BOK Financial Corporation Reports Annual Earnings of $618 million or $8.95 Per Share and Quarterly Earnings of $117 million or $1.71 Per Share in the Fourth Quarter

Rhea-AI Summary

BOK Financial Corporation (BOKF) reported record net income of $618.1 million, or $8.95 per diluted share, for 2021, up from $435.0 million in 2020. Notable achievements include a 14% increase in assets under management to over $100 billion and a $250 million (13%) growth in period-end loan balances to over $2.1 billion. Net interest revenue remained stable at $1.1 billion, while net interest margin decreased to 2.60%. Operating expenses rose to $1.2 billion, reflecting strategic investments. The company anticipates further loan growth and is well-positioned for a rising rate environment.

Positive

• Record net income of $618.1 million for 2021, up 42% from 2020.
• Assets under management grew over 14% to exceed $100 billion.
• Period-end loan balances increased by $250 million or 13%.
• Expecting further loan growth post-pandemic.

Negative

• Net interest margin decreased to 2.60%, down from 2.83% in 2020.
• Fees and commissions revenue decreased by $142 million.
• Operating expenses increased, totaling $1.2 billion.

TULSA, Okla., Jan. 19, 2022 (GLOBE NEWSWIRE) -- BOK Financial Corporation (NASD: BOKF) -

CEO Commentary

Stacy Kymes, president and chief executive officer, stated, “Our record earnings in 2021 are a testament to our diversified business model focused on revenue growth from long-term commitments and investments. It also reflects extraordinary dedication from our employees serving our clients in all areas of our business in a very difficult environment. While there were facets to our financial performance in 2021 that are non-recurring, the business activities that created those opportunistic gains are core to our franchise. Our diversified Wealth Management business achieved significant milestones this year, assets under management grew just over 14 percent, to over $100 billion, period end loan balances surpassed $2.1 billion, growing $250 million or 13 percent, while trust fees grew $11 million or 6 percent.”

Kymes continued, “Although our Commercial Lending segment experienced net payoffs this past year, the fourth quarter has been a bright spot as we’ve realized annualized growth above 10 percent in our Commercial and Industrial category. Also encouraging is that outstanding C&I loan commitments increased, with the resulting C&I utilization levels actually decreasing linked quarter. This further underscores the capacity we have for future loan growth. Although Commercial Real Estate payoffs continued in the fourth quarter, we expect these balances to grow in 2022 after the first quarter.”

Kymes added, “As I look forward, I am excited about BOK Financial's prospects for 2022. We believe we have turned the corner on loan growth, our overall asset quality is better than pre-pandemic, we have strong fundamental growth in assets under management in our Wealth Management business, and we are well positioned for a rising rate environment. Based on our history during the last rising rate cycle, we believe that we can deliver net interest revenue growth that will perform exceptionally well in the regional bank space.”

2021 Financial Highlights

• Net income was $618.1 million or $8.95 per diluted share for the year ended December 31, 2021, and $435.0 million or $6.19 per diluted share for the year ended December 31, 2020. Improving economic conditions related to the COVID-19 pandemic and massive government stimulus drove a $100.0 million reversal in 2021 of the $222.6 million provision for credit losses recorded in 2020.
• Net interest revenue totaled $1.1 billion, consistent with the prior year. Net interest margin was 2.60 percent compared to 2.83 percent for 2020. The full impact of the reduction of the federal funds rate by the Federal Reserve in 2020 was realized in 2021. The following reduction in other short-term market interest rates reduced the yield on floating-rate assets by more than the amount by which funding costs could be reduced, compressing the margin.
• Fees and commissions revenue totaled $668.3 million, a decrease of $142.0 million. Brokerage and trading revenues decreased $108.8 million, largely due to a shift from fee revenue to net interest revenue. Mortgage banking revenue decreased $76.5 million due to a decrease in mortgage production volume combined with a reduction in production revenue as a percentage of production volume. Other revenue increased $18.3 million, largely due to higher revenue on repossessed oil and gas properties, which was largely offset by related operating expenses.
• Other gains and losses, net increased $57.7 million to $63.7 million due to sales of an alternative investment and repossessed assets.
• Operating expense increased $13.4 million to $1.2 billion. Personnel expense increased $6.9 million while non-personnel expense increased $6.5 million, including an increase of $10.8 million of operating expenses on repossessed assets.
• Period-end loans decreased $2.8 billion to $20.2 billion at December 31, 2021. Period-end Paycheck Protection Program ("PPP") loans decreased $1.4 billion to $276.3 million while commercial real estate loans decreased $867 million and commercial loans decreased $571 million. Average loans were $21.5 billion, a $1.9 billion decrease compared to the prior year.
• The combined allowance for credit losses totaled $289 million or 1.45 percent of outstanding loans, excluding PPP loans, at December 31, 2021. The combined allowance for credit losses was $426 million or 2.00 percent of outstanding loans, excluding PPP loans, at December 31, 2020.
• Average deposits increased $5.2 billion to $37.9 billion and period-end deposits increased $5.1 billion to $41.2 billion as customers maintained higher deposit balances during this time of economic uncertainty. Average interest bearing deposits increased by $2.9 billion and average demand deposits grew by $2.3 billion.
• Commercial Banking contributed $328.5 million to net income in 2021, an increase of $22.5 million compared to 2020. The sale of an alternative investment in the third quarter resulted in a $31.1 million pre-tax gain, net of non-controlling interest. Combined net interest revenue and fee revenue decreased $12.8 million, largely due to a reduction in outstanding loan balances and lower yields on deposits sold to our Funds Management unit. Production revenue from oil and gas properties increased $17.1 million, which was partially offset by an increase in related operating expenses. Revenue growth was supplemented by increases in syndication fees, transaction card revenue, and deposit service charges and fees. Personnel expense increased $9.1 million, primarily due to incentive compensation costs. Net loan charge-offs decreased $38.3 million. Average Commercial Banking loans decreased $1.9 billion due to purposeful deleveraging by our customers. Average Commercial Banking deposits grew 23 percent to $17.7 billion in 2021.
• Consumer Banking contributed $27.6 million to net income in 2021, a decrease of $70.3 million compared to 2020. Combined net interest revenue and fee revenue decreased $115.7 million. Net interest revenue decreased $43.5 million, mainly due to lower yields on deposits sold to our Funds Management unit. Fees and commissions revenue decreased $72.2 million, largely due to reduced mortgage production volume and margin compression. Operating expense decreased $20.8 million, due to lower mortgage banking costs and incentive compensation expense. Average Consumer Banking deposits increased 11 percent to $8.4 billion in 2021.
• Wealth Management contributed $113.6 million to net income in 2021, a decrease of $2.1 million compared to record earnings in 2020. Total wealth management revenue decreased $3.7 million. Revenue primarily from agency residential mortgage-backed securities trading activity decreased $10.8 million due to narrowing margins and a reduction in trading volumes. Fiduciary and asset management revenue increased $10.8 million. Growth in trust fees and managed account fees as a result of growth in assets under management and administration was partially offset by lower mutual fund fees and increased waivers. Operating expense decreased $5.3 million, primarily due to incentive compensation costs related to reduced trading activity. Average Wealth Management loans grew by 13 percent to $2.0 billion. Average Wealth Management deposits increased 9 percent to $9.4 billion in 2021, led by growth in interest-bearing transaction deposits.

Fourth Quarter 2021 Financial Highlights

• Net income was $117.3 million or $1.71 per diluted share for the fourth quarter of 2021 and $188.3 million or $2.74 per diluted share for the third quarter of 2021.
• Net interest revenue totaled $277.1 million, a decrease of $3.2 million. Net interest margin was 2.52 percent compared to 2.66 percent in the third quarter of 2021.
• Operating revenue totaled $157.4 million, a decrease of $72.4 million. Brokerage and trading revenues decreased $33.1 million. Uncertainty in the markets led to reduced transaction activity and tighter margins compared to the elevated volumes in the third quarter. Lower mortgage loan production volume and lower margins also reduced mortgage banking revenue by $5.0 million. The prior quarter also included a $31.1 million pre-tax gain on the sale of an alternative investment.
• Operating expense increased $8.2 million to $299.5 million. The fourth quarter of 2021 included a $5.0 million charitable donation to the BOKF Foundation. Increases in business promotion costs, professional fees, and other expenses were partially offset by lower personnel expense.
• Period-end loans decreased $142 million to $20.2 billion at December 31, 2021. Period-end PPP loans decreased $260 million to $276 million. Excluding PPP loans, period-end loans grew $117 million with growth in commercial loans partially offset by paydowns in commercial real estate loans. Average loans were $20.2 billion, a $606 million decrease compared to the third quarter of 2021.
• Continued strength in commodity prices coupled with an outlook for moderate growth in gross domestic product and the labor markets, improving credit quality metrics and lower loan balances resulted in a $17.0 million negative provision for expected credit losses in the fourth quarter of 2021. A $23.0 million negative provision for expected credit losses was recorded in the prior quarter. The combined allowance for credit losses totaled $289 million or 1.45 percent of outstanding loans, excluding PPP loans, at December 31, 2021. The combined allowance for credit losses was $306 million or 1.54 percent of outstanding loans, excluding PPP loans, at September 30, 2021.
• Average deposits increased $2.0 billion to $39.8 billion and period-end deposits increased $2.7 billion to $41.2 billion, largely due to growth in commercial balances. Average demand deposits grew by $1.1 billion and average interest bearing deposits increased by $820 million.
• The company's common equity Tier 1 capital ratio was 12.23 percent at December 31, 2021. In addition, the company's Tier 1 capital ratio was 12.24 percent, total capital ratio was 13.28 percent, and leverage ratio was 8.55 percent at December 31, 2021. At September 30, 2021, the company's common equity Tier 1 capital ratio was 12.26 percent, Tier 1 capital ratio was 12.29 percent, total capital ratio was 13.38 percent, and leverage ratio was 8.77 percent.
• The company repurchased 128,522 shares of common stock at an average price of $104.46 a share in the fourth quarter of 2021.
• Commercial Banking contributed $83.5 million to net income in the fourth quarter of 2021, a decrease of $19.2 million compared to the third quarter of 2021 as the prior quarter included a pre-tax gain of $31.1 million from the sale of an alternative investment. Combined net interest revenue and fee revenue increased $7.6 million, largely driven by increased deposit balances and improved spreads, and was partially offset by an increase in personnel expense. Average Commercial Banking loans decreased $254 million due to purposeful deleveraging by our customers. Average Commercial Banking deposits grew 9 percent to $19.5 billion in the fourth quarter of 2021.
• Consumer Banking contributed $6.8 million to net income in the fourth quarter of 2021, a decrease of $5.6 million compared to the prior quarter. Combined net interest revenue and fee revenue decreased $2.3 million. Net interest revenue increased $3.2 million, mainly due to increased deposit balances and improved spreads. Fees and commissions revenue decreased $5.5 million due to normal seasonality in mortgage loan production volume and margin compression. Operating expense increased $2.6 million, due to increases in professional fees and other expenses. Average Consumer Banking deposits increased 2 percent to $8.7 billion in the fourth quarter of 2021.
• Wealth Management contributed $21.7 million to net income in the fourth quarter of 2021, a decrease of $19.7 million compared to the prior quarter. Our diverse set of investment-focused businesses including fixed income trading, private wealth, institutional wealth, financial risk management, and multiple fiduciary businesses combined to provide total net interest and fee revenues of $114.5 million, a decrease of $38.7 million compared to the third quarter of 2021. Revenue, primarily from trading activity, decreased $39.1 million to $38.2 million. Uncertainty around tapering by the Federal Reserve combined with year-end balance sheet management and concerns over yield curve steepening, resulted in decreased transaction activity and tighter margins. Operating expense decreased $12.5 million, primarily due to incentive compensation costs related to reduced trading activity. Average Wealth Management deposits were consistent with the prior quarter. Assets under management were $104.9 billion, an increase of $6.1 billion compared to the prior quarter.

Net Interest Revenue

Net interest revenue was $277.1 million for the fourth quarter of 2021 compared to $280.2 million for the third quarter of 2021. Net interest margin was 2.52 percent compared to 2.66 percent in the prior quarter. PPP loan fees of $7.7 million were recognized in the fourth quarter of 2021 compared to $12.7 million in the previous quarter. PPP loan fees remaining to be recognized were $7.5 million.

Average earning assets increased $1.2 billion compared to the third quarter of 2021. Average loan balances decreased $606 million, largely due to paydowns of PPP and commercial real estate loans, partially offset by growth in commercial loans. Average trading securities increased by $1.6 billion. Average interest bearing cash and cash equivalents grew by $526 million. Available for sale securities decreased $198 million. Other borrowings decreased $1.7 billion while funds purchased and repurchase agreements increased $1.4 billion.

The yield on average earning assets was 2.62 percent, a 16 basis point decrease from the prior quarter. The yield on trading securities was down 35 basis points to 1.69 percent, largely due to a decrease in the weighted average coupon rate. The yield on the available for sale securities portfolio decreased 8 basis points to 1.72 percent. The loan portfolio yield increased 2 basis points to 3.70 percent. Excluding PPP loan fees, the loan portfolio yield increased 11 basis points, primarily due to the timing of loan fees.

Funding costs were 0.15 percent, down 4 basis points. The cost of interest-bearing deposits decreased 1 basis point to 0.12 percent. The cost of other borrowed funds decreased 11 basis points to 0.19 percent. The cost of subordinated debentures decreased 61 basis points due to the redemption of $150 million in the third quarter. The benefit to net interest margin from assets funded by non-interest liabilities was 5 basis points for the fourth quarter of 2021, compared to 7 basis points for the prior quarter.

Operating Revenue

Fees and commissions revenue totaled $146.3 million for the fourth quarter of 2021, a $44.1 million decrease compared to the third quarter of 2021. Brokerage and trading revenue decreased $33.1 million to $14.9 million. Uncertainty around tapering by the Federal Reserve combined with year-end balance sheet management and concerns over yield curve steepening, resulted in decreased transaction activity and tighter margins for trading activities in the market. These factors combined to decrease trading revenue by $37.3 million. Customer hedging revenue increased $2.2 million, primarily attributed to energy customers. Investment banking revenue increased $2.6 million, largely due to the timing and increase of syndication activity.

Mortgage banking revenue decreased $5.0 million compared to the prior quarter due to lower production volume combined with narrowing margins. Mortgage production volume decreased $114 million to $501 million due to normal seasonal decline and continued inventory constraints. Production revenue as a percentage of production volume, which includes unrealized gains and losses on our mortgage commitment pipeline and related hedges, decreased 50 basis points to 2.00 percent.

Other revenue decreased $7.3 million as a result of lower operating revenue from repossessed oil and gas assets due to the sale of a property, which was largely offset by a reduction of expenses on the same properties.

Other gains and losses, net decreased $25.0 million compared to the prior quarter. The third quarter of 2021 included a $31.1 million gain on the sale of an alternative investment, which was partially offset by a $5.2 million loss on the extinguishment of subordinated debentures and a $3.9 million loss on the sale of a repossessed oil and gas asset.

Operating Expense

Total operating expense was $299.5 million for the fourth quarter of 2021, an increase of $8.2 million compared to the third quarter of 2021.

Personnel expense decreased $1.4 million. Cash based incentive compensation decreased $8.8 million due to reduced trading volumes, and was partially offset by an increase of $5.9 million in share based incentive compensation resulting from changes in vesting assumptions. Employee benefits expense increased $1.1 million due to an increase in employee healthcare costs, partially offset by a seasonal decrease in retirement costs and payroll taxes.

Non-personnel expense increased $9.6 million over the third quarter of 2021. The fourth quarter of 2021 included a $5.0 million charitable donation to the BOKF Foundation as we continue to focus on the communities we serve and the extreme need created by the pandemic. Smaller increases in business promotion costs, professional fees and services expense, and other expense supplemented the overall rise in non-personnel expense.

Loans, Deposits and Capital

Loans

Outstanding loans were $20.2 billion at December 31, 2021, a $142 million decrease compared to September 30, 2021. A reduction in PPP and commercial real estate loan balances was partially offset by growth in commercial and personal loan balances.

Outstanding commercial loan balances increased $331 million compared to September 30, 2021, with growth in all categories led by energy. Although the primary source of repayment of our commercial loan portfolio is the ongoing cash flow from operations of the customer's business, loans are generally governed by a borrowing base and secured by the customer’s assets.

Energy loan balances increased $193 million to $3.0 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 $3.0 billion at December 31, 2021, an increase of $248 million over September 30, 2021.

Healthcare sector loan balances increased $67 million compared to the prior quarter, totaling $3.4 billion or 17 percent of total loans. Our healthcare sector loans primarily consist of $2.7 billion of senior housing and care facilities, including independent living, assisted living and skilled nursing. Generally we loan to borrowers with a portfolio of multiple facilities, which serves to help diversify risks specific to a single facility.

Services loan balances increased $44 million to $3.4 billion or 17 percent of total loans. Services loans consist of a large number of loans to a variety of businesses, including Native American tribal and state and local municipal government entities, Native American tribal casino operations, foundations and not-for-profit organizations, educational services and specialty trade contractors.

Commercial real estate loan balances decreased $286 million compared to September 30, 2021 and represent 19 percent of total loans at December 31, 2021, largely due to refinancing in the long term, non-recourse markets. Loans secured by industrial facilities decreased $124 million to $766 million. Multifamily residential loans decreased $89 million to $786 million at December 31, 2021. Loans secured by retail facilities decreased $86 million to $680 million.

PPP loan balances decreased $260 million to $276 million or 1 percent of total loans.

Loans to individuals increased $72 million and represent 18 percent of total loans at December 31, 2021. Personal loans increased $120 million while residential mortgage loans decreased $48 million, largely due to the re-sale of loans previously sold into GNMA mortgage pools that the Company repurchased when certain defined delinquency criteria were met. Many loans repurchased during the pandemic have since been cured and meet the re-sale qualifications.

Deposits

Period-end deposits totaled $41.2 billion at December 31, 2021, a $2.7 billion increase compared to September 30, 2021. Interest-bearing transaction account balances increased by $1.5 billion and demand deposit account balances grew by $1.3 billion. Average deposits were $39.8 billion at December 31, 2021, a $2.0 billion increase compared to September 30, 2021. Demand deposit account balances increased $1.1 billion primarily from deposits attributed to the Commercial Banking segment while interest-bearing deposits increased $820 million.

Capital

The company's common equity Tier 1 capital ratio was 12.23 percent at December 31, 2021. In addition, the company's Tier 1 capital ratio was 12.24 percent, total capital ratio was 13.28 percent, and leverage ratio was 8.55 percent at December 31, 2021. We have elected to delay the regulatory capital impact of the transition of the allowance for credit losses from the incurred loss methodology to CECL for two years, followed by a three-year transition period, which added 19 basis points to the company's common equity tier 1 capital ratio at December 31. At September 30, 2021, the company's common equity Tier 1 capital ratio was 12.26 percent, Tier 1 capital ratio was 12.29 percent, total capital ratio was 13.38 percent, and leverage ratio was 8.77 percent.

The company's tangible common equity ratio, a non-GAAP measure, was 8.83 percent at December 31, 2021 and 9.28 percent at September 30, 2021. The tangible common equity ratio is primarily based on total shareholders' equity, which includes unrealized gains and losses on available for sale securities. The company has elected to exclude unrealized gains and losses from available for sale securities from its calculation of Tier 1 capital for regulatory capital purposes, consistent with the treatment under the previous capital rules.

The company repurchased 128,522 shares of common stock at an average price of $104.46 a share in the fourth quarter of 2021. 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 expected lives based on models that measure the probability of default and loss given default over a 12-month reasonable and supportable forecast period. Our models incorporate base case, downside and upside macroeconomic variables such as real gross domestic product ("GDP") growth, civilian unemployment rate and West Texas Intermediate ("WTI") oil prices on a probability weighted basis.

We recorded a $17.0 million negative provision for credit losses in the fourth quarter of 2021. Changes in our reasonable and supportable forecasts of macroeconomic variables, primarily due to continued strength in commodity prices and an outlook for moderate growth in GDP and labor markets resulted in a $12.6 million decrease in the allowance for credit losses related to lending activities. Changes in loan portfolio characteristics, primarily from net recoveries and changes in specific impairment, improving credit quality metrics and lower loan balances resulted in a $4.7 million decrease in the allowance for credit losses related to lending activities.

Our base case reasonable and supportable forecast assumes that the COVID-19 cases will increase due to the Omicron and Delta variants during the winter months in the U.S., though global virus immunity continues to be more widespread and vaccines prove to be effective against severe virus outcomes. Elevated consumer consumption and the need for inventory restocking is expected to result in GDP growth consistent with pre-pandemic levels. We expect a 2.9 percent increase in GDP over the next twelve months. We expect labor force participants will continue to re-enter the job market to help meet record job openings. This increase in employment helps maintain household income above its pre-pandemic trend and prevents a sharp drop-off in spending. Our forecasted civilian unemployment rate is 4.0 percent for the first quarter of 2022, improving to 3.7 percent by the fourth quarter of 2022. Our base case also assumes the Federal Reserve completes the tapering of their bond purchases in March 2022 and one federal funds rate increase in 2022 with the target range ending the year at 0.25 percent to 0.50 percent. WTI oil prices are projected to generally follow the NYMEX forward curve that existed at the end of December 2021, averaging $68.75 per barrel over the next twelve months.

Our downside case assumes new COVID-19 variants continue to emerge and spread rapidly in areas of the country with lower vaccination rates as the U.S. enters the winter months. This results in a relatively mild recession with conditions beginning to improve in the summer of 2022.

The allowance for loan losses totaled $256 million or 1.27 percent of outstanding loans and 213 percent of nonaccruing loans at December 31, 2021, excluding residential mortgage loans guaranteed by U.S. government agencies. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $289 million or 1.43 percent of outstanding loans and 241 percent of nonaccruing loans at December 31, 2021. Excluding PPP loans, the allowance for loan losses was 1.29 percent of outstanding loans and the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was 1.45 percent.

At September 30, 2021, the allowance for loan losses was $277 million or 1.36 percent of outstanding loans and 208 percent of nonaccruing loans, excluding loans guaranteed by U.S. government agencies. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $306 million or 1.50 percent of outstanding loans and 230 percent of nonaccruing loans.

Nonperforming assets totaled $369 million or 1.83 percent of outstanding loans and repossessed assets at December 31, 2021, compared to $349 million or 1.71 percent at September 30, 2021. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $145 million or 0.74 percent of outstanding loans and repossessed assets at December 31, 2021, compared to $162 million or 0.83 percent at September 30, 2021.

Nonaccruing loans were $134 million or 0.67 percent of outstanding loans, excluding PPP loans, at December 31, 2021. Nonaccruing commercial loans totaled $74 million or 0.59 percent of outstanding commercial loans. Nonaccruing commercial real estate loans totaled $14 million or 0.37 percent of outstanding commercial real estate loans. Nonaccruing loans to individuals totaled $46 million or 1.27 percent of outstanding loans to individuals.

Nonaccruing loans decreased $7.9 million compared to September 30, 2021. A decrease in nonaccruing energy, services, and commercial real estate loans, was partially offset by an increase in nonaccruing healthcare sector loans. New nonaccruing loans identified in the fourth quarter totaled $28 million, offset by $32 million in payments received and $6.6 million in charge-offs.

Potential problem loans, which are defined as performing loans that, based on known information, cause management concern as to the borrowers' ability to continue to perform, totaled $222 million at December 31, 2021, down significantly from $333 million at September 30, primarily due to a decrease in potential problem energy loans. Potential problem healthcare, services and general business loans also decreased compared to the prior quarter.

Net recoveries for the fourth quarter of 2021 were $714 thousand or 0.01 percent of average loans on an annualized basis for the fourth quarter of 2021, excluding PPP loans. Net charge-offs were 0.18 percent of average loans over the last four quarters. Net charge-offs were $7.8 million or 0.16 percent of average loans on an annualized basis for the third quarter of 2021, excluding PPP loans. Gross charge-offs were $6.6 million for the fourth quarter compared to $9.6 million for the previous quarter. Recoveries totaled $7.3 million for the fourth quarter of 2021 and $1.8 million for the third quarter of 2021.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $13.2 billion at December 31, 2021, a $184 million decrease compared to September 30, 2021. At December 31, 2021, the available for sale securities portfolio consisted primarily of $8.0 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 December 31, 2021, the available for sale securities portfolio had a net unrealized gain of $93 million compared to $221 million at September 30, 2021.

The company also maintains a portfolio of residential mortgage-backed securities issued by U.S. government agencies and interest rate derivative contracts as an economic hedge of the changes in the fair value of our mortgage servicing rights. This portfolio of fair value option securities decreased $7.2 million to $44 million at December 31, 2021.

The net economic benefit of the changes in the fair value of mortgage servicing rights and related economic hedges was $4.7 million during the fourth quarter of 2021, including a $7.9 million increase in the fair value of mortgage servicing rights, a $3.4 million decrease in the fair value of securities and derivative contracts held as an economic hedge, and $259 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, January 19, 2022 to discuss the financial results with investors. The live audio webcast and presentation slides will be available on the company’s website at www.bokf.com. The conference call can also be accessed by dialing 1-201-689-8471. A conference call and webcast replay will also be available shortly after conclusion of the live call at www.bokf.com or by dialing 1-844-512-2921 and referencing conference ID # 13725961.

About BOK Financial Corporation

BOK Financial Corporation is a $49 billion regional financial services company headquartered in Tulsa, Oklahoma with $105 billion in assets under management and administration. The company's stock is publicly traded on NASDAQ under the Global Select market listings (BOKF). BOK Financial Corporation's holdings include BOKF, NA; BOK Financial Securities, Inc., BOK Financial Private Wealth, Inc. and BOK Financial Insurance, Inc. BOKF, NA's holdings include TransFund, Cavanal Hill Investment Management, Inc. and BOK Financial Asset Management, Inc. BOKF, NA operates banking divisions across eight states as: Bank of Albuquerque; Bank of Oklahoma; Bank of Texas; and BOK Financial in Arizona, Arkansas, Colorado, Kansas and Missouri; as well as having limited purpose offices in Nebraska, Wisconsin and Connecticut. Through its subsidiaries, BOK Financial Corporation provides commercial and consumer banking, brokerage trading, investment, trust and insurance services, mortgage origination and servicing, and an electronic funds transfer network. For more information, visit www.bokf.com.

The company will continue to evaluate critical assumptions and estimates, such as the appropriateness of the allowance for credit losses and asset impairment as of December 31, 2021 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)

	Dec. 31, 2021				Sept. 30, 2021
ASSETS
Cash and due from banks	$	712,067			$	729,285
Interest-bearing cash and cash equivalents		2,125,343				1,162,477
Trading securities		9,136,813				5,554,040
Investment securities, net of allowance		210,444				215,592
Available for sale securities		13,157,817				13,342,113
Fair value option securities		43,770				51,019
Restricted equity securities		83,113				77,542
Residential mortgage loans held for sale		192,295				176,813
Loans:
Commercial		12,506,465				12,175,140
Commercial real estate		3,831,325				4,116,892
Paycheck protection program		276,341				536,052
Loans to individuals		3,591,549				3,519,852
Total loans		20,205,680				20,347,936
Allowance for loan losses		(256,421	)			(276,680	)
Loans, net of allowance		19,949,259				20,071,256
Premises and equipment, net		574,148				558,126
Receivables		223,021				171,505
Goodwill		1,044,749				1,044,749
Intangible assets, net		91,778				96,186
Mortgage servicing rights		163,198				133,308
Real estate and other repossessed assets, net		24,589				28,770
Derivative contracts, net		1,097,297				1,901,136
Cash surrender value of bank-owned life insurance		405,607				403,369
Receivable on unsettled securities sales		56,172				215,755
Other assets		957,951				990,368
TOTAL ASSETS	$	50,249,431			$	46,923,409
LIABILITIES AND EQUITY
Deposits:
Demand	$	15,344,423			$	14,090,229
Interest-bearing transaction		23,268,573				21,753,110
Savings		924,735				900,497
Time		1,704,328				1,780,715
Total deposits		41,242,059				38,524,551
Funds purchased and repurchase agreements		2,326,449				843,273
Other borrowings		36,753				37,426
Subordinated debentures		131,226				131,220
Accrued interest, taxes and expense		273,041				220,266
Due on unsettled securities purchases		160,686				614,598
Derivative contracts, net		275,625				739,641
Other liabilities		435,221				415,986
TOTAL LIABILITIES		44,881,060				41,526,961
Shareholders' equity:
Capital, surplus and retained earnings		5,291,361				5,219,801
Accumulated other comprehensive gain		72,371				169,172
TOTAL SHAREHOLDERS' EQUITY		5,363,732				5,388,973
Non-controlling interests		4,639				7,475
TOTAL EQUITY		5,368,371				5,396,448
TOTAL LIABILITIES AND EQUITY	$	50,249,431			$	46,923,409

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

	Three Months Ended
	Dec. 31, 2021				Sept. 30, 2021				June 30, 2021				Mar. 31, 2021				Dec. 31, 2020
ASSETS
Interest-bearing cash and cash equivalents	$	1,208,552			$	682,788			$	659,312			$	711,047			$	643,926
Trading securities		9,260,778				7,617,236				7,430,217				6,963,617				6,888,189
Investment securities, net of allowance		213,188				218,117				221,401				237,313				251,863
Available for sale securities		13,247,607				13,446,095				13,243,542				13,433,767				12,949,702
Fair value option securities		46,458				56,307				64,864				104,662				122,329
Restricted equity securities		137,874				245,485				208,692				189,921				280,428
Residential mortgage loans held for sale		163,433				167,620				218,200				207,013				229,631
Loans:
Commercial		12,401,935				12,231,230				12,402,925				12,908,461				13,113,449
Commercial real estate		3,838,336				4,218,190				4,395,848				4,547,945				4,788,393
Paycheck protection program		404,261				792,728				1,668,047				1,741,534				1,928,665
Loans to individuals		3,598,121				3,606,460				3,700,269				3,559,067				3,617,011
Total loans		20,242,653				20,848,608				22,167,089				22,757,007				23,447,518
Allowance for loan losses		(271,794	)			(306,125	)			(345,269	)			(382,734	)			(414,225	)
Loans, net of allowance		19,970,859				20,542,483				21,821,820				22,374,273				23,033,293
Total earning assets		44,248,749				42,976,131				43,868,048				44,221,613				44,399,361
Cash and due from banks		783,670				766,688				763,393				760,691				742,432
Derivative contracts, net		1,465,506				1,501,736				1,022,137				873,712				553,779
Cash surrender value of bank-owned life insurance		404,149				401,926				401,760				399,830				397,354
Receivable on unsettled securities sales		585,901				632,539				716,700				735,482				1,094,198
Other assets		3,116,081				3,220,129				3,424,884				3,319,305				3,200,040
TOTAL ASSETS	$	50,604,056			$	49,499,149			$	50,196,922			$	50,310,633			$	50,387,164
LIABILITIES AND EQUITY
Deposits:
Demand	$	14,818,841			$	13,670,656			$	13,189,954			$	12,312,629			$	12,136,071
Interest-bearing transaction		22,326,401				21,435,736				21,491,145				21,433,406				20,718,390
Savings		909,131				888,011				872,618				789,656				737,360
Time		1,747,715				1,839,983				1,936,510				1,986,425				1,930,808
Total deposits		39,802,088				37,834,386				37,490,227				36,522,116				35,522,629
Funds purchased and repurchase agreements		2,880,230				1,448,800				1,790,490				2,830,378				2,153,254
Other borrowings		880,837				2,546,083				3,608,369				3,392,346				5,193,656
Subordinated debentures		131,224				214,654				276,034				276,015				275,998
Derivative contracts, net		320,757				434,334				366,202				428,488				399,476
Due on unsettled securities purchases		629,642				957,538				701,495				915,410				957,642
Other liabilities		578,091				619,913				634,460				671,715				656,147
TOTAL LIABILITIES		45,222,869				44,055,708				44,867,277				45,036,468				45,158,802
Total equity		5,381,187				5,443,441				5,329,645				5,274,165				5,228,362
TOTAL LIABILITIES AND EQUITY	$	50,604,056			$	49,499,149			$	50,196,922			$	50,310,633			$	50,387,164

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

	Three Months Ended								Year Ended
	December 31,								December 31,
		2021				2020				2021				2020
Interest revenue	$	292,334			$	319,020			$	1,179,929			$	1,269,000
Interest expense		15,257				21,790				61,896				160,556
Net interest revenue		277,077				297,230				1,118,033				1,108,444
Provision for credit losses		(17,000	)			(6,500	)			(100,000	)			222,592
Net interest revenue after provision for credit losses		294,077				303,730				1,218,033				885,852
Other operating revenue:
Brokerage and trading revenue		14,869				39,506				112,989				221,833
Transaction card revenue		24,998				21,896				96,983				90,182
Fiduciary and asset management revenue		46,872				41,799				178,274				167,445
Deposit service charges and fees		26,718				24,343				104,217				96,805
Mortgage banking revenue		21,278				39,298				105,896				182,360
Other revenue		11,586				14,209				69,950				51,695
Total fees and commissions		146,321				181,051				668,309				810,320
Other gains, net		6,081				7,394				63,742				6,046
Gain (loss) on derivatives, net		(4,788	)			(339	)			(19,378	)			42,320
Gain (loss) on fair value option securities, net		1,418				68				(2,239	)			53,248
Change in fair value of mortgage servicing rights		7,859				6,276				41,637				(79,524	)
Gain on available for sale securities, net		552				4,339				3,704				9,910
Total other operating revenue		157,443				198,789				755,775				842,320
Other operating expense:
Personnel		174,474				176,198				695,382				688,474
Business promotion		6,452				3,728				16,289				14,511
Charitable contributions to BOKF Foundation		5,000				6,000				9,000				9,000
Professional fees and services		14,129				14,254				50,906				53,437
Net occupancy and equipment		26,897				27,875				108,587				112,722
Insurance		3,889				4,006				15,881				19,990
Data processing and communications		39,358				35,061				151,614				135,497
Printing, postage and supplies		2,935				3,805				14,218				15,061
Amortization of intangible assets		4,438				5,088				18,311				20,443
Mortgage banking costs		8,667				14,765				42,698				56,711
Other expense		13,256				11,892				54,822				38,462
Total other operating expense		299,495				302,672				1,177,708				1,164,308
Net income before taxes		152,025				199,847				796,100				563,864
Federal and state income taxes		34,836				45,138				179,775				128,793
Net income		117,189				154,709				616,325				435,071
Net income (loss) attributable to non-controlling interests		(129	)			485				(1,796	)			41
Net income attributable to BOK Financial Corporation shareholders	$	117,318			$	154,224			$	618,121			$	435,030
Average shares outstanding:
Basic		68,069,160				69,489,597				68,591,920				69,840,977
Diluted		68,070,910				69,493,050				68,594,322				69,844,172
Net income per share:
Basic	$	1.71			$	2.21			$	8.95			$	6.19
Diluted	$	1.71			$	2.21			$	8.95			$	6.19

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

	Three Months Ended
	Dec. 31, 2021				Sept. 30, 2021				June 30, 2021				Mar. 31, 2021				Dec. 31, 2020
Capital:
Period-end shareholders' equity	$	5,363,732			$	5,388,973			$	5,332,977			$	5,239,462			$	5,266,266
Risk weighted assets	$	34,606,309			$	33,916,456			$	33,824,860			$	32,623,108			$	32,492,277
Risk-based capital ratios:
Common equity tier 1		12.23	%			12.26	%			11.95	%			12.14	%			11.95	%
Tier 1		12.24	%			12.29	%			12.01	%			12.21	%			11.95	%
Total capital		13.28	%			13.38	%			13.61	%			13.98	%			13.82	%
Leverage ratio		8.55	%			8.77	%			8.58	%			8.42	%			8.28	%
Tangible common equity ratio1		8.83	%			9.28	%			9.09	%			8.82	%			9.02	%
Common stock:
Book value per share	$	78.34			$	78.56			$	77.20			$	75.33			$	75.62
Tangible book value per share	$	61.74			$	61.93			$	60.50			$	58.67			$	58.94
Market value per share:
High	$	110.21			$	92.97			$	93.00			$	98.95			$	73.07
Low	$	89.01			$	77.20			$	83.59			$	67.57			$	50.09
Cash dividends paid	$	36,256			$	35,725			$	35,925			$	36,038			$	36,219
Dividend payout ratio		30.90	%			18.97	%			21.59	%			24.67	%			23.48	%
Shares outstanding, net		68,467,772				68,596,764				69,078,458				69,557,873				69,637,600
Stock buy-back program:
Shares repurchased		128,522				478,141				492,994				260,000				665,100
Amount	$	13,426			$	40,644			$	43,797			$	20,071			$	42,450
Average price per share	$	104.46			$	85.00			$	88.84			$	77.20			$	63.82
Performance ratios (quarter annualized):
Return on average assets		0.92	%			1.51	%			1.33	%			1.18	%			1.22	%
Return on average equity		8.66	%			13.78	%			12.58	%			11.28	%			11.75	%
Net interest margin		2.52	%			2.66	%			2.60	%			2.62	%			2.72	%
Efficiency ratio		70.14	%			61.23	%			64.20	%			66.26	%			62.77	%
Reconciliation of non-GAAP measures:
1 Tangible common equity ratio:
Total shareholders' equity	$	5,363,732			$	5,388,973			$	5,332,977			$	5,239,462			$	5,266,266
Less: Goodwill and intangible assets, net		1,136,527				1,140,935				1,153,785				1,158,676				1,161,527
Tangible common equity	$	4,227,205			$	4,248,038			$	4,179,192			$	4,080,786			$	4,104,739
Total assets	$	49,007,431			$	46,923,409			$	47,154,375			$	47,442,513			$	46,671,088
Less: Goodwill and intangible assets, net		1,136,527				1,140,935				1,153,785				1,158,676				1,161,527
Tangible assets	$	47,870,904			$	45,782,474			$	46,000,590			$	46,283,837			$	45,509,561
Tangible common equity ratio		8.83	%			9.28	%			9.09	%			8.82	%			9.02	%

Pre-provision net revenue:
Net income before taxes	$	152,025			$	241,782			$	215,603			$	186,690			$	199,847
Provision for expected credit losses		(17,000	)			(23,000	)			(35,000	)			(25,000	)			(6,500	)
Net income (loss) attributable to non-controlling interests		(129	)			(601	)			686				(1,752	)			485
Pre-provision net revenue	$	135,154			$	219,383			$	179,917			$	163,442			$	192,862
Other data:
Tax equivalent interest	$	2,104			$	2,217			$	2,320			$	2,301			$	2,414
Net unrealized gain on available for sale securities	$	93,381			$	221,487			$	297,267			$	290,217			$	440,814
Mortgage banking:
Mortgage production revenue	$	10,018			$	15,403			$	10,004			$	25,287			$	26,662
Mortgage loans funded for sale	$	568,507			$	652,336			$	754,893			$	843,053			$	998,435
Add: current period-end outstanding commitments		171,412				239,066				276,154				387,465				380,637
Less: prior period end outstanding commitments		239,066				276,154				387,465				380,637				560,493
Total mortgage production volume	$	500,853			$	615,248			$	643,582			$	849,881			$	818,579
Mortgage loan refinances to mortgage loans funded for sale		51	%			48	%			48	%			65	%			58	%
Realized margin on funded mortgage loans		1.76	%			2.48	%			2.75	%			3.10	%			3.78	%
Production revenue as a percentage of production volume		2.00	%			2.50	%			1.55	%			2.98	%			3.26	%
Mortgage servicing revenue	$	11,260			$	10,883			$	11,215			$	11,826			$	12,636
Average outstanding principal balance of mortgage loans serviced for others		15,930,480				14,899,306				15,065,173				15,723,231				16,518,208
Average mortgage servicing revenue rates		0.28	%			0.29	%			0.30	%			0.31	%			0.30	%
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net	$	(4,862	)		$	(5,829	)		$	18,764			$	(27,705	)		$	(385	)
Gain (loss) on fair value option securities, net		1,418				(120	)			(1,627	)			(1,910	)			68
Gain (loss) on economic hedge of mortgage servicing rights		(3,444	)			(5,949	)			17,137				(29,615	)			(317	)
Gain (loss) on changes in fair value of mortgage servicing rights		7,859				12,945				(13,041	)			33,874				6,276
Gain on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue		4,415				6,996				4,096				4,259				5,959
Net interest revenue on fair value option securities2		259				286				341				393				550
Total economic benefit of changes in the fair value of mortgage servicing rights, net of economic hedges	$	4,674			$	7,282			$	4,437			$	4,652			$	6,509

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

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

	Three Months Ended
	Dec. 31, 2021				Sept. 30, 2021				June 30, 2021				Mar. 31, 2021				Dec. 31, 2020
Interest revenue	$	292,334			$	293,463			$	295,893			$	298,239			$	319,020
Interest expense		15,257				13,236				15,584				17,819				21,790
Net interest revenue		277,077				280,227				280,309				280,420				297,230
Provision for credit losses		(17,000	)			(23,000	)			(35,000	)			(25,000	)			(6,500	)
Net interest revenue after provision for credit losses		294,077				303,227				315,309				305,420				303,730
Other operating revenue:
Brokerage and trading revenue		14,869				47,930				29,408				20,782				39,506
Transaction card revenue		24,998				24,632				24,923				22,430				21,896
Fiduciary and asset management revenue		46,872				45,248				44,832				41,322				41,799
Deposit service charges and fees		26,718				27,429				25,861				24,209				24,343
Mortgage banking revenue		21,278				26,286				21,219				37,113				39,298
Other revenue		11,586				18,896				23,172				16,296				14,209
Total fees and commissions		146,321				190,421				169,415				162,152				181,051
Other gains, net		6,081				31,091				16,449				10,121				7,394
Gain (loss) on derivatives, net		(4,788	)			(5,760	)			18,820				(27,650	)			(339	)
Gain (loss) on fair value option securities, net		1,418				(120	)			(1,627	)			(1,910	)			68
Change in fair value of mortgage servicing rights		7,859				12,945				(13,041	)			33,874				6,276
Gain on available for sale securities, net		552				1,255				1,430				467				4,339
Total other operating revenue		157,443				229,832				191,446				177,054				198,789
Other operating expense:
Personnel		174,474				175,863				172,035				173,010				176,198
Business promotion		6,452				4,939				2,744				2,154				3,728
Charitable contributions to BOKF Foundation		5,000				—				—				4,000				6,000
Professional fees and services		14,129				12,436				12,361				11,980				14,254
Net occupancy and equipment		26,897				28,395				26,633				26,662				27,875
Insurance		3,889				3,712				3,660				4,620				4,006
Data processing and communications		39,358				38,371				36,418				37,467				35,061
Printing, postage and supplies		2,935				3,558				4,285				3,440				3,805
Amortization of intangible assets		4,438				4,488				4,578				4,807				5,088
Mortgage banking costs		8,667				8,962				11,126				13,943				14,765
Other expense		13,256				10,553				17,312				13,701				11,892
Total other operating expense		299,495				291,277				291,152				295,784				302,672
Net income before taxes		152,025				241,782				215,603				186,690				199,847
Federal and state income taxes		34,836				54,061				48,496				42,382				45,138
Net income		117,189				187,721				167,107				144,308				154,709
Net income (loss) attributable to non-controlling interests		(129	)			(601	)			686				(1,752	)			485
Net income attributable to BOK Financial Corporation shareholders	$	117,318			$	188,322			$	166,421			$	146,060			$	154,224
Average shares outstanding:
Basic		68,069,160				68,359,125				68,815,666				69,137,375				69,489,597
Diluted		68,070,910				68,360,871				68,817,442				69,141,710				69,493,050
Net income per share:
Basic	$	1.71			$	2.74			$	2.40			$	2.10			$	2.21
Diluted	$	1.71			$	2.74			$	2.40			$	2.10			$	2.21

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

		Dec. 31, 2021			Sept. 30, 2021			June 30, 2021			Mar. 31, 2021			Dec. 31, 2020
Commercial:
Healthcare		$	3,414,940		$	3,347,641		$	3,381,261		$	3,290,758		$	3,305,990
Services			3,367,193			3,323,422			3,389,756			3,421,948			3,508,583
Energy			3,006,884			2,814,059			3,011,331			3,202,488			3,469,194
General business			2,717,448			2,690,018			2,690,559			2,742,590			2,793,768
Total commercial			12,506,465			12,175,140			12,472,907			12,657,784			13,077,535
Commercial real estate:
Office			1,040,963			1,030,755			1,073,346			1,094,060			1,085,257
Industrial			766,125			890,316			824,577			789,437			810,510
Multifamily			786,404			875,586			964,824			1,227,915			1,328,045
Retail			679,917			766,402			784,445			787,648			796,223
Residential construction and land development			120,016			118,416			128,939			119,079			119,394
Other commercial real estate			437,900			435,417			470,861			485,208			559,109
Total commercial real estate			3,831,325			4,116,892			4,246,992			4,503,347			4,698,538
Paycheck protection program			276,341			536,052			1,121,583			1,848,550			1,682,310
Loans to individuals:
Residential mortgage			1,722,170			1,747,243			1,772,627			1,797,478			1,863,003
Residential mortgages guaranteed by U.S. government agencies			354,173			376,986			413,806			420,051			408,687
Personal			1,515,206			1,395,623			1,388,534			1,306,637			1,277,447
Total loans to individuals			3,591,549			3,519,852			3,574,967			3,524,166			3,549,137
Total		$	20,205,680		$	20,347,936		$	21,416,449		$	22,533,847		$	23,007,520

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

	Dec. 31, 2021			Sept. 30, 2021			June 30, 2021			Mar. 31, 2021			Dec. 31, 2020
Texas:
Commercial	$	6,068,700		$	5,815,562		$	5,690,901		$	5,748,345		$	5,926,534
Commercial real estate		1,253,439			1,383,871			1,403,751			1,511,714			1,519,217
Paycheck protection program		81,654			115,623			342,933			537,899			501,079
Loans to individuals		942,982			901,121			885,619			848,194			855,410
Total Texas		8,346,775			8,216,177			8,323,204			8,646,152			8,802,240
Oklahoma:
Commercial		2,633,014			2,590,887			2,840,560			2,975,477			3,144,782
Commercial real estate		546,021			552,184			552,673			597,840			597,733
Paycheck protection program		69,817			192,474			242,880			468,002			413,108
Loans to individuals		2,024,404			2,014,099			2,063,419			2,043,705			2,052,784
Total Oklahoma		5,273,256			5,349,644			5,699,532			6,085,024			6,208,407
Colorado:
Commercial		1,936,149			1,874,613			1,904,182			1,910,826			1,929,320
Commercial real estate		470,937			526,653			656,521			777,786			879,648
Paycheck protection program		82,781			140,470			299,712			436,540			377,111
Loans to individuals		256,533			249,298			262,796			264,759			264,295
Total Colorado		2,746,400			2,791,034			3,123,211			3,389,911			3,450,374
Arizona:
Commercial		1,130,798			1,194,801			1,239,270			1,207,089			1,219,072
Commercial real estate		674,309			734,174			705,497			667,766			726,111
Paycheck protection program		21,594			42,815			104,946			208,481			211,725
Loans to individuals		186,528			182,506			178,481			179,031			177,948
Total Arizona		2,013,229			2,154,296			2,228,194			2,262,367			2,334,856
Kansas/Missouri:
Commercial		338,697			336,414			388,291			421,974			455,914
Commercial real estate		382,761			408,001			406,055			395,590			366,821
Paycheck protection program		4,718			6,920			41,954			60,741			56,011
Loans to individuals		110,889			100,920			103,092			104,954			105,995
Total Kansas/Missouri		837,065			852,255			939,392			983,259			984,741
New Mexico:
Commercial		306,964			287,695			304,804			307,395			303,833
Commercial real estate		442,128			437,302			437,996			448,298			473,204
Paycheck protection program		13,510			31,444			86,716			124,059			109,881
Loans to individuals		63,930			66,651			68,177			70,491			75,665
Total New Mexico		826,532			823,092			897,693			950,243			962,583
Arkansas:
Commercial		92,143			75,168			104,899			86,678			98,080
Commercial real estate		61,730			74,707			84,499			104,353			135,804
Paycheck protection program		2,267			6,306			2,442			12,828			13,395
Loans to individuals		6,283			5,257			13,383			13,032			17,040
Total Arkansas		162,423			161,438			205,223			216,891			264,319
TOTAL BOK FINANCIAL	$	20,205,680		$	20,347,936		$	21,416,449		$	22,533,847		$	23,007,520

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)

	Dec. 31, 2021			Sept. 30, 2021			June 30, 2021			Mar. 31, 2021			Dec. 31, 2020
Oklahoma:
Demand	$	5,433,405		$	5,080,162		$	4,985,542		$	4,823,436		$	4,329,205
Interest-bearing:
Transaction		12,689,367			11,692,679			12,065,844			12,828,070			12,603,658
Savings		521,439			510,906			500,344			487,862			420,996
Time		978,822			1,039,866			1,139,980			1,197,517			1,134,453
Total interest-bearing		14,189,628			13,243,451			13,706,168			14,513,449			14,159,107
Total Oklahoma		19,623,033			18,323,613			18,691,710			19,336,885			18,488,312
Texas:
Demand		4,552,983			3,987,503			3,752,790			3,592,969			3,449,882
Interest-bearing:
Transaction		5,345,461			4,985,465			4,335,113			4,257,234			3,800,427
Savings		178,458			165,043			160,805			154,406			139,173
Time		337,559			337,389			346,577			368,086			383,062
Total interest-bearing		5,861,478			5,487,897			4,842,495			4,779,726			4,322,662
Total Texas		10,414,461			9,475,400			8,595,285			8,372,695			7,772,544
Colorado:
Demand		2,526,855			2,158,596			1,991,343			2,115,354			2,168,404
Interest-bearing:
Transaction		2,334,371			2,337,354			2,159,819			2,100,135			2,170,485
Savings		78,636			79,873			73,990			73,446			69,384
Time		174,351			184,002			193,787			204,973			208,778
Total interest-bearing		2,587,358			2,601,229			2,427,596			2,378,554			2,448,647
Total Colorado		5,114,213			4,759,825			4,418,939			4,493,908			4,617,051
New Mexico:
Demand		1,196,057			1,222,895			1,197,412			1,131,713			941,074
Interest-bearing:
Transaction		858,394			837,630			723,757			736,923			733,007
Savings		107,963			107,615			105,837			103,591			91,646
Time		163,871			168,879			174,665			181,863			186,307
Total interest-bearing		1,130,228			1,114,124			1,004,259			1,022,377			1,010,960
Total New Mexico		2,326,285			2,337,019			2,201,671			2,154,090			1,952,034
Arizona:
Demand		934,282			1,110,884			943,511			915,439			905,201
Interest-bearing:
Transaction		834,491			784,614			820,901			835,795			768,220
Savings		16,182			16,468			13,496			13,235			12,174
Time		31,274			30,862			30,012			30,997			32,721
Total interest-bearing		881,947			831,944			864,409			880,027			813,115
Total Arizona		1,816,229			1,942,828			1,807,920			1,795,466			1,718,316
Kansas/Missouri:
Demand		658,342			488,595			463,339			478,370			426,738
Interest-bearing:
Transaction		1,086,946			965,757			978,160			991,510			960,237
Savings		18,844			17,303			17,539			18,686			16,286
Time		12,255			13,040			13,509			13,898			14,610
Total interest-bearing		1,118,045			996,100			1,009,208			1,024,094			991,133
Total Kansas/Missouri		1,776,387			1,484,695			1,472,547			1,502,464			1,417,871
Arkansas:
Demand		42,499			41,594			46,472			45,889			45,834
Interest-bearing:
Transaction		119,543			149,611			195,125			141,207			122,388
Savings		3,213			3,289			3,445			3,000			2,333
Time		6,196			6,677			6,819			7,022			7,197
Total interest-bearing		128,952			159,577			205,389			151,229			131,918
Total Arkansas		171,451			201,171			251,861			197,118			177,752
TOTAL BOK FINANCIAL	$	41,242,059		$	38,524,551		$	37,439,933		$	37,852,626		$	36,143,880

NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION

	Three Months Ended
	Dec. 31, 2021			Sept. 30, 2021			June 30, 2021			Mar. 31, 2021			Dec. 31, 2020
TAX-EQUIVALENT ASSETS YIELDS
Interest-bearing cash and cash equivalents	0.16	%		0.14	%		0.10	%		0.10	%		0.10	%
Trading securities	1.69	%		2.04	%		1.95	%		2.06	%		2.02	%
Investment securities, net of allowance	4.99	%		5.02	%		5.01	%		4.88	%		4.88	%
Available for sale securities	1.72	%		1.80	%		1.85	%		1.84	%		1.98	%
Fair value option securities	2.71	%		2.62	%		2.60	%		1.95	%		2.27	%
Restricted equity securities	2.98	%		2.55	%		3.36	%		2.86	%		3.25	%
Residential mortgage loans held for sale	3.06	%		3.06	%		2.91	%		2.71	%		2.75	%
Loans	3.70	%		3.68	%		3.54	%		3.55	%		3.68	%
Allowance for loan losses
Loans, net of allowance	3.75	%		3.73	%		3.60	%		3.62	%		3.75	%
Total tax-equivalent yield on earning assets	2.62	%		2.78	%		2.75	%		2.78	%		2.92	%
COST OF INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest-bearing transaction	0.09	%		0.09	%		0.10	%		0.12	%		0.14	%
Savings	0.04	%		0.04	%		0.04	%		0.04	%		0.05	%
Time	0.53	%		0.55	%		0.58	%		0.70	%		0.89	%
Total interest-bearing deposits	0.12	%		0.13	%		0.14	%		0.17	%		0.19	%
Funds purchased and repurchase agreements	0.10	%		0.20	%		0.16	%		0.19	%		0.28	%
Other borrowings	0.49	%		0.37	%		0.34	%		0.39	%		0.42	%
Subordinated debt	4.02	%		4.63	%		4.87	%		4.92	%		4.87	%
Total cost of interest-bearing liabilities	0.15	%		0.19	%		0.21	%		0.24	%		0.28	%
Tax-equivalent net interest revenue spread	2.47	%		2.59	%		2.54	%		2.54	%		2.64	%
Effect of noninterest-bearing funding sources and other	0.05	%		0.07	%		0.06	%		0.08	%		0.08	%
Tax-equivalent net interest margin	2.52	%		2.66	%		2.60	%		2.62	%		2.72	%

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
	Dec. 31, 2021					Sept. 30, 2021				June 30, 2021				Mar. 31, 2021				Dec. 31, 2020
Nonperforming assets:
Nonaccruing loans:
Commercial:
Energy	$	31,091				$	45,500			$	70,341			$	101,800			$	125,059
Services		17,170					25,714				29,913				28,033				25,598
Healthcare		15,762					509				527				3,187				3,645
General business		10,081					8,951				11,823				14,053				12,857
Total commercial		74,104					80,674				112,604				147,073				167,159
Commercial real estate		14,262					21,223				26,123				27,243				27,246
Loans to individuals:
Permanent mortgage		31,574					30,674				31,473				32,884				32,228
Permanent mortgage guaranteed by U.S. government agencies		13,861					9,188				9,207				8,564				7,741
Personal		258					188				229				255				319
Total loans to individuals		45,693					40,050				40,909				41,703				40,288
Total nonaccruing loans	$	134,059				$	141,947			$	179,636			$	216,019			$	234,693
Accruing renegotiated loans guaranteed by U.S. government agencies		210,618					178,554				171,324				154,591				151,775
Real estate and other repossessed assets		24,589					28,770				57,337				70,911				90,526
Total nonperforming assets	$	369,266				$	349,271			$	408,297			$	441,521			$	476,994
Total nonperforming assets excluding those guaranteed by U.S. government agencies	$	144,787				$	161,529			$	227,766			$	278,366			$	317,478
Accruing loans 90 days past due1	$	313				$	223			$	252			$	395			$	10,369
Gross charge-offs	$	6,558				$	9,584			$	18,304			$	16,905			$	18,251
Recoveries		(7,272	)				(1,769	)			(2,856	)			(2,437	)			(1,592	)
Net charge-offs (recoveries)	$	(714	)			$	7,815			$	15,448			$	14,468			$	16,659
Provision for loan losses	$	(20,973	)			$	(27,395	)		$	(25,064	)		$	(21,770	)		$	(14,478	)
Provision for credit losses from off-balance sheet unfunded loan commitments		3,738					4,952				(8,590	)			(4,044	)			8,952
Provision for expected credit losses from mortgage banking activities		150					(534	)			(1,222	)			885				(923	)
Provision for credit losses related to held-to maturity (investment) securities portfolio		85					(23	)			(124	)			(71	)			(51	)
Total provision for credit losses	$	(17,000	)			$	(23,000	)		$	(35,000	)		$	(25,000	)		$	(6,500	)
Allowance for loan losses to period end loans		1.27		%			1.36	%			1.46	%			1.56	%			1.69	%
Allowance for loan losses to period end loans excluding PPP loans2		1.29		%			1.40	%			1.54	%			1.70	%			1.82	%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans		1.43		%			1.50	%			1.57	%			1.71	%			1.85	%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans excluding PPP loans2		1.45		%			1.54	%			1.66	%			1.86	%			2.00	%
Nonperforming assets to period end loans and repossessed assets		1.83		%			1.71	%			1.90	%			1.95	%			2.07	%
Net charge-offs (annualized) to average loans		(0.01	)	%			0.15	%			0.28	%			0.25	%			0.28	%
Net charge-offs (annualized) to average loans excluding PPP loans2		(0.01	)	%			0.16	%			0.30	%			0.28	%			0.31	%
Allowance for loan losses to nonaccruing loans1		213.33		%			208.41	%			183.00	%			169.87	%			171.24	%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to nonaccruing loans1		240.77		%			230.43	%			197.25	%			185.72	%			187.51	%

¹  Excludes residential mortgage loans guaranteed by agencies of the U.S. government.
²  Metric meaningful due to the unique characteristics and short-term nature of the PPP loans.

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

		Three Months Ended						4Q21 vs 3Q21								Year Ended						2021 vs 2020
		Dec. 31, 2021			Sept. 30, 2021			$ change				% change				Dec. 31, 2021			Dec. 31, 2020			$ change				% change
Commercial Banking
Net interest revenue		$	140,723		$	134,104		$	6,619			4.9		%		$	535,735		$	588,488		$	(52,753	)		(9.0	)	%
Fees and commissions revenue			57,414			56,452			962			1.7		%			227,081			187,119			39,962			21.4		%
Combined net interest and fee revenue			198,137			190,556			7,581			4.0		%			762,816			775,607			(12,791	)		(1.6	)	%
Other operating expense			74,459			68,301			6,158			9.0		%			281,089			258,903			22,186			8.6		%
Corporate expense allocations			12,926			11,769			1,157			9.8		%			49,941			24,862			25,079			100.9		%
Net income			83,514			102,694			(19,180	)		(18.7	)	%			328,516			306,005			22,511			7.4		%
Average assets			29,451,007			28,474,132			976,875			3.4		%			28,536,881			26,994,075			1,542,806			5.7		%
Average loans			16,334,695			16,588,875			(254,180	)		(1.5	)	%			16,853,006			18,711,372			(1,858,366	)		(9.9	)	%
Average deposits			19,537,285			17,881,673			1,655,612			9.3		%			17,659,695			14,319,729			3,339,966			23.3		%
Consumer Banking
Net interest revenue		$	30,385		$	27,222		$	3,163			11.6		%		$	103,527		$	147,004		$	(43,477	)		(29.6	)	%
Fees and commissions revenue			38,944			44,405			(5,461	)		(12.3	)	%			173,364			245,554			(72,190	)		(29.4	)	%
Combined net interest and fee revenue			69,329			71,627			(2,298	)		(3.2	)	%			276,891			392,558			(115,667	)		(29.5	)	%
Other operating expense			52,036			49,483			2,553			5.2		%			209,596			230,402			(20,806	)		(9.0	)	%
Corporate expense allocations			11,420			11,516			(96	)		(0.8	)	%			46,010			42,155			3,855			9.1		%
Net income			6,810			12,432			(5,622	)		(45.2	)	%			27,643			97,974			(70,331	)		(71.8	)	%
Average assets			10,186,797			10,083,593			103,204			1.0		%			10,029,687			9,842,114			187,573			1.9		%
Average loans			1,705,222			1,763,705			(58,483	)		(3.3	)	%			1,769,384			1,764,682			4,702			0.3		%
Average deposits			8,682,437			8,516,942			165,495			1.9		%			8,439,577			7,599,937			839,640			11.0		%
Wealth Management
Net interest revenue		$	58,229		$	55,196		$	3,033			5.5		%		$	214,072		$	117,290		$	96,782			82.5		%
Fees and commissions revenue			56,275			97,966			(41,691	)		(42.6	)	%			298,765			399,229			(100,464	)		(25.2	)	%
Combined net interest and fee revenue			114,504			153,162			(38,658	)		(25.2	)	%			512,837			516,519			(3,682	)		(0.7	)	%
Other operating expense			74,947			87,417			(12,470	)		(14.3	)	%			320,357			325,627			(5,270	)		(1.6	)	%
Corporate expense allocations			9,971			10,101			(130	)		(1.3	)	%			40,301			35,331			4,970			14.1		%
Net income			21,700			41,406			(19,706	)		(47.6	)	%			113,550			115,614			(2,064	)		(1.8	)	%
Average assets			19,526,382			19,109,704			416,678			2.2		%			19,123,130			15,695,646			3,427,484			21.8		%
Average loans			2,065,261			1,971,380			93,881			4.8		%			1,981,159			1,758,226			222,933			12.7		%
Average deposits			9,194,019			9,120,446			73,573			0.8		%			9,426,771			8,676,047			750,724			8.7		%
Fiduciary assets			64,536,833			60,497,576			4,039,257			6.7		%			64,536,833			55,486,492			9,050,341			16.3		%
Assets under management or administration			104,917,721			98,842,789			6,074,932			6.1		%			104,917,721			91,592,247			13,325,474			14.5		%

Contact:

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

FAQ

What were BOK Financial's earnings for 2021?

BOK Financial reported a net income of $618.1 million or $8.95 per diluted share for 2021.

How did BOK Financial's assets under management change in 2021?

Assets under management grew by 14% to over $100 billion in 2021.

What is the outlook for BOK Financial in 2022?

BOK Financial anticipates further loan growth and is well-positioned for a rising rate environment.

How did BOK Financial's net interest margin change?

BOK Financial's net interest margin decreased to 2.60% in 2021, down from 2.83% in 2020.