BOK Financial Corporation Reports Quarterly Earnings of $62 million or $0.91 Per Share in the First Quarter

Source: Nasdaq GlobeNewswire / 27 Apr 2022 07:55:01 America/New_York

TULSA, Okla., April 27, 2022 (GLOBE NEWSWIRE) -- BOK Financial Corporation (NASD: BOKF) -

CEO Commentary

Stacy Kymes, president and chief executive officer, stated, “BOK Financial has an enviable mix of business segments that are core to our strategy focused on long-term, sustainable success. Over a long period of time the company has benefited from the diversity of these segments. The overall results this quarter did not meet our expectations as the markets experienced extraordinary interest rate volatility. The markets had to digest high levels of inflation, changing sentiment around the magnitude of interest rate hikes, and the first meaningful geopolitical conflict in Europe since WWII. Several of our market segments experienced impacts as the markets appeared to reset. As we move forward, we believe we are well positioned for this new environment. We have strong momentum growing our loan portfolio with both solid actual results and strong loan pipelines. We have been intentional about positioning our balance sheet to benefit from rising interest rates and should the Federal Reserve move to hike more aggressively, we will see expanding margins and revenue. Credit quality has long been a differentiator for BOK Financial and we are well-positioned should the credit markets begin to show weakness, though there is no sign of that today.”

First Quarter 2022 Financial Highlights

Net income was $62.5 million or $0.91 per diluted share for the first quarter of 2022 and $117.3 million or $1.71 per diluted share for the fourth quarter of 2021. Interest rate volatility driven by expectations of future Federal Reserve actions to address rising inflation as well as the deepening conflict in Ukraine combined to significantly decrease our trading revenue, mortgage loan production volumes, and the net fair value of our mortgage servicing rights valuation.
Net interest revenue totaled $268.4 million, a decrease of $8.7 million. Net interest margin was 2.44 percent compared to 2.52 percent in the fourth quarter of 2021.
Fees and commissions revenue decreased $48.7 million to $97.6 million. Brokerage and trading revenue decreased $41.9 million while mortgage banking revenue decreased $4.6 million.
The net cost of the changes in fair value of mortgage servicing rights and related economic hedges was $8.4 million for the first quarter of 2022 compared to a net benefit of $4.7 million for the fourth quarter of 2021.
Operating expense decreased $21.9 million to $277.6 million. Personnel expense decreased $15.2 million, primarily due to lower incentive compensation expense, partially offset by a seasonal increase in employee benefits expense. Non-personnel expense decreased $6.6 million. The fourth quarter of 2021 included a $5.0 million charitable donation to the BOKF Foundation that did not recur in the first quarter of 2022.
Period-end loans increased $469 million to $20.7 billion at March 31, 2022. Commercial loans increased $377 million and commercial real estate loans increased $270 million while period-end Paycheck Protection Program (“PPP”) loans decreased $139 million to $137 million. Average loans were $20.5 billion, a $221 million increase compared to the fourth quarter of 2021.
No provision for expected credit losses was necessary for the first quarter of 2022. A $17.0 million negative provision for expected credit losses was recorded in the prior quarter. The impact of continued strength in commodity prices and improved credit quality metrics was offset by higher required provision due to loan growth and changes in our economic outlook. The combined allowance for credit losses totaled $283 million or 1.37 percent of outstanding loans at March 31, 2022. The combined allowance for credit losses was $289 million or 1.43 percent of outstanding loans at December 31, 2021.
Average deposits increased $560 million to $40.4 billion while period-end deposits decreased $1.8 billion to $39.4 billion due to expected seasonal activity from 2021 year-end balances. Average interest-bearing deposits increased $317 million and average demand deposits grew $243 million.
The company’s common equity Tier 1 capital ratio was 11.30 percent at March 31, 2022. In addition, the company’s Tier 1 capital ratio was 11.31 percent, total capital ratio was 12.25 percent, and leverage ratio was 8.47 percent at March 31, 2022. At December 31, 2021, the company’s common equity Tier 1 capital ratio was 12.24 percent, Tier 1 capital ratio was 12.25 percent, total capital ratio was 13.29 percent, and leverage ratio was 8.55 percent.
The company repurchased 475,877 shares of common stock at an average price of $101.02 a share in the first quarter of 2022.

First Quarter 2022 Segment Highlights

Commercial Banking contributed $82.3 million to net income in the first quarter of 2022, a decrease of $1.2 million compared to the fourth quarter of 2021. Combined net interest revenue and fee revenue decreased $4.2 million, primarily due to two fewer days in the quarter and a reduction in loan fees. Net loans charged-off increased $7.3 million. Personnel expense decreased $8.3 million, primarily due to reduced incentive compensation costs. Corporate expense allocations increased $3.3 million, largely related to project resources. Average Commercial Banking loans increased $362 million or 2 percent to $16.7 billion. Average Commercial Banking deposits were consistent with prior quarter.
Consumer Banking had a net loss of $7.3 million in the first quarter of 2022 compared to prior quarter net income of $6.8 million. Combined net interest revenue and fee revenue decreased $8.1 million. Net interest revenue decreased $3.2 million, mainly due to a 14 basis point reduction in the spread on deposits sold to our Funds Management unit. Fees and commissions revenue decreased $5.0 million due to lower mortgage production volumes combined with narrowing margins. The net cost of the changes in fair value of mortgage servicing rights and related economic hedges was $8.4 million for the first quarter of 2022 compared to a net benefit of $4.7 million for the fourth quarter of 2021. Interest rate volatility affected the effectiveness of our mortgage servicing rights hedging strategy. Operating expense decreased $3.2 million, primarily due to decreased professional fees and services expense. Average Consumer Banking loans decreased $32.9 million or 2 percent to $1.7 billion. Average Consumer Banking deposits increased $64.2 million or 1 percent to $8.7 billion in the first quarter of 2022.
Wealth Management had a net loss of $4.4 million in the first quarter of 2022 compared to net income of $21.7 million in the fourth quarter of 2021. Our diverse set of investment-focused businesses including fixed income trading, private wealth, institutional wealth, financial risk management, and multiple fiduciary businesses combined to provide total net interest and fee revenues of $80.8 million, a decrease of $33.7 million compared to the fourth quarter of 2021. Total revenue from trading activities decreased $43.3 million primarily due to reduced demand for U.S. government agency residential mortgage-backed securities. Investment banking and insurance brokerage revenue increased over the previous quarter. Fiduciary and asset management revenue and retail brokerage revenue were relatively consistent with the prior quarter. Decreases in revenue related to assets under management or administration were offset by improved money market fund fees. Operating expense was consistent with the prior quarter. Average Wealth Management loans increased $53.5 million or 3 percent to $2.1 billion. Average Wealth Management deposits increased $425 million or 5 percent to $9.6 billion. Deposit balances began to decline in the second half of March 2022. Assets under management were $101.1 billion, a decrease of $3.8 billion compared to the prior quarter.

Net Interest Revenue

Average earning assets decreased $744 million compared to the fourth quarter of 2021. Average trading securities decreased $723 million. Average loan balances increased $221 million, largely due to growth in commercial and commercial real estate loans, partially offset by a decrease in PPP loans. Average interest bearing cash and cash equivalents were reduced by $158 million. Available for sale securities decreased $155 million. Funds purchased and repurchase agreements decreased $889 million, while other borrowings increased $268 million. Net interest revenue was $268.4 million for the first quarter of 2022 compared to $277.1 million for the fourth quarter of 2021. Net interest margin was 2.44 percent compared to 2.52 percent in the prior quarter. PPP loan fees of $3.9 million were recognized in the first quarter of 2022 compared to $7.7 million in the previous quarter. PPP loan fees remaining to be recognized were $3.5 million as of March 31, 2022.

The yield on average earning assets was 2.58 percent, an 8 basis point decrease from the prior quarter. The loan portfolio yield decreased 13 basis points to 3.57 percent. Yields related to loan fees decreased 17 points from the prior quarter while core loan yields increased 4 basis points. The yield on trading securities was down 18 basis points to 1.71 percent, largely due to a decrease in the weighted average coupon rate. The yield on the available for sale securities portfolio increased 5 basis points to 1.77 percent.

Funding costs were 0.21 percent, consistent with the prior quarter. The cost of interest-bearing deposits was unchanged at 0.12 percent. The cost of funds purchased and repurchase agreements increased 22 basis points to 0.95 percent while the cost of other borrowings decreased 11 basis points to 0.38 percent. The benefit to net interest margin from assets funded by non-interest liabilities was 7 basis points for the first quarter of 2022, consistent with the prior quarter.

Operating Revenue

Brokerage and trading revenue decreased $41.9 million to a net loss of $27.1 million. Beginning in the second quarter of 2021, to meet customer demand in response to expected tightening by the Federal Reserve and increasing rates, we increased the trading volume of short duration, low coupon U.S. government agency residential mortgage-backed securities. These actions led to record trading revenues in the third quarter of 2021. As inflation pressure increased in the first quarter of 2022 and the conflict in Ukraine intensified, fixed income markets were disrupted reducing the demand for these securities. As of March 31, 2022, we have reduced our exposure to these securities by approximately 70 percent compared to December 31, 2021. Customer hedging revenue increased $1.8 million, primarily related to interest rate contracts, partially offset by a decline in energy contracts. Investment banking revenue decreased $3.9 million, largely due to the timing of syndication activity. Fees and commissions revenue totaled $97.6 million for the first quarter of 2022, a $48.7 million decrease compared to the fourth quarter of 2021.

Mortgage banking revenue decreased $4.6 million compared to the prior quarter due to lower loan production volume combined with narrowing margins. Interest rate volatility and continued inventory shortages have resulted in fewer refinance opportunities and heightened competitive pricing pressure. Mortgage loan production volume decreased $93 million to $408 million. Production revenue as a percentage of production volume, which includes unrealized gains and losses on our mortgage commitment pipeline and related hedges, decreased 76 basis points to 1.24 percent.

Other gains and losses, net decreased $7.7 million compared to the prior quarter, primarily related to the change in fair value of the rabbi trust investments, which is offset by a decrease in related deferred compensation expense.

Operating Expense

Personnel expense decreased $15.2 million. Cash-based incentive compensation expense decreased $11.2 million from elevated levels in the fourth quarter of 2021. Deferred compensation expense, which is largely offset by a decrease in the value of related rabbi trust investments, decreased $4.2 million. Share-based incentive compensation expense decreased $3.8 million resulting from changes in vesting assumptions. Employee benefits expense increased $3.2 million due to a seasonal increase in payroll taxes and retirement plan costs, partially offset by a decrease in employee healthcare costs. Total operating expense was $277.6 million for the first quarter of 2022, a decrease of $21.9 million compared to the fourth quarter of 2021.

Non-personnel expense decreased $6.6 million compared to the fourth quarter of 2021. The fourth quarter of 2021 included a $5.0 million charitable donation to the BOKF Foundation that did not recur in the first quarter of 2022. Decreases in professional fees and services expense and other expense were partially offset by an increase in net occupancy and equipment expense.

Loans, Deposits and Capital

Loans

Outstanding loans were $20.7 billion at March 31, 2022, a $469 million increase compared to December 31, 2021 due to growth in both commercial and commercial real estate loans.

Outstanding commercial loan balances increased $377 million compared to December 31, 2021, led by growth in energy and general business loans. Although the primary source of repayment of our commercial loan portfolio is the ongoing 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 increased $191 million to $3.2 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 $3.0 billion at March 31, 2022, an increase of $23 million over December 31, 2021.

General business loans increased $175 million to $2.9 billion or 14 percent of total loans. General business loans include $1.5 billion of wholesale/retail loans and $1.4 billion of loans from other commercial industries.

Healthcare sector loan balances increased $27 million compared to the prior quarter, totaling $3.4 billion or 17 percent of total loans. Our healthcare sector loans primarily consist of $2.7 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.

Services sector loan balances decreased $16 million to $3.4 billion or 16 percent of total loans. Services loans consist of a large number of loans to a variety of businesses, including Native American tribal and state and local municipal government entities, Native American tribal casino operations, foundations and not-for-profit organizations, educational services and specialty trade contractors.

Commercial real estate loan balances increased $270 million compared to December 31, 2021 and represent 20 percent of total loans at March 31, 2022. Loans secured by industrial facilities increased $146 million to $912 million. Multifamily residential loans increased $81 million to $867 million at March 31, 2022. Loans secured by office facilities increased $57 million to $1.1 billion.

PPP loan balances decreased $139 million to $137 million or less than 1 percent of total loans. PPP loan balances have decreased $2.0 billion since their peak in the third quarter of 2020.

Loans to individuals decreased $39 million and represent 17 percent of total loans at March 31, 2022. Personal loans decreased $8.4 million while residential mortgage loans guaranteed by U.S. government agencies decreased $32 million, largely due to the re-sale of loans previously sold into GNMA mortgage pools that the company repurchased when certain defined delinquency criteria were met. Many loans repurchased during the pandemic have since been cured and meet the re-sale qualifications. The balance of these loans peaked in the second quarter of 2021 at $421 million and since have been reduced by a total of $98 million.

Deposits

Period-end deposits totaled $39.4 billion at March 31, 2022, a $1.8 billion decrease compared to December 31, 2021 due to expected seasonal activity. Interest-bearing transaction account balances decreased by $1.6 billion. Period-end Commercial Banking deposits decreased $909 million and Wealth Management deposits reduced $1.2 billion while Consumer Banking deposits grew $208 million. Average deposits were $40.4 billion at March 31, 2022, a $560 million increase compared to December 31, 2021. Interest-bearing transaction account balances increased $437 million and demand deposit account balances increased $243 million.

Capital

The company’s common equity Tier 1 capital ratio was 11.30 percent at March 31, 2022. In addition, the company’s Tier 1 capital ratio was 11.31 percent, total capital ratio was 12.25 percent, and leverage ratio was 8.47 percent at March 31, 2022. 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. This election added 11 basis points to the company’s common equity tier 1 capital ratio at March 31. At December 31, 2021, the company’s common equity Tier 1 capital ratio was 12.24 percent, Tier 1 capital ratio was 12.25 percent, total capital ratio was 13.29 percent, and leverage ratio was 8.55 percent.

The company’s tangible common equity ratio, a non-GAAP measure, was 8.13 percent at March 31, 2022 and 8.61 percent at December 31, 2021. This decrease is primarily due to unrealized losses related to available for sale securities. 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 475,877 shares of common stock at an average price of $101.02 a share in the first quarter of 2022. We view share buybacks opportunistically, but within the context of maintaining our strong capital position.

Credit Quality

No provision for credit losses was necessary for the first quarter of 2022. Changes in our reasonable and supportable forecasts of macroeconomic variables resulted in a $7.3 million decrease in the allowance for credit losses related to lending activities. Continued strength in commodity prices was partially offset by changes in our economic outlook. Changes in loan portfolio characteristics, primarily related to growth in loan balances resulted in a $6.6 million increase in the allowance for credit losses related to lending activities. Continued improvements in credit quality metrics were offset by net charge-offs and changes in specific impairment and payment profile characteristics. 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 rate and West Texas Intermediate (“WTI”) oil prices on a probability weighted basis.

Our base case reasonable and supportable forecast assumes inflation peaks in the second quarter of 2022 and begins to normalize thereafter. We expect the Russian-Ukraine conflict remains isolated and conditions improve by mid-year 2022. We expect a 2.2 percent increase in GDP over the next twelve months as labor force participants will continue to re-enter the job market to help meet record job openings. This increase in employment helps maintain household income above its pre-pandemic trend and supports consumer spending and GDP growth consistent with pre-pandemic levels. Our forecasted civilian unemployment rate is 3.9 percent for the second quarter of 2022, improving to 3.8 percent by the first quarter of 2023. Our base case also assumes the Federal Reserve begins balance sheet reduction in mid-year 2022 and increases federal funds rates at each meeting through March 2023, which results in a target range of 2.75 percent to 3.00 percent. WTI oil prices are projected to generally follow the NYMEX forward curve that existed at the end of March 2022, averaging $94.98 per barrel over the next twelve months.

The probability weighting of our base case reasonable and supportable forecast decreased to 60 percent in the first quarter of 2022 compared to 65 percent in the fourth quarter of 2021 as the level of uncertainty in economic forecasts increased. Our downside case, probability weighted at 30 percent, assumes the Russia-Ukraine conflict persists through 2022, but does remain isolated. Additional surges in commodity prices and exacerbated supply chain dislocations create higher levels of inflation forcing the Federal Reserve to adopt a more aggressive monetary policy to combat the inflationary environment. This results in a federal funds target range of 4.00 percent to 4.25 percent. This pushes the United States into a recession with a contraction in economic activity and a sharp increase in the unemployment rate. Real GDP is expected to contract 1.3 percent over the next four quarters in this scenario. WTI oil prices are projected to average $109.67 per barrel over the next twelve months in this scenario.

At March 31, 2022, the allowance for loan losses totaled $246 million or 1.19 percent of outstanding loans and 230 percent of nonaccruing loans 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 $283 million or 1.37 percent of outstanding loans and 264 percent of nonaccruing loans at March 31, 2022.

At December 31, 2021, the allowance for loan losses was $256 million or 1.27 percent of outstanding loans and 213 percent of nonaccruing loans excluding loans guaranteed by U.S. government agencies. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $289 million or 1.43 percent of outstanding loans and 241 percent of nonaccruing loans.

Nonperforming assets totaled $353 million or 1.70 percent of outstanding loans and repossessed assets at March 31, 2022, compared to $369 million or 1.83 percent at December 31, 2021. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $132 million or 0.65 percent of outstanding loans and repossessed assets at March 31, 2022, compared to $145 million or 0.74 percent at December 31, 2021.

Nonaccruing loans were $124 million or 0.60 percent of outstanding loans at March 31, 2022. Nonaccruing commercial loans totaled $60 million or 0.47 percent of outstanding commercial loans. Nonaccruing commercial real estate loans totaled $16 million or 0.39 percent of outstanding commercial real estate loans. Nonaccruing loans to individuals totaled $48 million or 1.35 percent of outstanding loans to individuals.

Nonaccruing loans decreased $9.8 million compared to December 31, 2021 primarily related to nonaccruing general business and energy loans. New nonaccruing loans identified in the first quarter totaled $12 million, offset by $14 million in payments received and $7.8 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 $169 million at March 31, 2022, down from $222 million at December 31. Potential problem energy loans decreased $37 million. Potential problem commercial real estate loans decreased $8.8 million and potential problem services loans decreased $6.1 million.

Net charge-offs were $6.0 million or 0.12 percent of average loans on an annualized basis for the first quarter of 2022. Net charge-offs were 0.14 percent of average loans over the last four quarters. Net recoveries were $714 thousand or (0.01) percent of average loans on an annualized basis for the fourth quarter of 2021. Gross charge-offs were $7.8 million for the first quarter compared to $6.6 million for the previous quarter. Recoveries totaled $1.8 million for the first quarter of 2022 and $7.3 million for the fourth quarter of 2021.

Securities and Derivatives

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 increased $141 million to $185 million at March 31, 2022 as hedges that were previously held as derivatives were settled into the fair value option securities portfolio. The fair value of the available for sale securities portfolio totaled $12.9 billion at March 31, 2022, a $263 million decrease compared to December 31, 2021. At March 31, 2022, the available for sale securities portfolio consisted primarily of $7.6 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $4.4 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. At March 31, 2022, the available for sale securities portfolio had a net unrealized loss of $547 million compared to a net unrealized gain of $93 million at December 31, 2021.

The net fair values of derivative contracts, before consideration of cash margin, totaled $2.7 billion at March 31, 2022, a $1.6 billion increase compared to December 31, 2021. Energy contracts increased $1.3 billion driven by recent increases in oil and gas prices.

The net cost of the changes in the fair value of mortgage servicing rights and related economic hedges was $8.4 million during the first quarter of 2022, including a $57.9 million decrease in the fair value of securities and derivative contracts held as an economic hedge, $49.1 million increase in the fair value of mortgage servicing rights, and $383 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, April 27, 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 1-844-512-2921 and referencing conference ID # 13728424.

About BOK Financial Corporation

BOK Financial Corporation is a $47 billion regional financial services company headquartered in Tulsa, Oklahoma with $101 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 March 31, 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)

	Mar. 31, 2022			Dec. 31, 2021
ASSETS
Cash and due from banks	$	767,805		$	712,067
Interest-bearing cash and cash equivalents		599,976			2,125,343
Trading securities		4,891,096			9,136,813
Investment securities, net of allowance		183,824			210,444
Available for sale securities		12,894,534			13,157,817
Fair value option securities		185,003			43,770
Restricted equity securities		77,389			83,113
Residential mortgage loans held for sale		169,474			192,295
Loans:
Commercial		12,883,189			12,506,465
Commercial real estate		4,100,956			3,831,325
Paycheck protection program		137,365			276,341
Loans to individuals		3,552,919			3,591,549
Total loans		20,674,429			20,205,680
Allowance for loan losses		(246,473	)		(256,421	)
Loans, net of allowance		20,427,956			19,949,259
Premises and equipment, net		574,786			574,148
Receivables		238,694			223,021
Goodwill		1,044,749			1,044,749
Intangible assets, net		87,761			91,778
Mortgage servicing rights		209,563			163,198
Real estate and other repossessed assets, net		24,492			24,589
Derivative contracts, net		2,680,207			1,097,297
Cash surrender value of bank-owned life insurance		407,763			405,607
Receivable on unsettled securities sales		229,404			56,172
Other assets		1,132,031			957,951
TOTAL ASSETS	$	46,826,507		$	50,249,431

LIABILITIES AND EQUITY
Deposits:
Demand	$	15,242,341		$	15,344,423
Interest-bearing transaction		21,689,829			23,268,573
Savings		979,365			924,735
Time		1,514,416			1,704,328
Total deposits		39,425,951			41,242,059
Funds purchased and repurchase agreements		1,068,329			2,326,449
Other borrowings		36,246			36,753
Subordinated debentures		131,209			131,226
Accrued interest, taxes and expense		238,048			273,041
Due on unsettled securities purchases		81,016			160,686
Derivative contracts, net		557,834			275,625
Other liabilities		434,350			435,221
TOTAL LIABILITIES		41,972,983			44,881,060
Shareholders’ equity:
Capital, surplus and retained earnings		5,267,408			5,291,361
Accumulated other comprehensive gain (loss)		(417,826	)		72,371
TOTAL SHAREHOLDERS’ EQUITY		4,849,582			5,363,732
Non-controlling interests		3,942			4,639
TOTAL EQUITY		4,853,524			5,368,371
TOTAL LIABILITIES AND EQUITY	$	46,826,507		$	50,249,431

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

	Three Months Ended
	Mar. 31, 2022			Dec. 31, 2021			Sept. 30, 2021			June 30, 2021			Mar. 31, 2021
ASSETS
Interest-bearing cash and cash equivalents	$	1,050,409		$	1,208,552		$	682,788		$	659,312		$	711,047
Trading securities		8,537,390			9,260,778			7,617,236			7,430,217			6,963,617
Investment securities, net of allowance		195,198			213,188			218,117			221,401			237,313
Available for sale securities		13,092,422			13,247,607			13,446,095			13,243,542			13,433,767
Fair value option securities		75,539			46,458			56,307			64,864			104,662
Restricted equity securities		164,484			137,874			245,485			208,692			189,921
Residential mortgage loans held for sale		179,697			163,433			167,620			218,200			207,013
Loans:
Commercial		12,677,706			12,401,935			12,231,230			12,402,925			12,908,461
Commercial real estate		4,059,148			3,838,336			4,218,190			4,395,848			4,547,945
Paycheck protection program		210,110			404,261			792,728			1,668,047			1,741,534
Loans to individuals		3,516,698			3,598,121			3,606,460			3,700,269			3,559,067
Total loans		20,463,662			20,242,653			20,848,608			22,167,089			22,757,007
Allowance for loan losses		(254,191	)		(271,794	)		(306,125	)		(345,269	)		(382,734	)
Loans, net of allowance		20,209,471			19,970,859			20,542,483			21,821,820			22,374,273
Total earning assets		43,504,610			44,248,749			42,976,131			43,868,048			44,221,613
Cash and due from banks		790,440			783,670			766,688			763,393			760,691
Derivative contracts, net		2,126,282			1,441,869			1,501,736			1,022,137			873,712
Cash surrender value of bank-owned life insurance		406,379			404,149			401,926			401,760			399,830
Receivable on unsettled securities sales		375,616			585,901			632,539			716,700			735,482
Other assets		3,357,747			3,139,718			3,220,129			3,424,884			3,319,305
TOTAL ASSETS	$	50,561,074		$	50,604,056		$	49,499,149		$	50,196,922		$	50,310,633

LIABILITIES AND EQUITY
Deposits:
Demand	$	15,062,282		$	14,818,841		$	13,670,656		$	13,189,954		$	12,312,629
Interest-bearing transaction		22,763,479			22,326,401			21,435,736			21,491,145			21,433,406
Savings		947,407			909,131			888,011			872,618			789,656
Time		1,589,039			1,747,715			1,839,983			1,936,510			1,986,425
Total deposits		40,362,207			39,802,088			37,834,386			37,490,227			36,522,116
Funds purchased and repurchase agreements		2,004,466			2,893,128			1,448,800			1,790,490			2,830,378
Other borrowings		1,148,440			880,837			2,546,083			3,608,369			3,392,346
Subordinated debentures		131,228			131,224			214,654			276,034			276,015
Derivative contracts, net		682,435			320,757			434,334			366,202			428,488
Due on unsettled securities purchases		519,097			629,642			957,538			701,495			915,410
Other liabilities		565,350			578,091			619,913			634,460			671,715
TOTAL LIABILITIES		45,413,223			45,235,767			44,055,708			44,867,277			45,036,468
Total equity		5,147,851			5,368,289			5,443,441			5,329,645			5,274,165
TOTAL LIABILITIES AND EQUITY	$	50,561,074		$	50,604,056		$	49,499,149		$	50,196,922		$	50,310,633

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

	Three Months Ended
	March 31,
		2022			2021

Interest revenue	$	283,099		$	298,239
Interest expense		14,688			17,819
Net interest revenue		268,411			280,420
Provision for credit losses		—			(25,000	)
Net interest revenue after provision for credit losses		268,411			305,420
Other operating revenue:
Brokerage and trading revenue		(27,079	)		20,782
Transaction card revenue		24,216			22,430
Fiduciary and asset management revenue		46,399			41,322
Deposit service charges and fees		27,004			24,209
Mortgage banking revenue		16,650			37,113
Other revenue		10,445			16,296
Total fees and commissions		97,635			162,152
Other gains (losses), net		(1,644	)		10,121
Loss on derivatives, net		(46,981	)		(27,650	)
Loss on fair value option securities, net		(11,201	)		(1,910	)
Change in fair value of mortgage servicing rights		49,110			33,874
Gain on available for sale securities, net		937			467
Total other operating revenue		87,856			177,054
Other operating expense:
Personnel		159,228			173,010
Business promotion		6,513			2,154
Charitable contributions to BOKF Foundation		—			4,000
Professional fees and services		11,413			11,980
Net occupancy and equipment		30,855			26,662
Insurance		4,283			4,620
Data processing and communications		39,836			37,467
Printing, postage and supplies		3,689			3,440
Amortization of intangible assets		3,964			4,807
Mortgage banking costs		7,877			13,943
Other expense		9,960			13,701
Total other operating expense		277,618			295,784

Net income before taxes		78,649			186,690
Federal and state income taxes		16,197			42,382

Net income		62,452			144,308
Net loss attributable to non-controlling interests		(36	)		(1,752	)
Net income attributable to BOK Financial Corporation shareholders	$	62,488		$	146,060

Average shares outstanding:
Basic		67,812,400			69,137,375
Diluted		67,813,851			69,141,710

Net income per share:
Basic	$	0.91		$	2.10
Diluted	$	0.91		$	2.10

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

	Three Months Ended
	Mar. 31, 2022			Dec. 31, 2021			Sept. 30, 2021			June 30, 2021			Mar. 31, 2021
Capital:
Period-end shareholders’ equity	$	4,849,582		$	5,363,732		$	5,388,973		$	5,332,977		$	5,239,462
Risk weighted assets	$	37,160,258		$	34,575,277		$	33,916,456		$	33,824,860		$	32,623,108
Risk-based capital ratios:
Common equity tier 1		11.30	%		12.24	%		12.26	%		11.95	%		12.14	%
Tier 1		11.31	%		12.25	%		12.29	%		12.01	%		12.21	%
Total capital		12.25	%		13.29	%		13.38	%		13.61	%		13.98	%
Leverage ratio		8.47	%		8.55	%		8.77	%		8.58	%		8.42	%
Tangible common equity ratio¹		8.13	%		8.61	%		9.28	%		9.09	%		8.82	%

Common stock:
Book value per share	$	71.21		$	78.34		$	78.56		$	77.20		$	75.33
Tangible book value per share	$	54.58		$	61.74		$	61.93		$	60.50		$	58.67
Market value per share:
High	$	119.59		$	110.21		$	92.97		$	93.00		$	98.95
Low	$	93.76		$	89.01		$	77.20		$	83.59		$	67.57
Cash dividends paid	$	36,093		$	36,256		$	35,725		$	35,925		$	36,038
Dividend payout ratio		57.76	%		30.90	%		18.97	%		21.59	%		24.67	%
Shares outstanding, net		68,104,043			68,467,772			68,596,764			69,078,458			69,557,873
Stock buy-back program:
Shares repurchased		475,877			128,522			478,141			492,994			260,000
Amount	$	48,074		$	13,426		$	40,644		$	43,797		$	20,071
Average price per share	$	101.02		$	104.46		$	85.00		$	88.84		$	77.20

Performance ratios (quarter annualized):
Return on average assets		0.50	%		0.92	%		1.51	%		1.33	%		1.18	%
Return on average equity		4.93	%		8.68	%		13.78	%		12.58	%		11.28	%
Net interest margin		2.44	%		2.52	%		2.66	%		2.60	%		2.62	%
Efficiency ratio		75.07	%		70.14	%		61.23	%		64.20	%		66.26	%

Reconciliation of non-GAAP measures:
¹ Tangible common equity ratio:
Total shareholders’ equity	$	4,849,582		$	5,363,732		$	5,388,973		$	5,332,977		$	5,239,462
Less: Goodwill and intangible assets, net		1,132,510			1,136,527			1,140,935			1,153,785			1,158,676
Tangible common equity	$	3,717,072		$	4,227,205		$	4,248,038		$	4,179,192		$	4,080,786

Total assets	$	46,826,507		$	50,249,431		$	46,923,409		$	47,154,375		$	47,442,513
Less: Goodwill and intangible assets, net		1,132,510			1,136,527			1,140,935			1,153,785			1,158,676
Tangible assets	$	45,693,997		$	49,112,904		$	45,782,474		$	46,000,590		$	46,283,837

Tangible common equity ratio		8.13	%		8.61	%		9.28	%		9.09	%		8.82	%



Pre-provision net revenue:
Net income before taxes	$	78,649		$	152,025		$	241,782		$	215,603		$	186,690
Provision for expected credit losses		—			(17,000	)		(23,000	)		(35,000	)		(25,000	)
Net income (loss) attributable to non-controlling interests		(36	)		(129	)		(601	)		686			(1,752	)
Pre-provision net revenue	$	78,685		$	135,154		$	219,383		$	179,917		$	163,442

Other data:
Tax equivalent interest	$	1,973		$	2,104		$	2,217		$	2,320		$	2,301
Net unrealized gain (loss) on available for sale securities	$	(546,598	)	$	93,381		$	221,487		$	297,267		$	290,217

Mortgage banking:
Mortgage production revenue	$	5,055		$	10,018		$	15,403		$	10,004		$	25,287

Mortgage loans funded for sale	$	418,866		$	568,507		$	652,336		$	754,893		$	843,053
Add: current period-end outstanding commitments		160,260			171,412			239,066			276,154			387,465
Less: prior period end outstanding commitments		171,412			239,066			276,154			387,465			380,637
Total mortgage production volume	$	407,714		$	500,853		$	615,248		$	643,582		$	849,881

Mortgage loan refinances to mortgage loans funded for sale		45	%		51	%		48	%		48	%		65	%
Realized margin on funded mortgage loans		1.64	%		2.34	%		2.48	%		2.75	%		3.10	%
Production revenue as a percentage of production volume		1.24	%		2.00	%		2.50	%		1.55	%		2.98	%

Mortgage servicing revenue	$	11,595		$	11,260		$	10,883		$	11,215		$	11,826
Average outstanding principal balance of mortgage loans serviced for others		16,155,329			15,930,480			14,899,306			15,065,173			15,723,231
Average mortgage servicing revenue rates		0.29	%		0.28	%		0.29	%		0.30	%		0.31	%

Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net	$	(46,694	)	$	(4,862	)	$	(5,829	)	$	18,764		$	(27,705	)
Gain (loss) on fair value option securities, net		(11,201	)		1,418			(120	)		(1,627	)		(1,910	)
Gain (loss) on economic hedge of mortgage servicing rights		(57,895	)		(3,444	)		(5,949	)		17,137			(29,615	)
Gain (loss) on changes in fair value of mortgage servicing rights		49,110			7,859			12,945			(13,041	)		33,874
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue		(8,785	)		4,415			6,996			4,096			4,259
Net interest revenue on fair value option securities²		383			259			286			341			393
Total economic benefit (cost) of changes in the fair value of mortgage servicing rights, net of economic hedges	$	(8,402	)	$	4,674		$	7,282		$	4,437		$	4,652

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
	Mar. 31, 2022			Dec. 31, 2021			Sept. 30, 2021			June 30, 2021			Mar. 31, 2021

Interest revenue	$	283,099		$	292,334		$	293,463		$	295,893		$	298,239
Interest expense		14,688			15,257			13,236			15,584			17,819
Net interest revenue		268,411			277,077			280,227			280,309			280,420
Provision for credit losses		—			(17,000	)		(23,000	)		(35,000	)		(25,000	)
Net interest revenue after provision for credit losses		268,411			294,077			303,227			315,309			305,420
Other operating revenue:
Brokerage and trading revenue		(27,079	)		14,869			47,930			29,408			20,782
Transaction card revenue		24,216			24,998			24,632			24,923			22,430
Fiduciary and asset management revenue		46,399			46,872			45,248			44,832			41,322
Deposit service charges and fees		27,004			26,718			27,429			25,861			24,209
Mortgage banking revenue		16,650			21,278			26,286			21,219			37,113
Other revenue		10,445			11,586			18,896			23,172			16,296
Total fees and commissions		97,635			146,321			190,421			169,415			162,152
Other gains (losses), net		(1,644	)		6,081			31,091			16,449			10,121
Gain (loss) on derivatives, net		(46,981	)		(4,788	)		(5,760	)		18,820			(27,650	)
Gain (loss) on fair value option securities, net		(11,201	)		1,418			(120	)		(1,627	)		(1,910	)
Change in fair value of mortgage servicing rights		49,110			7,859			12,945			(13,041	)		33,874
Gain on available for sale securities, net		937			552			1,255			1,430			467
Total other operating revenue		87,856			157,443			229,832			191,446			177,054
Other operating expense:
Personnel		159,228			174,474			175,863			172,035			173,010
Business promotion		6,513			6,452			4,939			2,744			2,154
Charitable contributions to BOKF Foundation		—			5,000			—			—			4,000
Professional fees and services		11,413			14,129			12,436			12,361			11,980
Net occupancy and equipment		30,855			26,897			28,395			26,633			26,662
Insurance		4,283			3,889			3,712			3,660			4,620
Data processing and communications		39,836			39,358			38,371			36,418			37,467
Printing, postage and supplies		3,689			2,935			3,558			4,285			3,440
Amortization of intangible assets		3,964			4,438			4,488			4,578			4,807
Mortgage banking costs		7,877			8,667			8,962			11,126			13,943
Other expense		9,960			13,256			10,553			17,312			13,701
Total other operating expense		277,618			299,495			291,277			291,152			295,784
Net income before taxes		78,649			152,025			241,782			215,603			186,690
Federal and state income taxes		16,197			34,836			54,061			48,496			42,382
Net income		62,452			117,189			187,721			167,107			144,308
Net income (loss) attributable to non-controlling interests		(36	)		(129	)		(601	)		686			(1,752	)
Net income attributable to BOK Financial Corporation shareholders	$	62,488		$	117,318		$	188,322		$	166,421		$	146,060

Average shares outstanding:
Basic		67,812,400			68,069,160			68,359,125			68,815,666			69,137,375
Diluted		67,813,851			68,070,910			68,360,871			68,817,442			69,141,710
Net income per share:
Basic	$	0.91		$	1.71		$	2.74		$	2.40		$	2.10
Diluted	$	0.91		$	1.71		$	2.74		$	2.40		$	2.10

LOANS TREND — UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)

	Mar. 31, 2022		Dec. 31, 2021		Sept. 30, 2021		June 30, 2021		Mar. 31, 2021
Commercial:
Healthcare	$	3,441,732	$	3,414,940	$	3,347,641	$	3,381,261	$	3,290,758
Services		3,351,495		3,367,193		3,323,422		3,389,756		3,421,948
Energy		3,197,667		3,006,884		2,814,059		3,011,331		3,202,488
General business		2,892,295		2,717,448		2,690,018		2,690,559		2,742,590
Total commercial		12,883,189		12,506,465		12,175,140		12,472,907		12,657,784

Commercial real estate:
Office		1,097,516		1,040,963		1,030,755		1,073,346		1,094,060
Industrial		911,928		766,125		890,316		824,577		789,437
Multifamily		867,288		786,404		875,586		964,824		1,227,915
Retail		667,561		679,917		766,402		784,445		787,648
Residential construction and land development		120,506		120,016		118,416		128,939		119,079
Other commercial real estate		436,157		437,900		435,417		470,861		485,208
Total commercial real estate		4,100,956		3,831,325		4,116,892		4,246,992		4,503,347

Paycheck protection program		137,365		276,341		536,052		1,121,583		1,848,550

Loans to individuals:
Residential mortgage		1,723,506		1,722,170		1,747,243		1,772,627		1,797,478
Residential mortgages guaranteed by U.S. government agencies		322,581		354,173		376,986		413,806		420,051
Personal		1,506,832		1,515,206		1,395,623		1,388,534		1,306,637
Total loans to individuals		3,552,919		3,591,549		3,519,852		3,574,967		3,524,166

Total	$	20,674,429	$	20,205,680	$	20,347,936	$	21,416,449	$	22,533,847

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

	Mar. 31, 2022		Dec. 31, 2021		Sept. 30, 2021		June 30, 2021		Mar. 31, 2021

Texas:
Commercial	$	6,254,883	$	6,068,700	$	5,815,562	$	5,690,901	$	5,748,345
Commercial real estate		1,345,105		1,253,439		1,383,871		1,403,751		1,511,714
Paycheck protection program		31,242		81,654		115,623		342,933		537,899
Loans to individuals		957,320		942,982		901,121		885,619		848,194
Total Texas		8,588,550		8,346,775		8,216,177		8,323,204		8,646,152

Oklahoma:
Commercial		2,883,663		2,633,014		2,590,887		2,840,560		2,975,477
Commercial real estate		552,310		546,021		552,184		552,673		597,840
Paycheck protection program		52,867		69,817		192,474		242,880		468,002
Loans to individuals		1,977,886		2,024,404		2,014,099		2,063,419		2,043,705
Total Oklahoma		5,466,726		5,273,256		5,349,644		5,699,532		6,085,024

Colorado:
Commercial		1,977,773		1,936,149		1,874,613		1,904,182		1,910,826
Commercial real estate		480,740		470,937		526,653		656,521		777,786
Paycheck protection program		28,584		82,781		140,470		299,712		436,540
Loans to individuals		236,125		256,533		249,298		262,796		264,759
Total Colorado		2,723,222		2,746,400		2,791,034		3,123,211		3,389,911

Arizona:
Commercial		1,074,551		1,130,798		1,194,801		1,239,270		1,207,089
Commercial real estate		719,970		674,309		734,174		705,497		667,766
Paycheck protection program		11,644		21,594		42,815		104,946		208,481
Loans to individuals		190,746		186,528		182,506		178,481		179,031
Total Arizona		1,996,911		2,013,229		2,154,296		2,228,194		2,262,367

Kansas/Missouri:
Commercial		334,371		338,697		336,414		388,291		421,974
Commercial real estate		436,740		382,761		408,001		406,055		395,590
Paycheck protection program		2,595		4,718		6,920		41,954		60,741
Loans to individuals		121,247		110,889		100,920		103,092		104,954
Total Kansas/Missouri		894,953		837,065		852,255		939,392		983,259

New Mexico:
Commercial		262,533		306,964		287,695		304,804		307,395
Commercial real estate		504,632		442,128		437,302		437,996		448,298
Paycheck protection program		9,713		13,510		31,444		86,716		124,059
Loans to individuals		63,299		63,930		66,651		68,177		70,491
Total New Mexico		840,177		826,532		823,092		897,693		950,243

Arkansas:
Commercial		95,415		92,143		75,168		104,899		86,678
Commercial real estate		61,459		61,730		74,707		84,499		104,353
Paycheck protection program		720		2,267		6,306		2,442		12,828
Loans to individuals		6,296		6,283		5,257		13,383		13,032
Total Arkansas		163,890		162,423		161,438		205,223		216,891

TOTAL BOK FINANCIAL	$	20,674,429	$	20,205,680	$	20,347,936	$	21,416,449	$	22,533,847

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)

	Mar. 31, 2022		Dec. 31, 2021		Sept. 30, 2021		June 30, 2021		Mar. 31, 2021
Oklahoma:
Demand	$	5,205,806	$	5,433,405	$	5,080,162	$	4,985,542	$	4,823,436
Interest-bearing:
Transaction		11,410,709		12,689,367		11,692,679		12,065,844		12,828,070
Savings		558,634		521,439		510,906		500,344		487,862
Time		817,744		978,822		1,039,866		1,139,980		1,197,517
Total interest-bearing		12,787,087		14,189,628		13,243,451		13,706,168		14,513,449
Total Oklahoma		17,992,893		19,623,033		18,323,613		18,691,710		19,336,885

Texas:
Demand		4,552,001		4,552,983		3,987,503		3,752,790		3,592,969
Interest-bearing:
Transaction		4,963,118		5,345,461		4,985,465		4,335,113		4,257,234
Savings		182,536		178,458		165,043		160,805		154,406
Time		329,931		337,559		337,389		346,577		368,086
Total interest-bearing		5,475,585		5,861,478		5,487,897		4,842,495		4,779,726
Total Texas		10,027,586		10,414,461		9,475,400		8,595,285		8,372,695

Colorado:
Demand		2,673,352		2,526,855		2,158,596		1,991,343		2,115,354
Interest-bearing:
Transaction		2,387,304		2,334,371		2,337,354		2,159,819		2,100,135
Savings		81,762		78,636		79,873		73,990		73,446
Time		165,401		174,351		184,002		193,787		204,973
Total interest-bearing		2,634,467		2,587,358		2,601,229		2,427,596		2,378,554
Total Colorado		5,307,819		5,114,213		4,759,825		4,418,939		4,493,908

New Mexico:
Demand		1,271,264		1,196,057		1,222,895		1,197,412		1,131,713
Interest-bearing:
Transaction		888,257		858,394		837,630		723,757		736,923
Savings		115,457		107,963		107,615		105,837		103,591
Time		156,140		163,871		168,879		174,665		181,863
Total interest-bearing		1,159,854		1,130,228		1,114,124		1,004,259		1,022,377
Total New Mexico		2,431,118		2,326,285		2,337,019		2,201,671		2,154,090

Arizona:
Demand		947,775		934,282		1,110,884		943,511		915,439
Interest-bearing:
Transaction		810,896		834,491		784,614		820,901		835,795
Savings		18,122		16,182		16,468		13,496		13,235
Time		27,259		31,274		30,862		30,012		30,997
Total interest-bearing		856,277		881,947		831,944		864,409		880,027
Total Arizona		1,804,052		1,816,229		1,942,828		1,807,920		1,795,466


Kansas/Missouri:
Demand		553,345		658,342		488,595		463,339		478,370
Interest-bearing:
Transaction		1,107,525		1,086,946		965,757		978,160		991,510
Savings		19,589		18,844		17,303		17,539		18,686
Time		11,527		12,255		13,040		13,509		13,898
Total interest-bearing		1,138,641		1,118,045		996,100		1,009,208		1,024,094
Total Kansas/Missouri		1,691,986		1,776,387		1,484,695		1,472,547		1,502,464

Arkansas:
Demand		38,798		42,499		41,594		46,472		45,889
Interest-bearing:
Transaction		122,020		119,543		149,611		195,125		141,207
Savings		3,265		3,213		3,289		3,445		3,000
Time		6,414		6,196		6,677		6,819		7,022
Total interest-bearing		131,699		128,952		159,577		205,389		151,229
Total Arkansas		170,497		171,451		201,171		251,861		197,118

TOTAL BOK FINANCIAL	$	39,425,951	$	41,242,059	$	38,524,551	$	37,439,933	$	37,852,626

NET INTEREST MARGIN TREND — UNAUDITED
BOK FINANCIAL CORPORATION

	Three Months Ended
	Mar. 31, 2022		Dec. 31, 2021		Sept. 30, 2021		June 30, 2021		Mar. 31, 2021

TAX-EQUIVALENT ASSETS YIELDS
Interest-bearing cash and cash equivalents	0.18	%	0.16	%	0.14	%	0.10	%	0.10	%
Trading securities	1.71	%	1.89	%	2.04	%	1.95	%	2.06	%
Investment securities, net of allowance	5.07	%	4.99	%	5.02	%	5.01	%	4.88	%
Available for sale securities	1.77	%	1.72	%	1.80	%	1.85	%	1.84	%
Fair value option securities	2.81	%	2.71	%	2.62	%	2.60	%	1.95	%
Restricted equity securities	2.69	%	2.98	%	2.55	%	3.36	%	2.86	%
Residential mortgage loans held for sale	3.11	%	3.06	%	3.06	%	2.91	%	2.71	%
Loans	3.57	%	3.70	%	3.68	%	3.54	%	3.55	%
Allowance for loan losses
Loans, net of allowance	3.61	%	3.75	%	3.73	%	3.60	%	3.62	%
Total tax-equivalent yield on earning assets	2.58	%	2.66	%	2.78	%	2.75	%	2.78	%

COST OF INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest-bearing transaction	0.10	%	0.09	%	0.09	%	0.10	%	0.12	%
Savings	0.03	%	0.04	%	0.04	%	0.04	%	0.04	%
Time	0.56	%	0.53	%	0.55	%	0.58	%	0.70	%
Total interest-bearing deposits	0.12	%	0.12	%	0.13	%	0.14	%	0.17	%
Funds purchased and repurchase agreements	0.95	%	0.73	%	0.20	%	0.16	%	0.19	%
Other borrowings	0.38	%	0.49	%	0.37	%	0.34	%	0.39	%
Subordinated debt	4.02	%	4.02	%	4.63	%	4.87	%	4.92	%
Total cost of interest-bearing liabilities	0.21	%	0.21	%	0.19	%	0.21	%	0.24	%
Tax-equivalent net interest revenue spread	2.37	%	2.45	%	2.59	%	2.54	%	2.54	%
Effect of noninterest-bearing funding sources and other	0.07	%	0.07	%	0.07	%	0.06	%	0.08	%
Tax-equivalent net interest margin	2.44	%	2.52	%	2.66	%	2.60	%	2.62	%

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
	Mar. 31, 2022			Dec. 31, 2021			Sept. 30, 2021			June 30, 2021			Mar. 31, 2021
Nonperforming assets:
Nonaccruing loans:
Commercial:
Energy	$	24,976		$	31,091		$	45,500		$	70,341		$	101,800
Services		16,535			17,170			25,714			29,913			28,033
Healthcare		15,076			15,762			509			527			3,187
General business		3,750			10,081			8,951			11,823			14,053
Total commercial		60,337			74,104			80,674			112,604			147,073

Commercial real estate		15,989			14,262			21,223			26,123			27,243

Loans to individuals:
Permanent mortgage		30,757			31,574			30,674			31,473			32,884
Permanent mortgage guaranteed by U.S. government agencies		16,992			13,861			9,188			9,207			8,564
Personal		171			258			188			229			255
Total loans to individuals		47,920			45,693			40,050			40,909			41,703

Total nonaccruing loans	$	124,246		$	134,059		$	141,947		$	179,636		$	216,019
Accruing renegotiated loans guaranteed by U.S. government agencies		204,121			210,618			178,554			171,324			154,591
Real estate and other repossessed assets		24,492			24,589			28,770			57,337			70,911
Total nonperforming assets	$	352,859		$	369,266		$	349,271		$	408,297		$	441,521
Total nonperforming assets excluding those guaranteed by U.S. government agencies	$	131,746		$	144,787		$	161,529		$	227,766		$	278,366

Accruing loans 90 days past due¹	$	307		$	313		$	223		$	252		$	395

Gross charge-offs	$	7,805		$	6,558		$	9,584		$	18,304		$	16,905
Recoveries		(1,824	)		(7,272	)		(1,769	)		(2,856	)		(2,437	)
Net charge-offs (recoveries)	$	5,981		$	(714	)	$	7,815		$	15,448		$	14,468

Provision for loan losses	$	(3,967	)	$	(20,973	)	$	(27,395	)	$	(25,064	)	$	(21,770	)
Provision for credit losses from off-balance sheet unfunded loan commitments		3,268			3,738			4,952			(8,590	)		(4,044	)
Provision for expected credit losses from mortgage banking activities		621			150			(534	)		(1,222	)		885
Provision for credit losses related to held-to maturity (investment) securities portfolio		78			85			(23	)		(124	)		(71	)
Total provision for credit losses	$	—		$	(17,000	)	$	(23,000	)	$	(35,000	)	$	(25,000	)

Allowance for loan losses to period end loans		1.19	%		1.27	%		1.36	%		1.46	%		1.56	%
Allowance for loan losses to period end loans excluding PPP loans²		1.20	%		1.29	%		1.40	%		1.54	%		1.70	%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans		1.37	%		1.43	%		1.50	%		1.57	%		1.71	%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans excluding PPP loans²		1.38	%		1.45	%		1.54	%		1.66	%		1.86	%
Nonperforming assets to period end loans and repossessed assets		1.70	%		1.83	%		1.71	%		1.90	%		1.95	%
Net charge-offs (annualized) to average loans		0.12	%		(0.01	)%		0.15	%		0.28	%		0.25	%
Net charge-offs (annualized) to average loans excluding PPP loans²		0.12	%		(0.01	)%		0.16	%		0.30	%		0.28	%
Allowance for loan losses to nonaccruing loans¹		229.80	%		213.33	%		208.41	%		183.00	%		169.87	%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to nonaccruing loans¹		263.60	%		240.77	%		230.43	%		197.25	%		185.72	%

¹ Excludes residential mortgage loans guaranteed by agencies of the U.S. government.
² Metric 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							1Q22 vs 4Q21					1Q22 vs 1Q21
	Mar. 31, 2022			Dec. 31, 2021		Mar. 31, 2021		$ change			% change		$ change			% change
Commercial Banking
Net interest revenue	$	137,011		$	140,723	$	130,005	$	(3,712	)	(2.6	)%	$	7,006		5.4	%
Fees and commissions revenue		56,964			57,414		49,847		(450	)	(0.8	)%		7,117		14.3	%
Combined net interest and fee revenue		193,975			198,137		179,852		(4,162	)	(2.1	)%		14,123		7.9	%
Other operating expense		65,114			74,459		66,979		(9,345	)	(12.6	)%		(1,865	)	(2.8	)%
Corporate expense allocations		16,246			12,926		12,734		3,320		25.7	%		3,512		27.6	%
Net income		82,344			83,514		69,673		(1,170	)	(1.4	)%		12,671		18.2	%

Average assets		29,823,905			29,451,007		28,047,052		372,898		1.3	%		1,776,853		6.3	%
Average loans		16,696,428			16,334,695		17,522,520		361,733		2.2	%		(826,092	)	(4.7	)%
Average deposits		19,595,260			19,537,285		16,130,168		57,975		0.3	%		3,465,092		21.5	%

Consumer Banking
Net interest revenue	$	27,207		$	30,385	$	20,974	$	(3,178	)	(10.5	)%	$	6,233		29.7	%
Fees and commissions revenue		33,977			38,944		52,300		(4,967	)	(12.8	)%		(18,323	)	(35.0	)%
Combined net interest and fee revenue		61,184			69,329		73,274		(8,145	)	(11.7	)%		(12,090	)	(16.5	)%
Other operating expense		48,789			52,036		55,622		(3,247	)	(6.2	)%		(6,833	)	(12.3	)%
Corporate expense allocations		12,080			11,420		11,475		660		5.8	%		605		5.3	%
Net income (loss)		(7,317	)		6,810		6,948		(14,127	)	(207.4	)%		(14,265	)	(205.3	)%

Average assets		10,273,890			10,186,797		9,755,539		87,093		0.9	%		518,351		5.3	%
Average loans		1,672,346			1,705,222		1,823,732		(32,876	)	(1.9	)%		(151,386	)	(8.3	)%
Average deposits		8,746,622			8,682,437		8,082,443		64,185		0.7	%		664,179		8.2	%

Wealth Management
Net interest revenue	$	55,766		$	58,229	$	48,354	$	(2,463	)	(4.2	)%	$	7,412		15.3	%
Fees and commissions revenue		25,023			56,275		65,684		(31,252	)	(55.5	)%		(40,661	)	(61.9	)%
Combined net interest and fee revenue		80,789			114,504		114,038		(33,715	)	(29.4	)%		(33,249	)	(29.2	)%
Other operating expense		74,495			74,947		78,565		(452	)	(0.6	)%		(4,070	)	(5.2	)%
Corporate expense allocations		12,062			9,971		9,887		2,091		21.0	%		2,175		22.0	%
Net income (loss)		(4,419	)		21,700		19,382		(26,119	)	(120.4	)%		(23,801	)	(122.8	)%

Average assets		19,526,382			20,725,903		18,645,865		(1,199,521	)	(5.8	)%		880,517		4.7	%
Average loans		2,118,780			2,065,261		1,917,973		53,519		2.6	%		200,807		10.5	%
Average deposits		9,619,323			9,194,019		9,706,295		425,304		4.6	%		(86,972	)	(0.9	)%
Fiduciary assets		61,095,320			64,536,833		56,227,268		(3,441,513	)	(5.3	)%		4,868,052		8.7	%
Assets under management or administration		101,081,355			104,917,721		91,956,188		(3,836,366	)	(3.7	)%		9,125,167		9.9	%

Contact:

Sue Hermann
Senior Vice President, Corporate Communications, BOK Financial
303-312-3488

BOK Financial Corporation Reports Quarterly Earnings of $62 million or $0.91 Per Share in the First Quarter

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