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BOK Financial Reports Annual and Quarterly Earnings for 2016

TULSA, Okla., Jan. 25, 2017 (GLOBE NEWSWIRE) -- BOK Financial Corporation (Nasdaq:BOKF) reported net income of $232.7 million or $3.53 per diluted share for the year ended December 31, 2016. Net income for the year ended December 31, 2015 was $288.6 million or $4.21 per diluted share.

Net income for fourth quarter of 2016 totaled $50.0 million or $0.76 per diluted share. Unusual items that impacted fourth quarter earnings included:

  • A $17.0 million decrease in the fair value of mortgage servicing rights, net of economic hedges, which reduced earnings per share (EPS) by $0.18 per share; and a $5.0 million decrease in the net fair value of trading portfolio positions, which reduced EPS by $0.05 per share. Both of these items were a result of the unexpected 85 basis point increase in the 10-year U.S. Treasury interest rate and related interest rates primarily due to the market's reaction to the outcome of the presidential election.
  • Expenses related to the completion of the Mobank acquisition totaled $4.7 million or $0.05 per share.
  • Severance and other expenses related to the fourth quarter staff reductions totaled $5.0 million or $0.05 per share.

Steven G. Bradshaw, president and chief executive officer, noted, “In 2016 we achieved record net interest income and fees and commissions revenue, generated strong loan growth despite a significant reduction in energy loan outstandings, and worked through a protracted commodities downturn with performance near the top of our peer group of energy banks. We also completed the acquisition of MBT Bancshares (Mobank) in Kansas City and are already capitalizing on our opportunities in that important growth market. Finally, we adjusted our mortgage servicing rights hedging strategy to reduce volatility in a rising rate environment going forward. While the impact of changing interest rates, expense items associated with the Mobank acquisition, and other unusual expense items reduced profitability, I am as confident in our business prospects today as I have been in years. We believe we are well-positioned to continue to grow revenues and energize earnings growth in 2017.”

Bradshaw continued, “During the year we repurchased 1,005,169 shares at an average price of $66.45, including 700,000 shares in the fourth quarter at $70.03 per share. We also increased our dividend for the 11th consecutive year and deployed $102 million of capital for the Mobank acquisition. We will continue to deploy capital in a smart and disciplined fashion through a combination of organic growth, acquisitions, dividends, and more limited share buybacks.”

Fourth Quarter 2016 Highlights

  • Net interest revenue totaled $194.2 million for the fourth quarter of 2016, up $6.4 million over the third quarter of 2016. Net interest margin was 2.63 percent, compared to 2.64 percent in the third quarter of 2016. Average earning assets increased $107 million over the prior quarter.
  • Fees and commissions revenue totaled $162.0 million for the fourth quarter of 2016. Excluding the impact of the change in interest rates above, fees and commissions revenue decreased $14.3 million compared to the third quarter of 2016. Mortgage banking revenue decreased $10.1 million due primarily to a decrease in outstanding loan commitments related to rising interest rates and normal seasonality. Brokerage and trading revenue decreased $4.6 million primarily due to lower gains from trading of securities and related derivative contracts and decreased volumes of derivative contracts sold to our mortgage banking customers related to changes in interest rates.
  • Operating expense was $265.5 million for the fourth quarter, largely unchanged compared to the prior quarter, excluding the unusual items noted above. Personnel expense decreased $4.6 million and non-personnel expense increased $3.6 million.
  • No provision for credit losses was recorded in the fourth quarter, compared to $10.0 million for the third quarter of 2016. The decrease in the provision for credit losses was due to improving credit metric trends, largely driven by energy price stability. The company had a net recovery of $1.2 million in the fourth quarter of 2016, compared to net charge-offs of $6.1 million in the third quarter.
  • The combined allowance for credit losses totaled $257 million or 1.52 percent of outstanding loans at December 31, 2016, compared to $256 million or 1.56 percent of outstanding loans at September 30, 2016. The December 31, 2016 coverage ratio was unchanged at 1.56 percent, excluding the effect of the Mobank acquisition.
  • Nonperforming assets that are not guaranteed by U.S. government agencies totaled $263 million or 1.56 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at December 31, 2016 and $253 million or 1.55 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at September 30, 2016.
  • Average loans increased $276 million over the previous quarter, including $162 million related to the Mobank acquisition. The remaining increase was primarily due to growth in the personal and commercial loan portfolios. Period-end outstanding loan balances were $17.0 billion at December 31, 2016, an increase of $525 million over September 30, 2016. The Mobank acquisition added $485 million to loans at December 31, 2016. Excluding the impact of the acquisition, personal loans grew by $126 million, partially offset by a $72 million decrease in commercial real estate balances.
  • Average deposits increased $938 million over the previous quarter. Growth in demand deposit and interest-bearing transaction account balances was partially offset by a decrease in time deposits. Period end deposits grew by $1.7 billion over September 30, 2016 to $22.7 billion at December 31, 2016, including the addition of $624 million in Mobank deposits.
  • The common equity Tier 1 capital ratio was 11.27 percent at December 31. In addition, the Company's Tier 1 capital ratio was 11.27 percent, total capital ratio was 12.87 percent and leverage ratio was 8.72 percent. At September 30, 2016, the common equity Tier 1 capital ratio was 11.99 percent, the Tier 1 capital ratio was 11.99 percent, total capital ratio was 13.65 percent and leverage ratio was 9.06 percent. The decrease in capital ratios was primarily due to the purchase of Mobank and share repurchases during the fourth quarter.
  • The company paid a regular quarterly cash dividend of $29 million or $0.44 per common share during the fourth quarter of 2016. On January 31, 2017, the board of directors is expected to approve a quarterly cash dividend of $0.44 per common share payable on or about February 24, 2017 to shareholders of record as of February 10, 2017.

Net Interest Revenue

Net interest revenue was $194.2 million for the fourth quarter of 2016, an increase of $6.4 million over the third quarter of 2016.

Net interest margin was 2.63 percent for the fourth quarter of 2016, compared to 2.64 percent for the third quarter of 2016. The yield on average earning assets was 2.92 percent, a decrease of 1 basis point over the prior quarter. The loan portfolio yield increased 4 basis points to 3.67 percent, excluding the impact of $2.5 million of loan fees recognized in the fourth quarter of 2016. The yield on the available for sale securities portfolio decreased 1 basis point to 2.00 percent. Funding costs were unchanged compared to the prior quarter at 0.44 percent.

Average earning assets increased $107 million during the fourth quarter of 2016, including $244 million related to the Mobank acquisition. Average loan balances increased $276 million primarily due to commercial and personal loan growth and include $162 million related to the Mobank acquisition. Average trading securities balances increased $110 million. This growth was offset by a $101 million decrease in mortgage loans held for sale, a $96 million decrease in available for sale securities and a $56 million decrease in fair value option securities held as an economic hedge of our mortgage servicing rights. Average interest-bearing deposits increased $938 million over the third quarter of 2016, including $206 million related to the Mobank acquisition. The average balance of borrowed funds decreased $238 million.

Fees and Commissions Revenue

Fees and commissions revenue totaled $162.0 million for the fourth quarter of 2016, a $19.2 million decrease compared to the third quarter of 2016.

Mortgage banking revenue totaled $28.4 million for the fourth quarter of 2016, a decrease of $10.1 million compared to the third quarter of 2016 due primarily to a decrease in outstanding loan commitments related to rising interest rates and normal seasonality. Outstanding mortgage loan commitments at December 31 decreased $312 million or 50 percent from September 30. Average primary mortgage interest rates were 38 basis points higher than in the third quarter of 2016. Margins on loans produced through retail delivery channels were unchanged from the previous quarter. Margins on loans produced through the HomeDirect online delivery channel narrowed.

Mortgage loans funded for sale during the fourth quarter decreased $675 million or 36 percent compared to the previous quarter. This decrease was primarily due to the company's strategic decision to exit the correspondent lending channel after careful consideration of continued pressure on margin due to the competitive landscape and increasing regulatory costs. Mortgage loans funded for sale from our retail and HomeDirect online channel were largely unchanged compared to the prior quarter.

Brokerage and trading revenue totaled $28.5 million for the fourth quarter of 2016, a decrease of $9.5 million compared to the previous quarter. Trading revenue decreased $6.3 million, including $5.0 million related to the unexpected increase in interest rates primarily related to the market's reaction to the outcome of the presidential election. Customer hedging revenue and retail brokerage fees also decreased compared to the prior quarter, partially offset by increased loan syndication fees.

Transaction card revenue grew by $588 thousand and fiduciary and asset management revenue increased $462 thousand, partially offset by a $303 thousand decrease in deposit service charges compared to the third quarter.

Operating Expenses

Total operating expenses were $265.5 million for the fourth quarter of 2016, an increase of $7.5 million over the third quarter of 2016. Severance and other expenses related to the fourth quarter staff reductions totaled $5.0 million. Expenses related to the completion of the Mobank acquisition totaled $4.7 million for the fourth quarter and $1.3 million for the third quarter. The third quarter of 2016 included a $5.0 million accrual related to a legal settlement. The discussion following excludes the impact of these items.

Personnel costs decreased $4.6 million compared to the previous quarter. Employee benefits expense decreased $2.7 million primarily due to updated actuarial assumptions. Regular salary expense decreased $2.3 million. Incentive compensation expense increased $382 thousand.

Non-personnel expense increased $8.6 million over the third quarter of 2016. Net losses and operating expenses of repossessed assets were $1.6 million for the fourth quarter, compared to a net gain of $926 thousand in the third quarter. The fourth quarter included a $2.0 million contribution to the BOKF Foundation. Mortgage banking costs increased $1.4 million over the third quarter primarily due to an increase in residential mortgage repurchase accruals. Occupancy and equipment expense increased $1.4 million over the third quarter primarily due to property lease termination costs and software costs.

Loans, Deposits and Capital

Loans

Outstanding loans were $17.0 billion at December 31, 2016, an increase of $525 million over September 30, including $485 million of loans from the Mobank acquisition.

Outstanding commercial loan balances increased $271 million over September 30, 2016. The Mobank acquisition added $289 million of commercial loans, primarily in the service sector. Service sector loan balances grew by $172 million. Healthcare sector loans saw strong growth, up $117 million over the prior quarter. Wholesale/retail sector loan balances decreased $25 million and energy sector loans decreased $23 million compared to September 30, 2016.

Unfunded energy loan commitments grew by $424 million in the fourth quarter to $2.7 billion. All other unfunded commercial loan commitments totaled $4.8 billion at December 31, 2016, an increase of $367 million over September 30, 2016.

Commercial real estate loans increased $15 million over September 30, 2016. The Mobank acquisition added $87 million in commercial real estate loan balances. Loans secured by office buildings increased $46 million, primarily in the Arizona market. Loans secured by industrial facilities grew by $34 million, primarily in the Texas market. Multifamily residential loans increased $29 million primarily in the Kansas City and Texas markets, partially offset by a decrease in the Oklahoma market. Retail sector loans decreased $39 million and other commercial real estate loans decreased $30 million, both primarily in the Oklahoma market. Residential construction and land development loans decreased $24 million, primarily in the Arizona market. Unfunded commercial real estate loan commitments totaled $1.1 billion at December 31, 2016, a $127 million decrease compared to September 30, 2016.

Personal loans were $840 million, an increase of $162 million over the prior quarter primarily due to growth in private bank loans and the addition of $36 million of loans from the Mobank acquisition.

Deposits

Period-end deposits totaled $22.7 billion at December 31, 2016, an increase of $1.7 billion over September 30, 2016, primarily due to normal seasonality and temporary customer activity. The Mobank acquisition added $624 million in deposits. Interest-bearing transaction account balances grew by $1.0 billion, demand deposit balances increased $554 million and time deposits increased $52 million. Among the lines of business, Wealth Management deposits increased $442 million and Commercial Banking deposits increased $389 million, partially offset by a $174 million decrease in Consumer Banking deposits.

Capital

The company's common equity Tier 1 capital ratio was 11.27 percent at December 31, 2016. In addition, the Company's Tier 1 capital ratio was 11.27 percent, total capital ratio was 12.87 percent and leverage ratio was 8.72 percent at December 31, 2016. At September 30, 2016, the Company's common equity Tier 1 capital ratio was 11.99 percent, Tier 1 capital ratio was 11.99 percent, total capital ratio was 13.65 percent and leverage ratio was 9.06 percent. The decrease in all capital ratios was due to deployment of $152 million of capital for the Mobank acquisition and share repurchases.

The company's tangible common equity ratio, a non-GAAP measure, was 8.61 percent at December 31, 2016 and 9.19 percent at September 30, 2016. The tangible common equity ratio is primarily based on total shareholders' equity which includes unrealized gains and losses on available for sale securities. The Company has elected to exclude unrealized gains and losses from available for sale securities from its calculation of Tier 1 capital for regulatory capital purposes, consistent with the treatment under the previous capital rules.

Credit Quality

Nonperforming assets totaled $357 million or 2.09 percent of outstanding loans and repossessed assets at December 31, 2016 compared to $349 million or 2.12 percent of outstanding loans and repossessed assets at September 30, 2016. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $263 million or 1.56 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at December 31, 2016 and $253 million or 1.55 percent at September 30, 2016.

Excluding loans guaranteed by U.S. government agencies, nonaccruing loans totaled $219 million or 1.31 percent of outstanding loans at December 31, 2016 compared to $222 million or 1.36 percent of outstanding loans at September 30, 2016. New nonaccruing loans identified in the fourth quarter totaled $50 million, offset by $37 million in payments received, $14 million in foreclosures and repossessions and $1.7 million in charge-offs. At December 31, 2016, nonaccruing commercial loans totaled $179 million or 1.72 percent of outstanding commercial loans, including $132 million or 5.30 percent of energy loans. Nonaccruing commercial real estate loans totaled $5.5 million or 0.14 percent of outstanding commercial real estate loans.

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, decreased to $399 million at December 31, 2016 from $478 million at September 30, 2016. Potential problem energy loans decreased $53 million to $308 million. Potential problem wholesale/retail sector loans decreased $14 million and other commercial and industrial potential problem loans decreased $10 million.

The company had a $1.2 million net recovery in the fourth quarter of 2016, compared to net charge-offs of $6.1 million for the third quarter of 2016. Gross charge-offs totaled $1.7 million for the fourth quarter, compared to $8.1 million for the previous quarter. Recoveries totaled $2.8 million for the fourth quarter of 2016 and $2.0 million for the third quarter of 2016.

After evaluating all credit factors, the company determined that no provision for credit losses was necessary during the fourth quarter of 2016 based on continued improvement in credit metrics compared to the prior quarter. The combined allowance for credit losses totaled $257 million or 1.52 percent of outstanding loans and 117.46 percent of nonaccruing loans, excluding loans guaranteed by U.S. Government agencies, at December 31, 2016. The allowance for loan losses was $246 million and the accrual for off-balance sheet credit losses was $11 million.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $8.7 billion at December 31, 2016 and $8.9 billion at September 30, 2016. At December 31, 2016, the available for sale portfolio consisted primarily of $5.5 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $3.0 billion of commercial mortgage-backed securities fully backed by U.S. government agencies.

The available for sale securities portfolio had a net unrealized loss of $15 million at December 31, 2016, compared to a net unrealized gain of $160 million at September 30, 2016. The decrease in the net unrealized gain was primarily due to an increase in interest rates during the fourth quarter. Net unrealized gains on residential mortgage-backed securities issued by U.S. government agencies at September 30, 2016 decreased $113 million during the fourth quarter to a net unrealized loss of $15 million at December 31, 2016. Commercial mortgage-backed securities had a net unrealized loss of $18 million at December 31, 2016, compared to a net unrealized gain of $44 million at September 30, 2016.

The Company also maintains a portfolio of U.S. Treasury securities, 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. Changes in the fair value of mortgage servicing rights are highly dependent on primary mortgage interest rates offered to borrowers and other factors. Changes in the fair value of securities and interest rate derivatives are highly dependent on secondary mortgage rates, or rates required by investors. Changes in the spread between primary and secondary mortgage rates cannot be effectively hedged and can cause significant earnings volatility.

The fair value of our mortgage servicing rights increased by $40 million due primarily to an increase in residential mortgage interest rates during the fourth quarter of 2016. The fair value of securities and interest rate derivative contracts held as an economic hedge decreased by $57 million. Since mid-year 2016, the company maintained an economic hedge of its MSRs to reduce the impact of a 50 basis point decrease in long-term interest rates within its board-approved risk tolerance levels. This hedge position increased exposure to long-term interest rates. The significant increase in long-term interest rates following the presidential election resulted in a loss on this hedge, partially offset by an increase in the fair value of the MSR.

The fair value of mortgage servicing rights, net of economic hedge, increased by $1.2 million in the third quarter, primarily due to changes in short term interest rates and a decrease in average secondary mortgage rates.

Conference Call and Webcast

The Company will hold a conference call at 9 a.m. Central time on Wednesday, January 25, 2017 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 1-858-384-5517 and referencing replay PIN number 13652831.

About BOK Financial Corporation

BOK Financial is a $33 billion regional financial services company based in Tulsa, Oklahoma. The Company's stock is publicly traded on NASDAQ under the Global Select market listings (Nasdaq:BOKF). BOK Financial's holdings include BOKF, NA, Missouri Bank and Trust Company of Kansas City dba Mobank, BOK Financial Securities, Inc. and The Milestone Group, Inc. BOKF, NA operates TransFund, Cavanal Hill Investment Management, BOK Financial Asset Management, Inc. and seven banking divisions: Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas and Colorado State Bank and Trust. Through its subsidiaries, the Company provides commercial and consumer banking, investment and trust 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 December 31, 2016 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, the financial services industry and the economy generally. 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 BOK Financial's acquisitions and other 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 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 commodity prices, interest rates, interest rate relationships, 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 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)
Dec. 31, 2016 Sept. 30, 2016 Dec. 31, 2015
ASSETS
Cash and due from banks $620,846 $535,916 $573,699
Interest-bearing cash and cash equivalents 1,916,651 2,080,978 2,069,900
Trading securities 337,628 546,615 122,404
Investment securities 546,145 546,457 597,836
Available for sale securities 8,676,829 8,862,283 9,042,733
Fair value option securities 77,046 222,409 444,217
Restricted equity securities 307,240 333,391 273,684
Residential mortgage loans held for sale 301,897 447,592 308,439
Loans:
Commercial 10,390,824 10,120,163 10,252,531
Commercial real estate 3,809,046 3,793,598 3,259,033
Residential mortgage 1,949,832 1,872,793 1,876,893
Personal 839,958 678,232 552,697
Total loans 16,989,660 16,464,786 15,941,154
Allowance for loan losses (246,159) (245,103) (225,524)
Loans, net of allowance 16,743,501 16,219,683 15,715,630
Premises and equipment, net 325,849 318,196 306,490
Receivables 772,952 650,368 163,480
Goodwill 448,899 382,739 385,461
Intangible assets, net 46,931 41,977 43,909
Mortgage servicing rights, net 247,073 203,621 218,605
Real estate and other repossessed assets, net 44,287 31,941 30,731
Derivative contracts, net 689,872 655,078 586,270
Cash surrender value of bank-owned life insurance 308,430 310,211 303,335
Receivable on unsettled securities sales 7,188 19,642 40,193
Other assets 353,017 370,134 249,112
TOTAL ASSETS $32,772,281 $32,779,231 $31,476,128
LIABILITIES AND EQUITY
Deposits:
Demand $9,235,720 $8,681,364 $8,296,888
Interest-bearing transaction 10,865,105 9,824,160 9,998,954
Savings 425,470 420,349 386,252
Time 2,221,800 2,169,631 2,406,064
Total deposits 22,748,095 21,095,504 21,088,158
Funds purchased 57,929 109,031 491,192
Repurchase agreements 668,661 504,573 722,444
Other borrowings 4,846,072 6,533,443 4,837,879
Subordinated debentures 144,640 144,631 226,350
Accrued interest, taxes, and expense 146,704 191,276 119,584
Due on unsettled securities purchases 6,508 677 16,897
Derivative contracts, net 664,531 573,987 581,701
Other liabilities 182,784 193,698 124,284
TOTAL LIABILITIES 29,465,924 29,346,820 28,208,489
Shareholders' equity:
Capital, surplus and retained earnings 3,285,821 3,302,584 3,208,969
Accumulated other comprehensive income (loss) (10,967) 95,727 21,587
TOTAL SHAREHOLDERS' EQUITY 3,274,854 3,398,311 3,230,556
Non-controlling interests 31,503 34,100 37,083
TOTAL EQUITY 3,306,357 3,432,411 3,267,639
TOTAL LIABILITIES AND EQUITY $32,772,281 $32,779,231 $31,476,128


AVERAGE BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
Three Months Ended
Dec. 31, 2016 Sept. 30, 2016 June 30, 2016 March 31, 2016 Dec. 31, 2015
ASSETS
Interest-bearing cash and cash equivalents $2,032,785 $2,047,991 $2,022,028 $2,052,840 $1,995,945
Trading securities 476,498 366,545 237,808 188,100 150,402
Investment securities 542,869 552,592 562,391 587,465 602,369
Available for sale securities 8,766,555 8,862,590 8,890,112 8,951,435 8,971,090
Fair value option securities 210,733 266,998 368,434 450,478 435,449
Restricted equity securities 334,114 335,812 319,136 294,529 262,461
Residential mortgage loans held for sale 345,066 445,930 401,114 289,743 310,425
Loans:
Commercial 10,228,095 10,109,692 10,265,782 10,268,793 10,024,756
Commercial real estate 3,749,393 3,789,673 3,550,611 3,364,076 3,186,629
Residential mortgage 1,919,296 1,870,855 1,864,458 1,865,742 1,835,195
Personal 826,804 677,530 582,281 493,382 540,418
Total loans 16,723,588 16,447,750 16,263,132 15,991,993 15,586,998
Allowance for loan losses (246,977) (247,901) (245,448) (234,116) (207,156)
Total loans, net 16,476,611 16,199,849 16,017,684 15,757,877 15,379,842
Total earning assets 29,185,231 29,078,307 28,818,707 28,572,467 28,107,983
Cash and due from banks 578,694 511,534 507,085 505,522 514,629
Derivative contracts, net 681,455 766,671 823,584 632,102 657,780
Cash surrender value of bank-owned life insurance 309,532 308,670 306,318 304,141 301,793
Receivable on unsettled securities sales 33,813 259,906 49,568 115,101 62,228
Other assets 2,172,351 1,721,385 1,480,780 1,379,138 1,435,763
TOTAL ASSETS $32,961,076 $32,646,473 $31,986,042 $31,508,471 $31,080,176
LIABILITIES AND EQUITY
Deposits:
Demand $9,124,595 $8,497,037 $8,162,134 $8,105,756 $8,312,961
Interest-bearing transaction 9,980,132 9,650,618 9,590,855 9,756,843 9,527,491
Savings 421,654 420,009 417,122 397,479 382,284
Time 2,177,035 2,197,350 2,297,621 2,366,543 2,482,714
Total deposits 21,703,416 20,765,014 20,467,732 20,626,621 20,705,450
Funds purchased 62,004 68,280 70,682 112,211 73,220
Repurchase agreements 560,891 522,822 611,264 662,640 623,921
Other borrowings 6,072,150 6,342,369 6,076,028 5,583,917 4,957,175
Subordinated debentures 144,635 255,890 232,795 226,368 226,332
Derivative contracts, net 682,808 747,187 791,313 544,722 632,699
Due on unsettled securities purchases 77,575 200,574 93,812 158,050 248,811
Other liabilities 321,404 352,671 298,170 268,705 251,953
TOTAL LIABILITIES 29,624,883 29,254,807 28,641,796 28,183,234 27,719,561
Total equity 3,336,193 3,391,666 3,344,246 3,325,237 3,360,615
TOTAL LIABILITIES AND EQUITY $32,961,076 $32,646,473 $31,986,042 $31,508,471 $31,080,176


STATEMENTS OF EARNINGS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except per share data)
Three Months Ended Year Ended
Dec. 31, Dec. 31,
2016 2015 2016 2015
Interest revenue $215,737 $196,782 $829,117 $766,828
Interest expense 21,539 15,521 81,889 63,474
Net interest revenue 194,198 181,261 747,228 703,354
Provision for credit losses 22,500 65,000 34,000
Net interest revenue after provision for credit losses 194,198 158,761 682,228 669,354
Other operating revenue:
Brokerage and trading revenue 28,500 30,255 138,377 129,556
Transaction card revenue 34,521 32,319 135,758 128,621
Fiduciary and asset management revenue 34,535 31,165 135,477 126,153
Deposit service charges and fees 23,365 22,813 92,193 90,431
Mortgage banking revenue 28,414 22,907 133,914 126,002
Other revenue 12,693 14,233 51,029 49,883
Total fees and commissions 162,028 153,692 686,748 650,646
Other gains (losses), net (1,279) 2,329 4,030 5,702
Gain (loss) on derivatives, net (35,815) (732) (15,685) 430
Loss on fair value option securities, net (20,922) (4,127) (10,555) (3,684)
Change in fair value of mortgage servicing rights 39,751 7,416 (2,193) (4,853)
Gain (loss) on available for sale securities, net (9) 2,132 11,675 12,058
Total other-than-temporary impairment losses (1,662) (2,443)
Portion of loss recognized in other comprehensive income (65) 624
Net impairment losses recognized in earnings (1,727) (1,819)
Total other operating revenue 143,754 158,983 674,020 658,480
Other operating expense:
Personnel 141,132 131,104 553,119 515,298
Business promotion 7,344 8,416 26,582 27,851
Charitable contributions to BOKF Foundation 2,000 2,000 796
Professional fees and services 16,828 10,357 56,783 40,123
Net occupancy and equipment 21,470 19,356 80,024 76,016
Insurance 8,705 5,415 32,489 20,375
Data processing and communications 33,691 31,248 131,841 122,383
Printing, postage and supplies 3,998 3,108 15,584 13,498
Net losses and operating expenses of repossessed assets 1,627 343 3,359 1,446
Amortization of intangible assets 1,558 1,090 6,862 4,359
Mortgage banking costs 17,348 11,442 61,387 38,813
Other expense 9,846 8,547 47,560 35,233
Total other operating expense 265,547 230,426 1,017,590 896,191
Net income before taxes 72,405 87,318 338,658 431,643
Federal and state income taxes 22,496 26,242 106,377 139,384
Net income 49,909 61,076 232,281 292,259
Net income (loss) attributable to non-controlling interests (117) 1,475 (387) 3,694
Net income attributable to BOK Financial Corporation shareholders $50,026 $59,601 $232,668 $288,565
Average shares outstanding:
Basic 64,719,018 66,378,380 65,085,627 67,594,689
Diluted 64,787,728 66,467,729 65,143,898 67,691,658
Net income per share:
Basic $0.76 $0.89 $3.53 $4.22
Diluted $0.76 $0.89 $3.53 $4.21


FINANCIAL HIGHLIGHTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and share data)
Three Months Ended
Dec. 31, 2016

Sept. 30, 2016
June 30, 2016
March 31, 2016 Dec. 31, 2015
Capital:
Period-end shareholders' equity$3,274,854 $3,398,311 $3,368,833 $3,321,555 $3,230,556
Risk weighted assets$25,152,718 $24,358,385 $24,191,016 $23,707,824 $23,429,899
Risk-based capital ratios1:
Common equity tier 111.27% 11.99% 11.86% 12.00% N/A
Tier 111.27% 11.99% 11.86% 12.00% 12.13%
Total capital12.87% 13.65% 13.51% 13.21% 13.30%
Leverage ratio8.72% 9.06% 9.06% 9.12% 9.25%
Tangible common equity ratio28.61% 9.19% 9.33% 9.34% 9.02%
Common stock:
Book value per share$50.12 $51.56 $51.15 $50.21 $49.03
Tangible book value per share42.53 45.12 44.68 43.73 42.51
Market value per share:
High$85.00 $70.05 $65.14 $60.16 $74.73
Low$67.11 $56.36 $51.00 $43.74 $58.25
Cash dividends paid$28,860 $28,181 $28,241 $28,294 $28,967
Dividend payout ratio57.69% 37.94% 42.92% 66.47% 48.60%
Shares outstanding, net65,337,432 65,910,454 65,866,317 66,155,103 65,894,032
Stock buy-back program:
Shares repurchased700,000 305,169 1,874,074
Amount$49,021 $ $17,771 $ $119,780
Average price per share$70.03 $ $58.23 $ $63.91
Performance ratios (quarter annualized):
Return on average assets 0.60% 0.91% 0.83% 0.54% 0.76%
Return on average equity 6.03% 8.80% 8.00% 5.21
% 7.12%
Net interest margin 2.63% 2.64% 2.63% 2.65
% 2.64%
Efficiency ratio 72.93% 68.88% 68.16% 68.84
% 67.73%
1 Risk-based capital ratios March 31, 2015 and thereafter calculated under revised regulatory capital rules issued July 2013 and effective for the Company January 1, 2015. Previous risk-based capital ratios presented are calculated in accordance with then current regulatory capital rules.
Reconciliation of non-GAAP measures:
2 Tangible common equity ratio:
Total shareholders' equity$3,274,854 $3,398,311 $ 3,368,833 $3,321,555 $3,230,556
Less: Goodwill and intangible assets, net495,830 424,716 $ 426,111 428,733 429,370
Tangible common equity$2,779,024 $2,973,595 $ 2,942,722 $2,892,822 $2,801,186
Total assets$32,772,281 $32,779,231 $ 31,970,450 $31,413,945 $31,476,128
Less: Goodwill and intangible assets, net495,830 424,716 426,111 428,733 429,370
Tangible assets$32,276,451 $32,354,515 $ 31,544,339 $ 30,985,212 $ 31,046,758
Tangible common equity ratio8.61% 9.19% 9.33% 9.34% 9.02%
Other data:
Fiduciary assets$ 41,781,564 $ 41,222,162 $ 39,924,734 $39,113,305 $38,333,638
Tax equivalent adjustment$ 4,389 $ 4,455 $ 4,372 $4,385 $ 3,222
Net unrealized gain (loss) on available for sale securities$ (14,899) $ 159,533 $ 195,385 $155,236 $ 38,109
Mortgage banking:
Mortgage servicing portfolio$ 21,997,568 $ 21,851,536 $ 21,178,387 $20,294,662 $ 19,678,226
Mortgage commitments$ 318,359 $ 630,804 $ 965,631 $902,986 $ 601,147
Mortgage loans funded for sale$ 1,189,975 $ 1,864,583 $ 1,818,844 $1,244,015 $ 1,365,431
Mortgage loan refinances to total fundings 63% 51% 44% 49% 41%
Mortgage loans sold$ 1,347,607 $ 1,873,709 $ 1,742,582 $1,239,391 $ 1,424,527
Net realized gains on mortgage loans sold$ 21,523 $ 23,110 $ 15,865 $8,449 $ 13,573
Change in net unrealized gain on mortgage loans held for sale (9,586) (1,152) 3,221 8,198 (5,615)
Total production revenue 11,937 21,958 19,086 16,647 7,958
Servicing revenue 16,477 16,558 15,798 15,453 14,949
Total mortgage banking revenue$ 28,414 $ 38,516 $ 34,884 32,100 $ 22,907
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net$(35,868) $ 2,268 $ 10,766 $ 7,138 $(732)
Gain (loss) on fair value option securities, net (20,922) (3,355) 4,279 9,443 (4,127)
Gain (loss) on economic hedge of mortgage servicing rights (56,790) (1,087) 15,045 16,581 (4,859)
Gain (loss) on changes in fair value of mortgage servicing rights 39,751 2,327 (16,283) (27,988) 7,416
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges$(17,039) $ 1,240 $(1,238) $(11,407) $ 2,557
Net interest revenue on fair value option securities$114 $ 861 $ 1,348 $ 2,033 $ 2,137



QUARTERLY EARNINGS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and per share data)
Three Months Ended
Dec. 31, 2016 Sept. 30, 2016 June 30, 2016 March 31, 2016 Dec. 31, 2015
Interest revenue$215,737 $209,317 $202,267 $201,796 $196,782
Interest expense21,539 21,471 19,655 19,224 15,521
Net interest revenue194,198 187,846 182,612 182,572 181,261
Provision for credit losses 10,000 20,000 35,000 22,500
Net interest revenue after provision for credit losses194,198 177,846 162,612 147,572 158,761
Other operating revenue:
Brokerage and trading revenue28,500 38,006 39,530 32,341 30,255
Transaction card revenue34,521 33,933 34,950 32,354 32,319
Fiduciary and asset management revenue34,535 34,073 34,813 32,056 31,165
Deposit service charges and fees23,365 23,668 22,618 22,542 22,813
Mortgage banking revenue28,414 38,516 34,884 32,100 22,907
Other revenue12,693 13,080 13,352 11,904 14,233
Total fees and commissions162,028 181,276 180,147 163,297 153,692
Other gains (losses), net(1,279) 2,442 1,307 1,560 2,329
Gain (loss) on derivatives, net(35,815) 2,226 10,766 7,138 (732)
Gain (loss) on fair value option securities, net(20,922) (3,355) 4,279 9,443 (4,127)
Change in fair value of mortgage servicing rights39,751 2,327 (16,283) (27,988) 7,416
Gain on available for sale securities, net(9) 2,394 5,326 3,964 2,132
Total other-than-temporary impairment losses (1,662)
Portion of loss recognized in (reclassified from) other comprehensive income (65)
Net impairment losses recognized in earnings (1,727)
Total other operating revenue143,754 187,310 185,542 157,414 158,983
Other operating expense:
Personnel141,132 139,212 139,213 133,562 131,104
Business promotion7,344 6,839 6,703 5,696 8,416
Contribution to BOKF Foundation2,000
Professional fees and services16,828 14,038 14,158 11,759 10,357
Net occupancy and equipment21,470 20,111 19,677 18,766 19,356
Insurance8,705 9,390 7,129 7,265 5,415
Data processing and communications33,691 33,331 32,802 32,017 31,248
Printing, postage and supplies3,998 3,790 3,889 3,907 3,108
Net losses (gains) and operating expenses of repossessed assets1,627 (926) 1,588 1,070 343
Amortization of intangible assets1,558 1,521 2,624 1,159 1,090
Mortgage banking costs17,348 15,963 15,746 12,330 11,442
Other expense9,846 14,819 7,856 15,039 8,547
Total other operating expense265,547 258,088 251,385 242,570 230,426
Net income before taxes72,405 107,068 96,769 62,416 87,318
Federal and state income taxes22,496 31,956 30,497 21,428 26,242
Net income49,909 75,112 66,272 40,988 61,076
Net income (loss) attributable to non-controlling interests(117) 835 471 (1,576) 1,475
Net income attributable to BOK Financial Corporation shareholders$50,026 $74,277 $65,801 $42,564 $59,601
Average shares outstanding:
Basic64,719,018 65,085,392 65,245,887 65,296,541 66,378,380
Diluted64,787,728 65,157,841 65,302,926 65,331,428 66,467,729
Net income per share:
Basic$0.76 $1.13 $1.00 $0.64 $0.89
Diluted$0.76 $1.13 $1.00 $0.64 $0.89


LOANS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
Dec. 31, 2016 Sept. 30, 2016 June 30, 2016 March 31, 2016 Dec. 31, 2015
Commercial:
Services 3,108,990 2,936,599 2,830,864 2,728,891 2,784,276
Energy $2,497,868 $2,520,804 $2,818,656 $3,029,420 $3,097,328
Healthcare 2,201,916 2,085,046 2,051,146 1,995,425 1,883,380
Wholesale/retail 1,576,818 1,602,030 1,532,957 1,451,846 1,422,064
Manufacturing 514,975 499,486 595,403 600,645 556,729
Other commercial and industrial 490,257 476,198 527,411 482,198 508,754
Total commercial 10,390,824 10,120,163 10,356,437 10,288,425 10,252,531
Commercial real estate:
Multifamily 903,272 873,773 787,200 733,689 751,085
Industrial 871,749 838,021 645,586 564,467 563,169
Office 798,888 752,705 769,112 695,552 637,707
Retail 761,888 801,377 795,419 810,522 796,499
Residential construction and land development 135,533 159,946 157,576 171,949 160,426
Other real estate 337,716 367,776 427,073 394,328 350,147
Total commercial real estate 3,809,046 3,793,598 3,581,966 3,370,507 3,259,033
Residential mortgage:
Permanent mortgage 1,006,820 969,558 969,007 948,405 945,336
Permanent mortgages guaranteed by U.S. government agencies 199,387 190,309 192,732 197,350 196,937
Home equity 743,625 712,926 719,184 723,554 734,620
Total residential mortgage 1,949,832 1,872,793 1,880,923 1,869,309 1,876,893
Personal 839,958 678,232 587,423 494,325 552,697
Total $16,989,660 $16,464,786 $16,406,749 $16,022,566 $15,941,154


LOANS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
Dec. 31, 2016 Sept. 30, 2016 June 30, 2016 March 31, 2016 Dec. 31, 2015
Bank of Oklahoma:
Commercial$3,370,259 $3,545,924 $3,698,215 $3,656,034 $3,782,687
Commercial real estate684,381 795,806 781,458 747,689 739,829
Residential mortgage1,407,197 1,401,166 1,415,766 1,411,409 1,409,114
Personal303,823 271,420 246,229 204,158 255,387
Total Bank of Oklahoma5,765,660 6,014,316 6,141,668 6,019,290 6,187,017
Bank of Texas:
Commercial4,022,455 3,903,218 3,901,632 3,936,809 3,908,425
Commercial real estate1,415,011 1,400,709 1,311,408 1,211,978 1,204,202
Residential mortgage233,981 229,345 222,548 217,539 219,126
Personal306,748 278,167 233,304 210,456 203,496
Total Bank of Texas5,978,195 5,811,439 5,668,892 5,576,782 5,535,249
Bank of Albuquerque:
Commercial399,256 398,147 398,427 402,082 375,839
Commercial real estate284,603 299,785 322,956 323,059 313,422
Residential mortgage108,058 110,478 114,226 117,655 120,507
Personal11,483 11,333 10,569 10,823 11,557
Total Bank of Albuquerque803,400 819,743 846,178 853,619 821,325
Bank of Arkansas:
Commercial86,577 83,544 81,227 79,808 92,359
Commercial real estate73,616 72,649 69,235 66,674 69,320
Residential mortgage7,015 6,936 6,874 7,212 8,169
Personal6,524 6,757 7,025 918 819
Total Bank of Arkansas173,732 169,886 164,361 154,612 170,667
Colorado State Bank & Trust:
Commercial1,018,208 1,013,314 1,076,620 1,030,348 987,076
Commercial real estate265,264 254,078 237,569 219,078 223,946
Residential mortgage59,631 59,838 59,425 52,961 53,782
Personal50,372 42,901 35,064 24,497 23,384
Total Colorado State Bank & Trust1,393,475 1,370,131 1,408,678 1,326,884 1,288,188
Bank of Arizona:
Commercial686,253 680,447 670,814 656,527 606,733
Commercial real estate747,409 726,542 639,112 605,383 507,523
Residential mortgage36,265 39,206 38,998 40,338 44,047
Personal52,553 31,205 24,248 18,372 31,060
Total Bank of Arizona1,522,480 1,477,400 1,373,172 1,320,620 1,189,363
Bank of Kansas City / Mobank:
Commercial807,816 495,569 529,502 526,817 499,412
Commercial real estate338,762 244,029 220,228 196,646 200,791
Residential mortgage97,685 25,824 23,086 22,195 22,148
Personal108,455 36,449 30,984 25,101 26,994
Total Bank of Kansas City / Mobank1,352,718 801,871 803,800 770,759 749,345
TOTAL BOK FINANCIAL$16,989,660 $16,464,786 $16,406,749 $16,022,566 $15,941,154

Loans attributed to a geographical region may not always represent the location of the borrower or the collateral.

DEPOSITS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
Dec. 31, 2016 Sept. 30, 2016 June 30, 2016 March 31, 2016 Dec. 31, 2015
Bank of Oklahoma:
Demand$3,993,170 $4,158,273 $4,020,181 $3,813,128 $4,133,520
Interest-bearing:
Transaction6,345,536 5,701,983 5,741,302 5,706,067 5,971,819
Savings241,696 242,959 247,984 246,122 226,733
Time1,118,355 1,091,464 1,167,271 1,198,022 1,202,274
Total interest-bearing7,705,587 7,036,406 7,156,557 7,150,211 7,400,826
Total Bank of Oklahoma11,698,757 11,194,679 11,176,738 10,963,339 11,534,346
Bank of Texas:
Demand3,137,009 2,734,981 2,677,253 2,571,883 2,627,764
Interest-bearing:
Transaction2,388,812 2,240,040 2,035,634 2,106,905 2,132,099
Savings83,101 84,642 83,862 83,263 77,902
Time535,642 528,380 516,231 530,657 549,740
Total interest-bearing3,007,555 2,853,062 2,635,727 2,720,825 2,759,741
Total Bank of Texas6,144,564 5,588,043 5,312,980 5,292,708 5,387,505
Bank of Albuquerque:
Demand627,979 584,681 530,853 557,200 487,286
Interest-bearing:
Transaction590,571 555,326 573,690 560,684 563,723
Savings49,963 54,480 49,200 47,187 43,672
Time238,408 244,706 250,068 259,630 267,821
Total interest-bearing878,942 854,512 872,958 867,501 875,216
Total Bank of Albuquerque1,506,921 1,439,193 1,403,811 1,424,701 1,362,502
Bank of Arkansas:
Demand26,389 32,203 30,607 31,318 27,252
Interest-bearing:
Transaction105,232 313,480 278,335 265,803 202,857
Savings2,192 2,051 1,853 1,929 1,747
Time16,696 17,534 18,911 21,035 24,983
Total interest-bearing124,120 333,065 299,099 288,767 229,587
Total Bank of Arkansas150,509 365,268 329,706 320,085 256,839
Colorado State Bank & Trust:
Demand576,000 517,063 528,124 413,506 497,318
Interest-bearing:
Transaction616,679 623,055 625,240 610,077 616,697
Savings32,866 31,613 31,509 33,108 31,927
Time242,782 247,667 254,164 271,475 296,224
Total interest-bearing892,327 902,335 910,913 914,660 944,848
Total Colorado State Bank & Trust1,468,327 1,419,398 1,439,037 1,328,166 1,442,166
Bank of Arizona:
Demand366,755 418,718 396,837 341,828 326,324
Interest-bearing:
Transaction305,099 303,750 302,297 313,825 358,556
Savings2,973 2,959 3,198 3,277 2,893
Time27,765 27,935 28,681 29,053 29,498
Total interest-bearing335,837 334,644 334,176 346,155 390,947
Total Bank of Arizona702,592 753,362 731,013 687,983 717,271
Bank of Kansas City / Mobank:
Demand508,418 235,445 240,754 221,812 197,424
Interest-bearing:
Transaction513,176 86,526 112,371 146,405 153,203
Savings12,679 1,645 1,656 1,619 1,378
Time42,152 11,945 11,735 31,502 35,524
Total interest-bearing568,007 100,116 125,762 179,526 190,105
Total Bank of Kansas City / Mobank1,076,425 335,561 366,516 401,338 387,529
TOTAL BOK FINANCIAL$22,748,095 $21,095,504 $20,759,801 $20,418,320 $21,088,158



NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
Three Months Ended
Dec. 31, 2016 Sept. 30, 2016 June 30, 2016 March 31, 2016 Dec. 31, 2015
TAX-EQUIVALENT ASSETS YIELDS
Interest-bearing cash and cash equivalents0.55% 0.51% 0.51% 0.53% 0.29%
Trading securities1.74% 2.71% 1.89% 2.47% 2.86%
Investment securities:
Taxable5.39% 5.34% 5.41% 5.53% 5.41%
Tax-exempt2.33% 2.26% 2.25% 2.22% 1.53%
Total investment securities3.60% 3.51% 3.52% 3.51% 3.03%
Available for sale securities:
Taxable1.98% 1.99% 2.01% 2.06% 2.02%
Tax-exempt5.27% 5.47% 5.06% 4.95% 4.22%
Total available for sale securities2.00% 2.01% 2.04% 2.08% 2.04%
Fair value option securities0.99% 1.70% 2.19% 2.38% 2.32%
Restricted equity securities5.45% 5.37% 4.84% 5.85% 5.95%
Residential mortgage loans held for sale3.31% 3.28% 3.53% 3.75% 3.85%
Loans3.67% 3.63% 3.58% 3.57% 3.55%
Allowance for loan losses
Loans, net of allowance3.72% 3.69% 3.63% 3.63% 3.60%
Total tax-equivalent yield on earning assets2.92% 2.93% 2.91% 2.92% 2.86%
COST OF INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest-bearing transaction0.16% 0.14% 0.14% 0.14% 0.09%
Savings0.09% 0.09% 0.10% 0.09% 0.09%
Time1.12% 1.14% 1.16% 1.21% 1.26%
Total interest-bearing deposits0.32% 0.32% 0.33% 0.34% 0.32%
Funds purchased0.28% 0.19% 0.19% 0.27% 0.11%
Repurchase agreements0.02% 0.04% 0.05% 0.05% 0.04%
Other borrowings0.61% 0.57% 0.57% 0.56% 0.38%
Subordinated debt5.51% 3.84% 1.52% 1.26% 1.13%
Total cost of interest-bearing liabilities0.44% 0.44% 0.41% 0.40% 0.34%
Tax-equivalent net interest revenue spread2.48% 2.49% 2.50% 2.52% 2.52%
Effect of noninterest-bearing funding sources and other0.15% 0.15% 0.13% 0.13% 0.12%
Tax-equivalent net interest margin2.63% 2.64% 2.63% 2.65% 2.64%

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
BOK FINANCIAL CORPORATION
(in thousands, except ratios)
Three Months Ended
Dec. 31, 2016 Sept. 30, 2016 June 30, 2016 March 31, 2016 Dec. 31, 2015
Nonperforming assets:
Nonaccruing loans:
Commercial $178,953 $176,464 $181,989 $174,652 $76,424
Commercial real estate 5,521 7,350 7,780 9,270 9,001
Residential mortgage 46,220 52,452 57,061 57,577 61,240
Personal 290 686 354 331 463
Total nonaccruing loans 230,984 236,952 247,184 241,830 147,128
Accruing renegotiated loans guaranteed by U.S. government agencies 81,370 80,306 78,806 77,597 74,049
Real estate and other repossessed assets: 44,287 31,941 24,054 29,896 30,731
Total nonperforming assets $356,641 $349,199 $350,044 $349,323 $251,908
Total nonperforming assets excluding those guaranteed by U.S. government agencies $263,425 $253,461 $251,497 $252,176 $155,959
Nonaccruing loans by loan portfolio sector:
Commercial:
Services $8,173 $8,477 $9,388 $9,512 $10,290
Energy $132,499 $142,966 $168,145 $159,553 $61,189
Healthcare 825 855 875 1,023 1,072
Wholesale/retail 11,407 2,453 2,772 3,685 2,919
Manufacturing 4,931 274 293 312 331
Other commercial and industrial 21,118 21,439 516 567 623
Total commercial 178,953 176,464 181,989 174,652 76,424
Commercial real estate:
Multifamily 38 51 65 250 274
Industrial 76 76 76 76 76
Office 426 882 606 629 651
Retail 326 1,249 1,265 1,302 1,319
Residential construction and land development 3,433 3,739 4,261 4,789 4,409
Other commercial real estate 1,222 1,353 1,507 2,224 2,272
Total commercial real estate 5,521 7,350 7,780 9,270 9,001
Residential mortgage:
Permanent mortgage 22,855 25,956 27,228 27,497 28,984
Permanent mortgage guaranteed by U.S. government agencies 11,846 15,432 19,741 19,550 21,900
Home equity 11,519 11,064 10,092 10,530 10,356
Total residential mortgage 46,220 52,452 57,061 57,577 61,240
Personal 290 686 354 331 463
Total nonaccruing loans $230,984 $236,952 $247,184 $241,830 $147,128
Performing loans 90 days past due1 $5 $3,839 $2,899 $8,019 $1,207
Gross charge-offs $(1,651) $(8,101) $(8,845) $(23,991) $(4,851)
Recoveries 2,813 2,038 1,386 1,519 1,870
Net recoveries (charge-offs) $1,162 $(6,063) $(7,459) $(22,472) $(2,981)
Provision for credit losses $ $10,000 $20,000 $35,000 $22,500
Allowance for loan losses to period end loans 1.45% 1.49% 1.48% 1.46% 1.41%
Combined allowance for credit losses to period end loans 1.52% 1.56% 1.54% 1.50% 1.43%
Nonperforming assets to period end loans and repossessed assets 2.09% 2.12% 2.13% 2.18% 1.58%
Net charge-offs (annualized) to average loans (0.03)% 0.15% 0.18% 0.56% 0.08%
Allowance for loan losses to nonaccruing loans1 112.33% 110.65% 106.95% 104.89% 180.09%
Combined allowance for credit losses to nonaccruing loans1 117.46% 115.67% 110.93% 107.87% 181.46%
1 Excludes residential mortgage loans guaranteed by agencies of the U.S. government.


For Further Information Contact: Joseph Crivelli Investor Relations (918) 595-3027

Source:BOK Financial Corporation