BOK Financial Corporation Reports Quarterly Earnings of $151 Million or $2.27 Per Share in the Second Quarter

Rhea-AI Summary

BOK Financial (BOKF) reports Q2 2023 financial results with net income at $151.3 million, net interest revenue at $322.3 million, and total deposits at $33.3 billion. The company's disciplined, long-view approach has consistently been a distinct advantage.

Positive

• BOK Financial reported a decrease in net interest revenue by $30.1 million and net interest margin by 0.45%, which may indicate a potential challenge in maintaining interest revenue.
• The company's provision for credit losses increased by $0.5 million, indicating a slightly higher risk in the loan portfolio.
• The company's tangible common equity ratio decreased from 8.46% to 7.79%, which may raise concerns about the company's capital position.

Negative

• None.

TULSA, OK / ACCESSWIRE / July 26, 2023 /

CEO Commentary

Stacy Kymes, president and chief executive officer, stated, "I am proud of the exceptional second quarter financial results delivered across the board by our team. Wealth segment revenues set another record this quarter, and core loans reached an all-time high led by the commercial and industrial segments. Our growth efforts are supported by the vitality of our geographic footprint as well as our diverse business model-non-interest revenues were almost 40 percent of total revenues for the quarter.

"Using our capital and liquidity strength, we are taking advantage of market and economic uncertainty to prudently grow. Our full-service banking market expansion into San Antonio and the addition of a fixed-income sales and trading office in Memphis are just two more examples of how we are investing to build long-term shareholder value. That disciplined, long-view approach has consistently been a distinct advantage for BOK Financial."

Second Quarter 2023 Financial Highlights
_{(Unless indicated otherwise, all comparisons are to the prior quarter)}

• Net income was $151.3 million or $2.27 per diluted share for the second quarter of 2023 compared to $162.4 million or $2.43 per diluted share for the first quarter of 2023.
• Net interest revenue totaled $322.3 million, a decrease of $30.1 million compared to the prior quarter. Net interest margin was 3.00 percent compared to 3.45 percent. Growth in low-spread trading assets drove a 9 basis point decline in net interest margin with deposit repricing activity primarily driving the remaining 36 basis point reduction.
• Fees and commissions revenue was $200.5 million, an increase of $14.5 million. Brokerage and trading revenue grew $12.6 million, driven largely by higher U.S. government agency mortgage-backed securities and related derivative contracts trading volumes.
• The net cost of the changes in the fair value of mortgage servicing rights and related economic hedges was $1.2 million compared to $10.5 million for the first quarter of 2023.
• Operating expense increased $12.9 million to $318.7 million. Personnel expense increased $8.5 million. Growth in regular compensation related to our annual merit increases and higher cash-based incentive compensation reflecting sales activity was partially offset by lower seasonal employee benefits costs. Non-personnel expense increased $4.4 million, led by higher mortgage banking costs.
• Period-end loans grew by $488 million to $23.2 billion at June 30, 2023, primarily driven by growth in commercial loans and commercial real estate loans secured by multifamily residential properties. Average outstanding loan balances were $22.9 billion, a $413 million increase.
• We recorded a $17.0 million provision for expected credit losses in the second quarter of 2023, primarily related to higher assumed commercial real estate vacancy rates during the forecast period and overall loan portfolio growth during the quarter. We recorded a $16.0 million provision for expected credit losses in the first quarter of 2023 as key economic assumptions in the base case, including projected West Texas Intermediate ("WTI") oil prices and projected commercial real estate vacancy rates, were less favorable to economic growth. The combined allowance for credit losses totaled $323 million or 1.39 percent of outstanding loans at June 30, 2023. The combined allowance for credit losses was $312 million or 1.37 percent of outstanding loans at March 31, 2023. Net charge-offs were $6.7 million or 0.12 percent of average loans on an annualized basis in the second quarter compared to net charge-offs of $769 thousand or 0.01 percent of average loans on an annualized basis in the first quarter.
• Period-end deposits increased $714 million to $33.3 billion while average deposits decreased $1.1 billion to $32.4 billion. Average demand deposits declined by $1.4 billion and average interest-bearing deposits increased $295 million. The loan to deposit ratio was 70 percent at June 30, 2023, consistent with March 31, 2023.
• The company's tangible common equity ratio, a non-GAAP measure, was 7.79 percent at June 30, 2023 and 8.46 percent at March 31, 2023. The tangible common equity ratio is primarily based on total shareholders' equity, which includes unrealized gains and losses on available for sale securities. Adjusted for all unrealized securities portfolio gains and losses, including those in the investment portfolio, the tangible common equity ratio would be 7.49 percent.
• The company's common equity Tier 1 capital ratio was 12.13 percent at June 30, 2023. In addition, the company's Tier 1 capital ratio was 12.13 percent, total capital ratio was 13.24 percent, and leverage ratio was 9.75 percent at June 30, 2023. At March 31, 2023, the company's common equity Tier 1 capital ratio was 12.19 percent, Tier 1 capital ratio was 12.20 percent, total capital ratio was 13.21 percent, and leverage ratio was 9.94 percent.
• The company repurchased 266,000 shares of common stock at an average price paid of $84.08 a share in the second quarter of 2023.

Second Quarter 2023 Segment Highlights

• Commercial Banking contributed $170.2 million to net income in the second quarter of 2023, a decrease of $7.1 million compared to the first quarter of 2023. Combined net interest revenue and fee revenue decreased $3.2 million due to a decline in demand deposit balances, partially offset by increased customer hedging revenue, primarily related to our energy customers. Net loans charged-off increased $5.9 million to $6.0 million in the second quarter of 2023. Personnel expense increased $3.3 million, driven primarily by incentive compensation costs. The second quarter of 2023 included a gain on alternative investments of $8.1 million resulting from merchant banking activities. Average loans increased $409 million or 2 percent to $19.2 billion. Average deposits decreased $1.0 billion or 7 percent to $14.8 billion.
• Consumer Banking contributed $60.3 million to net income in the second quarter of 2023, an increase of $9.6 million over the prior quarter. The net cost of the changes in the fair value of mortgage servicing rights and related economic hedges was $1.2 million compared to $10.5 million for the first quarter of 2023. Combined net interest revenue and fee revenue increased $5.8 million, largely due to an increase in the spread on deposits, partially offset by a decline in deposit balances. Operating expense increased $2.1 million. Increases in mortgage banking costs of $2.5 million driven by higher seasonal prepayments and personnel expense of $1.1 million were partially offset by a decline in business promotion expense. Average loans increased $15 million or 1 percent to $1.8 billion. Average deposits decreased $262 million or 3 percent to $8.0 billion.
• Wealth Management contributed $57.3 million to net income in the second quarter of 2023, an increase of $4.9 million over the first quarter of 2023. Combined net interest and fee revenue increased $9.4 million, primarily due to an increase of $5.1 million in total revenue from institutional trading activities from higher U.S. agency residential mortgage-backed securities trading volumes and increases in other revenue and fiduciary and asset management revenue. These increases were partially offset by a decrease in the spread on deposits. Personnel expense increased $2.7 million due to increased cash-based incentive compensation, driven by higher trading activities, combined with higher regular compensation related to annual merit increases. Average loans increased $29 million or 1 percent to $2.2 billion. Average deposits increased $112 million or 2 percent to $7.5 billion. Assets under management or administration were $103.6 billion, an increase of $1.3 billion.

Net Interest Revenue

Net interest revenue was $322.3 million for the second quarter of 2023 compared to $352.3 million for the prior quarter. Net interest margin was 3.00 percent compared to 3.45 percent. Growth in low-spread trading assets drove a 9 basis point decline in net interest margin with deposit repricing activity primarily driving the remaining 36 basis point reduction. Deposit price competition and liability mix shift have driven compression in the net interest margin.

Average earning assets increased $2.0 billion. Average trading securities grew $1.2 billion due to favorable market opportunities. Average loan balances increased $413 million, largely due to growth in commercial and commercial real estate loans. Average available for sale securities increased $295 million. Average interest-bearing cash and cash equivalents increased $92 million. Average interest-bearing deposits increased $295 million. Average funds purchased and repurchase agreements grew $1.9 billion while other borrowings increased $763 million.

The yield on average earning assets was 5.29 percent, up 23 basis points. The loan portfolio yield increased 36 basis points to 7.03 percent while the yield on the available for sale securities portfolio increased 13 basis points to 3.00 percent. The yield on interest-bearing cash and cash equivalents increased 113 basis points to 5.41 percent.

Funding costs were 3.27 percent, an 84 basis point increase. The cost of interest-bearing deposits increased 73 basis points to 2.56 percent. The cost of funds purchased and repurchase agreements increased 125 basis points to 4.58 percent while the cost of other borrowings was up 39 basis points to 5.12 percent. The benefit to net interest margin from assets funded by non-interest liabilities was 98 basis points, an increase of 16 basis points.

Fees and Commissions Revenue

Fees and commissions revenue totaled $200.5 million for the second quarter of 2023, an increase of $14.5 million over the prior quarter.

Brokerage and trading revenue increased $12.6 million, with a $9.3 million increase in trading revenue, largely due to a higher volume of U.S. agency residential mortgage-backed securities and related derivatives contracts trading activity. Customer hedging revenue grew $5.3 million, primarily driven by energy customer activity. Fiduciary and asset management revenue increased $2.3 million, largely due to seasonal tax preparation fee income.

Operating Expense

Total operating expense was $318.7 million for the second quarter of 2023, an increase of $12.9 million compared to the first quarter of 2023.

Personnel expense was $190.7 million, including $2.7 million of deferred compensation expense. Excluding deferred compensation costs, personnel expense increased $7.5 million. Cash-based incentive compensation increased $6.6 million, driven by sales activities. Regular compensation increased $4.1 million, representing the full quarter impact of our annual merit increases in March. Employee benefits expense decreased $2.5 million due to a seasonal decrease in payroll taxes, partially offset by higher healthcare costs.

Non-personnel expense was $128.0 million, an increase of $4.4 million. Higher seasonal prepayments led to a $2.5 million increase in mortgage banking costs. Occupancy and equipment costs grew $1.6 million, largely related to seasonal increases in general building operating costs.

Loans, Deposits and Capital

Loans

Outstanding loans were $23.2 billion at June 30, 2023, growing $488 million over March 31, 2023, largely due to growth in commercial and commercial real estate loans. Unfunded loan commitments decreased $141 million compared to the first quarter of 2023.

Outstanding commercial loan balances, which includes healthcare, services, energy and general business loans, increased $317 million over the prior quarter.

Energy loan balances increased $111 million to $3.5 billion or 15 percent of total loans. The majority of this portfolio is first lien, senior secured, reserve-based lending to oil and gas producers, which we believe is the lowest risk form of energy lending. Approximately 67 percent of committed production loans are secured by properties primarily producing oil. The remaining 33 percent is secured by properties primarily producing natural gas. Unfunded energy loan commitments were $4.3 billion at June 30, 2023, an increase of $224 million over March 31, 2023.

General business loans increased $93 million to $3.4 billion or 15 percent of total loans. General business loans include $2.0 billion of wholesale/retail loans and $1.4 billion of loans from other commercial industries.

Healthcare sector loan balances increased $92 million, totaling $4.0 billion or 17 percent of total loans. Our healthcare sector loans primarily consist of $3.3 billion of senior housing and care facilities, including independent living, assisted living and skilled nursing. Generally, we loan to borrowers with a portfolio of multiple facilities, which serves to help diversify risks specific to a single facility.

Services sector loan balances increased $21 million to $3.6 billion or 15 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 grew$155 million and represent 21 percent of total loans. Loans secured by multifamily residential properties increased $139 million to $1.5 billion. Loans secured by industrial facilities increased $40 million to $1.3 billion. This growth was partially offset by a $40 million decrease in loans secured by office facilities. Unfunded commercial real estate loan commitments were $2.4 billion at June 30, 2023, a decrease of $306 million compared to March 31, 2023. We take a disciplined approach to managing our concentration of commercial real estate loan commitments as a percentage of Tier 1 Capital. While loan commitments are presently at the upper concentration limit, we expect continued growth in our commercial real estate balances as loans fund, primarily in the multifamily and industrial loan portfolios.

Loans to individuals increased $15 million and represent 16 percent of total loans. Residential mortgage loans increased $29 million while personal loans decreased $14 million.

Liquidity and Capital

Our funding sources, which primarily include deposits and borrowings from the Federal Home Loan Banks, provide adequate liquidity to meet our needs. The loan to deposit ratio was 70 percent at June 30, 2023, consistent with the prior quarter, providing significant on-balance sheet liquidity to meet future loan demand and contractual obligations.

Period-end deposits totaled $33.3 billion at June 30, 2023, a $714 million increase. Time deposits increased $1.1 billion while interest-bearing transaction account balances increased $473 million. Demand deposits decreased $824 million. Average deposits were $32.4 billion at June 30, 2023, a $1.1 billion decrease. Average demand deposit account balances decreased $1.4 billion and average interest-bearing transaction account balances decreased $271 million. Average time deposits increased $598 million. Average Commercial Banking deposits decreased $1.0 billion to $14.8 billion or 46 percent of total deposits. Our commercial deposit portfolio is highly diversified across industries and customers. The highest concentration by industry within our commercial deposit portfolio is with our energy customers representing 6 percent of our total deposits. Wealth Management deposits increased $112 million to $7.5 billion or 23 percent of total deposits. Consumer Banking deposits decreased $262 million to $8.0 billion or 25 percent of total deposits.

The company's common equity Tier 1 capital ratio was 12.13 percent at June 30, 2023. In addition, the company's Tier 1 capital ratio was 12.13 percent, total capital ratio was 13.24 percent, and leverage ratio was 9.75 percent at June 30, 2023. At the beginning of 2020, we elected to delay the regulatory capital impact of the transition of the allowance for credit losses from the incurred loss methodology to CECL for two years, followed by a three-year transition period. This election added 7 basis points to the company's common equity tier 1 capital ratio at June 30, 2023. At March 31, 2023, the company's common equity Tier 1 capital ratio was 12.19 percent, Tier 1 capital ratio was 12.20 percent, total capital ratio was 13.21 percent, and leverage ratio was 9.94 percent.

The company's tangible common equity ratio, a non-GAAP measure, was 7.79 percent at June 30, 2023 and 8.46 percent at March 31, 2023. The tangible common equity ratio is primarily based on total shareholders' equity, which includes unrealized gains and losses on available for sale securities. Adjusted for all unrealized securities portfolio gains and losses, including those in the investment portfolio, the tangible common equity ratio would be 7.49 percent. The company has elected to exclude unrealized gains and losses from available for sale securities from its calculation of Tier 1 capital for regulatory capital purposes, consistent with the treatment under the previous capital rules.

The company repurchased 266,000 shares of common stock at an average price paid of $84.08 a share in the second quarter of 2023. We view share buybacks opportunistically, but within the context of maintaining our strong capital position.

Credit Quality

Expected credit losses on assets carried at amortized cost are recognized over their projected lives based on models that measure the probability of default and loss given default over a 12-month reasonable and supportable forecast period. Our models incorporate base case, downside and upside macroeconomic variables such as real gross domestic product ("GDP") growth, civilian unemployment rates, commercial real estate vacancy rates and WTI oil prices on a probability weighted basis.

A $17.0 million provision for credit losses was necessary for the second quarter of 2023, primarily related to higher assumed commercial real estate vacancy rates during the forecast period and loan growth during the quarter.

The probability weighting of our base case reasonable and supportable forecast remained at 50 percent in the second quarter of 2023 as the level of uncertainty in economic forecasts remained high. Our base case reasonable and supportable forecast assumes inflation continues to improve from the peak experienced in 2022 and reaches 3.1 percent by the second quarter of 2024. We expect the impact of the Russian-Ukraine conflict remains isolated. Inflation pressures cause modest declines in real household income compared to pre-pandemic levels, resulting in below-trend GDP growth. GDP is projected to grow by 1.0 percent over the next twelve months. Job openings revert to more normalized levels and overall hiring levels decline, causing the national unemployment rate to modestly increase over the next four quarters. Our forecasted civilian unemployment rate is 3.8 percent for the third quarter of 2023, increasing to 4.2 percent by the second quarter of 2024. Our base case also assumes the Federal Reserve increases the federal funds rate once in the third quarter of 2023, resulting in a target range of 5.25 percent to 5.50 percent. No additional rate increases are anticipated for the remainder of the forecast horizon. WTI oil prices are projected to generally follow the NYMEX forward curve that existed at the end of June 30, 2023, averaging $69.39 per barrel over the next twelve months.

Our downside case, probability weighted at 40 percent, assumes that inflation moderates from the peak experienced in 2022, but remains elevated through the forecast horizon ending at 3.8 percent by the second quarter of 2024. Higher levels of inflation force the Federal Reserve to adopt a more aggressive monetary policy as compared to the base case scenario. This results in a federal funds target range of 6.00 to 6.25 percent by the second quarter of 2024. The United States economy is pushed into a recession, with a contraction in economic activity and a sharp increase in the unemployment rate from 4.7 percent in the third quarter of 2023 to 6.1 percent in the second quarter of 2024. In this scenario, real GDP is expected to contract 2.0 percent over the next four quarters. WTI oil prices are projected to average $55.78 per barrel over the next twelve months, peaking at $62.31 in the third quarter of 2023 and falling 19 percent over the following three quarters.

Nonperforming assets totaled $136 million or 0.59 percent of outstanding loans and repossessed assets at June 30, 2023, compared to $133 million or 0.58 percent at March 31, 2023. Excluding loans guaranteed by U.S. government agencies, nonperforming assets totaled $125 million or 0.54 percent of outstanding loans and repossessed assets at June 30, 2023, compared to $119 million or 0.53 percent at March 31, 2023.

Nonaccruing loans were $132 million or 0.57 percent of outstanding loans at June 30, 2023. Nonaccruing commercial loans totaled $73 million or 0.50 percent of outstanding commercial loans. Nonaccruing commercial real estate loans totaled $17 million or 0.35 percent of outstanding commercial real estate loans. Nonaccruing loans to individuals totaled $42 million or 1.11 percent of outstanding loans to individuals.

Nonaccruing loans increased $12.0 million compared to March 31, 2023. Nonaccruing energy loans increased $20 million and nonaccruing general business loans increased $3.0 million. These increases were partially offset by a $4.3 million decrease in nonaccruing commercial real estate loans and a $3.6 million decrease in nonaccruing services loans. New nonaccruing loans identified in the second quarter totaled $28 million, offset by $5.9 million in payments received and $8.0 million of 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 $109 million at June 30, 2023. The $28 million decrease compared to March 31, 2023 was primarily related to potential problem energy and general business loans.

At June 30, 2023, the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $323 million or 1.39 percent of outstanding loans and 267 percent of nonaccruing loans. The allowance for loan losses totaled $263 million or 1.13 percent of outstanding loans and 218 percent of nonaccruing loans. At March 31, 2023, the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $312 million or 1.37 percent of outstanding loans and 295 percent of nonaccruing loans. The allowance for loan losses was $249 million or 1.10 percent of outstanding loans and 235 percent of nonaccruing loans. The allowance to nonaccruing loan percentages referenced above omit residential mortgage loans guaranteed by U.S. government agencies.

Gross charge-offs were $8.0 million for the second quarter compared to $3.7 million for the first quarter of 2023. Gross charge-offs for the second quarter were primarily related to a single commercial real estate borrower and a single commercial services borrower. Recoveries totaled $1.3 million for the second quarter of 2023 and $2.9 million for the prior quarter. Net charge-offs were $6.7 million or 0.12 percent of average loans on an annualized basis in the second quarter compared to net charge-offs of $769 thousand or 0.01 percent of average loans on an annualized basis in the first quarter. Net charge-offs were 0.10 percent of average loans over the last four quarters.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $11.9 billion at June 30, 2023, largely unchanged compared to March 31, 2023. At June 30, 2023, the available for sale securities portfolio consisted primarily of $6.1 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 June 30, 2023, the available for sale securities portfolio had a net unrealized loss of $899 million compared to $742 million at March 31, 2023.

We hold an inventory of trading securities in support of sales to a variety of customers. At June 30, 2023, the trading securities portfolio totaled $5.4 billion compared to $2.3 billion at March 31, 2023.

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 $114 million to $212 million at June 30, 2023.

Derivative contracts are carried at fair value. At June 30, 2023, the net fair values of derivative contracts, before consideration of cash margin, reported as assets under our customer derivative programs totaled $538 million compared to $572 million at March 31, 2023. The aggregate net fair value of derivative contracts, before consideration of cash margin, held under these programs reported as liabilities totaled $526 million at June 30, 2023 and $578 million at March 31, 2023.

The net cost of the changes in the fair value of mortgage servicing rights and related economic hedges was $1.2 million during the second quarter of 2023, including a $10.3 million decrease in the fair value of securities and derivative contracts held as an economic hedge, a $9.3 million increase in the fair value of mortgage servicing rights and $232 thousand of related net interest expense.

Conference Call and Webcast

The company will hold a conference call at 9 a.m. Central time on Wednesday, July 26, 2023 to discuss the financial results with investors. The live audio webcast and presentation slides will be available on the company's website at www.bokf.com. The conference call can also be accessed by dialing 1-201-689-8471. A conference call and webcast replay will also be available shortly after conclusion of the live call at www.bokf.com or by dialing 1-844-512-2921 and referencing conference ID # 13739748.

About BOK Financial Corporation

BOK Financial Corporation is a $49 billion regional financial services company headquartered in Tulsa, Oklahoma with $104 billion in assets under management or administration. The company's stock is publicly traded on NASDAQ under the Global Select market listings (BOKF). BOK Financial Corporation's holdings include BOKF, NA; BOK Financial Securities, Inc., BOK Financial Private Wealth, Inc. and BOK Financial Insurance, Inc. BOKF, NA's holdings include TransFund, Cavanal Hill Investment Management, Inc. and BOK Financial Asset Management, Inc. BOKF, NA operates banking divisions across eight states as: Bank of Albuquerque; Bank of Oklahoma; Bank of Texas; and BOK Financial in Arizona, Arkansas, Colorado, Kansas and Missouri; as well as having limited purpose offices in Nebraska, Wisconsin, Connecticut and Tennessee. Through its subsidiaries, BOK Financial Corporation provides commercial and consumer banking, brokerage trading, investment, trust and insurance services, mortgage origination and servicing, and an electronic funds transfer network. For more information, visit www.bokf.com.

The company will continue to evaluate critical assumptions and estimates, such as the appropriateness of the allowance for credit losses and asset impairment as of June 30, 2023 through the date its financial statements are filed with the Securities and Exchange Commission and will adjust amounts reported if necessary.

This news release contains forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about BOK Financial Corporation, the financial services industry 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 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, 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)

	Jun. 30, 2023			Mar. 31, 2023
ASSETS
Cash and due from banks	$	875,714		$	792,371
Interest-bearing cash and cash equivalents		571,616			571,613
Trading securities		5,442,364			2,294,358
Investment securities, net of allowance		2,374,071			2,448,136
Available for sale securities		11,938,523			11,937,841
Fair value option securities		212,321			326,390
Restricted equity securities		330,086			288,181
Residential mortgage loans held for sale		94,820			74,175
Loans:
Commercial		14,534,516			14,217,349
Commercial real estate		4,970,801			4,815,316
Loans to individuals		3,732,342			3,717,388
Total loans		23,237,659			22,750,053
Allowance for loan losses		(262,714)			(249,460)
Loans, net of allowance		22,974,945			22,500,593
Premises and equipment, net		617,918			623,112
Receivables		263,915			265,680
Goodwill		1,044,749			1,044,749
Intangible assets, net		69,246			72,689
Mortgage servicing rights		304,722			299,803
Real estate and other repossessed assets, net		4,227			12,651
Derivative contracts, net		353,037			394,291
Cash surrender value of bank-owned life insurance		411,084			408,614
Receivable on unsettled securities sales		133,909			18,186
Other assets		1,220,653			1,150,689
TOTAL ASSETS	$	49,237,920		$	45,524,122
LIABILITIES AND EQUITY
Deposits:
Demand	$	10,782,548		$	11,606,975
Interest-bearing transaction		18,907,981			18,434,489
Savings		897,937			962,673
Time		2,706,377			1,576,610
Total deposits		33,294,843			32,580,747
Funds purchased and repurchase agreements		5,446,864			1,599,724
Other borrowings		3,777,056			4,735,885
Subordinated debentures		131,154			131,148
Accrued interest, taxes and expense		228,797			268,449
Due on unsettled securities purchases		400,430			262,492
Derivative contracts, net		550,653			510,483
Other liabilities		540,726			557,167
TOTAL LIABILITIES		44,370,523			40,646,095
Shareholders' equity:
Capital, surplus and retained earnings		5,700,526			5,603,340
Accumulated other comprehensive loss		(836,672)			(728,554)
TOTAL SHAREHOLDERS' EQUITY		4,863,854			4,874,786
Non-controlling interests		3,543			3,241
TOTAL EQUITY		4,867,397			4,878,027
TOTAL LIABILITIES AND EQUITY	$	49,237,920		$	45,524,122

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

	Three Months Ended
	Jun. 30, 2023			Mar. 31, 2023			Dec. 31, 2022			Sep. 30, 2022			Jun. 30, 2022
ASSETS
Interest-bearing cash and cash equivalents	$	708,475		$	616,596		$	568,307		$	748,263		$	843,619
Trading securities		4,274,803			3,031,969			3,086,985			3,178,068			4,166,954
Investment securities, net of allowance		2,408,122			2,473,796			2,535,305			2,593,989			610,983
Available for sale securities		12,033,597			11,738,693			10,953,851			10,306,257			12,258,072
Fair value option securities		245,469			300,372			92,012			36,846			54,832
Restricted equity securities		351,944			316,724			216,673			173,656			167,732
Residential mortgage loans held for sale		72,959			65,769			98,613			132,685			148,183
Loans:
Commercial		14,316,474			14,046,237			13,846,339			13,508,325			13,472,488
Commercial real estate		4,896,230			4,757,362			4,488,091			4,434,650			4,061,129
Loans to individuals		3,676,350			3,672,648			3,641,574			3,656,257			3,524,097
Total loans		22,889,054			22,476,247			21,976,004			21,599,232			21,057,714
Allowance for loan losses		(252,890)			(238,909)			(242,450)			(241,136)			(246,064)
Loans, net of allowance		22,636,164			22,237,338			21,733,554			21,358,096			20,811,650
Total earning assets		42,731,533			40,781,257			39,285,300			38,527,860			39,062,025
Cash and due from banks		875,280			857,771			865,796			821,801			822,599
Derivative contracts, net		410,793			546,018			1,239,717			2,019,905			3,051,429
Cash surrender value of bank-owned life insurance		409,313			408,124			406,826			410,667			408,489
Receivable on unsettled securities sales		163,903			177,312			194,996			219,113			457,165
Other assets		3,317,285			3,211,986			3,216,983			3,119,856			3,486,691
TOTAL ASSETS	$	47,908,107		$	45,982,468		$	45,209,618		$	45,119,202		$	47,288,398
LIABILITIES AND EQUITY
Deposits:
Demand	$	10,998,201		$	12,406,408		$	14,176,189		$	15,105,305		$	15,202,597
Interest-bearing transaction		18,368,592			18,639,900			18,898,315			19,556,806			21,037,294
Savings		926,882			958,443			969,275			978,596			981,493
Time		2,076,037			1,477,720			1,417,606			1,409,069			1,373,036
Total deposits		32,369,712			33,482,471			35,461,385			37,049,776			38,594,420
Funds purchased and repurchase agreements		3,670,994			1,759,237			1,046,447			800,759			1,224,134
Other borrowings		5,275,291			4,512,280			2,523,195			1,528,887			1,301,358
Subordinated debentures		131,153			131,166			131,180			131,199			131,219
Derivative contracts, net		576,558			428,023			445,105			105,221			535,574
Due on unsettled securities purchases		436,353			316,738			575,957			331,428			380,332
Other liabilities		503,134			511,530			408,029			396,510			389,031
TOTAL LIABILITIES		42,963,195			41,141,445			40,591,298			40,343,780			42,556,068
Total equity		4,944,912			4,841,023			4,618,320			4,775,422			4,732,330
TOTAL LIABILITIES AND EQUITY	$	47,908,107		$	45,982,468		$	45,209,618		$	45,119,202		$	47,288,398

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

	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2023				2022				2023				2022
Interest revenue	$	570,367			$	294,247			$	1,087,096			$	577,346
Interest expense		248,106				20,229				412,487				34,917
Net interest revenue		322,261				274,018				674,609				542,429
Provision for credit losses		17,000				-				33,000				-
Net interest revenue after provision for credit losses		305,261				274,018				641,609				542,429
Other operating revenue:
Brokerage and trading revenue		65,006				44,043				117,402				16,964
Transaction card revenue		26,003				26,940				51,624				51,156
Fiduciary and asset management revenue		52,997				49,838				103,654				96,237
Deposit service charges and fees		27,100				28,500				53,068				55,504
Mortgage banking revenue		15,141				11,368				29,508				28,018
Other revenue		14,250				12,684				31,220				23,129
Total fees and commissions		200,497				173,373				386,476				271,008
Other gains (losses), net		12,618				(7,639	)			14,869				(9,283	)
Loss on derivatives, net		(8,159	)			(13,569	)			(9,503	)			(60,550	)
Loss on fair value option securities, net		(2,158	)			(2,221	)			(5,120	)			(13,422	)
Change in fair value of mortgage servicing rights		9,261				17,485				3,202				66,595
Gain (loss) on available for sale securities, net		(3,010	)			1,188				(3,010	)			2,125
Total other operating revenue		209,049				168,617				386,914				256,473
Other operating expense:
Personnel		190,652				154,923				372,797				314,151
Business promotion		7,640				6,325				16,209				12,838
Charitable contributions to BOKF Foundation		1,142				-				1,142				-
Professional fees and services		12,777				12,475				25,825				23,888
Net occupancy and equipment		30,105				27,489				58,564				58,344
Insurance		6,974				4,728				14,289				9,011
Data processing and communications		45,307				41,280				90,109				81,116
Printing, postage and supplies		3,728				3,929				7,621				7,618
Amortization of intangible assets		3,474				4,049				6,865				8,013
Mortgage banking costs		8,300				9,437				14,082				17,314
Other expense		8,574				9,020				16,982				18,980
Total other operating expense		318,673				273,655				624,485				551,273
Net income before taxes		195,637				168,980				404,038				247,629
Federal and state income taxes		44,001				36,122				89,906				52,319
Net income		151,636				132,858				314,132				195,310
Net income (loss) attributable to non-controlling interests		328				12				456				(24	)
Net income attributable to BOK Financial Corporation shareholders	$	151,308			$	132,846			$	313,676			$	195,334
Average shares outstanding:
Basic		65,994,132				67,453,748				66,162,048				67,616,396
Diluted		65,994,132				67,455,172				66,162,048				67,617,834
Net income per share:
Basic	$	2.27			$	1.96			$	4.70			$	2.87
Diluted	$	2.27			$	1.96			$	4.70			$	2.87

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

	Three Months Ended
	Jun. 30, 2023			Mar. 31, 2023			Dec. 31, 2022			Sep. 30, 2022			Jun. 30, 2022
Interest revenue	$	570,367		$	516,729		$	451,606		$	363,150		$	294,247
Interest expense		248,106			164,381			98,980			46,825			20,229
Net interest revenue		322,261			352,348			352,626			316,325			274,018
Provision for credit losses		17,000			16,000			15,000			15,000			-
Net interest revenue after provision for credit losses		305,261			336,348			337,626			301,325			274,018
Other operating revenue:
Brokerage and trading revenue		65,006			52,396			63,008			61,006			44,043
Transaction card revenue		26,003			25,621			27,136			25,974			26,940
Fiduciary and asset management revenue		52,997			50,657			49,899			50,190			49,838
Deposit service charges and fees		27,100			25,968			26,429			28,703			28,500
Mortgage banking revenue		15,141			14,367			10,065			11,282			11,368
Other revenue		14,250			16,970			17,034			15,479			12,684
Total fees and commissions		200,497			185,979			193,571			192,634			173,373
Other gains (losses), net		12,618			2,251			8,427			979			(7,639)
Gain (loss) on derivatives, net		(8,159)			(1,344)			4,548			(17,009)			(13,569)
Loss on fair value option securities, net		(2,158)			(2,962)			(2,568)			(4,368)			(2,221)
Change in fair value of mortgage servicing rights		9,261			(6,059)			(2,904)			16,570			17,485
Gain (loss) on available for sale securities, net		(3,010)			-			(3,988)			892			1,188
Total other operating revenue		209,049			177,865			197,086			189,698			168,617
Other operating expense:
Personnel		190,652			182,145			186,419			170,348			154,923
Business promotion		7,640			8,569			7,470			6,127			6,325
Charitable contributions to BOKF Foundation		1,142			-			2,500			-			-
Professional fees and services		12,777			13,048			18,365			14,089			12,475
Net occupancy and equipment		30,105			28,459			29,227			29,296			27,489
Insurance		6,974			7,315			4,677			4,306			4,728
Data processing and communications		45,307			44,802			43,048			41,743			41,280
Printing, postage and supplies		3,728			3,893			3,890			4,349			3,929
Amortization of intangible assets		3,474			3,391			3,736			3,943			4,049
Mortgage banking costs		8,300			5,782			9,016			9,504			9,437
Other expense		8,574			8,408			10,108			11,046			9,020
Total other operating expense		318,673			305,812			318,456			294,751			273,655
Net income before taxes		195,637			208,401			216,256			196,272			168,980
Federal and state income taxes		44,001			45,905			47,864			39,681			36,122
Net income		151,636			162,496			168,392			156,591			132,858
Net income (loss) attributable to non-controlling interests		328			128			(37)			81			12
Net income attributable to BOK Financial Corporation shareholders	$	151,308		$	162,368		$	168,429		$	156,510		$	132,846
Average shares outstanding:
Basic		65,994,132			66,331,775			66,627,955			67,003,199			67,453,748
Diluted		65,994,132			66,331,775			66,627,955			67,004,623			67,455,172
Net income per share:
Basic	$	2.27		$	2.43		$	2.51		$	2.32		$	1.96
Diluted	$	2.27		$	2.43		$	2.51		$	2.32		$	1.96

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

	Three Months Ended
	Jun. 30, 2023			Mar. 31, 2023			Dec. 31, 2022			Sep. 30, 2022			Jun. 30, 2022
Capital:
Period-end shareholders' equity	$	4,863,854		$	4,874,786		$	4,682,649		$	4,509,934		$	4,737,339
Risk weighted assets	$	38,218,164		$	37,192,197		$	38,142,231		$	36,866,994		$	36,787,092
Risk-based capital ratios:
Common equity tier 1		12.13%			12.19%			11.69%			11.80%			11.61%
Tier 1		12.13%			12.20%			11.71%			11.82%			11.63%
Total capital		13.24%			13.21%			12.67%			12.81%			12.59%
Leverage ratio		9.75%			9.94%			9.91%			9.76%			9.12%
Tangible common equity ratio1		7.79%			8.46%			7.63%			7.96%			8.16%
Adjusted tangible common equity ratio1		7.49%			8.22%			7.36%			7.66%			8.10%
Common stock:
Book value per share	$	73.28		$	73.19		$	69.93		$	67.06		$	69.87
Tangible book value per share	$	56.50		$	56.42		$	53.19		$	50.34		$	53.22
Market value per share:
High	$	90.91		$	106.47		$	110.28		$	95.51		$	94.76
Low	$	74.40		$	80.00		$	88.46		$	69.82		$	74.03
Cash dividends paid	$	35,879		$	36,006		$	36,188		$	35,661		$	35,892
Dividend payout ratio		23.71%			22.18%			21.49%			22.79%			27.02%
Shares outstanding, net		66,369,208			66,600,833			66,958,634			67,254,383			67,806,005
Stock buy-back program:
Shares repurchased		266,000			447,071			314,406			548,034			294,084
Amount	$	22,366		$	44,100		$	32,429		$	49,980		$	24,404
Average price paid per share2	$	84.08		$	98.64		$	103.14		$	91.20		$	82.98
Performance ratios (quarter annualized):
Return on average assets		1.27%			1.43%			1.48%			1.38%			1.13%
Return on average equity		12.28%			13.61%			14.48%			13.01%			11.27%
Return on average tangible common equity1		15.86%			17.71%			19.14%			17.04%			14.81%
Net interest margin		3.00%			3.45%			3.54%			3.24%			2.76%
Efficiency ratio1,3		58.75%			56.79%			56.61%			57.33%			60.79%
Other data:
Tax equivalent interest	$	2,200		$	2,285		$	2,287		$	2,163		$	2,040
Net unrealized loss on available for sale securities	$	(898,906)		$	(741,508)		$	(865,553)		$	(935,788)		$	(522,812)
Mortgage banking:
Mortgage production revenue	$	(284)		$	(633)		$	(3,983)		$	(2,406)		$	(504)
Mortgage loans funded for sale	$	214,785		$	138,624		$	141,090		$	260,210		$	360,237
Add: current period-end outstanding commitments		55,031			71,693			45,492			75,779			106,004
Less: prior period end outstanding commitments		71,693			45,492			75,779			106,004			160,260
Total mortgage production volume	$	198,123		$	164,825		$	110,803		$	229,985		$	305,981
Mortgage loan refinances to mortgage loans funded for sale		8%			9%			10%			10%			19%
Realized margin on funded mortgage loans		(0.14)%			(1.25)%			(1.10)%			(0.41)%			0.88%
Production revenue as a percentage of production volume		(0.14)%			(0.38)%			(3.59)%			(1.05)%			(0.16)%
Mortgage servicing revenue	$	15,425		$	15,000		$	14,048		$	13,688		$	11,872
Average outstanding principal balance of mortgage loans serviced for others		20,807,044			21,121,319			18,923,078			19,070,221			17,336,596
Average mortgage servicing revenue rates		0.30%			0.29%			0.29%			0.28%			0.27%
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net	$	(8,099)		$	(1,711)		$	4,373		$	(17,027)		$	(13,639)
Loss on fair value option securities, net		(2,158)			(2,962)			(2,568)			(4,368)			(2,221)
Gain (loss) on economic hedge of mortgage servicing rights		(10,257)			(4,673)			1,805			(21,395)			(15,860)
Gain (loss) on changes in fair value of mortgage servicing rights		9,261			(6,059)			(2,904)			16,570			17,485
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue		(996)			(10,732)			(1,099)			(4,825)			1,625
Net interest revenue (expense) on fair value option securities4		(232)			187			(118)			29			275
Total economic benefit (cost) of changes in the fair value of mortgage servicing rights, net of economic hedges	$	(1,228)		$	(10,545)		$	(1,217)		$	(4,796)		$	1,900

¹ See Reconciliation of Non-GAAP Measures following.
² Excludes 1 percent excise tax on corporate stock repurchases.
³ Prior period ratios have been adjusted to be consistent with the current period presentation.
⁴ Actual interest earned on fair value option securities less internal transfer-priced cost of funds.

EXPLANATION AND RECONCILIATION OF NON-GAAP MEASURES - UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and share data)

	Three Months Ended
	Jun. 30, 2023			Mar. 31, 2023			Dec. 31, 2022			Sep. 30, 2022			Jun. 30, 2022
Reconciliation of tangible common equity ratio and adjusted tangible common equity ratio:
Total shareholders' equity	$	4,863,854		$	4,874,786		$	4,682,649		$	4,509,934		$	4,737,339
Less: Goodwill and intangible assets, net		1,113,995			1,117,438			1,120,880			1,124,582			1,128,493
Tangible common equity		3,749,859			3,757,348			3,561,769			3,385,352			3,608,846
Add: Unrealized gain (loss) on investment securities, net		(189,152)			(140,947)			(167,477)			(165,206)			(30,305)
Add: Tax effect on unrealized gain (loss) on investment securities, net		44,486			33,149			39,196			38,665			7,093
Adjusted tangible common equity	$	3,605,193		$	3,649,550		$	3,433,488		$	3,258,811		$	3,585,634
Total assets	$	49,237,920		$	45,524,122		$	47,790,642		$	43,645,446		$	45,377,072
Less: Goodwill and intangible assets, net		1,113,995			1,117,438			1,120,880			1,124,582			1,128,493
Tangible assets	$	48,123,925		$	44,406,684		$	46,669,762		$	42,520,864		$	44,248,579
Tangible common equity ratio		7.79%			8.46%			7.63%			7.96%			8.16%
Adjusted tangible common equity ratio		7.49%			8.22%			7.36%			7.66%			8.10%
Reconciliation of return on average tangible common equity:
Total average shareholders' equity	$	4,941,352		$	4,837,567		$	4,613,929		$	4,771,123		$	4,728,311
Less: Average goodwill and intangible assets, net		1,115,652			1,119,123			1,122,680			1,126,440			1,130,430
Average tangible common equity	$	3,825,700		$	3,718,444		$	3,491,249		$	3,644,683		$	3,597,881
Net Income		151,308			162,368			168,429			156,510			132,846
Return on average tangible common equity		15.86%			17.71%			19.14%			17.04%			14.81%
Reconciliation of pre-provision net revenue:
Net income before taxes	$	195,637		$	208,401		$	216,256		$	196,272		$	168,980
Provision for expected credit losses		17,000			16,000			15,000			15,000			-
Net income (loss) attributable to non-controlling interests		328			128			(37)			81			12
Pre-provision net revenue	$	212,309		$	224,273		$	231,293		$	211,191		$	168,968
Calculation of efficiency ratio:
Total other operating expense	$	318,673		$	305,812		$	318,456		$	294,751		$	273,655
Less: Amortization of intangible assets		3,474			3,391			3,736			3,943			4,049
Adjusted total other operating expense	$	315,199		$	302,421		$	314,720		$	290,808		$	269,606
Net interest revenue	$	322,261		$	352,348		$	352,626		$	316,325		$	274,018
Tax-equivalent adjustment		2,200			2,285			2,287			2,163			2,040
Tax-equivalent net interest revenue		324,461			354,633			354,913			318,488			276,058
Total other operating revenue		209,049			177,865			197,086			189,698			168,617
Less: Gain (loss) on available for sale securities, net		(3,010)			-			(3,988)			892			1,188
Adjusted revenue	$	536,520		$	532,498		$	555,987		$	507,294		$	443,487
Efficiency ratio		58.75%			56.79%			56.61%			57.33%			60.79%
Information on net interest revenue and net interest margin excluding trading activities:
Net interest revenue	$	322,261		$	352,348		$	352,626		$	316,325		$	274,018
Less: Trading activities net interest revenue		(3,461)			70			(860)			4,478			15,073
Net interest revenue excluding trading activities		325,722			352,278			353,486			311,847			258,945
Tax-equivalent adjustment		2,200			2,285			2,287			2,163			2,040
Tax-equivalent net interest revenue excluding trading activities	$	327,922		$	354,563		$	355,773		$	314,010		$	260,985
Average total earning assets	$	42,731,533		$	40,781,257		$	39,285,300		$	38,527,860		$	39,062,025
Less: Average trading activities interest-earning assets		4,274,803			3,031,969			3,086,985			3,178,068			4,166,954
Average interest-earning assets excluding trading activities	$	38,456,730		$	37,749,288		$	36,198,315		$	35,349,792		$	34,895,071
Net interest margin on average interest-earning assets		3.00%			3.45%			3.54%			3.24%			2.76%
Net interest margin on average trading activities interest-earning assets		(0.34)%			0.00%			(0.12)%			0.53%			1.31%
Net interest margin on average interest-earning assets excluding trading activities		3.36%			3.72%			3.84%			3.49%			2.95%
Explanation of Non-GAAP Measures

The tangible common equity ratio and return on average tangible common equity are primarily based on total shareholders' equity, which includes unrealized gains and losses on available for sale securities, less intangible assets and equity that does not benefit common shareholders. The adjusted tangible common equity ratio also includes unrealized gains and losses on the investment portfolio. These measures are valuable indicators of a financial institution's capital strength since they eliminate intangible assets from shareholders' equity and retain the effect of unrealized losses on securities and other components of accumulated other comprehensive income in shareholders' equity.

Pre-provision net revenue is a measure of revenue less expenses, and is calculated before provision for credit losses and income tax expense. This financial measure is frequently used by investors and analysts and enables them to assess a company's ability to generate earnings to cover credit losses through a credit cycle. It also provides an additional basis for comparing the results of operations between periods by isolating the impact of the provision for credit losses, which can vary significantly between periods.

The efficiency ratio measures the Company's ability to use its assets and manage its liabilities effectively in the current period. Prior to the second quarter of 2023, the efficiency ratio did not exclude amortization of intangible assets and only included tax-equivalent net interest revenue and fees and commissions as part of total revenue. All prior periods were adjusted to conform with the current methodology.

Net interest revenue and net interest margin excluding trading activities removes the effect of trading activities on these metrics allowing management and investors to assess the performance of the Company's core lending and deposit activities without the associated volatility from trading activities.

LOANS TREND - UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)

	Jun. 30, 2023			Mar. 31, 2023			Dec. 31, 2022			Sep. 30, 2022			Jun. 30, 2022
Commercial:
Healthcare	$	3,991,387		$	3,899,341		$	3,845,017		$	3,826,623		$	3,696,963
Services		3,585,169			3,563,702			3,431,521			3,280,925			3,421,493
Energy		3,508,752			3,398,057			3,424,790			3,371,588			3,393,072
General business		3,449,208			3,356,249			3,511,171			3,148,783			3,110,309
Total commercial		14,534,516			14,217,349			14,212,499			13,627,919			13,621,837
Commercial real estate:
Multifamily		1,502,971			1,363,881			1,212,883			1,126,700			878,565
Industrial		1,349,709			1,309,435			1,221,501			1,103,905			953,626
Office		1,005,660			1,045,700			1,053,331			1,086,615			1,100,115
Retail		617,886			618,264			620,518			635,021			637,304
Residential construction and land development		106,370			102,828			95,684			91,690			111,575
Other commercial real estate		388,205			375,208			402,860			429,980			424,963
Total commercial real estate		4,970,801			4,815,316			4,606,777			4,473,911			4,106,148
Loans to individuals:
Residential mortgage		1,993,690			1,926,027			1,890,784			1,851,836			1,784,729
Residential mortgages guaranteed by U.S. government agencies		186,170			224,753			245,940			262,466			293,838
Personal		1,552,482			1,566,608			1,601,150			1,574,325			1,484,596
Total loans to individuals		3,732,342			3,717,388			3,737,874			3,688,627			3,563,163
Total	$	23,237,659		$	22,750,053		$	22,557,150		$	21,790,457		$	21,291,148

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

	Jun. 30, 2023			Mar. 31, 2023			Dec. 31, 2022			Sep. 30, 2022			Jun. 30, 2022
Texas:
Commercial	$	7,223,820		$	7,103,166		$	6,878,618		$	6,644,890		$	6,645,698
Commercial real estate		1,748,796			1,675,831			1,555,508			1,448,590			1,339,452
Loans to individuals		974,911			992,343			982,700			970,459			934,856
Total Texas		9,947,527			9,771,340			9,416,826			9,063,939			8,920,006
Oklahoma:
Commercial		3,251,547			3,178,934			3,382,577			3,108,608			3,139,093
Commercial real estate		573,559			574,708			582,109			608,856			576,458
Loans to individuals		2,079,311			2,049,472			2,077,124			2,054,362			1,982,247
Total Oklahoma		5,904,417			5,803,114			6,041,810			5,771,826			5,697,798
Colorado:
Commercial		2,179,473			2,148,066			2,149,199			2,117,181			2,082,688
Commercial real estate		683,973			646,537			613,912			565,057			473,231
Loans to individuals		223,200			231,368			241,902			237,981			234,105
Total Colorado		3,086,646			3,025,971			3,005,013			2,920,219			2,790,024
Arizona:
Commercial		1,177,778			1,115,973			1,124,289			1,103,000			1,085,401
Commercial real estate		926,750			881,465			860,947			850,319			766,767
Loans to individuals		242,102			240,556			229,872			225,981			212,870
Total Arizona		2,346,630			2,237,994			2,215,108			2,179,300			2,065,038
Kansas/Missouri:
Commercial		309,148			318,782			310,715			307,456			338,910
Commercial real estate		516,299			489,951			479,968			466,955			458,157
Loans to individuals		138,960			129,580			131,307			125,039			125,584
Total Kansas/Missouri		964,407			938,313			921,990			899,450			922,651
New Mexico:
Commercial		287,443			280,945			263,349			258,754			253,825
Commercial real estate		425,472			449,715			417,008			426,367			431,606
Loans to individuals		64,803			65,770			67,163			68,095			67,026
Total New Mexico		777,718			796,430			747,520			753,216			752,457
Arkansas:
Commercial		105,307			71,483			103,752			88,030			76,222
Commercial real estate		95,952			97,109			97,325			107,767			60,477
Loans to individuals		9,055			8,299			7,806			6,710			6,475
Total Arkansas		210,314			176,891			208,883			202,507			143,174
TOTAL BOK FINANCIAL	$	23,237,659		$	22,750,053		$	22,557,150		$	21,790,457		$	21,291,148

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)

	Jun. 30, 2023			Mar. 31, 2023			Dec. 31, 2022			Sep. 30, 2022			Jun. 30, 2022
Oklahoma:
Demand	$	4,273,136		$	4,369,944		$	4,585,963		$	5,143,405		$	5,422,593
Interest-bearing:
Transaction		9,979,534			9,468,100			9,475,528			9,619,419			10,240,378
Savings		531,536			564,829			555,407			558,256			561,413
Time		1,945,916			942,787			794,002			776,306			678,127
Total interest-bearing		12,456,986			10,975,716			10,824,937			10,953,981			11,479,918
Total Oklahoma		16,730,122			15,345,660			15,410,900			16,097,386			16,902,511
Texas:
Demand		2,876,568			3,154,789			3,873,759			4,609,255			4,670,535
Interest-bearing:
Transaction		4,532,093			4,366,932			4,878,482			4,781,920			5,344,326
Savings		162,704			175,012			178,356			179,049			183,708
Time		377,424			321,774			356,538			343,015			333,038
Total interest-bearing		5,072,221			4,863,718			5,413,376			5,303,984			5,861,072
Total Texas		7,948,789			8,018,507			9,287,135			9,913,239			10,531,607
Colorado:
Demand		1,726,130			1,869,194			2,462,891			2,510,179			2,799,798
Interest-bearing:
Transaction		1,825,295			2,126,435			2,123,218			2,221,796			2,277,563
Savings		66,968			72,548			77,961			80,542			82,976
Time		148,840			128,583			135,043			151,064			160,795
Total interest-bearing		2,041,103			2,327,566			2,336,222			2,453,402			2,521,334
Total Colorado		3,767,233			4,196,760			4,799,113			4,963,581			5,321,132
New Mexico:
Demand		912,218			997,364			1,141,958			1,296,410			1,347,600
Interest-bearing:
Transaction		712,541			674,328			691,915			717,492			845,442
Savings		102,729			111,771			112,430			113,056			115,660
Time		179,548			137,875			133,625			142,856			148,532
Total interest-bearing		994,818			923,974			937,970			973,404			1,109,634
Total New Mexico		1,907,036			1,921,338			2,079,928			2,269,814			2,457,234
Arizona:
Demand		592,144			780,051			844,327			903,296			901,543
Interest-bearing:
Transaction		800,970			687,527			739,628			788,142			792,269
Savings		14,489			16,993			16,496			18,258			17,999
Time		31,248			27,755			24,846			26,704			28,774
Total interest-bearing		846,707			732,275			780,970			833,104			839,042
Total Arizona		1,438,851			1,512,326			1,625,297			1,736,400			1,740,585
Kansas/Missouri:
Demand		363,534			393,321			436,259			479,459			537,143
Interest-bearing:
Transaction		1,014,247			1,040,009			694,163			747,981			913,921
Savings		16,316			18,292			20,678			19,375			19,943
Time		16,176			13,061			12,963			13,258			13,962
Total interest-bearing		1,046,739			1,071,362			727,804			780,614			947,826
Total Kansas/Missouri		1,410,273			1,464,683			1,164,063			1,260,073			1,484,969
Arkansas:
Demand		38,818			42,312			50,180			43,111			41,084
Interest-bearing:
Transaction		43,301			71,158			56,181			123,273			130,300
Savings		3,195			3,228			3,083			3,098			3,125
Time		7,225			4,775			4,825			5,940			6,371
Total interest-bearing		53,721			79,161			64,089			132,311			139,796
Total Arkansas		92,539			121,473			114,269			175,422			180,880
TOTAL BOK FINANCIAL	$	33,294,843		$	32,580,747		$	34,480,705		$	36,415,915		$	38,618,918

NET INTEREST MARGIN TREND - UNAUDITED
BOK FINANCIAL CORPORATION

	Three Months Ended
	Jun. 30, 2023			Mar. 31, 2023			Dec. 31, 2022			Sep. 30, 2022			Jun. 30, 2022
TAX-EQUIVALENT ASSETS YIELDS
Interest-bearing cash and cash equivalents	5.41	%		4.28	%		4.06	%		1.87	%		0.83	%
Trading securities	4.50	%		4.52	%		3.70	%		2.72	%		2.00	%
Investment securities, net of allowance	1.44	%		1.46	%		1.46	%		1.42	%		2.35	%
Available for sale securities	3.00	%		2.87	%		2.54	%		2.21	%		1.84	%
Fair value option securities	5.07	%		5.17	%		4.40	%		2.98	%		2.92	%
Restricted equity securities	7.31	%		7.34	%		5.70	%		6.23	%		3.30	%
Residential mortgage loans held for sale	5.85	%		5.79	%		5.56	%		5.05	%		4.22	%
Loans	7.03	%		6.67	%		5.99	%		4.89	%		3.92	%
Allowance for loan losses
Loans, net of allowance	7.10	%		6.74	%		6.06	%		4.94	%		3.96	%
Total tax-equivalent yield on earning assets	5.29	%		5.06	%		4.53	%		3.71	%		2.96	%
COST OF INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest-bearing transaction	2.60	%		1.91	%		1.28	%		0.63	%		0.22	%
Savings	0.21	%		0.10	%		0.08	%		0.05	%		0.03	%
Time	3.27	%		1.95	%		1.25	%		0.93	%		0.68	%
Total interest-bearing deposits	2.56	%		1.83	%		1.22	%		0.63	%		0.24	%
Funds purchased and repurchase agreements	4.58	%		3.33	%		2.05	%		0.72	%		0.53	%
Other borrowings	5.12	%		4.73	%		4.08	%		2.33	%		1.01	%
Subordinated debt	6.79	%		6.40	%		6.16	%		5.07	%		4.50	%
Total cost of interest-bearing liabilities	3.27	%		2.43	%		1.57	%		0.76	%		0.31	%
Tax-equivalent net interest revenue spread	2.02	%		2.63	%		2.96	%		2.95	%		2.65	%
Effect of noninterest-bearing funding sources and other	0.98	%		0.82	%		0.58	%		0.29	%		0.11	%
Tax-equivalent net interest margin	3.00	%		3.45	%		3.54	%		3.24	%		2.76	%

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
	Jun. 30, 2023			Mar. 31, 2023			Dec. 31, 2022			Sep. 30, 2022			Jun. 30, 2022
Nonperforming assets:
Nonaccruing loans:
Commercial:
Healthcare	$	36,753		$	37,247		$	41,034		$	41,438		$	14,886
Services		4,541			8,097			16,228			27,315			15,259
Energy		20,037			127			1,399			4,164			20,924
General business		11,946			8,961			1,636			2,753			3,539
Total commercial		73,277			54,432			60,297			75,670			54,608
Commercial real estate		17,395			21,668			16,570			7,971			10,939
Loans to individuals:
Permanent mortgage		29,973			29,693			29,791			30,066			30,460
Permanent mortgage guaranteed by U.S. government agencies		11,473			14,302			15,005			16,957			18,000
Personal		133			200			134			136			132
Total loans to individuals		41,579			44,195			44,930			47,159			48,592
Total nonaccruing loans	$	132,251		$	120,295		$	121,797		$	130,800		$	114,139
Accruing renegotiated loans guaranteed by U.S. government agencies1		-			-			163,535			176,022			196,420
Real estate and other repossessed assets		4,227			12,651			14,304			29,676			22,221
Total nonperforming assets	$	136,478		$	132,946		$	299,636		$	336,498		$	332,780
Total nonperforming assets excluding those guaranteed by U.S. government agencies	$	125,005		$	118,644		$	121,096		$	143,519		$	118,360
Accruing loans 90 days past due2	$	220		$	76		$	510		$	120		$	3
Gross charge-offs	$	8,049		$	3,667		$	17,807		$	1,766		$	1,368
Recoveries		(1,346)			(2,898)			(2,301)			(1,309)			(2,167)
Net charge-offs (recoveries)	$	6,703		$	769		$	15,506		$	457		$	(799)
Provision for loan losses	$	19,957		$	14,525		$	9,442		$	1,111		$	(6,158)
Provision for credit losses from off-balance sheet unfunded loan commitments		(3,003)			2,024			4,609			14,060			6,005
Provision for expected credit losses from mortgage banking activities		78			(488)			1,003			(66)			69
Provision for credit losses related to held-to maturity (investment) securities portfolio		(32)			(61)			(54)			(105)			84
Total provision for credit losses	$	17,000		$	16,000		$	15,000		$	15,000		$	-
Allowance for loan losses to period end loans		1.13%			1.10%			1.04%			1.11%			1.13%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans		1.39%			1.37%			1.31%			1.37%			1.33%
Nonperforming assets to period end loans and repossessed assets		0.59%			0.58%			1.33%			1.54%			1.56%
Net charge-offs (annualized) to average loans		0.12%			0.01%			0.28%			0.01%			(0.02)%
Allowance for loan losses to nonaccruing loans2		217.52%			235.36%			220.71%			212.37%			250.80%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to nonaccruing loans2		267.15%			294.74%			277.76%			261.83%			294.74%

¹ The Company adopted FASB Accounting Standards Update No. 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, which eliminates designation of these loans as troubled debt restructurings effective January 1, 2023.

² Excludes residential mortgage loans guaranteed by agencies of the U.S. government.

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

	Three Months Ended									2Q23 vs 1Q23					2Q23 vs 2Q22
	Jun. 30, 2023			Mar. 31, 2023			Jun. 30, 2022			$ change			% change		$ change			% change
Commercial Banking
Net interest revenue	$	260,099		$	267,157		$	166,543		$	(7,058)		(2.6)		$	93,556		56.2%
Fees and commissions revenue		59,704			55,835			59,881			3,869		6.9%			(177)		(0.3)%
Combined net interest and fee revenue		319,803			322,992			226,424			(3,189)		(1.0)%			93,379		41.2%
Other operating expense		77,479			73,134			69,631			4,345		5.9%			7,848		11.3%
Corporate expense allocations		21,404			17,718			16,617			3,686		20.8%			4,787		28.8%
Net income		170,179			177,306			105,115			(7,127)		(4.0)%			65,064		61.9%
Average assets		28,170,869			28,162,934			29,269,712			7,935		-%			(1,098,843)		(3.8)%
Average loans		19,158,984			18,750,426			17,336,841			408,558		2.2%			1,822,143		10.5%
Average deposits		14,822,093			15,861,285			18,933,766			(1,039,192)		(6.6)%			(4,111,673)		(21.7)%
Consumer Banking
Net interest revenue	$	113,391		$	109,381		$	33,786		$	4,010		3.7%		$	79,605		235.6%
Fees and commissions revenue		32,361			30,581			30,101			1,780		5.8%			2,260		7.5%
Combined net interest and fee revenue		145,752			139,962			63,887			5,790		4.1%			81,865		128.1%
Other operating expense		52,340			50,198			52,660			2,142		4.3%			(320)		(0.6)%
Corporate expense allocations		12,318			11,622			10,120			696		6.0%			2,198		21.7%
Net income		60,332			50,683			1,239			9,649		19.0%			59,093		4,769.4%
Average assets		9,597,723			9,934,511			10,338,191			(336,788)		(3.4)%			(740,468)		(7.2)%
Average loans		1,762,568			1,747,237			1,669,830			15,331		0.9%			92,738		5.6%
Average deposits		7,986,674			8,248,541			8,876,469			(261,867)		(3.2)%			(889,795)		(10.0)%
Wealth Management
Net interest revenue	$	49,352		$	54,106		$	37,747		$	(4,754)		(8.8)%		$	11,605		30.7%
Fees and commissions revenue		123,050			108,911			86,771			14,139		13.0%			36,279		41.8%
Combined net interest and fee revenue		172,402			163,017			124,518			9,385		5.8%			47,884		38.5%
Other operating expense		84,859			82,039			76,393			2,820		3.4%			8,466		11.1%
Corporate expense allocations		12,574			12,360			12,503			214		1.7%			71		0.6%
Net income		57,317			52,447			27,287			4,870		9.3%			30,030		110.1%
Average assets		12,949,258			11,663,096			16,902,721			1,286,162		11.0%			(3,953,463)		(23.4)%
Average loans		2,230,906			2,201,622			2,157,771			29,284		1.3%			73,135		3.4%
Average deposits		7,544,143			7,432,413			8,482,785			111,730		1.5%			(938,642)		(11.1)%
Fiduciary assets		57,873,868			57,457,925			55,972,584			415,943		0.7%			1,901,284		3.4%
Assets under management or administration		103,618,940			102,310,126			95,981,289			1,308,814		1.3%			7,637,651		8.0%

SOURCE: BOK Financial Corp

View source version on accesswire.com:
https://www.accesswire.com/770335/BOK-Financial-Corporation-Reports-Quarterly-Earnings-of-151-Million-or-227-Per-Share-in-the-Second-Quarter

FAQ

What are BOK Financial's Q2 2023 financial results?

BOK Financial reported a net income of $151.3 million, net interest revenue of $322.3 million, and total deposits of $33.3 billion.

What is the company's approach to growth?

BOK Financial is taking advantage of market and economic uncertainty to prudently grow, with a disciplined, long-view approach.

What is the company's provision for credit losses?

The company recorded a $17.0 million provision for expected credit losses in Q2 2023, primarily related to higher assumed commercial real estate vacancy rates and overall loan portfolio growth.