
Commercial real estate		4,473,911				4,106,148
Paycheck protection program		20,233				43,140
Loans to individuals		3,688,627				3,563,163
Total loans		21,790,457				21,291,148
Allowance for loan losses		(241,768	)			(241,114	)
Loans, net of allowance		21,548,689				21,050,034
Premises and equipment, net		569,379				573,605
Receivables		200,343				176,672
Goodwill		1,044,749				1,044,749
Intangible assets, net		79,833				83,744
Mortgage servicing rights		283,806				270,312
Real estate and other repossessed assets, net		29,676				22,221
Derivative contracts, net		1,693,742				1,992,977
Cash surrender value of bank-owned life insurance		407,722				409,937
Receivable on unsettled securities sales		49,089				60,168
Other assets		1,039,194				1,690,068
TOTAL ASSETS	$	43,645,446			$	45,377,072
LIABILITIES AND EQUITY
Deposits:
Demand	$	14,985,115			$	15,720,296
Interest-bearing transaction		19,000,023				20,544,199
Savings		971,634				984,824
Time		1,459,143				1,369,599
Total deposits		36,415,915				38,618,918
Funds purchased and repurchase agreements		626,952				677,030
Other borrowings		234,933				35,505
Subordinated debentures		131,168				131,223
Accrued interest, taxes and expense		212,342				211,419
Due on unsettled securities purchases		205,388				297,352
Derivative contracts, net		821,275				214,576
Other liabilities		483,165				449,507
TOTAL LIABILITIES		39,131,138				40,635,530
Shareholders' equity:
Capital, surplus and retained earnings		5,414,879				5,339,967
Accumulated other comprehensive loss		(904,945	)			(602,628	)
TOTAL SHAREHOLDERS' EQUITY		4,509,934				4,737,339
Non-controlling interests		4,374				4,203
TOTAL EQUITY		4,514,308				4,741,542
TOTAL LIABILITIES AND EQUITY	$	43,645,446			$	45,377,072

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

	Three Months Ended
	Sep. 30, 2022				June 30, 2022				Mar. 31, 2022				Dec. 31, 2021				Sep. 30, 2021
ASSETS
Interest-bearing cash and cash equivalents	$	748,263			$	843,619			$	1,050,409			$	1,208,552			$	682,788
Trading securities		3,178,068				4,166,954				8,537,390				9,260,778				7,617,236
Investment securities, net of allowance		2,593,989				610,983				195,198				213,188				218,117
Available for sale securities		10,306,257				12,258,072				13,092,422				13,247,607				13,446,095
Fair value option securities		36,846				54,832				75,539				46,458				56,307
Restricted equity securities		173,656				167,732				164,484				137,874				245,485
Residential mortgage loans held for sale		132,685				148,183				179,697				163,433				167,620
Loans:
Commercial		13,481,961				13,382,176				12,677,706				12,401,935				12,231,230
Commercial real estate		4,434,650				4,061,129				4,059,148				3,838,336				4,218,190
Paycheck protection program		26,364				90,312				210,110				404,261				792,728
Loans to individuals		3,656,257				3,524,097				3,516,698				3,598,121				3,606,460
Total loans		21,599,232				21,057,714				20,463,662				20,242,653				20,848,608
Allowance for loan losses		(241,136	)			(246,064	)			(254,191	)			(271,794	)			(306,125	)
Loans, net of allowance		21,358,096				20,811,650				20,209,471				19,970,859				20,542,483
Total earning assets		38,527,860				39,062,025				43,504,610				44,248,749				42,976,131
Cash and due from banks		821,801				822,599				790,440				783,670				766,688
Derivative contracts, net		2,019,905				3,051,429				2,126,282				1,441,869				1,501,736
Cash surrender value of bank-owned life insurance		410,667				408,489				406,379				404,149				401,926
Receivable on unsettled securities sales		219,113				457,165				375,616				585,901				632,539
Other assets		3,119,856				3,486,691				3,357,747				3,139,718				3,220,129
TOTAL ASSETS	$	45,119,202			$	47,288,398			$	50,561,074			$	50,604,056			$	49,499,149
LIABILITIES AND EQUITY
Deposits:
Demand	$	15,105,305			$	15,202,597			$	15,062,282			$	14,818,841			$	13,670,656
Interest-bearing transaction		19,556,806				21,037,294				22,763,479				22,326,401				21,435,736
Savings		978,596				981,493				947,407				909,131				888,011
Time		1,409,069				1,373,036				1,589,039				1,747,715				1,839,983
Total deposits		37,049,776				38,594,420				40,362,207				39,802,088				37,834,386
Funds purchased and repurchase agreements		800,759				1,224,134				2,004,466				2,893,128				1,448,800
Other borrowings		1,528,887				1,301,358				1,148,440				880,837				2,546,083
Subordinated debentures		131,199				131,219				131,228				131,224				214,654
Derivative contracts, net		105,221				535,574				682,435				320,757				434,334
Due on unsettled securities purchases		331,428				380,332				519,097				629,642				957,538
Other liabilities		396,510				389,031				565,350				578,091				619,913
TOTAL LIABILITIES		40,343,780				42,556,068				45,413,223				45,235,767				44,055,708
Total equity		4,775,422				4,732,330				5,147,851				5,368,289				5,443,441
TOTAL LIABILITIES AND EQUITY	$	45,119,202			$	47,288,398			$	50,561,074			$	50,604,056			$	49,499,149

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

	Three Months Ended								Nine Months Ended
	September 30,								September 30,
		2022				2021				2022				2021
Interest revenue	$	363,150			$	293,463			$	940,496			$	887,595
Interest expense		46,825				13,236				81,742				46,639
Net interest revenue		316,325				280,227				858,754				840,956
Provision for credit losses		15,000				(23,000	)			15,000				(83,000	)
Net interest revenue after provision for credit losses		301,325				303,227				843,754				923,956
Other operating revenue:
Brokerage and trading revenue		61,006				47,930				77,970				98,120
Transaction card revenue		25,974				24,632				77,130				71,985
Fiduciary and asset management revenue		50,190				45,248				146,427				131,402
Deposit service charges and fees		28,703				27,429				84,207				77,499
Mortgage banking revenue		11,282				26,286				39,300				84,618
Other revenue		15,479				18,896				38,608				58,364
Total fees and commissions		192,634				190,421				463,642				521,988
Other gains (losses), net		979				31,091				(8,304	)			57,661
Loss on derivatives, net		(17,009	)			(5,760	)			(77,559	)			(14,590	)
Loss on fair value option securities, net		(4,368	)			(120	)			(17,790	)			(3,657	)
Change in fair value of mortgage servicing rights		16,570				12,945				83,165				33,778
Gain on available for sale securities, net		892				1,255				3,017				3,152
Total other operating revenue		189,698				229,832				446,171				598,332
Other operating expense:
Personnel		170,348				175,863				484,499				520,908
Business promotion		6,127				4,939				18,965				9,837
Charitable contributions to BOKF Foundation		—				—				—				4,000
Professional fees and services		14,089				12,436				37,977				36,777
Net occupancy and equipment		29,296				28,395				87,640				81,690
Insurance		4,306				3,712				13,317				11,992
Data processing and communications		41,743				38,371				122,859				112,256
Printing, postage and supplies		4,349				3,558				11,967				11,283
Amortization of intangible assets		3,943				4,488				11,956				13,873
Mortgage banking costs		9,504				8,962				26,818				34,031
Other expense		11,046				10,553				30,026				41,566
Total other operating expense		294,751				291,277				846,024				878,213
Net income before taxes		196,272				241,782				443,901				644,075
Federal and state income taxes		39,681				54,061				92,000				144,939
Net income		156,591				187,721				351,901				499,136
Net income (loss) attributable to non-controlling interests		81				(601	)			57				(1,667	)
Net income attributable to BOK Financial Corporation shareholders	$	156,510			$	188,322			$	351,844			$	500,803
Average shares outstanding:
Basic		67,003,199				68,359,125				67,409,789				68,768,044
Diluted		67,004,623				68,360,871				67,411,222				68,770,663
Net income per share:
Basic	$	2.32			$	2.74			$	5.18			$	7.23
Diluted	$	2.32			$	2.74			$	5.18			$	7.23

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

	Three Months Ended
	Sep. 30, 2022				June 30, 2022				Mar. 31, 2022				Dec. 31, 2021				Sep. 30, 2021
Capital:
Period-end shareholders' equity	$	4,509,934			$	4,737,339			$	4,849,582			$	5,363,732			$	5,388,973
Risk weighted assets	$	36,866,994			$	36,787,092			$	37,160,258			$	34,575,277			$	33,916,456
Risk-based capital ratios:
Common equity tier 1		11.80	%			11.61	%			11.30	%			12.24	%			12.26	%
Tier 1		11.82	%			11.63	%			11.31	%			12.25	%			12.29	%
Total capital		12.81	%			12.59	%			12.25	%			13.29	%			13.38	%
Leverage ratio		9.76	%			9.12	%			8.47	%			8.55	%			8.77	%
Tangible common equity ratio1		7.96	%			8.16	%			8.13	%			8.61	%			9.28	%
Common stock:
Book value per share	$	67.06			$	69.87			$	71.21			$	78.34			$	78.56
Tangible book value per share	$	50.34			$	53.22			$	54.58			$	61.74			$	61.93
Market value per share:
High	$	95.51			$	94.76			$	119.59			$	110.21			$	92.97
Low	$	69.82			$	74.03			$	93.76			$	89.01			$	77.20
Cash dividends paid	$	35,661			$	35,892			$	36,093			$	36,256			$	35,725
Dividend payout ratio		22.79	%			27.02	%			57.76	%			30.90	%			18.97	%
Shares outstanding, net		67,254,383				67,806,005				68,104,043				68,467,772				68,596,764
Stock buy-back program:
Shares repurchased		548,034				294,084				475,877				128,522				478,141
Amount	$	49,980			$	24,404			$	48,074			$	13,426			$	40,644
Average price per share	$	91.20			$	82.98			$	101.02			$	104.46			$	85.00
Performance ratios (quarter annualized):
Return on average assets		1.38	%			1.13	%			0.50	%			0.92	%			1.51	%
Return on average equity		13.01	%			11.27	%			4.93	%			8.68	%			13.78	%
Net interest margin		3.24	%			2.76	%			2.44	%			2.52	%			2.66	%
Efficiency ratio		57.35	%			60.65	%			75.07	%			70.14	%			61.23	%
Reconciliation of non-GAAP measures:
1     Tangible common equity ratio:
Total shareholders' equity	$	4,509,934			$	4,737,339			$	4,849,582			$	5,363,732			$	5,388,973
Less: Goodwill and intangible assets, net		1,124,582				1,128,493				1,132,510				1,136,527				1,140,935
Tangible common equity	$	3,385,352			$	3,608,846			$	3,717,072			$	4,227,205			$	4,248,038
Total assets	$	43,645,446			$	45,377,072			$	46,826,507			$	50,249,431			$	46,923,409
Less: Goodwill and intangible assets, net		1,124,582				1,128,493				1,132,510				1,136,527				1,140,935
Tangible assets	$	42,520,864			$	44,248,579			$	45,693,997			$	49,112,904			$	45,782,474
Tangible common equity ratio		7.96	%			8.16	%			8.13	%			8.61	%			9.28	%
Pre-provision net revenue:
Net income before taxes	$	196,272			$	168,980			$	78,649			$	152,025			$	241,782
Provision for expected credit losses		15,000				—				—				(17,000	)			(23,000	)
Net income (loss) attributable to non-controlling interests		81				12				(36	)			(129	)			(601	)
Pre-provision net revenue	$	211,191			$	168,968			$	78,685			$	135,154			$	219,383
Other data:
Tax equivalent interest	$	2,163			$	2,040			$	1,973			$	2,104			$	2,217
Net unrealized gain (loss) on available for sale securities	$	(935,788	)		$	(522,812	)		$	(546,598	)		$	93,381			$	221,487
Mortgage banking:
Mortgage production revenue	$	(2,406	)		$	(504	)		$	5,055			$	10,018			$	15,403
Mortgage loans funded for sale	$	260,210			$	360,237			$	418,866			$	568,507			$	652,336
Add: current period-end outstanding commitments		75,779				106,004				160,260				171,412				239,066
Less: prior period end outstanding commitments		106,004				160,260				171,412				239,066				276,154
Total mortgage production volume	$	229,985			$	305,981			$	407,714			$	500,853			$	615,248
Mortgage loan refinances to mortgage loans funded for sale		10	%			19	%			45	%			51	%			48	%
Realized margin on funded mortgage loans	(0.41		)%			0.88	%			1.64	%			2.34	%			2.48	%
Production revenue as a percentage of production volume	(1.05		)%		(0.16		)%			1.24	%			2.00	%			2.50	%
Mortgage servicing revenue	$	13,688			$	11,872			$	11,595			$	11,260			$	10,883
Average outstanding principal balance of mortgage loans serviced for others		19,070,221				17,336,596				16,155,329				15,930,480				14,899,306
Average mortgage servicing revenue rates		0.28	%			0.27	%			0.29	%			0.28	%			0.29	%
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net	$	(17,027	)		$	(13,639	)		$	(46,694	)		$	(4,862	)		$	(5,829	)
Gain (loss) on fair value option securities, net		(4,368	)			(2,221	)			(11,201	)			1,418				(120	)
Loss on economic hedge of mortgage servicing rights		(21,395	)			(15,860	)			(57,895	)			(3,444	)			(5,949	)
Gain on changes in fair value of mortgage servicing rights		16,570				17,485				49,110				7,859				12,945
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue		(4,825	)			1,625				(8,785	)			4,415				6,996
Net interest revenue on fair value option securities2		29				275				383				259				286
Total economic benefit (cost) of changes in the fair value of mortgage servicing rights, net of economic hedges	$	(4,796	)		$	1,900			$	(8,402	)		$	4,674			$	7,282

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
	Sep. 30, 2022				June 30, 2022				Mar. 31, 2022				Dec. 31, 2021				Sep. 30, 2021
Interest revenue	$	363,150			$	294,247			$	283,099			$	292,334			$	293,463
Interest expense		46,825				20,229				14,688				15,257				13,236
Net interest revenue		316,325				274,018				268,411				277,077				280,227
Provision for credit losses		15,000				—				—				(17,000	)			(23,000	)
Net interest revenue after provision for credit losses		301,325				274,018				268,411				294,077				303,227
Other operating revenue:
Brokerage and trading revenue		61,006				44,043				(27,079	)			14,869				47,930
Transaction card revenue		25,974				26,940				24,216				24,998				24,632
Fiduciary and asset management revenue		50,190				49,838				46,399				46,872				45,248
Deposit service charges and fees		28,703				28,500				27,004				26,718				27,429
Mortgage banking revenue		11,282				11,368				16,650				21,278				26,286
Other revenue		15,479				12,684				10,445				11,586				18,896
Total fees and commissions		192,634				173,373				97,635				146,321				190,421
Other gains (losses), net		979				(7,639	)			(1,644	)			6,081				31,091
Loss on derivatives, net		(17,009	)			(13,569	)			(46,981	)			(4,788	)			(5,760	)
Gain (loss) on fair value option securities, net		(4,368	)			(2,221	)			(11,201	)			1,418				(120	)
Change in fair value of mortgage servicing rights		16,570				17,485				49,110				7,859				12,945
Gain on available for sale securities, net		892				1,188				937				552				1,255
Total other operating revenue		189,698				168,617				87,856				157,443				229,832
Other operating expense:
Personnel		170,348				154,923				159,228				174,474				175,863
Business promotion		6,127				6,325				6,513				6,452				4,939
Charitable contributions to BOKF Foundation		—				—				—				5,000				—
Professional fees and services		14,089				12,475				11,413				14,129				12,436
Net occupancy and equipment		29,296				27,489				30,855				26,897				28,395
Insurance		4,306				4,728				4,283				3,889				3,712
Data processing and communications		41,743				41,280				39,836				39,358				38,371
Printing, postage and supplies		4,349				3,929				3,689				2,935				3,558
Amortization of intangible assets		3,943				4,049				3,964				4,438				4,488
Mortgage banking costs		9,504				9,437				7,877				8,667				8,962
Other expense		11,046				9,020				9,960				13,256				10,553
Total other operating expense		294,751				273,655				277,618				299,495				291,277
Net income before taxes		196,272				168,980				78,649				152,025				241,782
Federal and state income taxes		39,681				36,122				16,197				34,836				54,061
Net income		156,591				132,858				62,452				117,189				187,721
Net income (loss) attributable to non-controlling interests		81				12				(36	)			(129	)			(601	)
Net income attributable to BOK Financial Corporation shareholders	$	156,510			$	132,846			$	62,488			$	117,318			$	188,322
Average shares outstanding:
Basic		67,003,199				67,453,748				67,812,400				68,069,160				68,359,125
Diluted		67,004,623				67,455,172				67,813,851				68,070,910				68,360,871
Net income per share:
Basic	$	2.32			$	1.96			$	0.91			$	1.71			$	2.74
Diluted	$	2.32			$	1.96			$	0.91			$	1.71			$	2.74

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

		Sep. 30, 2022			June 30, 2022			Mar. 31, 2022			Dec. 31, 2021			Sep. 30, 2021
Commercial:
Healthcare		$	3,826,623		$	3,696,963		$	3,441,732		$	3,414,940		$	3,347,641
Energy			3,371,588			3,393,072			3,197,667			3,006,884			2,814,059
Services			3,280,925			3,421,493			3,351,495			3,367,193			3,323,422
General business			3,128,550			3,067,169			2,892,295			2,717,448			2,690,018
Total commercial			13,607,686			13,578,697			12,883,189			12,506,465			12,175,140
Commercial real estate:
Multifamily			1,126,700			878,565			867,288			786,404			875,586
Industrial			1,103,905			953,626			911,928			766,125			890,316
Office			1,086,615			1,100,115			1,097,516			1,040,963			1,030,755
Retail			635,021			637,304			667,561			679,917			766,402
Residential construction and land development			91,690			111,575			120,506			120,016			118,416
Other commercial real estate			429,980			424,963			436,157			437,900			435,417
Total commercial real estate			4,473,911			4,106,148			4,100,956			3,831,325			4,116,892
Paycheck protection program			20,233			43,140			137,365			276,341			536,052
Loans to individuals:
Residential mortgage			1,851,836			1,784,729			1,723,506			1,722,170			1,747,243
Residential mortgages guaranteed by U.S. government agencies			262,466			293,838			322,581			354,173			376,986
Personal			1,574,325			1,484,596			1,506,832			1,515,206			1,395,623
Total loans to individuals			3,688,627			3,563,163			3,552,919			3,591,549			3,519,852
Total		$	21,790,457		$	21,291,148		$	20,674,429		$	20,205,680		$	20,347,936

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

	Sep. 30, 2022			June 30, 2022			Mar. 31, 2022			Dec. 31, 2021			Sep. 30, 2021
Texas:
Commercial	$	6,632,610		$	6,631,658		$	6,254,883		$	6,068,700		$	5,815,562
Commercial real estate		1,448,590			1,339,452			1,345,105			1,253,439			1,383,871
Paycheck protection program		12,280			14,040			31,242			81,654			115,623
Loans to individuals		970,459			934,856			957,320			942,982			901,121
Total Texas		9,063,939			8,920,006			8,588,550			8,346,775			8,216,177
Oklahoma:
Commercial		3,104,037			3,125,764			2,883,663			2,633,014			2,590,887
Commercial real estate		608,856			576,458			552,310			546,021			552,184
Paycheck protection program		4,571			13,329			52,867			69,817			192,474
Loans to individuals		2,054,362			1,982,247			1,977,886			2,024,404			2,014,099
Total Oklahoma		5,771,826			5,697,798			5,466,726			5,273,256			5,349,644
Colorado:
Commercial		2,115,883			2,074,455			1,977,773			1,936,149			1,874,613
Commercial real estate		565,057			473,231			480,740			470,937			526,653
Paycheck protection program		1,298			8,233			28,584			82,781			140,470
Loans to individuals		237,981			234,105			236,125			256,533			249,298
Total Colorado		2,920,219			2,790,024			2,723,222			2,746,400			2,791,034
Arizona:
Commercial		1,101,917			1,080,228			1,074,551			1,130,798			1,194,801
Commercial real estate		850,319			766,767			719,970			674,309			734,174
Paycheck protection program		1,083			5,173			11,644			21,594			42,815
Loans to individuals		225,981			212,870			190,746			186,528			182,506
Total Arizona		2,179,300			2,065,038			1,996,911			2,013,229			2,154,296
Kansas/Missouri:
Commercial		307,446			338,337			334,371			338,697			336,414
Commercial real estate		466,955			458,157			436,740			382,761			408,001
Paycheck protection program		10			573			2,595			4,718			6,920
Loans to individuals		125,039			125,584			121,247			110,889			100,920
Total Kansas/Missouri		899,450			922,651			894,953			837,065			852,255
New Mexico:
Commercial		257,763			252,033			262,533			306,964			287,695
Commercial real estate		426,367			431,606			504,632			442,128			437,302
Paycheck protection program		991			1,792			9,713			13,510			31,444
Loans to individuals		68,095			67,026			63,299			63,930			66,651
Total New Mexico		753,216			752,457			840,177			826,532			823,092
Arkansas:
Commercial		88,030			76,222			95,415			92,143			75,168
Commercial real estate		107,767			60,477			61,459			61,730			74,707
Paycheck protection program		—			—			720			2,267			6,306
Loans to individuals		6,710			6,475			6,296			6,283			5,257
Total Arkansas		202,507			143,174			163,890			162,423			161,438
TOTAL BOK FINANCIAL	$	21,790,457		$	21,291,148		$	20,674,429		$	20,205,680		$	20,347,936

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)

	Sep. 30, 2022			June 30, 2022			Mar. 31, 2022			Dec. 31, 2021			Sep. 30, 2021
Oklahoma:
Demand	$	5,143,405		$	5,422,593		$	5,205,806		$	5,433,405		$	5,080,162
Interest-bearing:
Transaction		9,619,419			10,240,378			11,410,709			12,689,367			11,692,679
Savings		558,256			561,413			558,634			521,439			510,906
Time		776,306			678,127			817,744			978,822			1,039,866
Total interest-bearing		10,953,981			11,479,918			12,787,087			14,189,628			13,243,451
Total Oklahoma		16,097,386			16,902,511			17,992,893			19,623,033			18,323,613
Texas:
Demand		4,609,255			4,670,535			4,552,001			4,552,983			3,987,503
Interest-bearing:
Transaction		4,781,920			5,344,326			4,963,118			5,345,461			4,985,465
Savings		179,049			183,708			182,536			178,458			165,043
Time		343,015			333,038			329,931			337,559			337,389
Total interest-bearing		5,303,984			5,861,072			5,475,585			5,861,478			5,487,897
Total Texas		9,913,239			10,531,607			10,027,586			10,414,461			9,475,400
Colorado:
Demand		2,510,179			2,799,798			2,673,352			2,526,855			2,158,596
Interest-bearing:
Transaction		2,221,796			2,277,563			2,387,304			2,334,371			2,337,354
Savings		80,542			82,976			81,762			78,636			79,873
Time		151,064			160,795			165,401			174,351			184,002
Total interest-bearing		2,453,402			2,521,334			2,634,467			2,587,358			2,601,229
Total Colorado		4,963,581			5,321,132			5,307,819			5,114,213			4,759,825
New Mexico:
Demand		1,296,410			1,347,600			1,271,264			1,196,057			1,222,895
Interest-bearing:
Transaction		717,492			845,442			888,257			858,394			837,630
Savings		113,056			115,660			115,457			107,963			107,615
Time		142,856			148,532			156,140			163,871			168,879
Total interest-bearing		973,404			1,109,634			1,159,854			1,130,228			1,114,124
Total New Mexico		2,269,814			2,457,234			2,431,118			2,326,285			2,337,019
Arizona:
Demand		903,296			901,543			947,775			934,282			1,110,884
Interest-bearing:
Transaction		788,142			792,269			810,896			834,491			784,614
Savings		18,258			17,999			18,122			16,182			16,468
Time		26,704			28,774			27,259			31,274			30,862
Total interest-bearing		833,104			839,042			856,277			881,947			831,944
Total Arizona		1,736,400			1,740,585			1,804,052			1,816,229			1,942,828
Kansas/Missouri:
Demand		479,459			537,143			553,345			658,342			488,595
Interest-bearing:
Transaction		747,981			913,921			1,107,525			1,086,946			965,757
Savings		19,375			19,943			19,589			18,844			17,303
Time		13,258			13,962			11,527			12,255			13,040
Total interest-bearing		780,614			947,826			1,138,641			1,118,045			996,100
Total Kansas/Missouri		1,260,073			1,484,969			1,691,986			1,776,387			1,484,695
Arkansas:
Demand		43,111			41,084			38,798			42,499			41,594
Interest-bearing:
Transaction		123,273			130,300			122,020			119,543			149,611
Savings		3,098			3,125			3,265			3,213			3,289
Time		5,940			6,371			6,414			6,196			6,677
Total interest-bearing		132,311			139,796			131,699			128,952			159,577
Total Arkansas		175,422			180,880			170,497			171,451			201,171
TOTAL BOK FINANCIAL	$	36,415,915		$	38,618,918		$	39,425,951		$	41,242,059		$	38,524,551

NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION

	Three Months Ended
	Sep. 30, 2022			June 30, 2022			Mar. 31, 2022			Dec. 31, 2021			Sep. 30, 2021
TAX-EQUIVALENT ASSETS YIELDS
Interest-bearing cash and cash equivalents	1.87	%		0.83	%		0.18	%		0.16	%		0.14	%
Trading securities	2.72	%		2.00	%		1.71	%		1.89	%		2.04	%
Investment securities, net of allowance	1.42	%		2.35	%		5.07	%		4.99	%		5.02	%
Available for sale securities	2.21	%		1.84	%		1.77	%		1.72	%		1.80	%
Fair value option securities	2.98	%		2.92	%		2.81	%		2.71	%		2.62	%
Restricted equity securities	6.23	%		3.30	%		2.69	%		2.98	%		2.55	%
Residential mortgage loans held for sale	5.05	%		4.22	%		3.11	%		3.06	%		3.06	%
Loans	4.89	%		3.92	%		3.57	%		3.70	%		3.68	%
Allowance for loan losses
Loans, net of allowance	4.94	%		3.96	%		3.61	%		3.75	%		3.73	%
Total tax-equivalent yield on earning assets	3.71	%		2.96	%		2.58	%		2.66	%		2.78	%
COST OF INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest-bearing transaction	0.63	%		0.22	%		0.10	%		0.09	%		0.09	%
Savings	0.05	%		0.03	%		0.03	%		0.04	%		0.04	%
Time	0.93	%		0.68	%		0.56	%		0.53	%		0.55	%
Total interest-bearing deposits	0.63	%		0.24	%		0.12	%		0.12	%		0.13	%
Funds purchased and repurchase agreements	0.72	%		0.53	%		0.95	%		0.73	%		0.20	%
Other borrowings	2.33	%		1.01	%		0.38	%		0.49	%		0.37	%
Subordinated debt	5.07	%		4.50	%		4.02	%		4.02	%		4.63	%
Total cost of interest-bearing liabilities	0.76	%		0.31	%		0.21	%		0.21	%		0.19	%
Tax-equivalent net interest revenue spread	2.95	%		2.65	%		2.37	%		2.45	%		2.59	%
Effect of noninterest-bearing funding sources and other	0.29	%		0.11	%		0.07	%		0.07	%		0.07	%
Tax-equivalent net interest margin	3.24	%		2.76	%		2.44	%		2.52	%		2.66	%

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
	Sep. 30, 2022				June 30, 2022				Mar. 31, 2022				Dec. 31, 2021				Sep. 30, 2021
Nonperforming assets:
Nonaccruing loans:
Commercial:
Healthcare	$	41,438			$	14,886			$	15,076			$	15,762			$	509
Services		27,315				15,259				16,535				17,170				25,714
Energy		4,164				20,924				24,976				31,091				45,500
General business		2,753				3,539				3,750				10,081				8,951
Total commercial		75,670				54,608				60,337				74,104				80,674
Commercial real estate		7,971				10,939				15,989				14,262				21,223
Loans to individuals:
Permanent mortgage		30,066				30,460				30,757				31,574				30,674
Permanent mortgage guaranteed by U.S. government agencies		16,957				18,000				16,992				13,861				9,188
Personal		136				132				171				258				188
Total loans to individuals		47,159				48,592				47,920				45,693				40,050
Total nonaccruing loans	$	130,800			$	114,139			$	124,246			$	134,059			$	141,947
Accruing renegotiated loans guaranteed by U.S. government agencies		176,022				196,420				204,121				210,618				178,554
Real estate and other repossessed assets		29,676				22,221				24,492				24,589				28,770
Total nonperforming assets	$	336,498			$	332,780			$	352,859			$	369,266			$	349,271
Total nonperforming assets excluding those guaranteed by U.S. government agencies	$	143,519			$	118,360			$	131,746			$	144,787			$	161,529
Accruing loans 90 days past due1	$	120			$	3			$	307			$	313			$	223
Gross charge-offs	$	1,766			$	1,368			$	7,805			$	6,558			$	9,584
Recoveries		(1,309	)			(2,167	)			(1,824	)			(7,272	)			(1,769	)
Net charge-offs (recoveries)	$	457			$	(799	)		$	5,981			$	(714	)		$	7,815
Provision for loan losses	$	1,111			$	(6,158	)		$	(3,967	)		$	(20,973	)		$	(27,395	)
Provision for credit losses from off-balance sheet unfunded loan commitments		14,060				6,005				3,268				3,738				4,952
Provision for expected credit losses from mortgage banking activities		(66	)			69				621				150				(534	)
Provision for credit losses related to held-to maturity (investment) securities portfolio		(105	)			84				78				85				(23	)
Total provision for credit losses	$	15,000			$	—			$	—			$	(17,000	)		$	(23,000	)
Allowance for loan losses to period end loans		1.11	%			1.13	%			1.19	%			1.27	%			1.36	%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans		1.37	%			1.33	%			1.37	%			1.43	%			1.50	%
Nonperforming assets to period end loans and repossessed assets		1.54	%			1.56	%			1.70	%			1.83	%			1.71	%
Net charge-offs (annualized) to average loans		0.01	%		(0.02		)%			0.12	%		(0.01		)%			0.15	%
Allowance for loan losses to nonaccruing loans1		212.37	%			250.80	%			229.80	%			213.33	%			208.41	%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to nonaccruing loans1		261.83	%			294.74	%			263.60	%			240.77	%			230.43	%

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

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

		Three Months Ended									3Q22 vs 2Q22							3Q22 vs 3Q21
		Sep. 30, 2022			June 30, 2022			Sep. 30, 2021			$ change				% change			$ change				% change
Commercial Banking
Net interest revenue		$	206,904		$	166,542		$	134,104		$	40,362			24.2	%		$	72,800			54.3	%
Fees and commissions revenue			58,147			59,881			56,452			(1,734	)		(2.9	)%			1,695			3.0	%
Combined net interest and fee revenue			265,051			226,423			190,556			38,628			17.1	%			74,495			39.1	%
Other operating expense			75,872			70,009			68,301			5,863			8.4	%			7,571			11.1	%
Corporate expense allocations			16,451			16,634			11,769			(183	)		(1.1	)%			4,682			39.8	%
Net income			132,941			104,813			102,694			28,128			26.8	%			30,247			29.5	%
Average assets			28,890,429			29,269,712			28,474,132			(379,283	)		(1.3	)%			416,297			1.5	%
Average loans			17,904,779			17,336,841			16,588,875			567,938			3.3	%			1,315,904			7.9	%
Average deposits			17,966,661			18,933,766			17,881,673			(967,105	)		(5.1	)%			84,988			0.5	%
Consumer Banking
Net interest revenue		$	43,951		$	33,786		$	27,222		$	10,165			30.1	%		$	16,729			61.5	%
Fees and commissions revenue			30,230			30,101			44,405			129			0.4	%			(14,175	)		(31.9	)%
Combined net interest and fee revenue			74,181			63,887			71,627			10,294			16.1	%			2,554			3.6	%
Other operating expense			53,236			52,660			49,483			576			1.1	%			3,753			7.6	%
Corporate expense allocations			10,792			10,120			11,516			672			6.6	%			(724	)		(6.3	)%
Net income			2,970			1,239			12,432			1,731			139.7	%			(9,462	)		(76.1	)%
Average assets			10,233,401			10,338,191			10,083,593			(104,790	)		(1.0	)%			149,808			1.5	%
Average loans			1,686,498			1,669,830			1,763,705			16,668			1.0	%			(77,207	)		(4.4	)%
Average deposits			8,812,884			8,876,469			8,516,942			(63,585	)		(0.7	)%			295,942			3.5	%
Wealth Management
Net interest revenue		$	33,584		$	37,747		$	55,196		$	(4,163	)		(11.0	)%		$	(21,612	)		(39.2	)%
Fees and commissions revenue			113,113			86,771			97,966			26,342			30.4	%			15,147			15.5	%
Combined net interest and fee revenue			146,697			124,518			153,162			22,179			17.8	%			(6,465	)		(4.2	)%
Other operating expense			79,151			76,393			87,498			2,758			3.6	%			(8,347	)		(9.5	)%
Corporate expense allocations			12,934			12,503			10,110			431			3.4	%			2,824			27.9	%
Net income			41,808			27,287			41,339			14,521			53.2	%			469			1.1	%
Average assets			13,818,299			16,902,721			19,109,704			(3,084,422	)		(18.2	)%			(5,291,405	)		(27.7	)%
Average loans			2,163,975			2,157,771			1,971,380			6,204			0.3	%			192,595			9.8	%
Average deposits			7,999,074			8,482,785			9,120,446			(483,711	)		(5.7	)%			(1,121,372	)		(12.3	)%
Fiduciary assets			54,714,705			55,972,584			60,497,576			(1,257,879	)		(2.2	)%			(5,782,871	)		(9.6	)%
Assets under management or administration			95,401,638			95,981,289			98,842,789			(579,651	)		(0.6	)%			(3,441,151	)		(3.5	)%

 

Contact:
Sue Hermann
Director, Corporate Communications
303-312-3488