BOK Financial Corporation Reports Quarterly Earnings of $162 million or $2.43 Per Share in the First Quarter

Source: Nasdaq GlobeNewswire / 26 Apr 2023 07:55:01 America/New_York

TULSA, Okla., April 26, 2023 (GLOBE NEWSWIRE) -- BOK Financial Corporation (NASD: BOKF) -

CEO Commentary

Stacy Kymes, president and chief executive officer, stated, “The strong financial results in the first quarter are a testament to our diverse business model, strong operating geographies, and disciplined approach to risk management that has long been critical to our ability to sustain success. Our peer-leading tangible capital ratio paired with our balance sheet liquidity have served us well over the last 45 days with the disruptions in our sector. The disruptions and almost unprecedented level of rate volatility in the quarter have demonstrated our ability to both manage critical risks well while also continuing to post strong financial results for our shareholders. In fact, this quarter was the second highest pre-provision net revenue in our history. The first quarter showed sustained revenue in our non-interest income businesses, continued loan growth, and an efficiency ratio below 57 percent. While we cannot be totally immune from the macro economy, we believe this is exactly the environment where we can be most differentiated. Our interest rate, liquidity, and credit risk management are strong and we remain focused on increasing top line revenue in exceptional growth markets."

First Quarter 2023 Financial Highlights

(Unless indicated otherwise, all comparisons are to the prior quarter)

Net income was $162.4 million or $2.43 per diluted share for the first quarter of 2023 and $168.4 million or $2.51 per diluted share for the fourth quarter of 2022.
Net interest revenue totaled $352.3 million, consistent with the prior quarter. Net interest margin was 3.45 percent compared to 3.54 percent, driven by higher funding costs, as expected.
Fees and commissions revenue was $186.0 million, a decrease of $7.6 million. A $10.6 million reduction in brokerage and trading revenue related to lower trading volumes due to escalated market volatility was partially offset by a $4.3 million increase in mortgage banking revenue related to higher production volume and expanded mortgage servicing.
Due to interest rate volatility in the first quarter, the net cost of the changes in the fair value of mortgage servicing rights and related economic hedges was $10.5 million compared to $1.2 million for the fourth quarter of 2022.
Operating expense decreased $12.6 million to $305.8 million. Personnel expense decreased $4.3 million. Lower incentive compensation costs, driven largely by a one-time incentive given to employees in the fourth quarter of 2022, were partially offset by increased employee benefits costs related to higher seasonal payroll taxes. Non-personnel expense decreased $8.4 million, led by a reduction in professional fees and mortgage banking costs.
Period-end loans increased $193 million to $22.8 billion at March 31, 2023, primarily related to a $209 million increase in commercial real estate loans driven largely by loans secured by multifamily residential properties and industrial facilities. Average outstanding loan balances were $22.5 billion, a $500 million increase, primarily due to higher commercial and commercial real estate balances.
We recorded a $16.0 million provision for expected credit losses in the first quarter of 2023, as key economic assumptions in the base case, including projected West Texas Intermediate ("WTI") oil prices and projected commercial real estate vacancy rates, were less favorable to economic growth. We recorded a $15.0 million provision for expected credit losses in the fourth quarter of 2022, primarily as a result of growth in loans and loan commitments during the quarter. The combined allowance for credit losses totaled $312 million or 1.37 percent of outstanding loans at March 31, 2023. The combined allowance for credit losses was $297 million or 1.31 percent of outstanding loans at December 31, 2022. Net charge-offs were $769 thousand or 0.01 percent of average loans on an annualized basis in the first quarter compared to net charge-offs of $15.5 million or 0.28 percent of average loans on an annualized basis in the fourth quarter.
Average deposits decreased $2.0 billion to $33.5 billion and period-end deposits decreased $1.9 billion to $32.6 billion as customers redeployed resources and pursued investment alternatives following the savings trend during the height of the pandemic. The impact of recent events in the banking industry was not significant to our deposit trends. Average demand deposits were reduced by $1.8 billion and average interest-bearing deposits decreased $209 million. The loan to deposit ratio was 70 percent at March 31, 2023, up from 65 percent at December 31, 2022, representing a funding profile more consistent with, but still below, pre-pandemic levels.
The company's tangible common equity ratio, a non-GAAP measure, was 8.46 percent at March 31, 2023 and 7.63 percent at December 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. Adjusted for all unrealized securities portfolio gains and losses, including those in the investment portfolio, the tangible common equity ratio would be 8.22 percent.
The company's common equity Tier 1 capital ratio was 12.19 percent at March 31, 2023. In addition, the company's Tier 1 capital ratio was 12.20 percent, total capital ratio was 13.21 percent, and leverage ratio was 9.94 percent at March 31, 2023. At December 31, 2022, the company's common equity Tier 1 capital ratio was 11.69 percent, Tier 1 capital ratio was 11.71 percent, total capital ratio was 12.67 percent, and leverage ratio was 9.91 percent.
The company repurchased 447,071 shares of common stock at an average price paid of $98.64 a share in the first quarter of 2023.

First Quarter 2023 Segment Highlights

Commercial Banking contributed $176.5 million to net income in the first quarter of 2023, an increase of $37.2 million over the fourth quarter of 2022. Combined net interest revenue and fee revenue increased $30.7 million, primarily due to an increase in the spread on deposits sold to our Funds Management unit. Net loans charged-off decreased $14.3 million to $76 thousand in the first quarter of 2023. Personnel expense decreased $5.3 million, driven by incentive compensation costs. Average loans increased $496 million or 3 percent to $18.8 billion. Average deposits decreased $971 million or 6 percent to $15.9 billion.
Consumer Banking contributed $50.7 million to net income in the first quarter of 2023, an increase of $41.7 million over the prior quarter. Combined net interest revenue and fee revenue increased $59.0 million, largely due to an increase in the spread on deposits sold to our Funds Management unit. Fees and commissions revenue increased $3.0 million. Mortgage banking revenue increased $4.3 million as mortgage production volumes grew $54.0 million, partially offset by decreases in deposit service charges and other revenue. Operating expense decreased $4.3 million. Mortgage banking costs decreased $3.2 million from lower prepayments combined with reduced accruals related to default servicing and loss mitigation costs on loans serviced for others. Personnel expense decreased $1.1 million. Average loans increased $22 million or 1 percent to $1.7 billion. Average deposits decreased $369 million or 4 percent to $8.2 billion.
Wealth Management contributed $52.4 million to net income in the first quarter of 2023, an increase of $11.0 million over the fourth quarter of 2022. Combined net interest and fee revenue increased $13.9 million, primarily due to an increase in the spread on deposits sold to our Funds Management unit, which was partially offset by a decrease of $9.0 million in total revenue from institutional trading activities from reduced U.S. agency residential mortgage-backed securities trading volumes. Average loans decreased $22 million or 1 percent to $2.2 billion. Average deposits decreased $456 million or 6 percent to $7.4 billion. Assets under management or administration were $102.3 billion, an increase of $2.6 billion.

Net Interest Revenue

Net interest revenue was $352.3 million for the first quarter of 2023, relatively unchanged from the prior quarter. Net interest margin was 3.45 percent compared to 3.54 percent, driven by expected deposit repricing activity. In recent prior quarters, the rapid pace of market interest rate increases grew net interest margin as our earning assets, led by our significant percentage of variable-rate loans, repriced at a higher rate and faster pace than our interest-bearing liabilities. In the current quarter, we saw margin compression as our interest-bearing liabilities began to catch up and reprice more quickly.

Average earning assets increased $1.5 billion. Average loan balances increased $500 million, largely due to growth in commercial and commercial real estate loans. Average available for sale securities increased $785 million as we reposition our balance sheet for the current rate environment. Average fair value option securities, held as an economic hedge of the changes in fair value of our mortgage servicing rights, increased $208 million while average restricted equity securities grew $100 million. Average interest-bearing deposits decreased $209 million as customers redeployed resources following the savings trend during the height of the pandemic. Average other borrowings increased $2.0 billion while funds purchased and repurchase agreements grew $713 million.

The yield on average earning assets was 5.06 percent, up 53 basis points. The loan portfolio yield increased 68 basis points to 6.67 percent while the yield on trading securities was up 82 basis points to 4.52 percent. The yield on the available for sale securities portfolio increased 33 basis points to 2.87 percent while the yield on the fair value option securities portfolio grew 77 basis points to 5.17 percent. The yield on interest-bearing cash and cash equivalents increased 22 basis points to 4.28 percent.

Funding costs were 2.43 percent, an 86 basis point increase. The cost of interest-bearing deposits increased 61 basis points to 1.83 percent. The cost of funds purchased and repurchase agreements increased 128 basis points to 3.33 percent while the cost of other borrowings was up 65 basis points to 4.73 percent. The benefit to net interest margin from assets funded by non-interest liabilities was 82 basis points, an increase of 24 basis points.

Fees and Commissions Revenue

Fees and commissions revenue totaled $186.0 million for the first quarter of 2023, a decrease of $7.6 million from the prior quarter.

Brokerage and trading revenue decreased $10.6 million, with an $8.3 million reduction in trading revenue, largely due to a lower volume of U.S. agency residential mortgage-backed securities trading activity caused by high market volatility. Total investment banking revenue decreased $2.6 million with a reduction in syndication activity partially offset by higher underwriting fees. Transaction card revenue decreased $1.5 million, largely related to a decline in seasonal transaction volumes.

Mortgage banking revenue increased $4.3 million as mortgage originations were up following seasonal declines in the prior quarter. Mortgage production volume increased $54 million to $165 million.

Operating Expense

Total operating expense was $305.8 million for the first quarter of 2023, a decrease of $12.6 million compared to the fourth quarter of 2022.

Personnel expense was $182.1 million, including $1.7 million of deferred compensation expense. Excluding deferred compensation costs, personnel expense decreased $2.1 million. Cash-based incentive compensation decreased $12.6 million, largely due to a one-time incentive given to employees in the fourth quarter of 2022. Share-based compensation expense increased $2.2 million due to changes in assumptions of certain performance-based equity awards while regular compensation increased $2.2 million along with our annual merit increases in March. Employee benefits expense was up $6.1 million due to a seasonal increase in payroll taxes.

Non-personnel expense was $123.7 million, a decrease of $8.4 million. Professional fees and services expense decreased $5.3 million, largely related to reduced legal fees and lower technology project costs. Lower prepayments and decreased accruals related to default servicing and loss mitigations costs led to a $3.2 million reduction in mortgage banking costs. The fourth quarter of 2022 also included a $2.5 million charitable donation to the BOKF Foundation. These decreases were partially offset by $2.6 million more in FDIC insurance expenses from higher assessment rates.

Loans, Deposits and Capital

Loans

Outstanding loans were $22.8 billion at March 31, 2023, growing $193 million over December 31, 2022, largely due to growth in commercial real estate loans, primarily from loans secured by multifamily residential properties and industrial facilities. Unfunded loan commitments decreased $304 million compared to the fourth quarter.

Outstanding commercial loan balances, which includes services, general business, energy, and healthcare loans, were largely unchanged compared to the prior quarter.

General business loans decreased $155 million to $3.4 billion or 15 percent of total loans. General business loans include $2.0 billion of wholesale/retail loans and $1.4 billion of loans from other commercial industries.

Services sector loan balances increased $132 million to $3.6 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.

Healthcare sector loan balances increased $54 million, totaling $3.9 billion or 17 percent of total loans. Our healthcare sector loans primarily consist of $3.2 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 decreased $27 million to $3.4 billion or 15 percent of total loans. The majority of this portfolio is first lien, senior secured, reserve-based lending to oil and gas producers, which we believe is the lowest risk form of energy lending. Approximately 67 percent of committed production loans are secured by properties primarily producing oil. The remaining 33 percent is secured by properties primarily producing natural gas. Unfunded energy loan commitments were $4.1 billion at March 31, 2023, an increase of $246 million over December 31, 2022.

Commercial real estate loan balances grew $209 million and represent 21 percent of total loans. Loans secured by multifamily residential properties increased $151 million to $1.4 billion. Loans secured by industrial facilities increased $88 million to $1.3 billion. This growth was partially offset by a $28 million decrease in other real estate loans. Unfunded commercial real estate loan commitments were $2.7 billion at March 31, 2023, a decrease of $397 million compared to December 31, 2022. We take a disciplined approach to managing our concentration of commercial real estate loan commitments as a percentage of Tier 1 Capital. While loan commitments are presently at the upper concentration limit, we expect continued growth in our commercial real estate balances as loans fund, primarily in the multifamily and industrial loan portfolios.

Loans to individuals decreased $20 million and represent 16 percent of total loans. Personal loans decreased $35 million while total residential mortgage loans increased $14 million.

Liquidity and Capital

Our funding sources, which primarily include deposits and borrowings from the Federal Home Loan Banks, provide adequate liquidity to meet our needs. The loan to deposit ratio was 70 percent at March 31, 2023, providing significant on-balance sheet liquidity to meet future loan demand and contractual obligations.

Period-end deposits totaled $32.6 billion at March 31, 2023, a $1.9 billion decrease, largely due to clients redeploying capital and seeking higher yielding alternatives following the savings trend during the pandemic. This trend is consistent with prior quarters and is in line with previous guidance. Demand deposits decreased $1.8 billion while interest-bearing transaction account balances decreased $225 million. Time deposits increased $115 million. Average deposits were $33.5 billion at March 31, 2023, a $2.0 billion decrease. Average demand deposit account balances decreased $1.8 billion and average interest-bearing transaction account balances decreased $258 million. Average Commercial Banking deposits decreased $971 million to $15.9 billion or 47 percent of total deposits. Our commercial deposit portfolio is highly diversified across industries and customers. The highest concentration by industry within our commercial deposit portfolio is with our energy customers at 7 percent. Wealth Management deposits decreased $456 million to $7.4 billion or 22 percent of total deposits and Consumer Banking deposits declined $369 million to $8.2 billion or 25 percent of total deposits.

The company's common equity Tier 1 capital ratio was 12.19 percent at March 31, 2023. In addition, the company's Tier 1 capital ratio was 12.20 percent, total capital ratio was 13.21 percent, and leverage ratio was 9.94 percent at March 31, 2023. 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 6 basis points to the company's common equity tier 1 capital ratio at March 31, 2023. At December 31, 2022, the company's common equity Tier 1 capital ratio was 11.69 percent, Tier 1 capital ratio was 11.71 percent, total capital ratio was 12.67 percent, and leverage ratio was 9.91 percent.

The company's tangible common equity ratio, a non-GAAP measure, was 8.46 percent at March 31, 2023 and 7.63 percent at December 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. Adjusted for all unrealized securities portfolio gains and losses, including those in the investment portfolio, the tangible common equity ratio would be 8.22 percent. 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 447,071 shares of common stock at an average price paid of $98.64 a share in the first quarter of 2023. 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 WTI oil prices on a probability weighted basis.

A $16.0 million provision for credit losses was necessary for the first quarter of 2023, as key economic assumptions in the base case, including projected WTI oil prices and projected commercial real estate vacancy rates, were less favorable to economic growth.

The probability weighting of our base case reasonable and supportable forecast remained at 50 percent in the first quarter of 2023 as the level of uncertainty in economic forecasts remained high. Our base case reasonable and supportable forecast assumes inflation continues to improve from the peak experienced in 2022 and reaches 3.0 percent by the end of 2023. We expect the impact of the Russian-Ukraine conflict remains isolated and stress in the banking sector does not become widespread. Inflation pressures cause modest declines in real household income compared to pre-pandemic levels, resulting in below-trend GDP growth. GDP is projected to grow by 0.7 percent over the next twelve months. Job openings revert to more normalized levels and overall hiring levels decline, causing the national unemployment rate to modestly increase over the next four quarters. Our forecasted civilian unemployment rate is 3.8 percent for the second quarter of 2023, increasing to 4.1 percent by the first quarter of 2024. Our base case also assumes the Federal Reserve increases the federal funds rate once in the second quarter of 2023, resulting in a target range of 5.00 percent to 5.25 percent. No additional rate increases are anticipated for the remainder of the forecast horizon. WTI oil prices are projected to generally follow the NYMEX forward curve that existed at the end of March 31, 2023, averaging $69.18 per barrel over the next twelve months.

Our downside case, probability weighted at 40 percent, assumes that inflation moderates slightly from the peak experienced in 2022, but remains elevated through the forecast horizon ending 2023 at 5.0 percent. Higher levels of inflation force the Federal Reserve to adopt a more aggressive monetary policy as compared to the base case scenario. This results in a federal funds target range of 5.75 percent to 6.00 percent by the first quarter of 2024. The United States economy is pushed into a recession, with a contraction in economic activity and a sharp increase in the unemployment rate from 4.7 percent in the second quarter of 2023 to 6.0 percent in the first quarter of 2024. In this scenario, real GDP is expected to contract 2.0 percent over the next four quarters. WTI oil prices are projected to average $58.02 per barrel over the next twelve months, peaking at $62.53 in the second quarter of 2023 and falling 17 percent over the following three quarters.

Nonperforming assets totaled $133 million or 0.58 percent of outstanding loans and repossessed assets at March 31, 2023, compared to $300 million or 1.33 percent at December 31, 2022. Excluding loans guaranteed by U.S. government agencies, nonperforming assets totaled $119 million or 0.53 percent of outstanding loans and repossessed assets at March 31, 2023, compared to $121 million or 0.54 percent at December 31, 2022.

Nonaccruing loans were $120 million or 0.53 percent of outstanding loans at March 31, 2023. Nonaccruing commercial loans totaled $54 million or 0.38 percent of outstanding commercial loans. Nonaccruing commercial real estate loans totaled $22 million or 0.45 percent of outstanding commercial real estate loans. Nonaccruing loans to individuals totaled $44 million or 1.19 percent of outstanding loans to individuals.

Nonaccruing loans decreased $1.5 million compared to December 31, 2022. Nonaccruing services loans decreased $8.1 million, nonaccruing healthcare loans decreased $3.8 million and nonaccruing energy loans decreased $1.3 million. These decreases were partially offset by a $7.3 million increase in nonaccruing general business loans and a $5.1 million increase in nonaccruing commercial real estate loans. New nonaccruing loans identified in the first quarter totaled $25 million, offset by $22 million in payments received.

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 $137 million at March 31, 2023, compared to $94 million at December 31, 2022. An increase in potential problem general business and services loans was offset by a decrease in energy, healthcare and commercial real estate potential problem loans.

At March 31, 2023, the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $312 million or 1.37 percent of outstanding loans and 295 percent of nonaccruing loans. The allowance for loan losses totaled $249 million or 1.10 percent of outstanding loans and 235 percent of nonaccruing loans. At December 31, 2022, the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $297 million or 1.31 percent of outstanding loans and 278 percent of nonaccruing loans. The allowance for loan losses was $236 million or 1.04 percent of outstanding loans and 221 percent of nonaccruing loans. The allowance to nonaccruing loan percentages referenced above omit residential mortgage loans guaranteed by U.S. government agencies.

Gross charge-offs were $3.7 million for the first quarter compared to $17.8 million for the fourth quarter of 2022. Gross charge-offs for the first quarter were primarily related to a single commercial real estate borrower. Recoveries totaled $2.9 million for the first quarter of 2023 and $2.3 million for the prior quarter. Net charge-offs were $769 thousand or 0.01 percent of average loans on an annualized basis in the first quarter compared to net charge-offs of $15.5 million or 0.28 percent of average loans on an annualized basis in the fourth quarter. Net charge-offs were 0.07 percent of average loans over the last four quarters.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $11.9 billion at March 31, 2023, a $444 million increase over December 31, 2022. At March 31, 2023, the available for sale securities portfolio consisted primarily of $6.0 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $4.6 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. At March 31, 2023, the available for sale securities portfolio had a net unrealized loss of $742 million compared to $866 million at December 31, 2022.

We hold an inventory of trading securities in support of sales to a variety of customers. At March 31, 2023, the trading securities portfolio totaled $2.3 billion compared to $4.5 billion at December 31, 2022.

The company also maintains a portfolio of residential mortgage-backed securities issued by U.S. government agencies and interest rate derivative contracts as an economic hedge of the changes in the fair value of our mortgage servicing rights. This portfolio of fair value option securities increased $30 million to $326 million at March 31, 2023.

Derivative contracts are carried at fair value. At March 31, 2023, the net fair values of derivative contracts, before consideration of cash margin, reported as assets under our customer derivative programs totaled $572 million compared to $1.0 billion at December 31, 2022. The aggregate net fair value of derivative contracts, before consideration of cash margin, held under these programs reported as liabilities totaled $578 million at March 31, 2023 and $1.0 billion at December 31, 2022.

The net cost of the changes in the fair value of mortgage servicing rights and related economic hedges was $10.5 million during the first quarter of 2023, including a $6.1 million decrease in the fair value of mortgage servicing rights, $4.7 million decrease in the fair value of securities and derivative contracts held as an economic hedge, and $187 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 26, 2023 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 # 13737852.

About BOK Financial Corporation

BOK Financial Corporation is a $46 billion regional financial services company headquartered in Tulsa, Oklahoma with $102 billion in assets under management or 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, 2023 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, 2023			Dec. 31, 2022
ASSETS
Cash and due from banks	$	792,371		$	943,810
Interest-bearing cash and cash equivalents		571,613			457,906
Trading securities		2,294,358			4,464,161
Investment securities, net of allowance		2,448,136			2,513,687
Available for sale securities		11,937,841			11,493,860
Fair value option securities		326,390			296,590
Restricted equity securities		288,181			299,651
Residential mortgage loans held for sale		74,175			75,272
Loans:
Commercial		14,217,349			14,212,499
Commercial real estate		4,815,316			4,606,777
Loans to individuals		3,717,388			3,737,874
Total loans		22,750,053			22,557,150
Allowance for loan losses		(249,460	)		(235,704	)
Loans, net of allowance		22,500,593			22,321,446
Premises and equipment, net		623,112			565,175
Receivables		265,680			273,815
Goodwill		1,044,749			1,044,749
Intangible assets, net		72,689			76,131
Mortgage servicing rights		299,803			277,608
Real estate and other repossessed assets, net		12,651			14,304
Derivative contracts, net		394,291			880,343
Cash surrender value of bank-owned life insurance		408,614			406,751
Receivable on unsettled securities sales		18,186			31,004
Other assets		1,150,689			1,354,379
TOTAL ASSETS	$	45,524,122		$	47,790,642

LIABILITIES AND EQUITY
Deposits:
Demand	$	11,606,975		$	13,395,337
Interest-bearing transaction		18,434,489			18,659,115
Savings		962,673			964,411
Time		1,576,610			1,461,842
Total deposits		32,580,747			34,480,705
Funds purchased and repurchase agreements		1,599,724			2,270,377
Other borrowings		4,735,885			4,736,908
Subordinated debentures		131,148			131,205
Accrued interest, taxes and expense		268,449			296,870
Due on unsettled securities purchases		262,492			147,470
Derivative contracts, net		510,483			554,900
Other liabilities		557,167			484,849
TOTAL LIABILITIES		40,646,095			43,103,284
Shareholders' equity:
Capital, surplus and retained earnings		5,603,340			5,519,604
Accumulated other comprehensive loss		(728,554	)		(836,955	)
TOTAL SHAREHOLDERS' EQUITY		4,874,786			4,682,649
Non-controlling interests		3,241			4,709
TOTAL EQUITY		4,878,027			4,687,358
TOTAL LIABILITIES AND EQUITY	$	45,524,122		$	47,790,642

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

	Three Months Ended
	Mar. 31, 2023			Dec. 31, 2022			Sep. 30, 2022			June 30, 2022			Mar. 31, 2022
ASSETS
Interest-bearing cash and cash equivalents	$	616,596		$	568,307		$	748,263		$	843,619		$	1,050,409
Trading securities		3,031,969			3,086,985			3,178,068			4,166,954			8,537,390
Investment securities, net of allowance		2,473,796			2,535,305			2,593,989			610,983			195,198
Available for sale securities		11,738,693			10,953,851			10,306,257			12,258,072			13,092,422
Fair value option securities		300,372			92,012			36,846			54,832			75,539
Restricted equity securities		316,724			216,673			173,656			167,732			164,484
Residential mortgage loans held for sale		65,769			98,613			132,685			148,183			179,697
Loans:
Commercial		14,046,237			13,846,339			13,508,325			13,472,488			12,887,816
Commercial real estate		4,757,362			4,488,091			4,434,650			4,061,129			4,059,148
Loans to individuals		3,672,648			3,641,574			3,656,257			3,524,097			3,516,698
Total loans		22,476,247			21,976,004			21,599,232			21,057,714			20,463,662
Allowance for loan losses		(238,909	)		(242,450	)		(241,136	)		(246,064	)		(254,191	)
Loans, net of allowance		22,237,338			21,733,554			21,358,096			20,811,650			20,209,471
Total earning assets		40,781,257			39,285,300			38,527,860			39,062,025			43,504,610
Cash and due from banks		857,771			865,796			821,801			822,599			790,440
Derivative contracts, net		546,018			1,239,717			2,019,905			3,051,429			2,126,282
Cash surrender value of bank-owned life insurance		408,124			406,826			410,667			408,489			406,379
Receivable on unsettled securities sales		177,312			194,996			219,113			457,165			375,616
Other assets		3,211,986			3,216,983			3,119,856			3,486,691			3,357,747
TOTAL ASSETS	$	45,982,468		$	45,209,618		$	45,119,202		$	47,288,398		$	50,561,074

LIABILITIES AND EQUITY
Deposits:
Demand	$	12,406,408		$	14,176,189		$	15,105,305		$	15,202,597		$	15,062,282
Interest-bearing transaction		18,639,900			18,898,315			19,556,806			21,037,294			22,763,479
Savings		958,443			969,275			978,596			981,493			947,407
Time		1,477,720			1,417,606			1,409,069			1,373,036			1,589,039
Total deposits		33,482,471			35,461,385			37,049,776			38,594,420			40,362,207
Funds purchased and repurchase agreements		1,759,237			1,046,447			800,759			1,224,134			2,004,466
Other borrowings		4,512,280			2,523,195			1,528,887			1,301,358			1,148,440
Subordinated debentures		131,166			131,180			131,199			131,219			131,228
Derivative contracts, net		428,023			445,105			105,221			535,574			682,435
Due on unsettled securities purchases		316,738			575,957			331,428			380,332			519,097
Other liabilities		511,530			408,029			396,510			389,031			565,350
TOTAL LIABILITIES		41,141,445			40,591,298			40,343,780			42,556,068			45,413,223
Total equity		4,841,023			4,618,320			4,775,422			4,732,330			5,147,851
TOTAL LIABILITIES AND EQUITY	$	45,982,468		$	45,209,618		$	45,119,202		$	47,288,398		$	50,561,074

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

	Three Months Ended
	March 31,
		2023			2022

Interest revenue	$	516,729		$	283,099
Interest expense		164,381			14,688
Net interest revenue		352,348			268,411
Provision for credit losses		16,000			—
Net interest revenue after provision for credit losses		336,348			268,411
Other operating revenue:
Brokerage and trading revenue		52,396			(27,079	)
Transaction card revenue		25,621			24,216
Fiduciary and asset management revenue		50,657			46,399
Deposit service charges and fees		25,968			27,004
Mortgage banking revenue		14,367			16,650
Other revenue		16,970			10,445
Total fees and commissions		185,979			97,635
Other gains (losses), net		2,251			(1,644	)
Loss on derivatives, net		(1,344	)		(46,981	)
Loss on fair value option securities, net		(2,962	)		(11,201	)
Change in fair value of mortgage servicing rights		(6,059	)		49,110
Gain on available for sale securities, net		—			937
Total other operating revenue		177,865			87,856
Other operating expense:
Personnel		182,145			159,228
Business promotion		8,569			6,513
Professional fees and services		13,048			11,413
Net occupancy and equipment		28,459			30,855
Insurance		7,315			4,283
Data processing and communications		44,802			39,836
Printing, postage and supplies		3,893			3,689
Amortization of intangible assets		3,391			3,964
Mortgage banking costs		5,782			7,877
Other expense		8,408			9,960
Total other operating expense		305,812			277,618

Net income before taxes		208,401			78,649
Federal and state income taxes		45,905			16,197

Net income		162,496			62,452
Net income (loss) attributable to non-controlling interests		128			(36	)
Net income attributable to BOK Financial Corporation shareholders	$	162,368		$	62,488

Average shares outstanding:
Basic		66,331,775			67,812,400
Diluted		66,331,775			67,813,851

Net income per share:
Basic	$	2.43		$	0.91
Diluted	$	2.43		$	0.91

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

	Three Months Ended
	Mar. 31, 2023			Dec. 31, 2022			Sep. 30, 2022			June 30, 2022			Mar. 31, 2022

Interest revenue	$	516,729		$	451,606		$	363,150		$	294,247		$	283,099
Interest expense		164,381			98,980			46,825			20,229			14,688
Net interest revenue		352,348			352,626			316,325			274,018			268,411
Provision for credit losses		16,000			15,000			15,000			—			—
Net interest revenue after provision for credit losses		336,348			337,626			301,325			274,018			268,411
Other operating revenue:
Brokerage and trading revenue		52,396			63,008			61,006			44,043			(27,079	)
Transaction card revenue		25,621			27,136			25,974			26,940			24,216
Fiduciary and asset management revenue		50,657			49,899			50,190			49,838			46,399
Deposit service charges and fees		25,968			26,429			28,703			28,500			27,004
Mortgage banking revenue		14,367			10,065			11,282			11,368			16,650
Other revenue		16,970			17,034			15,479			12,684			10,445
Total fees and commissions		185,979			193,571			192,634			173,373			97,635
Other gains (losses), net		2,251			8,427			979			(7,639	)		(1,644	)
Gain (loss) on derivatives, net		(1,344	)		4,548			(17,009	)		(13,569	)		(46,981	)
Loss on fair value option securities, net		(2,962	)		(2,568	)		(4,368	)		(2,221	)		(11,201	)
Change in fair value of mortgage servicing rights		(6,059	)		(2,904	)		16,570			17,485			49,110
Gain (loss) on available for sale securities, net		—			(3,988	)		892			1,188			937
Total other operating revenue		177,865			197,086			189,698			168,617			87,856
Other operating expense:
Personnel		182,145			186,419			170,348			154,923			159,228
Business promotion		8,569			7,470			6,127			6,325			6,513
Charitable contributions to BOKF Foundation		—			2,500			—			—			—
Professional fees and services		13,048			18,365			14,089			12,475			11,413
Net occupancy and equipment		28,459			29,227			29,296			27,489			30,855
Insurance		7,315			4,677			4,306			4,728			4,283
Data processing and communications		44,802			43,048			41,743			41,280			39,836
Printing, postage and supplies		3,893			3,890			4,349			3,929			3,689
Amortization of intangible assets		3,391			3,736			3,943			4,049			3,964
Mortgage banking costs		5,782			9,016			9,504			9,437			7,877
Other expense		8,408			10,108			11,046			9,020			9,960
Total other operating expense		305,812			318,456			294,751			273,655			277,618
Net income before taxes		208,401			216,256			196,272			168,980			78,649
Federal and state income taxes		45,905			47,864			39,681			36,122			16,197
Net income		162,496			168,392			156,591			132,858			62,452
Net income (loss) attributable to non-controlling interests		128			(37	)		81			12			(36	)
Net income attributable to BOK Financial Corporation shareholders	$	162,368		$	168,429		$	156,510		$	132,846		$	62,488

Average shares outstanding:
Basic		66,331,775			66,627,955			67,003,199			67,453,748			67,812,400
Diluted		66,331,775			66,627,955			67,004,623			67,455,172			67,813,851
Net income per share:
Basic	$	2.43		$	2.51		$	2.32		$	1.96		$	0.91
Diluted	$	2.43		$	2.51		$	2.32		$	1.96		$	0.91

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

	Three Months Ended
	Mar. 31, 2023			Dec. 31, 2022			Sep. 30, 2022			June 30, 2022			Mar. 31, 2022
Capital:
Period-end shareholders' equity	$	4,874,786		$	4,682,649		$	4,509,934		$	4,737,339		$	4,849,582
Risk weighted assets	$	37,192,197		$	38,142,231		$	36,866,994		$	36,787,092		$	37,160,258
Risk-based capital ratios:
Common equity tier 1		12.19	%		11.69	%		11.80	%		11.61	%		11.30	%
Tier 1		12.20	%		11.71	%		11.82	%		11.63	%		11.31	%
Total capital		13.21	%		12.67	%		12.81	%		12.59	%		12.25	%
Leverage ratio		9.94	%		9.91	%		9.76	%		9.12	%		8.47	%
Tangible common equity ratio¹		8.46	%		7.63	%		7.96	%		8.16	%		8.13	%
Adjusted tangible common equity ratio¹		8.22	%		7.36	%		7.66	%		8.10	%		8.15	%

Common stock:
Book value per share	$	73.19		$	69.93		$	67.06		$	69.87		$	71.21
Tangible book value per share	$	56.42		$	53.19		$	50.34		$	53.22		$	54.58
Market value per share:
High	$	106.47		$	110.28		$	95.51		$	94.76		$	119.59
Low	$	80.00		$	88.46		$	69.82		$	74.03		$	93.76
Cash dividends paid	$	36,006		$	36,188		$	35,661		$	35,892		$	36,093
Dividend payout ratio		22.18	%		21.49	%		22.79	%		27.02	%		57.76	%
Shares outstanding, net		66,600,833			66,958,634			67,254,383			67,806,005			68,104,043
Stock buy-back program:
Shares repurchased		447,071			314,406			548,034			294,084			475,877
Amount	$	44,100		$	32,429		$	49,980		$	24,404		$	48,074
Average price paid per share²	$	98.64		$	103.14		$	91.20		$	82.98		$	101.02

Performance ratios (quarter annualized):
Return on average assets		1.43	%		1.48	%		1.38	%		1.13	%		0.50	%
Return on average equity		13.61	%		14.48	%		13.01	%		11.27	%		4.93	%
Net interest margin		3.45	%		3.54	%		3.24	%		2.76	%		2.44	%
Efficiency ratio		56.38	%		57.87	%		57.35	%		60.65	%		75.07	%

Reconciliation of non-GAAP measures:
¹ Tangible common equity ratio and adjusted tangible common equity ratio:
Total shareholders' equity	$	4,874,786		$	4,682,649		$	4,509,934		$	4,737,339		$	4,849,582
Less: Goodwill and intangible assets, net		1,117,438			1,120,880			1,124,582			1,128,493			1,132,510
Tangible common equity		3,757,348			3,561,769			3,385,352			3,608,846			3,717,072
Add: Unrealized gain (loss) on investment securities, net		(140,947	)		(167,477	)		(165,206	)		(30,305	)		6,778
Add: Tax effect on unrealized gain (loss) on investment securities, net		33,149			39,196			38,665			7,093			(1,586	)
Adjusted tangible common equity	$	3,649,550		$	3,433,488		$	3,258,811		$	3,585,634		$	3,722,264

Total assets	$	45,524,122		$	47,790,642		$	43,645,446		$	45,377,072		$	46,826,507
Less: Goodwill and intangible assets, net		1,117,438			1,120,880			1,124,582			1,128,493			1,132,510
Tangible assets	$	44,406,684		$	46,669,762		$	42,520,864		$	44,248,579		$	45,693,997

Tangible common equity ratio		8.46	%		7.63	%		7.96	%		8.16	%		8.13	%

Adjusted tangible common equity ratio		8.22	%		7.36	%		7.66	%		8.10	%		8.15	%
Pre-provision net revenue:
Net income before taxes	$	208,401		$	216,256		$	196,272		$	168,980		$	78,649
Provision for expected credit losses		16,000			15,000			15,000			—			—
Net income (loss) attributable to non-controlling interests		128			(37	)		81			12			(36	)
Pre-provision net revenue	$	224,273		$	231,293		$	211,191		$	168,968		$	78,685

Other data:
Tax equivalent interest	$	2,285		$	2,287		$	2,163		$	2,040		$	1,973
Net unrealized loss on available for sale securities	$	(741,508	)	$	(865,553	)	$	(935,788	)	$	(522,812	)	$	(546,598	)

Mortgage banking:
Mortgage production revenue	$	(633	)	$	(3,983	)	$	(2,406	)	$	(504	)	$	5,055

Mortgage loans funded for sale	$	138,624		$	141,090		$	260,210		$	360,237		$	418,866
Add: current period-end outstanding commitments		71,693			45,492			75,779			106,004			160,260
Less: prior period end outstanding commitments		45,492			75,779			106,004			160,260			171,412
Total mortgage production volume	$	164,825		$	110,803		$	229,985		$	305,981		$	407,714

Mortgage loan refinances to mortgage loans funded for sale		9	%		10	%		10	%		19	%		45	%
Realized margin on funded mortgage loans	(1.25)%			(1.10)%			(0.41)%				0.88	%		1.64	%
Production revenue as a percentage of production volume	(0.38)%			(3.59)%			(1.05)%			(0.16)%				1.24	%

Mortgage servicing revenue	$	15,000		$	14,048		$	13,688		$	11,872		$	11,595
Average outstanding principal balance of mortgage loans serviced for others		21,121,319			18,923,078			19,070,221			17,336,596			16,155,329
Average mortgage servicing revenue rates		0.29	%		0.29	%		0.28	%		0.27	%		0.29	%

Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net	$	(1,711	)	$	4,373		$	(17,027	)	$	(13,639	)	$	(46,694	)
Loss on fair value option securities, net		(2,962	)		(2,568	)		(4,368	)		(2,221	)		(11,201	)
Gain (loss) on economic hedge of mortgage servicing rights		(4,673	)		1,805			(21,395	)		(15,860	)		(57,895	)
Gain (loss) on changes in fair value of mortgage servicing rights		(6,059	)		(2,904	)		16,570			17,485			49,110
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue		(10,732	)		(1,099	)		(4,825	)		1,625			(8,785	)
Net interest revenue on fair value option securities³		187			(118	)		29			275			383
Total economic benefit (cost) of changes in the fair value of mortgage servicing rights, net of economic hedges	$	(10,545	)	$	(1,217	)	$	(4,796	)	$	1,900		$	(8,402	)

² Excludes 1 percent excise tax on corporate stock repurchases.
³ Actual interest earned on fair value option securities less internal transfer-priced cost of funds.

LOANS TREND – UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)

	Mar. 31, 2023		Dec. 31, 2022		Sep. 30, 2022		June 30, 2022		Mar. 31, 2022
Commercial:
Healthcare	$	3,899,341	$	3,845,017	$	3,826,623	$	3,696,963	$	3,441,732
Services		3,563,702		3,431,521		3,280,925		3,421,493		3,351,495
Energy		3,398,057		3,424,790		3,371,588		3,393,072		3,197,667
General business		3,356,249		3,511,171		3,148,783		3,110,309		3,029,660
Total commercial		14,217,349		14,212,499		13,627,919		13,621,837		13,020,554

Commercial real estate:
Multifamily		1,363,881		1,212,883		1,126,700		878,565		867,288
Industrial		1,309,435		1,221,501		1,103,905		953,626		911,928
Office		1,045,700		1,053,331		1,086,615		1,100,115		1,097,516
Retail		618,264		620,518		635,021		637,304		667,561
Residential construction and land development		102,828		95,684		91,690		111,575		120,506
Other commercial real estate		375,208		402,860		429,980		424,963		436,157
Total commercial real estate		4,815,316		4,606,777		4,473,911		4,106,148		4,100,956

Loans to individuals:
Residential mortgage		1,926,027		1,890,784		1,851,836		1,784,729		1,723,506
Residential mortgages guaranteed by U.S. government agencies		224,753		245,940		262,466		293,838		322,581
Personal		1,566,608		1,601,150		1,574,325		1,484,596		1,506,832
Total loans to individuals		3,717,388		3,737,874		3,688,627		3,563,163		3,552,919

Total	$	22,750,053	$	22,557,150	$	21,790,457	$	21,291,148	$	20,674,429

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

	Mar. 31, 2023		Dec. 31, 2022		Sep. 30, 2022		June 30, 2022		Mar. 31, 2022

Texas:
Commercial	$	7,103,166	$	6,878,618	$	6,644,890	$	6,645,698	$	6,286,125
Commercial real estate		1,675,831		1,555,508		1,448,590		1,339,452		1,345,105
Loans to individuals		992,343		982,700		970,459		934,856		957,320
Total Texas		9,771,340		9,416,826		9,063,939		8,920,006		8,588,550

Oklahoma:
Commercial		3,178,934		3,382,577		3,108,608		3,139,093		2,936,530
Commercial real estate		574,708		582,109		608,856		576,458		552,310
Loans to individuals		2,049,472		2,077,124		2,054,362		1,982,247		1,977,886
Total Oklahoma		5,803,114		6,041,810		5,771,826		5,697,798		5,466,726

Colorado:
Commercial		2,148,066		2,149,199		2,117,181		2,082,688		2,006,357
Commercial real estate		646,537		613,912		565,057		473,231		480,740
Loans to individuals		231,368		241,902		237,981		234,105		236,125
Total Colorado		3,025,971		3,005,013		2,920,219		2,790,024		2,723,222

Arizona:
Commercial		1,115,973		1,124,289		1,103,000		1,085,401		1,086,195
Commercial real estate		881,465		860,947		850,319		766,767		719,970
Loans to individuals		240,556		229,872		225,981		212,870		190,746
Total Arizona		2,237,994		2,215,108		2,179,300		2,065,038		1,996,911

Kansas/Missouri:
Commercial		318,782		310,715		307,456		338,910		336,966
Commercial real estate		489,951		479,968		466,955		458,157		436,740
Loans to individuals		129,580		131,307		125,039		125,584		121,247
Total Kansas/Missouri		938,313		921,990		899,450		922,651		894,953

New Mexico:
Commercial		280,945		263,349		258,754		253,825		272,246
Commercial real estate		449,715		417,008		426,367		431,606		504,632
Loans to individuals		65,770		67,163		68,095		67,026		63,299
Total New Mexico		796,430		747,520		753,216		752,457		840,177

Arkansas:
Commercial		71,483		103,752		88,030		76,222		96,135
Commercial real estate		97,109		97,325		107,767		60,477		61,459
Loans to individuals		8,299		7,806		6,710		6,475		6,296
Total Arkansas		176,891		208,883		202,507		143,174		163,890

TOTAL BOK FINANCIAL	$	22,750,053	$	22,557,150	$	21,790,457	$	21,291,148	$	20,674,429

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, 2023		Dec. 31, 2022		Sep. 30, 2022		June 30, 2022		Mar. 31, 2022
Oklahoma:
Demand	$	4,369,944	$	4,585,963	$	5,143,405	$	5,422,593	$	5,205,806
Interest-bearing:
Transaction		9,468,100		9,475,528		9,619,419		10,240,378		11,410,709
Savings		564,829		555,407		558,256		561,413		558,634
Time		942,787		794,002		776,306		678,127		817,744
Total interest-bearing		10,975,716		10,824,937		10,953,981		11,479,918		12,787,087
Total Oklahoma		15,345,660		15,410,900		16,097,386		16,902,511		17,992,893

Texas:
Demand		3,154,789		3,873,759		4,609,255		4,670,535		4,552,001
Interest-bearing:
Transaction		4,366,932		4,878,482		4,781,920		5,344,326		4,963,118
Savings		175,012		178,356		179,049		183,708		182,536
Time		321,774		356,538		343,015		333,038		329,931
Total interest-bearing		4,863,718		5,413,376		5,303,984		5,861,072		5,475,585
Total Texas		8,018,507		9,287,135		9,913,239		10,531,607		10,027,586

Colorado:
Demand		1,869,194		2,462,891		2,510,179		2,799,798		2,673,352
Interest-bearing:
Transaction		2,126,435		2,123,218		2,221,796		2,277,563		2,387,304
Savings		72,548		77,961		80,542		82,976		81,762
Time		128,583		135,043		151,064		160,795		165,401
Total interest-bearing		2,327,566		2,336,222		2,453,402		2,521,334		2,634,467
Total Colorado		4,196,760		4,799,113		4,963,581		5,321,132		5,307,819

New Mexico:
Demand		997,364		1,141,958		1,296,410		1,347,600		1,271,264
Interest-bearing:
Transaction		674,328		691,915		717,492		845,442		888,257
Savings		111,771		112,430		113,056		115,660		115,457
Time		137,875		133,625		142,856		148,532		156,140
Total interest-bearing		923,974		937,970		973,404		1,109,634		1,159,854
Total New Mexico		1,921,338		2,079,928		2,269,814		2,457,234		2,431,118

Arizona:
Demand		780,051		844,327		903,296		901,543		947,775
Interest-bearing:
Transaction		687,527		739,628		788,142		792,269		810,896
Savings		16,993		16,496		18,258		17,999		18,122
Time		27,755		24,846		26,704		28,774		27,259
Total interest-bearing		732,275		780,970		833,104		839,042		856,277
Total Arizona		1,512,326		1,625,297		1,736,400		1,740,585		1,804,052

Kansas/Missouri:
Demand		393,321		436,259		479,459		537,143		553,345
Interest-bearing:
Transaction		1,040,009		694,163		747,981		913,921		1,107,525
Savings		18,292		20,678		19,375		19,943		19,589
Time		13,061		12,963		13,258		13,962		11,527
Total interest-bearing		1,071,362		727,804		780,614		947,826		1,138,641
Total Kansas/Missouri		1,464,683		1,164,063		1,260,073		1,484,969		1,691,986

Arkansas:
Demand		42,312		50,180		43,111		41,084		38,798
Interest-bearing:
Transaction		71,158		56,181		123,273		130,300		122,020
Savings		3,228		3,083		3,098		3,125		3,265
Time		4,775		4,825		5,940		6,371		6,414
Total interest-bearing		79,161		64,089		132,311		139,796		131,699
Total Arkansas		121,473		114,269		175,422		180,880		170,497

TOTAL BOK FINANCIAL	$	32,580,747	$	34,480,705	$	36,415,915	$	38,618,918	$	39,425,951

NET INTEREST MARGIN TREND – UNAUDITED
BOK FINANCIAL CORPORATION

	Three Months Ended
	Mar. 31, 2023	Dec. 31, 2022	Sep. 30, 2022	June 30, 2022	Mar. 31, 2022

TAX-EQUIVALENT ASSETS YIELDS
Interest-bearing cash and cash equivalents	4.28%	4.06%	1.87%	0.83%	0.18%
Trading securities	4.52%	3.70%	2.72%	2.00%	1.71%
Investment securities, net of allowance	1.46%	1.46%	1.42%	2.35%	5.07%
Available for sale securities	2.87%	2.54%	2.21%	1.84%	1.77%
Fair value option securities	5.17%	4.40%	2.98%	2.92%	2.81%
Restricted equity securities	7.34%	5.70%	6.23%	3.30%	2.69%
Residential mortgage loans held for sale	5.79%	5.56%	5.05%	4.22%	3.11%
Loans	6.67%	5.99%	4.89%	3.92%	3.57%
Allowance for loan losses
Loans, net of allowance	6.74%	6.06%	4.94%	3.96%	3.61%
Total tax-equivalent yield on earning assets	5.06%	4.53%	3.71%	2.96%	2.58%

COST OF INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest-bearing transaction	1.91%	1.28%	0.63%	0.22%	0.10%
Savings	0.10%	0.08%	0.05%	0.03%	0.03%
Time	1.95%	1.25%	0.93%	0.68%	0.56%
Total interest-bearing deposits	1.83%	1.22%	0.63%	0.24%	0.12%
Funds purchased and repurchase agreements	3.33%	2.05%	0.72%	0.53%	0.95%
Other borrowings	4.73%	4.08%	2.33%	1.01%	0.38%
Subordinated debt	6.40%	6.16%	5.07%	4.50%	4.02%
Total cost of interest-bearing liabilities	2.43%	1.57%	0.76%	0.31%	0.21%
Tax-equivalent net interest revenue spread	2.63%	2.96%	2.95%	2.65%	2.37%
Effect of noninterest-bearing funding sources and other	0.82%	0.58%	0.29%	0.11%	0.07%
Tax-equivalent net interest margin	3.45%	3.54%	3.24%	2.76%	2.44%

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, 2023			Dec. 31, 2022			Sep. 30, 2022			June 30, 2022			Mar. 31, 2022
Nonperforming assets:
Nonaccruing loans:
Commercial:
Healthcare	$	37,247		$	41,034		$	41,438		$	14,886		$	15,076
Services		8,097			16,228			27,315			15,259			16,535
Energy		127			1,399			4,164			20,924			24,976
General business		8,961			1,636			2,753			3,539			3,750
Total commercial		54,432			60,297			75,670			54,608			60,337

Commercial real estate		21,668			16,570			7,971			10,939			15,989

Loans to individuals:
Permanent mortgage		29,693			29,791			30,066			30,460			30,757
Permanent mortgage guaranteed by U.S. government agencies		14,302			15,005			16,957			18,000			16,992
Personal		200			134			136			132			171
Total loans to individuals		44,195			44,930			47,159			48,592			47,920

Total nonaccruing loans	$	120,295		$	121,797		$	130,800		$	114,139		$	124,246
Accruing renegotiated loans guaranteed by U.S. government agencies¹		—			163,535			176,022			196,420			204,121
Real estate and other repossessed assets		12,651			14,304			29,676			22,221			24,492
Total nonperforming assets	$	132,946		$	299,636		$	336,498		$	332,780		$	352,859
Total nonperforming assets excluding those guaranteed by U.S. government agencies	$	118,644		$	121,096		$	143,519		$	118,360		$	131,746

Accruing loans 90 days past due²	$	76		$	510		$	120		$	3		$	307

Gross charge-offs	$	3,667		$	17,807		$	1,766		$	1,368		$	7,805
Recoveries		(2,898	)		(2,301	)		(1,309	)		(2,167	)		(1,824	)
Net charge-offs (recoveries)	$	769		$	15,506		$	457		$	(799	)	$	5,981

Provision for loan losses	$	14,525		$	9,442		$	1,111		$	(6,158	)	$	(3,967	)
Provision for credit losses from off-balance sheet unfunded loan commitments		2,024			4,609			14,060			6,005			3,268
Provision for expected credit losses from mortgage banking activities		(488	)		1,003			(66	)		69			621
Provision for credit losses related to held-to maturity (investment) securities portfolio		(61	)		(54	)		(105	)		84			78
Total provision for credit losses	$	16,000		$	15,000		$	15,000		$	—		$	—

Allowance for loan losses to period end loans		1.10	%		1.04	%		1.11	%		1.13	%		1.19	%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans		1.37	%		1.31	%		1.37	%		1.33	%		1.37	%
Nonperforming assets to period end loans and repossessed assets		0.58	%		1.33	%		1.54	%		1.56	%		1.70	%
Net charge-offs (annualized) to average loans		0.01	%		0.28	%		0.01	%	(0.02)%				0.12	%
Allowance for loan losses to nonaccruing loans²		235.36	%		220.71	%		212.37	%		250.80	%		229.80	%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to nonaccruing loans²		294.74	%		277.76	%		261.83	%		294.74	%		263.60	%

¹ The Company adopted FASB Accounting Standards Update No. 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, which eliminates designation of these loans as troubled debt restructurings effective January 1, 2023.
² Excludes residential mortgage loans guaranteed by agencies of the U.S. government.

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

	Three Months Ended							1Q23 vs 4Q22				1Q23 vs 1Q22
	Mar. 31, 2023		Dec. 31, 2022		Mar. 31, 2022			$ change			% change	$ change		% change
Commercial Banking
Net interest revenue	$	266,545	$	232,834	$	137,011		$	33,711		14.5%	$	129,534	94.5%
Fees and commissions revenue		55,835		58,881		56,964			(3,046	)	(5.2)%		(1,129)	(2.0)%
Combined net interest and fee revenue		322,380		291,715		193,975			30,665		10.5%		128,405	66.2%
Other operating expense		73,504		79,722		65,114			(6,218	)	(7.8)%		8,390	12.9%
Corporate expense allocations		17,729		18,007		16,246			(278	)	(1.5)%		1,483	9.1%
Net income		176,547		139,374		82,344			37,173		26.7%		94,203	114.4%

Average assets		28,162,934		28,373,856		29,823,905			(210,922	)	(0.7)%		(1,660,971)	(5.6)%
Average loans		18,750,426		18,254,559		16,696,428			495,867		2.7%		2,053,998	12.3%
Average deposits		15,861,285		16,832,244		19,595,260			(970,959	)	(5.8)%		(3,733,975)	(19.1)%

Consumer Banking
Net interest revenue	$	109,381	$	53,302	$	27,207		$	56,079		105.2%	$	82,174	302.0%
Fees and commissions revenue		30,581		27,618		33,977			2,963		10.7%		(3,396)	(10.0)%
Combined net interest and fee revenue		139,962		80,920		61,184			59,042		73.0%		78,778	128.8%
Other operating expense		50,198		54,526		48,789			(4,328	)	(7.9)%		1,409	2.9%
Corporate expense allocations		11,618		11,972		12,080			(354	)	(3.0)%		(462)	(3.8)%
Net income (loss)		50,687		8,996		(7,317	)		41,691		463.4%		58,004	(792.7)%

Average assets		9,934,511		10,078,381		10,273,890			(143,870	)	(1.4)%		(339,379)	(3.3)%
Average loans		1,747,237		1,725,555		1,672,346			21,682		1.3%		74,891	4.5%
Average deposits		8,248,541		8,617,085		8,746,622			(368,544	)	(4.3)%		(498,081)	(5.7)%

Wealth Management
Net interest revenue	$	54,106	$	34,498	$	55,766		$	19,608		56.8%	$	(1,660)	(3.0)%
Fees and commissions revenue		108,911		114,630		25,023			(5,719	)	(5.0)%		83,888	335.2%
Combined net interest and fee revenue		163,017		149,128		80,789			13,889		9.3%		82,228	101.8%
Other operating expense		82,039		82,211		74,620			(172	)	(0.2)%		7,419	9.9%
Corporate expense allocations		12,386		12,733		12,071			(347	)	(2.7)%		315	2.6%
Net income (loss)		52,427		41,447		(4,521	)		10,980		26.5%		56,948	(1,259.6)%

Average assets		11,663,096		12,912,630		21,323,795			(1,249,534	)	(9.7)%		(9,660,699)	(45.3)%
Average loans		2,201,622		2,223,275		2,118,780			(21,653	)	(1.0)%		82,842	3.9%
Average deposits		7,432,413		7,888,753		9,619,323			(456,340	)	(5.8)%		(2,186,910)	(22.7)%
Fiduciary assets		57,457,925		56,060,496		61,095,320			1,397,429		2.5%		(3,637,395)	(6.0)%
Assets under management or administration		102,310,126		99,735,040		101,081,355			2,575,086		2.6%		1,228,771	1.2%

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

BOK Financial Corporation Reports Quarterly Earnings of $162 million or $2.43 Per Share in the First Quarter

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