BOK Financial Corporation Reports Quarterly Earnings of $133 million or $1.96 Per Share in the Second Quarter

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

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

CEO Commentary

Stacy Kymes, president and chief executive officer, stated, “The quarter represented strong earnings performance from across the company, demonstrating both our diversity and breadth. Loans are on a pace to exceed a 10 percent growth rate for the year, excluding the PPP program. While loan growth was exceptional, new loan commitments for the quarter grew at an even faster pace and broadly across our business region. Our net interest margin improved from the mix of earning assets and a balance sheet structure that is currently positioned to benefit from rising rates. Our trading businesses rebounded from the volatile first quarter. We had a strong quarter in commodity hedging and syndication activity as our market share in the energy space continues to expand. Despite market volatility and the resulting decrease in the value of assets under management and administration, our fiduciary fees increased. Transaction card revenues accelerated. We entered the year focused on growing top-line revenue and our team has responded, delivering those results across the board. While we understand these are unusual economic times, we are committed to prudent growth. The business profile of our geographic footprint remains exceptional and, when combined with BOKF's long-held credit discipline, will serve us well if the economy slows in future periods.”

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

Net income was $132.8 million or $1.96 per diluted share for the second quarter of 2022 and $62.5 million or $0.91 per diluted share for the first quarter of 2022.

Net interest revenue totaled $274.0 million, an increase of $5.6 million. Net interest margin was 2.76 percent compared to 2.44 percent. In response to rising inflation, the Federal Reserve has increased the federal funds rate 150 basis points since the beginning of 2022. The resulting impact on market interest rates has started to increase net interest margin.

Fees and commissions revenue increased $75.7 million to $173.4 million. Brokerage and trading revenue increased $71.1 million following trading losses in the prior quarter. Revenue growth in all other fee-generating business activities was partially offset by a $5.3 million decrease in mortgage banking revenue.

The net benefit of the changes in fair value of mortgage servicing rights and related economic hedges was $1.9 million for the second quarter of 2022 compared to a net cost of $8.4 million for the first quarter of 2022 due to reduced price sensitivity in the second quarter.

Operating expense decreased $4.0 million to $273.7 million. Personnel expense decreased $4.3 million, primarily due to lower share-based compensation expense. Non-personnel expense was consistent with the prior quarter.

Period-end loans increased $617 million to $21.3 billion at June 30, 2022. Commercial loans increased $696 million while period-end Paycheck Protection Program (“PPP”) loans decreased $94 million to $43 million. In addition, unfunded loan commitments grew by $979 million. Average outstanding loan balances were $21.1 billion, a $594 million increase.

No provision for expected credit losses was necessary for the second quarter of 2022, consistent with the prior quarter. An increase in required provision due to loan growth and changes in our economic outlook was offset by a sustained trend of improving credit quality metrics. The combined allowance for credit losses totaled $283 million or 1.33 percent of outstanding loans at June 30, 2022. The combined allowance for credit losses was $283 million or 1.37 percent of outstanding loans at March 31, 2022.

Average deposits decreased $1.8 billion to $38.6 billion while period-end deposits decreased $807 million to $38.6 billion. Average interest-bearing deposits decreased $1.9 billion and average demand deposits grew $140 million.

The company's common equity Tier 1 capital ratio was 11.61 percent at June 30, 2022. In addition, the company's Tier 1 capital ratio was 11.63 percent, total capital ratio was 12.59 percent, and leverage ratio was 9.12 percent at June 30, 2022. At March 31, 2022, the company's common equity Tier 1 capital ratio was 11.30 percent, Tier 1 capital ratio was 11.31 percent, total capital ratio was 12.25 percent, and leverage ratio was 8.47 percent.

The company repurchased 294,084 shares of common stock at an average price of $82.98 a share in the second quarter of 2022.

Second Quarter 2022 Segment Highlights

Commercial Banking contributed $104.8 million to net income in the second quarter of 2022, an increase of $22.5 million. Combined net interest revenue and fee revenue increased $32.4 million due to loan growth, increased spreads on deposits sold to the Funds Management unit, and loan syndication fees. Net loans charged-off decreased $6.8 million. Transaction card revenue increased $2.7 million due to elevated transaction volumes in the second quarter. Personnel expense increased $3.3 million, primarily due to increased incentive compensation costs with growth in loans and syndication activity. The second quarter also included a $5.8 million write-down of a repossessed equity interest in a midstream energy entity. Average loans increased $640 million or 4 percent to $17.3 billion. Average deposits decreased $661 million or 3 percent.

Consumer Banking contributed $1.2 million to net income in the second quarter of 2022 compared to a prior quarter net loss of $7.3 million. The net benefit of the changes in fair value of mortgage servicing rights and related economic hedges was $1.9 million for the second quarter of 2022 compared to a net cost of $8.4 million for the first quarter of 2022. Combined net interest revenue and fee revenue increased $2.7 million. Net interest revenue increased $6.6 million, primarily due to an increase in the spread on deposits sold to our Funds Management unit. Fees and commissions revenue decreased $3.9 million due to lower mortgage production volumes combined with narrowing margins. Operating expense increased $3.9 million due to a combination of increased business promotion expense and increased accruals for mortgage loan default servicing and loss mitigation costs. Average loans were relatively consistent with the previous quarter. Average deposits increased $130 million or 1 percent to $8.9 billion.

Wealth Management contributed $27.3 million to net income in the second quarter of 2022 compared to a net loss of $4.5 million in the first 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 $124.5 million, an increase of $43.7 million. Total revenue from trading activities increased $47.4 million. Market disruptions during the first quarter of 2022 reduced demand for low-coupon, fixed-rate U.S. government agency residential mortgage-backed securities. These securities were fully sold during the second quarter. Growth in money market fund revenue, seasonal tax preparation fees and a reduction in fee waivers combined to increase fiduciary and asset management revenue $6.6 million. This increase was partially offset by a $3.2 million reduction in asset under management billable fees, consistent with market driven declines in assets under management. Operating expense increased $1.8 million, primarily due to increased volume-driven incentive compensation costs and a full quarter's impact of annual merit increases. Average loans increased $39 million or 2 percent to $2.2 billion. Average deposits decreased $1.1 billion or 12 percent to $8.5 billion as customers redeployed deposits into higher yielding alternatives. Assets under management were $96.0 billion, a decrease of $5.1 billion.

Net Interest Revenue

Net interest revenue was $274.0 million for the second quarter of 2022 compared to $268.4 million for the first quarter of 2022. Net interest margin was 2.76 percent compared to 2.44 percent. In response to rising inflation, the Federal Reserve has increased the federal funds rate 150 basis points since the beginning of 2022. The resulting impact on market interest rates has started to increase net interest margin as our earning assets reprice at a higher rate and faster pace than our interest-bearing liabilities.

Average earning assets decreased $4.4 billion. Average trading securities decreased $4.4 billion as we reduced our inventory of low-coupon mortgage-backed securities and repositioned the trading portfolio in response to rising mortgage interest rates. Average loan balances increased $594 million, largely due to growth in commercial loans, partially offset by a decrease in PPP loans. Average available for sale securities decreased $834 million while investment securities increased $416 million. We transferred $2.4 billion in U.S. government agency mortgage-backed securities from available for sale to investment securities late in the second quarter to limit the effect of future rate increases on the tangible common equity ratio. The transfer of securities did not significantly affect net interest revenue or net interest margin. Average interest bearing cash and cash equivalents decreased $207 million. Funds purchased and repurchase agreements decreased $780 million while other borrowings increased $153 million.

The yield on average earning assets was 2.96 percent, a 38 basis point increase. The loan portfolio yield increased 35 basis points to 3.92 percent. The yield on trading securities was up 29 basis points to 2.00 percent. The yield on the available for sale securities portfolio increased 7 basis points to 1.84 percent. The yield on investment securities decreased 272 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 65 basis points.

Funding costs were 0.31 percent, a 10 basis point increase. The cost of interest-bearing deposits increased 12 basis points to 0.24 percent. The cost of funds purchased and repurchase agreements decreased 42 basis points to 0.53 percent while the cost of other borrowings increased 63 basis points to 1.01 percent. The benefit to net interest margin from assets funded by non-interest liabilities was 11 basis points, an increase of 4 basis points.

Operating Revenue

Fees and commissions revenue totaled $173.4 million for the second quarter of 2022, a $75.7 million increase compared to the first quarter of 2022.

Brokerage and trading revenue increased $71.1 million to $44.0 million, rebounding from a net loss of $27.1 million. Trading revenue increased $66.0 million. Disruption in the fixed income markets related to uncertainty around rising inflation and interest rates adversely affected the value of trading securities during the first quarter of 2022. During the second quarter, we fully sold our inventory of low-coupon, U.S. government agency residential mortgage-backed securities. Trading activity in current-coupon instruments has returned to more normal levels. Investment banking revenue increased $4.2 million, largely due to the timing of commercial loan syndication activity.

Fiduciary and asset management revenue increased $3.4 million, primarily due to an increase in money market fund revenue, a reduction of fee waivers, and seasonal tax preparation fees. These increases were partially offset by a reduction in asset under management billable fees, consistent with market-driven declines in assets under management. We voluntarily waived certain administration fees on the Cavanal Hill money market funds in order to maintain positive yields during the low short-term interest rate environment.

Transaction card revenue increased $2.7 million and deposit service charges increased $1.5 million, both largely affected by changes in customer activity as transaction volumes recover from the pandemic.

Mortgage banking revenue decreased $5.3 million. Rapidly rising mortgage interest rates and continued inventory shortages have adversely affected both loan production volume and margins. Mortgage loan production volume, which includes funded loans and changes in unfunded commitments, decreased $102 million to $306 million. Competitive pricing pressure and a significant decrease in refinancing opportunities, down to 19 percent of total production, have reduced margins. Production revenue, which includes realized gains on loans sold and unrealized gains and losses on our mortgage commitment pipeline and related hedges, as a percentage of production volume, decreased 140 basis points to (0.16) percent.

Other gains and losses, net decreased $6.0 million, primarily related to a write-down of a repossessed equity interest in a midstream entity.

Operating Expense

Total operating expense was $273.7 million for the second quarter of 2022, a decrease of $4.0 million compared to the first quarter of 2022.

Personnel expense decreased $4.3 million. Deferred compensation expense, which is largely offset by a decrease in the value of related rabbi trust investments, decreased $4.8 million. Share-based incentive compensation expense decreased $3.9 million resulting from changes in vesting assumptions. Employee benefits expense decreased $2.4 million primarily due to a seasonal decrease in payroll taxes. These decreases were partially offset by an increase of $5.0 million in cash-based incentive compensation largely related to growing commercial activity and an increase of $1.8 million in regular compensation expense as we recognized a full quarter of expense related to annual merit increases.

Non-personnel expense was $118.7 million, consistent with the first quarter of 2022. Increases in mortgage banking expense, data processing and communications expense, and professional fees and services expense were offset by a decline in net occupancy and equipment expense and other expense.

Loans, Deposits and Capital

Loans

Outstanding loans were $21.3 billion at June 30, 2022, a $617 million increase compared to March 31, 2022 due to growth in commercial loans. Unfunded loan commitments also grew by $979 million during the second quarter.

Outstanding commercial loan balances increased $696 million, with growth in all categories.

Healthcare sector loan balances increased $255 million, totaling $3.7 billion or 17 percent of total loans. Our healthcare sector loans primarily consist of $3.0 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.

Energy loan balances increased $195 million to $3.4 billion or 16 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 $3.4 billion at June 30, 2022, an increase of $342 million over March 31, 2022.

General business loans increased $175 million to $3.1 billion or 14 percent of total loans. General business loans include $1.6 billion of wholesale/retail loans and $1.5 billion of loans from other commercial industries.

Services sector loan balances increased $70 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 $5.2 million and represent 19 percent of total loans. Loans secured by industrial facilities increased $42 million to $954 million while loans secured by retail facilities decreased $30 million to $637 million. Other changes include an increase of $11 million in multifamily residential loans, fully offset by a decrease in other real estate loans.

PPP loan balances decreased $94 million to $43 million, or less than 1 percent of the total loans balance.

Loans to individuals increased $10 million and represent 17 percent of total loans. Total residential mortgage loans increased $32 million while personal loans decreased $22 million.

Deposits

Period-end deposits totaled $38.6 billion at June 30, 2022, an $807 million decrease as customers begin to deploy cash resources following the savings trend during the pandemic. Interest-bearing transaction account balances decreased by $1.1 billion while demand deposits increased $478 million. Period-end Wealth Management deposits decreased $587 million, Commercial Banking deposits decreased $104 million, and Consumer Banking deposits declined by $138 million. Average deposits were $38.6 billion at June 30, 2022, a $1.8 billion decrease. Average interest-bearing transaction account balances decreased $1.7 billion, and average demand deposit account balances increased $140 million.

Capital

The company's common equity Tier 1 capital ratio was 11.61 percent at June 30, 2022. In addition, the company's Tier 1 capital ratio was 11.63 percent, total capital ratio was 12.59 percent, and leverage ratio was 9.12 percent at June 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 10 basis points to the company's common equity tier 1 capital ratio at June 30. At March 31, 2022, the company's common equity Tier 1 capital ratio was 11.30 percent, Tier 1 capital ratio was 11.31 percent, total capital ratio was 12.25 percent, and leverage ratio was 8.47 percent.

The company's tangible common equity ratio, a non-GAAP measure, was 8.16 percent at June 30, 2022 and 8.13 percent at March 31, 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 294,084 shares of common stock at an average price of $82.98 a share in the second 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.

No provision for credit losses was necessary for the second quarter of 2022. An increase in allowance related to our lending activities from the strong loan growth during the quarter and changes in our reasonable and supportable forecast, primarily related to the economic outlook from the Federal Reserve's actions to control inflation, were 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 normalize thereafter. We expect the Russian-Ukraine conflict remains isolated and conditions improve in the fourth quarter of 2022. GDP is projected to increase 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, but is offset by a drawdown in savings. This results in below-trend GDP growth. Our forecasted civilian unemployment rate is 3.7 percent for the third quarter of 2022, increasing to 4.0 percent by the second quarter of 2023. Our base case also assumes the Federal Reserve increases federal funds rates at each meeting through June 2023, which results in a target range of 3.50 percent to 3.75 percent. WTI oil prices are projected to generally follow the NYMEX forward curve that existed at the end of June 2022, averaging $98.15 per barrel over the next twelve months.

The probability weighting of our base case reasonable and supportable forecast decreased to 55 percent in the second quarter of 2022 compared to 60 percent in the first quarter of 2022 as the level of uncertainty in economic forecasts continued to increase. Our downside case, probability weighted at 35 percent, assumes the Russia-Ukraine conflict persists through the second quarter of 2023, 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 4.50 percent to 4.75 percent. The United States economy is pushed into a recession, with a contraction in economic activity and a sharp increase in the unemployment rate from 4.2 percent in the third quarter of 2022 to 6.9 percent in the second quarter of 2023. In this scenario, real GDP is expected to contract 1.8 percent over the next four quarters. WTI oil prices are projected to average $105.36 per barrel over the next twelve months, peaking at $130.37 in the fourth quarter of 2022 and falling 39 percent over the following two quarters.

Nonperforming assets totaled $333 million or 1.56 percent of outstanding loans and repossessed assets at June 30, 2022, compared to $353 million or 1.70 percent at March 31, 2022. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $118 million or 0.56 percent of outstanding loans and repossessed assets at June 30, 2022, compared to $132 million or 0.65 percent at March 31, 2022.

Nonaccruing loans were $114 million or 0.54 percent of outstanding loans at June 30, 2022. Nonaccruing commercial loans totaled $55 million or 0.40 percent of outstanding commercial loans. Nonaccruing commercial real estate loans totaled $11 million or 0.27 percent of outstanding commercial real estate loans. Nonaccruing loans to individuals totaled $49 million or 1.36 percent of outstanding loans to individuals.

Nonaccruing loans decreased $10 million compared to March 31, 2022, primarily related to nonaccruing commercial real estate, energy and services loans. New nonaccruing loans identified in the second quarter totaled $4.4 million, offset by $8.4 million in payments received, $4.0 million in foreclosures and $1.4 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 $131 million at June 30, 2022, down from $169 million at March 31. Potential problem energy loans decreased $36 million. Potential problem services loans increased $16 million, offset by a $14 million decrease in potential problem commercial real estate 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 totaled $241 million or 1.13 percent of outstanding loans and 251 percent of nonaccruing loans excluding residential mortgage loans guaranteed by U.S. government agencies.

At March 31, 2022, 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. The allowance for loan losses was $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.

Gross charge-offs were $1.4 million for the second quarter compared to $7.8 million for the first quarter of 2022. Recoveries totaled $2.2 million for the second quarter of 2022 and $1.8 million for the prior quarter leading to net recoveries of $799 thousand or 0.02 percent of average loans on an annualized basis and net charge-offs of $6.0 million or 0.12 percent of average loans on an annualized basis, respectively. Net charge-offs were 0.06 percent of average loans over the last four quarters.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $10.2 billion at June 30, 2022, a $2.7 billion decrease compared to March 31, 2022. During the second quarter of 2022, certain U.S. government agency residential mortgage-backed securities were transferred from the available for sale portfolio to the investment securities portfolio. At the time of transfer, the fair value totaled $2.4 billion, amortized cost totaled $2.7 billion and the pretax unrealized loss totaled $268 million. At June 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 $4.1 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. At June 30, 2022, the available for sale securities portfolio had a net unrealized loss of $523 million compared to $547 million at March 31, 2022.

We hold an inventory of trading securities in support of sales to a variety of customers. At June 30, 2022, the trading securities portfolio totaled $2.9 billion compared to $4.9 billion at March 31, 2022. During the second quarter of 2022, we sold our low-coupon, fixed rate U.S. government agency residential mortgage-backed securities inventory.

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 $147 million to $38 million at June 30, 2022.

Derivative contracts are carried at fair value. At June 30, 2022, the net fair values of derivative contracts, before consideration of cash margin, reported as assets under our customer derivative programs totaled $2.0 billion compared to $2.4 billion at March 31, 2022. The aggregate net fair value of derivative contracts, before consideration of cash margin, held under these programs reported as liabilities totaled $2.0 billion at June 30, 2022 and $2.4 billion at March 31, 2022.

The net benefit of the changes in the fair value of mortgage servicing rights and related economic hedges was $1.9 million during the second quarter of 2022, including a $17.5 million increase in the fair value of mortgage servicing rights, $15.9 million decrease in the fair value of securities and derivative contracts held as an economic hedge, and $275 thousand of related net interest revenue. Three bulk mortgage servicing rights portfolios were acquired during the second quarter of 2022. These acquisitions added $3.5 billion in unpaid principal balance comprised of conventional, low note rate, strong performing loans.

Conference Call and Webcast

The company will hold a conference call at 9 a.m. Central time on Wednesday, July 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 1-877-407-4018 and referencing conference ID # 13731240.

About BOK Financial Corporation

BOK Financial Corporation is a $45 billion regional financial services company headquartered in Tulsa, Oklahoma with $96 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 June 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)

	June 30, 2022			Mar. 31, 2022
ASSETS
Cash and due from banks	$	1,313,563		$	767,805
Interest-bearing cash and cash equivalents		723,787			599,976
Trading securities		2,859,444			4,891,096
Investment securities, net of allowance		2,637,345			183,824
Available for sale securities		10,152,663			12,894,534
Fair value option securities		37,927			185,003
Restricted equity securities		95,130			77,389
Residential mortgage loans held for sale		182,726			169,474
Loans:
Commercial		13,578,697			12,883,189
Commercial real estate		4,106,148			4,100,956
Paycheck protection program		43,140			137,365
Loans to individuals		3,563,163			3,552,919
Total loans		21,291,148			20,674,429
Allowance for loan losses		(241,114	)		(246,473	)
Loans, net of allowance		21,050,034			20,427,956
Premises and equipment, net		573,605			574,786
Receivables		176,672			238,694
Goodwill		1,044,749			1,044,749
Intangible assets, net		83,744			87,761
Mortgage servicing rights		270,312			209,563
Real estate and other repossessed assets, net		22,221			24,492
Derivative contracts, net		1,992,977			2,680,207
Cash surrender value of bank-owned life insurance		409,937			407,763
Receivable on unsettled securities sales		60,168			229,404
Other assets		1,690,068			1,132,031
TOTAL ASSETS	$	45,377,072		$	46,826,507

LIABILITIES AND EQUITY
Deposits:
Demand	$	15,720,296		$	15,242,341
Interest-bearing transaction		20,544,199			21,689,829
Savings		984,824			979,365
Time		1,369,599			1,514,416
Total deposits		38,618,918			39,425,951
Funds purchased and repurchase agreements		677,030			1,068,329
Other borrowings		35,505			36,246
Subordinated debentures		131,223			131,209
Accrued interest, taxes and expense		211,419			238,048
Due on unsettled securities purchases		297,352			81,016
Derivative contracts, net		214,576			557,834
Other liabilities		449,507			434,350
TOTAL LIABILITIES		40,635,530			41,972,983
Shareholders' equity:
Capital, surplus and retained earnings		5,339,967			5,267,408
Accumulated other comprehensive income (loss)		(602,628	)		(417,826	)
TOTAL SHAREHOLDERS' EQUITY		4,737,339			4,849,582
Non-controlling interests		4,203			3,942
TOTAL EQUITY		4,741,542			4,853,524
TOTAL LIABILITIES AND EQUITY	$	45,377,072		$	46,826,507

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

	Three Months Ended
	June 30, 2022			Mar. 31, 2022			Dec. 31, 2021			Sep. 30, 2021			June 30, 2021
ASSETS
Interest-bearing cash and cash equivalents	$	843,619		$	1,050,409		$	1,208,552		$	682,788		$	659,312
Trading securities		4,166,954			8,537,390			9,260,778			7,617,236			7,430,217
Investment securities, net of allowance		610,983			195,198			213,188			218,117			221,401
Available for sale securities		12,258,072			13,092,422			13,247,607			13,446,095			13,243,542
Fair value option securities		54,832			75,539			46,458			56,307			64,864
Restricted equity securities		167,732			164,484			137,874			245,485			208,692
Residential mortgage loans held for sale		148,183			179,697			163,433			167,620			218,200
Loans:
Commercial		13,382,176			12,677,706			12,401,935			12,231,230			12,402,925
Commercial real estate		4,061,129			4,059,148			3,838,336			4,218,190			4,395,848
Paycheck protection program		90,312			210,110			404,261			792,728			1,668,047
Loans to individuals		3,524,097			3,516,698			3,598,121			3,606,460			3,700,269
Total loans		21,057,714			20,463,662			20,242,653			20,848,608			22,167,089
Allowance for loan losses		(246,064	)		(254,191	)		(271,794	)		(306,125	)		(345,269	)
Loans, net of allowance		20,811,650			20,209,471			19,970,859			20,542,483			21,821,820
Total earning assets		39,062,025			43,504,610			44,248,749			42,976,131			43,868,048
Cash and due from banks		822,599			790,440			783,670			766,688			763,393
Derivative contracts, net		3,051,429			2,126,282			1,441,869			1,501,736			1,022,137
Cash surrender value of bank-owned life insurance		408,489			406,379			404,149			401,926			401,760
Receivable on unsettled securities sales		457,165			375,616			585,901			632,539			716,700
Other assets		3,486,691			3,357,747			3,139,718			3,220,129			3,424,884
TOTAL ASSETS	$	47,288,398		$	50,561,074		$	50,604,056		$	49,499,149		$	50,196,922

LIABILITIES AND EQUITY
Deposits:
Demand	$	15,202,597		$	15,062,282		$	14,818,841		$	13,670,656		$	13,189,954
Interest-bearing transaction		21,037,294			22,763,479			22,326,401			21,435,736			21,491,145
Savings		981,493			947,407			909,131			888,011			872,618
Time		1,373,036			1,589,039			1,747,715			1,839,983			1,936,510
Total deposits		38,594,420			40,362,207			39,802,088			37,834,386			37,490,227
Funds purchased and repurchase agreements		1,224,134			2,004,466			2,893,128			1,448,800			1,790,490
Other borrowings		1,301,358			1,148,440			880,837			2,546,083			3,608,369
Subordinated debentures		131,219			131,228			131,224			214,654			276,034
Derivative contracts, net		535,574			682,435			320,757			434,334			366,202
Due on unsettled securities purchases		380,332			519,097			629,642			957,538			701,495
Other liabilities		389,031			565,350			578,091			619,913			634,460
TOTAL LIABILITIES		42,556,068			45,413,223			45,235,767			44,055,708			44,867,277
Total equity		4,732,330			5,147,851			5,368,289			5,443,441			5,329,645
TOTAL LIABILITIES AND EQUITY	$	47,288,398		$	50,561,074		$	50,604,056		$	49,499,149		$	50,196,922

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
		2022			2021			2022			2021

Interest revenue	$	294,247		$	295,893		$	577,346		$	594,132
Interest expense		20,229			15,584			34,917			33,403
Net interest revenue		274,018			280,309			542,429			560,729
Provision for credit losses		—			(35,000	)		—			(60,000	)
Net interest revenue after provision for credit losses		274,018			315,309			542,429			620,729
Other operating revenue:
Brokerage and trading revenue		44,043			29,408			16,964			50,190
Transaction card revenue		26,940			24,923			51,156			47,353
Fiduciary and asset management revenue		49,838			44,832			96,237			86,154
Deposit service charges and fees		28,500			25,861			55,504			50,070
Mortgage banking revenue		11,368			21,219			28,018			58,332
Other revenue		12,684			23,172			23,129			39,468
Total fees and commissions		173,373			169,415			271,008			331,567
Other gains (losses), net		(7,639	)		16,449			(9,283	)		26,570
Gain (loss) on derivatives, net		(13,569	)		18,820			(60,550	)		(8,830	)
Loss on fair value option securities, net		(2,221	)		(1,627	)		(13,422	)		(3,537	)
Change in fair value of mortgage servicing rights		17,485			(13,041	)		66,595			20,833
Gain on available for sale securities, net		1,188			1,430			2,125			1,897
Total other operating revenue		168,617			191,446			256,473			368,500
Other operating expense:
Personnel		154,923			172,035			314,151			345,045
Business promotion		6,325			2,744			12,838			4,898
Charitable contributions to BOKF Foundation		—			—			—			4,000
Professional fees and services		12,475			12,361			23,888			24,341
Net occupancy and equipment		27,489			26,633			58,344			53,295
Insurance		4,728			3,660			9,011			8,280
Data processing and communications		41,280			36,418			81,116			73,885
Printing, postage and supplies		3,929			4,285			7,618			7,725
Amortization of intangible assets		4,049			4,578			8,013			9,385
Mortgage banking costs		9,437			11,126			17,314			25,069
Other expense		9,020			17,312			18,980			31,013
Total other operating expense		273,655			291,152			551,273			586,936

Net income before taxes		168,980			215,603			247,629			402,293
Federal and state income taxes		36,122			48,496			52,319			90,878

Net income		132,858			167,107			195,310			311,415
Net loss attributable to non-controlling interests		12			686			(24	)		(1,066	)
Net income attributable to BOK Financial Corporation shareholders	$	132,846		$	166,421		$	195,334		$	312,481

Average shares outstanding:
Basic		67,453,748			68,815,666			67,616,396			68,975,743
Diluted		67,455,172			68,817,442			67,617,834			68,978,798

Net income per share:
Basic	$	1.96		$	2.40		$	2.87		$	4.50
Diluted	$	1.96		$	2.40		$	2.87		$	4.50

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

	Three Months Ended
	June 30, 2022			Mar. 31, 2022			Dec. 31, 2021			Sep. 30, 2021			June 30, 2021
Capital:
Period-end shareholders' equity	$	4,737,339		$	4,849,582		$	5,363,732		$	5,388,973		$	5,332,977
Risk weighted assets	$	36,792,067		$	37,160,258		$	34,575,277		$	33,916,456		$	33,824,860
Risk-based capital ratios:
Common equity tier 1		11.61	%		11.30	%		12.24	%		12.26	%		11.95	%
Tier 1		11.63	%		11.31	%		12.25	%		12.29	%		12.01	%
Total capital		12.59	%		12.25	%		13.29	%		13.38	%		13.61	%
Leverage ratio		9.12	%		8.47	%		8.55	%		8.77	%		8.58	%
Tangible common equity ratio¹		8.16	%		8.13	%		8.61	%		9.28	%		9.09	%

Common stock:
Book value per share	$	69.87		$	71.21		$	78.34		$	78.56		$	77.20
Tangible book value per share	$	53.22		$	54.58		$	61.74		$	61.93		$	60.50
Market value per share:
High	$	94.76		$	119.59		$	110.21		$	92.97		$	93.00
Low	$	74.03		$	93.76		$	89.01		$	77.20		$	83.59
Cash dividends paid	$	35,892		$	36,093		$	36,256		$	35,725		$	35,925
Dividend payout ratio		27.02	%		57.76	%		30.90	%		18.97	%		21.59	%
Shares outstanding, net		67,806,005			68,104,043			68,467,772			68,596,764			69,078,458
Stock buy-back program:
Shares repurchased		294,084			475,877			128,522			478,141			492,994
Amount	$	24,404		$	48,074		$	13,426		$	40,644		$	43,797
Average price per share	$	82.98		$	101.02		$	104.46		$	85.00		$	88.84

Performance ratios (quarter annualized):
Return on average assets		1.13	%		0.50	%		0.92	%		1.51	%		1.33	%
Return on average equity		11.27	%		4.93	%		8.68	%		13.78	%		12.58	%
Net interest margin		2.76	%		2.44	%		2.52	%		2.66	%		2.60	%
Efficiency ratio		60.65	%		75.07	%		70.14	%		61.23	%		64.20	%

Reconciliation of non-GAAP measures:
¹Tangible common equity ratio:
Total shareholders' equity	$	4,737,339		$	4,849,582		$	5,363,732		$	5,388,973		$	5,332,977
Less: Goodwill and intangible assets, net		1,128,493			1,132,510			1,136,527			1,140,935			1,153,785
Tangible common equity	$	3,608,846		$	3,717,072		$	4,227,205		$	4,248,038		$	4,179,192

Total assets	$	45,377,072		$	46,826,507		$	50,249,431		$	46,923,409		$	47,154,375
Less: Goodwill and intangible assets, net		1,128,493			1,132,510			1,136,527			1,140,935			1,153,785
Tangible assets	$	44,248,579		$	45,693,997		$	49,112,904		$	45,782,474		$	46,000,590

Tangible common equity ratio		8.16	%		8.13	%		8.61	%		9.28	%		9.09	%


Pre-provision net revenue:
Net income before taxes	$	168,980		$	78,649		$	152,025		$	241,782		$	215,603
Provision for expected credit losses		—			—			(17,000	)		(23,000	)		(35,000	)
Net income (loss) attributable to non-controlling interests		12			(36	)		(129	)		(601	)		686
Pre-provision net revenue	$	168,968		$	78,685		$	135,154		$	219,383		$	179,917

Other data:
Tax equivalent interest	$	2,040		$	1,973		$	2,104		$	2,217		$	2,320
Net unrealized gain (loss) on available for sale securities	$	(522,812	)	$	(546,598	)	$	93,381		$	221,487		$	297,267

Mortgage banking:
Mortgage production revenue	$	(504	)	$	5,055		$	10,018		$	15,403		$	10,004

Mortgage loans funded for sale	$	360,237		$	418,866		$	568,507		$	652,336		$	754,893
Add: current period-end outstanding commitments		106,004			160,260			171,412			239,066			276,154
Less: prior period end outstanding commitments		160,260			171,412			239,066			276,154			387,465
Total mortgage production volume	$	305,981		$	407,714		$	500,853		$	615,248		$	643,582

Mortgage loan refinances to mortgage loans funded for sale		19	%		45	%		51	%		48	%		48	%
Realized margin on funded mortgage loans		0.88	%		1.64	%		2.34	%		2.48	%		2.75	%
Production revenue as a percentage of production volume	(0.16		)%		1.24	%		2.00	%		2.50	%		1.55	%

Mortgage servicing revenue	$	11,872		$	11,595		$	11,260		$	10,883		$	11,215
Average outstanding principal balance of mortgage loans serviced for others		17,336,596			16,155,329			15,930,480			14,899,306			15,065,173
Average mortgage servicing revenue rates		0.27	%		0.29	%		0.28	%		0.29	%		0.30	%

Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net	$	(13,639	)	$	(46,694	)	$	(4,862	)	$	(5,829	)	$	18,764
Gain (loss) on fair value option securities, net		(2,221	)		(11,201	)		1,418			(120	)		(1,627	)
Gain (loss) on economic hedge of mortgage servicing rights		(15,860	)		(57,895	)		(3,444	)		(5,949	)		17,137
Gain (loss) on changes in fair value of mortgage servicing rights		17,485			49,110			7,859			12,945			(13,041	)
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue		1,625			(8,785	)		4,415			6,996			4,096
Net interest revenue on fair value option securities²		275			383			259			286			341
Total economic benefit (cost) of changes in the fair value of mortgage servicing rights, net of economic hedges	$	1,900		$	(8,402	)	$	4,674		$	7,282		$	4,437

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

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

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

Interest revenue	$	294,247		$	283,099		$	292,334		$	293,463		$	295,893
Interest expense		20,229			14,688			15,257			13,236			15,584
Net interest revenue		274,018			268,411			277,077			280,227			280,309
Provision for credit losses		—			—			(17,000	)		(23,000	)		(35,000	)
Net interest revenue after provision for credit losses		274,018			268,411			294,077			303,227			315,309
Other operating revenue:
Brokerage and trading revenue		44,043			(27,079	)		14,869			47,930			29,408
Transaction card revenue		26,940			24,216			24,998			24,632			24,923
Fiduciary and asset management revenue		49,838			46,399			46,872			45,248			44,832
Deposit service charges and fees		28,500			27,004			26,718			27,429			25,861
Mortgage banking revenue		11,368			16,650			21,278			26,286			21,219
Other revenue		12,684			10,445			11,586			18,896			23,172
Total fees and commissions		173,373			97,635			146,321			190,421			169,415
Other gains (losses), net		(7,639	)		(1,644	)		6,081			31,091			16,449
Gain (loss) on derivatives, net		(13,569	)		(46,981	)		(4,788	)		(5,760	)		18,820
Gain (loss) on fair value option securities, net		(2,221	)		(11,201	)		1,418			(120	)		(1,627	)
Change in fair value of mortgage servicing rights		17,485			49,110			7,859			12,945			(13,041	)
Gain on available for sale securities, net		1,188			937			552			1,255			1,430
Total other operating revenue		168,617			87,856			157,443			229,832			191,446
Other operating expense:
Personnel		154,923			159,228			174,474			175,863			172,035
Business promotion		6,325			6,513			6,452			4,939			2,744
Charitable contributions to BOKF Foundation		—			—			5,000			—			—
Professional fees and services		12,475			11,413			14,129			12,436			12,361
Net occupancy and equipment		27,489			30,855			26,897			28,395			26,633
Insurance		4,728			4,283			3,889			3,712			3,660
Data processing and communications		41,280			39,836			39,358			38,371			36,418
Printing, postage and supplies		3,929			3,689			2,935			3,558			4,285
Amortization of intangible assets		4,049			3,964			4,438			4,488			4,578
Mortgage banking costs		9,437			7,877			8,667			8,962			11,126
Other expense		9,020			9,960			13,256			10,553			17,312
Total other operating expense		273,655			277,618			299,495			291,277			291,152
Net income before taxes		168,980			78,649			152,025			241,782			215,603
Federal and state income taxes		36,122			16,197			34,836			54,061			48,496
Net income		132,858			62,452			117,189			187,721			167,107
Net income (loss) attributable to non-controlling interests		12			(36	)		(129	)		(601	)		686
Net income attributable to BOK Financial Corporation shareholders	$	132,846		$	62,488		$	117,318		$	188,322		$	166,421

Average shares outstanding:
Basic		67,453,748			67,812,400			68,069,160			68,359,125			68,815,666
Diluted		67,455,172			67,813,851			68,070,910			68,360,871			68,817,442
Net income per share:
Basic	$	1.96		$	0.91		$	1.71		$	2.74		$	2.40
Diluted	$	1.96		$	0.91		$	1.71		$	2.74		$	2.40

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

	June 30, 2022		Mar. 31, 2022		Dec. 31, 2021		Sep. 30, 2021		June 30, 2021
Commercial:
Healthcare	$	3,696,963	$	3,441,732	$	3,414,940	$	3,347,641	$	3,381,261
Services		3,421,493		3,351,495		3,367,193		3,323,422		3,389,756
Energy		3,393,072		3,197,667		3,006,884		2,814,059		3,011,331
General business		3,067,169		2,892,295		2,717,448		2,690,018		2,690,559
Total commercial		13,578,697		12,883,189		12,506,465		12,175,140		12,472,907

Commercial real estate:
Office		1,100,115		1,097,516		1,040,963		1,030,755		1,073,346
Industrial		953,626		911,928		766,125		890,316		824,577
Multifamily		878,565		867,288		786,404		875,586		964,824
Retail		637,304		667,561		679,917		766,402		784,445
Residential construction and land development		111,575		120,506		120,016		118,416		128,939
Other commercial real estate		424,963		436,157		437,900		435,417		470,861
Total commercial real estate		4,106,148		4,100,956		3,831,325		4,116,892		4,246,992

Paycheck protection program		43,140		137,365		276,341		536,052		1,121,583

Loans to individuals:
Residential mortgage		1,784,729		1,723,506		1,722,170		1,747,243		1,772,627
Residential mortgages guaranteed by U.S. government agencies		293,838		322,581		354,173		376,986		413,806
Personal		1,484,596		1,506,832		1,515,206		1,395,623		1,388,534
Total loans to individuals		3,563,163		3,552,919		3,591,549		3,519,852		3,574,967

Total	$	21,291,148	$	20,674,429	$	20,205,680	$	20,347,936	$	21,416,449

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

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

Texas:
Commercial	$	6,631,658	$	6,254,883	$	6,068,700	$	5,815,562	$	5,690,901
Commercial real estate		1,339,452		1,345,105		1,253,439		1,383,871		1,403,751
Paycheck protection program		14,040		31,242		81,654		115,623		342,933
Loans to individuals		934,856		957,320		942,982		901,121		885,619
Total Texas		8,920,006		8,588,550		8,346,775		8,216,177		8,323,204

Oklahoma:
Commercial		3,125,764		2,883,663		2,633,014		2,590,887		2,840,560
Commercial real estate		576,458		552,310		546,021		552,184		552,673
Paycheck protection program		13,329		52,867		69,817		192,474		242,880
Loans to individuals		1,982,247		1,977,886		2,024,404		2,014,099		2,063,419
Total Oklahoma		5,697,798		5,466,726		5,273,256		5,349,644		5,699,532

Colorado:
Commercial		2,074,455		1,977,773		1,936,149		1,874,613		1,904,182
Commercial real estate		473,231		480,740		470,937		526,653		656,521
Paycheck protection program		8,233		28,584		82,781		140,470		299,712
Loans to individuals		234,105		236,125		256,533		249,298		262,796
Total Colorado		2,790,024		2,723,222		2,746,400		2,791,034		3,123,211

Arizona:
Commercial		1,080,228		1,074,551		1,130,798		1,194,801		1,239,270
Commercial real estate		766,767		719,970		674,309		734,174		705,497
Paycheck protection program		5,173		11,644		21,594		42,815		104,946
Loans to individuals		212,870		190,746		186,528		182,506		178,481
Total Arizona		2,065,038		1,996,911		2,013,229		2,154,296		2,228,194

Kansas/Missouri:
Commercial		338,337		334,371		338,697		336,414		388,291
Commercial real estate		458,157		436,740		382,761		408,001		406,055
Paycheck protection program		573		2,595		4,718		6,920		41,954
Loans to individuals		125,584		121,247		110,889		100,920		103,092
Total Kansas/Missouri		922,651		894,953		837,065		852,255		939,392

New Mexico:
Commercial		252,033		262,533		306,964		287,695		304,804
Commercial real estate		431,606		504,632		442,128		437,302		437,996
Paycheck protection program		1,792		9,713		13,510		31,444		86,716
Loans to individuals		67,026		63,299		63,930		66,651		68,177
Total New Mexico		752,457		840,177		826,532		823,092		897,693

Arkansas:
Commercial		76,222		95,415		92,143		75,168		104,899
Commercial real estate		60,477		61,459		61,730		74,707		84,499
Paycheck protection program		—		720		2,267		6,306		2,442
Loans to individuals		6,475		6,296		6,283		5,257		13,383
Total Arkansas		143,174		163,890		162,423		161,438		205,223

TOTAL BOK FINANCIAL	$	21,291,148	$	20,674,429	$	20,205,680	$	20,347,936	$	21,416,449

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

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

	June 30, 2022		Mar. 31, 2022		Dec. 31, 2021		Sep. 30, 2021		June 30, 2021
Oklahoma:
Demand	$	5,422,593	$	5,205,806	$	5,433,405	$	5,080,162	$	4,985,542
Interest-bearing:
Transaction		10,240,378		11,410,709		12,689,367		11,692,679		12,065,844
Savings		561,413		558,634		521,439		510,906		500,344
Time		678,127		817,744		978,822		1,039,866		1,139,980
Total interest-bearing		11,479,918		12,787,087		14,189,628		13,243,451		13,706,168
Total Oklahoma		16,902,511		17,992,893		19,623,033		18,323,613		18,691,710

Texas:
Demand		4,670,535		4,552,001		4,552,983		3,987,503		3,752,790
Interest-bearing:
Transaction		5,344,326		4,963,118		5,345,461		4,985,465		4,335,113
Savings		183,708		182,536		178,458		165,043		160,805
Time		333,038		329,931		337,559		337,389		346,577
Total interest-bearing		5,861,072		5,475,585		5,861,478		5,487,897		4,842,495
Total Texas		10,531,607		10,027,586		10,414,461		9,475,400		8,595,285

Colorado:
Demand		2,799,798		2,673,352		2,526,855		2,158,596		1,991,343
Interest-bearing:
Transaction		2,277,563		2,387,304		2,334,371		2,337,354		2,159,819
Savings		82,976		81,762		78,636		79,873		73,990
Time		160,795		165,401		174,351		184,002		193,787
Total interest-bearing		2,521,334		2,634,467		2,587,358		2,601,229		2,427,596
Total Colorado		5,321,132		5,307,819		5,114,213		4,759,825		4,418,939

New Mexico:
Demand		1,347,600		1,271,264		1,196,057		1,222,895		1,197,412
Interest-bearing:
Transaction		845,442		888,257		858,394		837,630		723,757
Savings		115,660		115,457		107,963		107,615		105,837
Time		148,532		156,140		163,871		168,879		174,665
Total interest-bearing		1,109,634		1,159,854		1,130,228		1,114,124		1,004,259
Total New Mexico		2,457,234		2,431,118		2,326,285		2,337,019		2,201,671

Arizona:
Demand		901,543		947,775		934,282		1,110,884		943,511
Interest-bearing:
Transaction		792,269		810,896		834,491		784,614		820,901
Savings		17,999		18,122		16,182		16,468		13,496
Time		28,774		27,259		31,274		30,862		30,012
Total interest-bearing		839,042		856,277		881,947		831,944		864,409
Total Arizona		1,740,585		1,804,052		1,816,229		1,942,828		1,807,920

Kansas/Missouri:
Demand		537,143		553,345		658,342		488,595		463,339
Interest-bearing:
Transaction		913,921		1,107,525		1,086,946		965,757		978,160
Savings		19,943		19,589		18,844		17,303		17,539
Time		13,962		11,527		12,255		13,040		13,509
Total interest-bearing		947,826		1,138,641		1,118,045		996,100		1,009,208
Total Kansas/Missouri		1,484,969		1,691,986		1,776,387		1,484,695		1,472,547

Arkansas:
Demand		41,084		38,798		42,499		41,594		46,472
Interest-bearing:
Transaction		130,300		122,020		119,543		149,611		195,125
Savings		3,125		3,265		3,213		3,289		3,445
Time		6,371		6,414		6,196		6,677		6,819
Total interest-bearing		139,796		131,699		128,952		159,577		205,389
Total Arkansas		180,880		170,497		171,451		201,171		251,861

TOTAL BOK FINANCIAL	$	38,618,918	$	39,425,951	$	41,242,059	$	38,524,551	$	37,439,933

NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION

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

TAX-EQUIVALENT ASSETS YIELDS
Interest-bearing cash and cash equivalents	0.83	%	0.18	%	0.16	%	0.14	%	0.10	%
Trading securities	2.00	%	1.71	%	1.89	%	2.04	%	1.95	%
Investment securities, net of allowance	2.35	%	5.07	%	4.99	%	5.02	%	5.01	%
Available for sale securities	1.84	%	1.77	%	1.72	%	1.80	%	1.85	%
Fair value option securities	2.92	%	2.81	%	2.71	%	2.62	%	2.60	%
Restricted equity securities	3.30	%	2.69	%	2.98	%	2.55	%	3.36	%
Residential mortgage loans held for sale	4.22	%	3.11	%	3.06	%	3.06	%	2.91	%
Loans	3.92	%	3.57	%	3.70	%	3.68	%	3.54	%
Allowance for loan losses
Loans, net of allowance	3.96	%	3.61	%	3.75	%	3.73	%	3.60	%
Total tax-equivalent yield on earning assets	2.96	%	2.58	%	2.66	%	2.78	%	2.75	%

COST OF INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest-bearing transaction	0.22	%	0.10	%	0.09	%	0.09	%	0.10	%
Savings	0.03	%	0.03	%	0.04	%	0.04	%	0.04	%
Time	0.68	%	0.56	%	0.53	%	0.55	%	0.58	%
Total interest-bearing deposits	0.24	%	0.12	%	0.12	%	0.13	%	0.14	%
Funds purchased and repurchase agreements	0.53	%	0.95	%	0.73	%	0.20	%	0.16	%
Other borrowings	1.01	%	0.38	%	0.49	%	0.37	%	0.34	%
Subordinated debt	4.50	%	4.02	%	4.02	%	4.63	%	4.87	%
Total cost of interest-bearing liabilities	0.31	%	0.21	%	0.21	%	0.19	%	0.21	%
Tax-equivalent net interest revenue spread	2.65	%	2.37	%	2.45	%	2.59	%	2.54	%
Effect of noninterest-bearing funding sources and other	0.11	%	0.07	%	0.07	%	0.07	%	0.06	%
Tax-equivalent net interest margin	2.76	%	2.44	%	2.52	%	2.66	%	2.60	%

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

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

	Three Months Ended
	June 30, 2022			Mar. 31, 2022			Dec. 31, 2021			Sep. 30, 2021			June 30, 2021
Nonperforming assets:
Nonaccruing loans:
Commercial:
Energy	$	20,924		$	24,976		$	31,091		$	45,500		$	70,341
Services		15,259			16,535			17,170			25,714			29,913
Healthcare		14,886			15,076			15,762			509			527
General business		3,539			3,750			10,081			8,951			11,823
Total commercial		54,608			60,337			74,104			80,674			112,604

Commercial real estate		10,939			15,989			14,262			21,223			26,123

Loans to individuals:
Permanent mortgage		30,460			30,757			31,574			30,674			31,473
Permanent mortgage guaranteed by U.S. government agencies		18,000			16,992			13,861			9,188			9,207
Personal		132			171			258			188			229
Total loans to individuals		48,592			47,920			45,693			40,050			40,909

Total nonaccruing loans	$	114,139		$	124,246		$	134,059		$	141,947		$	179,636
Accruing renegotiated loans guaranteed by U.S. government agencies		196,420			204,121			210,618			178,554			171,324
Real estate and other repossessed assets		22,221			24,492			24,589			28,770			57,337
Total nonperforming assets	$	332,780		$	352,859		$	369,266		$	349,271		$	408,297
Total nonperforming assets excluding those guaranteed by U.S. government agencies	$	118,360		$	131,746		$	144,787		$	161,529		$	227,766

Accruing loans 90 days past due¹	$	3		$	307		$	313		$	223		$	252

Gross charge-offs	$	1,368		$	7,805		$	6,558		$	9,584		$	18,304
Recoveries		(2,167	)		(1,824	)		(7,272	)		(1,769	)		(2,856	)
Net charge-offs (recoveries)	$	(799	)	$	5,981		$	(714	)	$	7,815		$	15,448

Provision for loan losses	$	(6,158	)	$	(3,967	)	$	(20,973	)	$	(27,395	)	$	(25,064	)
Provision for credit losses from off-balance sheet unfunded loan commitments		6,005			3,268			3,738			4,952			(8,590	)
Provision for expected credit losses from mortgage banking activities		69			621			150			(534	)		(1,222	)
Provision for credit losses related to held-to maturity (investment) securities portfolio		84			78			85			(23	)		(124	)
Total provision for credit losses	$	—		$	—		$	(17,000	)	$	(23,000	)	$	(35,000	)

Allowance for loan losses to period end loans		1.13	%		1.19	%		1.27	%		1.36	%		1.46	%
Allowance for loan losses to period end loans excluding PPP loans²		1.13	%		1.20	%		1.29	%		1.40	%		1.54	%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans		1.33	%		1.37	%		1.43	%		1.50	%		1.57	%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans excluding PPP loans²		1.33	%		1.38	%		1.45	%		1.54	%		1.66	%
Nonperforming assets to period end loans and repossessed assets		1.56	%		1.70	%		1.83	%		1.71	%		1.90	%
Net charge-offs (annualized) to average loans		(0.02	)%		0.12	%		(0.01	)%		0.15	%		0.28	%
Net charge-offs (annualized) to average loans excluding PPP loans²		(0.02	)%		0.12	%		(0.01	)%		0.16	%		0.30	%
Allowance for loan losses to nonaccruing loans¹		250.80	%		229.80	%		213.33	%		208.41	%		183.00	%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to nonaccruing loans¹		294.74	%		263.60	%		240.77	%		230.43	%		197.25	%

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							2Q22 vs 1Q22					2Q22 vs 2Q21
	June 30, 2022		Mar. 31, 2022			June 30, 2021		$ change			% change		$ change			% change
Commercial Banking
Net interest revenue	$	166,522	$	137,011		$	130,901	$	29,511		21.5	%	$	35,621		27.2	%
Fees and commissions revenue		59,881		56,964			63,368		2,917		5.1	%		(3,487	)	(5.5	)%
Combined net interest and fee revenue		226,403		193,975			194,269		32,428		16.7	%		32,134		16.5	%
Other operating expense		70,009		65,114			71,351		4,895		7.5	%		(1,342	)	(1.9	)%
Corporate expense allocations		16,634		16,246			12,512		388		2.4	%		4,122		32.9	%
Net income		104,797		82,344			72,632		22,453		27.3	%		32,165		44.3	%

Average assets		29,269,712		29,823,905			28,160,594		(554,193	)	(1.9	)%		1,109,118		3.9	%
Average loans		17,336,841		16,696,428			16,981,888		640,413		3.8	%		354,953		2.1	%
Average deposits		18,933,766		19,595,260			17,049,772		(661,494	)	(3.4	)%		1,883,994		11.0	%

Consumer Banking
Net interest revenue	$	33,786	$	27,207		$	24,945	$	6,579		24.2	%	$	8,841		35.4	%
Fees and commissions revenue		30,101		33,977			37,714		(3,876	)	(11.4	)%		(7,613	)	(20.2	)%
Combined net interest and fee revenue		63,887		61,184			62,659		2,703		4.4	%		1,228		2.0	%
Other operating expense		52,660		48,789			52,453		3,871		7.9	%		207		0.4	%
Corporate expense allocations		10,120		12,080			11,599		(1,960	)	(16.2	)%		(1,479	)	(12.8	)%
Net income (loss)		1,239		(7,317	)		1,698		8,556		116.9	%		(459	)	(27.0	)%

Average assets		10,338,191		10,273,890			10,087,488		64,301		0.6	%		250,703		2.5	%
Average loans		1,669,830		1,672,346			1,786,242		(2,516	)	(0.2	)%		(116,412	)	(6.5	)%
Average deposits		8,876,469		8,746,622			8,469,043		129,847		1.5	%		407,426		4.8	%

Wealth Management
Net interest revenue	$	37,747	$	55,766		$	52,293	$	(18,019	)	(32.3	)%	$	(14,546	)	(27.8	)%
Fees and commissions revenue		86,771		25,023			78,841		61,748		246.8	%		7,930		10.1	%
Combined net interest and fee revenue		124,518		80,789			131,134		43,729		54.1	%		(6,616	)	(5.0	)%
Other operating expense		76,393		74,619			79,518		1,774		2.4	%		(3,125	)	(3.9	)%
Corporate expense allocations		12,503		12,072			10,352		431		3.6	%		2,151		20.8	%
Net income (loss)		27,287		(4,521	)		30,988		31,808		703.6	%		(3,701	)	(11.9	)%

Average assets		16,902,721		21,323,795			19,201,041		(4,421,074	)	(20.7	)%		(2,298,320	)	(12.0	)%
Average loans		2,157,771		2,118,780			1,968,513		38,991		1.8	%		189,258		9.6	%
Average deposits		8,482,785		9,619,323			9,695,319		(1,136,538	)	(11.8	)%		(1,212,534	)	(12.5	)%
Fiduciary assets		55,972,584		61,095,320			58,654,788		(5,122,736	)	(8.4	)%		(2,682,204	)	(4.6	)%
Assets under management or administration		95,981,289		101,081,355			96,632,748		(5,100,066	)	(5.0	)%		(651,459	)	(0.7	)%

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

BOK Financial Corporation Reports Quarterly Earnings of $133 million or $1.96 Per Share in the Second Quarter

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