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

Rhea-AI Summary

BOK Financial Corporation (BOKF) reported strong financial results for Q1 2023, with net income of $162.4 million or $2.43 per diluted share. Net interest revenue remained stable at $352.3 million, while net interest margin decreased to 3.45% due to rising funding costs. Non-interest income saw a slight decline, primarily due to a $10.6 million drop in brokerage and trading revenue amid market volatility. Operating expenses decreased by $12.6 million to $305.8 million. Loans increased to $22.8 billion, driven by commercial real estate growth. BOKF recorded a provision for expected credit losses of $16.0 million amid economic uncertainties. The company's common equity Tier 1 capital ratio improved to 12.19%. Additionally, 447,071 shares were repurchased at an average price of $98.64. BOKF continues to navigate a volatile market while balancing risk management and growth.

Positive

• Net income of $162.4 million or $2.43 per share for Q1 2023.
• Stable net interest revenue at $352.3 million.
• Loan growth of $193 million to $22.8 billion, primarily in commercial real estate.
• Decrease in operating expenses by $12.6 million to $305.8 million.
• Improved common equity Tier 1 capital ratio at 12.19%.
• Share repurchase of 447,071 shares at an average price of $98.64.

Negative

• Net interest margin decreased to 3.45% from 3.54%.
• Fees and commissions revenue declined by $7.6 million, including a $10.6 million drop in brokerage and trading revenue.

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

CEO Commentary

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

First Quarter 2023 Financial Highlights

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

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

First Quarter 2023 Segment Highlights

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

Net Interest Revenue

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

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

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

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

Fees and Commissions Revenue

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

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

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

Operating Expense

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

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

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

Loans, Deposits and Capital

Loans

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

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

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

Services sector loan balances increased $132 million to $3.6 billion or 16 percent of total loans. Services loans consist of a large number of loans to a variety of businesses, including Native American tribal and state and local municipal government entities, Native American tribal casino operations, foundations and not-for-profit organizations, educational services and specialty trade contractors.

Healthcare sector loan balances increased $54 million, totaling $3.9 billion or 17 percent of total loans. Our healthcare sector loans primarily consist of $3.2 billion of senior housing and care facilities, including independent living, assisted living and skilled nursing. Generally, we loan to borrowers with a portfolio of multiple facilities, which serves to help diversify risks specific to a single facility.

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

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

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

Liquidity and Capital

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

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

The company's common equity Tier 1 capital ratio was 12.19 percent at March 31, 2023. In addition, the company's Tier 1 capital ratio was 12.20 percent, total capital ratio was 13.21 percent, and leverage ratio was 9.94 percent at March 31, 2023. At the beginning of 2020, we elected to delay the regulatory capital impact of the transition of the allowance for credit losses from the incurred loss methodology to CECL for two years, followed by a three-year transition period. This election added 6 basis points to the company's common equity tier 1 capital ratio at March 31, 2023. At December 31, 2022, the company's common equity Tier 1 capital ratio was 11.69 percent, Tier 1 capital ratio was 11.71 percent, total capital ratio was 12.67 percent, and leverage ratio was 9.91 percent.

The company's tangible common equity ratio, a non-GAAP measure, was 8.46 percent at March 31, 2023 and 7.63 percent at December 31, 2022. The tangible common equity ratio is primarily based on total shareholders' equity, which includes unrealized gains and losses on available for sale securities. Adjusted for all unrealized securities portfolio gains and losses, including those in the investment portfolio, the tangible common equity ratio would be 8.22 percent. The company has elected to exclude unrealized gains and losses from available for sale securities from its calculation of Tier 1 capital for regulatory capital purposes, consistent with the treatment under the previous capital rules.

The company repurchased 447,071 shares of common stock at an average price paid of $98.64 a share in the first quarter of 2023. We view share buybacks opportunistically, but within the context of maintaining our strong capital position.

Credit Quality

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

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

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

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

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

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

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

Potential problem loans, which are defined as performing loans that, based on known information, cause management concern as to the borrowers' ability to continue to perform, totaled $137 million at March 31, 2023, compared to $94 million at December 31, 2022. An increase in potential problem general business and services loans was offset by a decrease in energy, healthcare and commercial real estate potential problem loans.

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

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

Securities and Derivatives

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

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

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

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

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

Conference Call and Webcast

The company will hold a conference call at 9 a.m. Central time on Wednesday, April 26, 2023 to discuss the financial results with investors. The live audio webcast and presentation slides will be available on the company’s website at www.bokf.com. The conference call can also be accessed by dialing 1-201-689-8471. A conference call and webcast replay will also be available shortly after conclusion of the live call at www.bokf.com or by dialing 1-844-512-2921 and referencing conference ID # 13737852.

About BOK Financial Corporation

BOK Financial Corporation is a $46 billion regional financial services company headquartered in Tulsa, Oklahoma with $102 billion in assets under management or administration. The company's stock is publicly traded on NASDAQ under the Global Select market listings (BOKF). BOK Financial Corporation's holdings include BOKF, NA; BOK Financial Securities, Inc., BOK Financial Private Wealth, Inc. and BOK Financial Insurance, Inc. BOKF, NA's holdings include TransFund, Cavanal Hill Investment Management, Inc. and BOK Financial Asset Management, Inc. BOKF, NA operates banking divisions across eight states as: Bank of Albuquerque; Bank of Oklahoma; Bank of Texas; and BOK Financial in Arizona, Arkansas, Colorado, Kansas and Missouri; as well as having limited purpose offices in Nebraska, Wisconsin and Connecticut. Through its subsidiaries, BOK Financial Corporation provides commercial and consumer banking, brokerage trading, investment, trust and insurance services, mortgage origination and servicing, and an electronic funds transfer network. For more information, visit www.bokf.com.

The company will continue to evaluate critical assumptions and estimates, such as the appropriateness of the allowance for credit losses and asset impairment as of March 31, 2023 through the date its financial statements are filed with the Securities and Exchange Commission and will adjust amounts reported if necessary.

This news release contains forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about BOK Financial Corporation, the financial services industry, the economy generally and the expected or potential impact of the novel coronavirus (COVID-19) pandemic, and the related responses of the government, consumers, and others, on our business, financial condition and results of operations. Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “plans,” “projects,” “will,” “intends,” variations of such words and similar expressions are intended to identify such forward-looking statements. Management judgments relating to and discussion of the provision and allowance for credit losses, allowance for uncertain tax positions, accruals for loss contingencies and valuation of mortgage servicing rights involve judgments as to expected events and are inherently forward-looking statements. Assessments that acquisitions and growth endeavors will be profitable are necessary statements of belief as to the outcome of future events based in part on information provided by others which BOK Financial has not independently verified. These various forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions which are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what is expected, implied or forecasted in such forward-looking statements. Internal and external factors that might cause such a difference include, but are not limited to changes in government, consumer or business responses to, and ability to treat or prevent further outbreak of the COVID-19 pandemic, changes in commodity prices, interest rates and interest rate relationships, inflation, demand for products and services, the degree of competition by traditional and nontraditional competitors, changes in banking regulations, tax laws, prices, levies and assessments, the impact of technological advances, and trends in customer behavior as well as their ability to repay loans. BOK Financial Corporation and its affiliates undertake no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events, or otherwise.

BALANCE SHEETS – UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)

	Mar. 31, 2023				Dec. 31, 2022
ASSETS
Cash and due from banks	$	792,371			$	943,810
Interest-bearing cash and cash equivalents		571,613				457,906
Trading securities		2,294,358				4,464,161
Investment securities, net of allowance		2,448,136				2,513,687
Available for sale securities		11,937,841				11,493,860
Fair value option securities		326,390				296,590
Restricted equity securities		288,181				299,651
Residential mortgage loans held for sale		74,175				75,272
Loans:
Commercial		14,217,349				14,212,499
Commercial real estate		4,815,316				4,606,777
Loans to individuals		3,717,388				3,737,874
Total loans		22,750,053				22,557,150
Allowance for loan losses		(249,460	)			(235,704	)
Loans, net of allowance		22,500,593				22,321,446
Premises and equipment, net		623,112				565,175
Receivables		265,680				273,815
Goodwill		1,044,749				1,044,749
Intangible assets, net		72,689				76,131
Mortgage servicing rights		299,803				277,608
Real estate and other repossessed assets, net		12,651				14,304
Derivative contracts, net		394,291				880,343
Cash surrender value of bank-owned life insurance		408,614				406,751
Receivable on unsettled securities sales		18,186				31,004
Other assets		1,150,689				1,354,379
TOTAL ASSETS	$	45,524,122			$	47,790,642
LIABILITIES AND EQUITY
Deposits:
Demand	$	11,606,975			$	13,395,337
Interest-bearing transaction		18,434,489				18,659,115
Savings		962,673				964,411
Time		1,576,610				1,461,842
Total deposits		32,580,747				34,480,705
Funds purchased and repurchase agreements		1,599,724				2,270,377
Other borrowings		4,735,885				4,736,908
Subordinated debentures		131,148				131,205
Accrued interest, taxes and expense		268,449				296,870
Due on unsettled securities purchases		262,492				147,470
Derivative contracts, net		510,483				554,900
Other liabilities		557,167				484,849
TOTAL LIABILITIES		40,646,095				43,103,284
Shareholders' equity:
Capital, surplus and retained earnings		5,603,340				5,519,604
Accumulated other comprehensive loss		(728,554	)			(836,955	)
TOTAL SHAREHOLDERS' EQUITY		4,874,786				4,682,649
Non-controlling interests		3,241				4,709
TOTAL EQUITY		4,878,027				4,687,358
TOTAL LIABILITIES AND EQUITY	$	45,524,122			$	47,790,642

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

	Three Months Ended
	Mar. 31, 2023				Dec. 31, 2022				Sep. 30, 2022				June 30, 2022				Mar. 31, 2022
ASSETS
Interest-bearing cash and cash equivalents	$	616,596			$	568,307			$	748,263			$	843,619			$	1,050,409
Trading securities		3,031,969				3,086,985				3,178,068				4,166,954				8,537,390
Investment securities, net of allowance		2,473,796				2,535,305				2,593,989				610,983				195,198
Available for sale securities		11,738,693				10,953,851				10,306,257				12,258,072				13,092,422
Fair value option securities		300,372				92,012				36,846				54,832				75,539
Restricted equity securities		316,724				216,673				173,656				167,732				164,484
Residential mortgage loans held for sale		65,769				98,613				132,685				148,183				179,697
Loans:
Commercial		14,046,237				13,846,339				13,508,325				13,472,488				12,887,816
Commercial real estate		4,757,362				4,488,091				4,434,650				4,061,129				4,059,148
Loans to individuals		3,672,648				3,641,574				3,656,257				3,524,097				3,516,698
Total loans		22,476,247				21,976,004				21,599,232				21,057,714				20,463,662
Allowance for loan losses		(238,909	)			(242,450	)			(241,136	)			(246,064	)			(254,191	)
Loans, net of allowance		22,237,338				21,733,554				21,358,096				20,811,650				20,209,471
Total earning assets		40,781,257				39,285,300				38,527,860				39,062,025				43,504,610
Cash and due from banks		857,771				865,796				821,801				822,599				790,440
Derivative contracts, net		546,018				1,239,717				2,019,905				3,051,429				2,126,282
Cash surrender value of bank-owned life insurance		408,124				406,826				410,667				408,489				406,379
Receivable on unsettled securities sales		177,312				194,996				219,113				457,165				375,616
Other assets		3,211,986				3,216,983				3,119,856				3,486,691				3,357,747
TOTAL ASSETS	$	45,982,468			$	45,209,618			$	45,119,202			$	47,288,398			$	50,561,074
LIABILITIES AND EQUITY
Deposits:
Demand	$	12,406,408			$	14,176,189			$	15,105,305			$	15,202,597			$	15,062,282
Interest-bearing transaction		18,639,900				18,898,315				19,556,806				21,037,294				22,763,479
Savings		958,443				969,275				978,596				981,493				947,407
Time		1,477,720				1,417,606				1,409,069				1,373,036				1,589,039
Total deposits		33,482,471				35,461,385				37,049,776				38,594,420				40,362,207
Funds purchased and repurchase agreements		1,759,237				1,046,447				800,759				1,224,134				2,004,466
Other borrowings		4,512,280				2,523,195				1,528,887				1,301,358				1,148,440
Subordinated debentures		131,166				131,180				131,199				131,219				131,228
Derivative contracts, net		428,023				445,105				105,221				535,574				682,435
Due on unsettled securities purchases		316,738				575,957				331,428				380,332				519,097
Other liabilities		511,530				408,029				396,510				389,031				565,350
TOTAL LIABILITIES		41,141,445				40,591,298				40,343,780				42,556,068				45,413,223
Total equity		4,841,023				4,618,320				4,775,422				4,732,330				5,147,851
TOTAL LIABILITIES AND EQUITY	$	45,982,468			$	45,209,618			$	45,119,202			$	47,288,398			$	50,561,074

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

	Three Months Ended
	March 31,
		2023				2022
Interest revenue	$	516,729			$	283,099
Interest expense		164,381				14,688
Net interest revenue		352,348				268,411
Provision for credit losses		16,000				—
Net interest revenue after provision for credit losses		336,348				268,411
Other operating revenue:
Brokerage and trading revenue		52,396				(27,079	)
Transaction card revenue		25,621				24,216
Fiduciary and asset management revenue		50,657				46,399
Deposit service charges and fees		25,968				27,004
Mortgage banking revenue		14,367				16,650
Other revenue		16,970				10,445
Total fees and commissions		185,979				97,635
Other gains (losses), net		2,251				(1,644	)
Loss on derivatives, net		(1,344	)			(46,981	)
Loss on fair value option securities, net		(2,962	)			(11,201	)
Change in fair value of mortgage servicing rights		(6,059	)			49,110
Gain on available for sale securities, net		—				937
Total other operating revenue		177,865				87,856
Other operating expense:
Personnel		182,145				159,228
Business promotion		8,569				6,513
Professional fees and services		13,048				11,413
Net occupancy and equipment		28,459				30,855
Insurance		7,315				4,283
Data processing and communications		44,802				39,836
Printing, postage and supplies		3,893				3,689
Amortization of intangible assets		3,391				3,964
Mortgage banking costs		5,782				7,877
Other expense		8,408				9,960
Total other operating expense		305,812				277,618
Net income before taxes		208,401				78,649
Federal and state income taxes		45,905				16,197
Net income		162,496				62,452
Net income (loss) attributable to non-controlling interests		128				(36	)
Net income attributable to BOK Financial Corporation shareholders	$	162,368			$	62,488
Average shares outstanding:
Basic		66,331,775				67,812,400
Diluted		66,331,775				67,813,851
Net income per share:
Basic	$	2.43			$	0.91
Diluted	$	2.43			$	0.91

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

	Three Months Ended
	Mar. 31, 2023				Dec. 31, 2022				Sep. 30, 2022				June 30, 2022				Mar. 31, 2022
Interest revenue	$	516,729			$	451,606			$	363,150			$	294,247			$	283,099
Interest expense		164,381				98,980				46,825				20,229				14,688
Net interest revenue		352,348				352,626				316,325				274,018				268,411
Provision for credit losses		16,000				15,000				15,000				—				—
Net interest revenue after provision for credit losses		336,348				337,626				301,325				274,018				268,411
Other operating revenue:
Brokerage and trading revenue		52,396				63,008				61,006				44,043				(27,079	)
Transaction card revenue		25,621				27,136				25,974				26,940				24,216
Fiduciary and asset management revenue		50,657				49,899				50,190				49,838				46,399
Deposit service charges and fees		25,968				26,429				28,703				28,500				27,004
Mortgage banking revenue		14,367				10,065				11,282				11,368				16,650
Other revenue		16,970				17,034				15,479				12,684				10,445
Total fees and commissions		185,979				193,571				192,634				173,373				97,635
Other gains (losses), net		2,251				8,427				979				(7,639	)			(1,644	)
Gain (loss) on derivatives, net		(1,344	)			4,548				(17,009	)			(13,569	)			(46,981	)
Loss on fair value option securities, net		(2,962	)			(2,568	)			(4,368	)			(2,221	)			(11,201	)
Change in fair value of mortgage servicing rights		(6,059	)			(2,904	)			16,570				17,485				49,110
Gain (loss) on available for sale securities, net		—				(3,988	)			892				1,188				937
Total other operating revenue		177,865				197,086				189,698				168,617				87,856
Other operating expense:
Personnel		182,145				186,419				170,348				154,923				159,228
Business promotion		8,569				7,470				6,127				6,325				6,513
Charitable contributions to BOKF Foundation		—				2,500				—				—				—
Professional fees and services		13,048				18,365				14,089				12,475				11,413
Net occupancy and equipment		28,459				29,227				29,296				27,489				30,855
Insurance		7,315				4,677				4,306				4,728				4,283
Data processing and communications		44,802				43,048				41,743				41,280				39,836
Printing, postage and supplies		3,893				3,890				4,349				3,929				3,689
Amortization of intangible assets		3,391				3,736				3,943				4,049				3,964
Mortgage banking costs		5,782				9,016				9,504				9,437				7,877
Other expense		8,408				10,108				11,046				9,020				9,960
Total other operating expense		305,812				318,456				294,751				273,655				277,618
Net income before taxes		208,401				216,256				196,272				168,980				78,649
Federal and state income taxes		45,905				47,864				39,681				36,122				16,197
Net income		162,496				168,392				156,591				132,858				62,452
Net income (loss) attributable to non-controlling interests		128				(37	)			81				12				(36	)
Net income attributable to BOK Financial Corporation shareholders	$	162,368			$	168,429			$	156,510			$	132,846			$	62,488
Average shares outstanding:
Basic		66,331,775				66,627,955				67,003,199				67,453,748				67,812,400
Diluted		66,331,775				66,627,955				67,004,623				67,455,172				67,813,851
Net income per share:
Basic	$	2.43			$	2.51			$	2.32			$	1.96			$	0.91
Diluted	$	2.43			$	2.51			$	2.32			$	1.96			$	0.91

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

	Three Months Ended
	Mar. 31, 2023				Dec. 31, 2022				Sep. 30, 2022				June 30, 2022				Mar. 31, 2022
Capital:
Period-end shareholders' equity	$	4,874,786			$	4,682,649			$	4,509,934			$	4,737,339			$	4,849,582
Risk weighted assets	$	37,192,197			$	38,142,231			$	36,866,994			$	36,787,092			$	37,160,258
Risk-based capital ratios:
Common equity tier 1		12.19	%			11.69	%			11.80	%			11.61	%			11.30	%
Tier 1		12.20	%			11.71	%			11.82	%			11.63	%			11.31	%
Total capital		13.21	%			12.67	%			12.81	%			12.59	%			12.25	%
Leverage ratio		9.94	%			9.91	%			9.76	%			9.12	%			8.47	%
Tangible common equity ratio1		8.46	%			7.63	%			7.96	%			8.16	%			8.13	%
Adjusted tangible common equity ratio1		8.22	%			7.36	%			7.66	%			8.10	%			8.15	%
Common stock:
Book value per share	$	73.19			$	69.93			$	67.06			$	69.87			$	71.21
Tangible book value per share	$	56.42			$	53.19			$	50.34			$	53.22			$	54.58
Market value per share:
High	$	106.47			$	110.28			$	95.51			$	94.76			$	119.59
Low	$	80.00			$	88.46			$	69.82			$	74.03			$	93.76
Cash dividends paid	$	36,006			$	36,188			$	35,661			$	35,892			$	36,093
Dividend payout ratio		22.18	%			21.49	%			22.79	%			27.02	%			57.76	%
Shares outstanding, net		66,600,833				66,958,634				67,254,383				67,806,005				68,104,043
Stock buy-back program:
Shares repurchased		447,071				314,406				548,034				294,084				475,877
Amount	$	44,100			$	32,429			$	49,980			$	24,404			$	48,074
Average price paid per share2	$	98.64			$	103.14			$	91.20			$	82.98			$	101.02
Performance ratios (quarter annualized):
Return on average assets		1.43	%			1.48	%			1.38	%			1.13	%			0.50	%
Return on average equity		13.61	%			14.48	%			13.01	%			11.27	%			4.93	%
Net interest margin		3.45	%			3.54	%			3.24	%			2.76	%			2.44	%
Efficiency ratio		56.38	%			57.87	%			57.35	%			60.65	%			75.07	%
Reconciliation of non-GAAP measures:
1 Tangible common equity ratio and adjusted tangible common equity ratio:
Total shareholders' equity	$	4,874,786			$	4,682,649			$	4,509,934			$	4,737,339			$	4,849,582
Less: Goodwill and intangible assets, net		1,117,438				1,120,880				1,124,582				1,128,493				1,132,510
Tangible common equity		3,757,348				3,561,769				3,385,352				3,608,846				3,717,072
Add: Unrealized gain (loss) on investment securities, net		(140,947	)			(167,477	)			(165,206	)			(30,305	)			6,778
Add: Tax effect on unrealized gain (loss) on investment securities, net		33,149				39,196				38,665				7,093				(1,586	)
Adjusted tangible common equity	$	3,649,550			$	3,433,488			$	3,258,811			$	3,585,634			$	3,722,264
Total assets	$	45,524,122			$	47,790,642			$	43,645,446			$	45,377,072			$	46,826,507
Less: Goodwill and intangible assets, net		1,117,438				1,120,880				1,124,582				1,128,493				1,132,510
Tangible assets	$	44,406,684			$	46,669,762			$	42,520,864			$	44,248,579			$	45,693,997
Tangible common equity ratio		8.46	%			7.63	%			7.96	%			8.16	%			8.13	%
Adjusted tangible common equity ratio		8.22	%			7.36	%			7.66	%			8.10	%			8.15	%
Pre-provision net revenue:
Net income before taxes	$	208,401			$	216,256			$	196,272			$	168,980			$	78,649
Provision for expected credit losses		16,000				15,000				15,000				—				—
Net income (loss) attributable to non-controlling interests		128				(37	)			81				12				(36	)
Pre-provision net revenue	$	224,273			$	231,293			$	211,191			$	168,968			$	78,685
Other data:
Tax equivalent interest	$	2,285			$	2,287			$	2,163			$	2,040			$	1,973
Net unrealized loss on available for sale securities	$	(741,508	)		$	(865,553	)		$	(935,788	)		$	(522,812	)		$	(546,598	)
Mortgage banking:
Mortgage production revenue	$	(633	)		$	(3,983	)		$	(2,406	)		$	(504	)		$	5,055
Mortgage loans funded for sale	$	138,624			$	141,090			$	260,210			$	360,237			$	418,866
Add: current period-end outstanding commitments		71,693				45,492				75,779				106,004				160,260
Less: prior period end outstanding commitments		45,492				75,779				106,004				160,260				171,412
Total mortgage production volume	$	164,825			$	110,803			$	229,985			$	305,981			$	407,714
Mortgage loan refinances to mortgage loans funded for sale		9	%			10	%			10	%			19	%			45	%
Realized margin on funded mortgage loans	(1.25)%				(1.10)%				(0.41)%					0.88	%			1.64	%
Production revenue as a percentage of production volume	(0.38)%				(3.59)%				(1.05)%				(0.16)%					1.24	%
Mortgage servicing revenue	$	15,000			$	14,048			$	13,688			$	11,872			$	11,595
Average outstanding principal balance of mortgage loans serviced for others		21,121,319				18,923,078				19,070,221				17,336,596				16,155,329
Average mortgage servicing revenue rates		0.29	%			0.29	%			0.28	%			0.27	%			0.29	%
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net	$	(1,711	)		$	4,373			$	(17,027	)		$	(13,639	)		$	(46,694	)
Loss on fair value option securities, net		(2,962	)			(2,568	)			(4,368	)			(2,221	)			(11,201	)
Gain (loss) on economic hedge of mortgage servicing rights		(4,673	)			1,805				(21,395	)			(15,860	)			(57,895	)
Gain (loss) on changes in fair value of mortgage servicing rights		(6,059	)			(2,904	)			16,570				17,485				49,110
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue		(10,732	)			(1,099	)			(4,825	)			1,625				(8,785	)
Net interest revenue on fair value option securities3		187				(118	)			29				275				383
Total economic benefit (cost) of changes in the fair value of mortgage servicing rights, net of economic hedges	$	(10,545	)		$	(1,217	)		$	(4,796	)		$	1,900			$	(8,402	)

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

LOANS TREND – UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)

		Mar. 31, 2023			Dec. 31, 2022			Sep. 30, 2022			June 30, 2022			Mar. 31, 2022
Commercial:
Healthcare		$	3,899,341		$	3,845,017		$	3,826,623		$	3,696,963		$	3,441,732
Services			3,563,702			3,431,521			3,280,925			3,421,493			3,351,495
Energy			3,398,057			3,424,790			3,371,588			3,393,072			3,197,667
General business			3,356,249			3,511,171			3,148,783			3,110,309			3,029,660
Total commercial			14,217,349			14,212,499			13,627,919			13,621,837			13,020,554
Commercial real estate:
Multifamily			1,363,881			1,212,883			1,126,700			878,565			867,288
Industrial			1,309,435			1,221,501			1,103,905			953,626			911,928
Office			1,045,700			1,053,331			1,086,615			1,100,115			1,097,516
Retail			618,264			620,518			635,021			637,304			667,561
Residential construction and land development			102,828			95,684			91,690			111,575			120,506
Other commercial real estate			375,208			402,860			429,980			424,963			436,157
Total commercial real estate			4,815,316			4,606,777			4,473,911			4,106,148			4,100,956
Loans to individuals:
Residential mortgage			1,926,027			1,890,784			1,851,836			1,784,729			1,723,506
Residential mortgages guaranteed by U.S. government agencies			224,753			245,940			262,466			293,838			322,581
Personal			1,566,608			1,601,150			1,574,325			1,484,596			1,506,832
Total loans to individuals			3,717,388			3,737,874			3,688,627			3,563,163			3,552,919
Total		$	22,750,053		$	22,557,150		$	21,790,457		$	21,291,148		$	20,674,429

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

	Mar. 31, 2023			Dec. 31, 2022			Sep. 30, 2022			June 30, 2022			Mar. 31, 2022
Texas:
Commercial	$	7,103,166		$	6,878,618		$	6,644,890		$	6,645,698		$	6,286,125
Commercial real estate		1,675,831			1,555,508			1,448,590			1,339,452			1,345,105
Loans to individuals		992,343			982,700			970,459			934,856			957,320
Total Texas		9,771,340			9,416,826			9,063,939			8,920,006			8,588,550
Oklahoma:
Commercial		3,178,934			3,382,577			3,108,608			3,139,093			2,936,530
Commercial real estate		574,708			582,109			608,856			576,458			552,310
Loans to individuals		2,049,472			2,077,124			2,054,362			1,982,247			1,977,886
Total Oklahoma		5,803,114			6,041,810			5,771,826			5,697,798			5,466,726
Colorado:
Commercial		2,148,066			2,149,199			2,117,181			2,082,688			2,006,357
Commercial real estate		646,537			613,912			565,057			473,231			480,740
Loans to individuals		231,368			241,902			237,981			234,105			236,125
Total Colorado		3,025,971			3,005,013			2,920,219			2,790,024			2,723,222
Arizona:
Commercial		1,115,973			1,124,289			1,103,000			1,085,401			1,086,195
Commercial real estate		881,465			860,947			850,319			766,767			719,970
Loans to individuals		240,556			229,872			225,981			212,870			190,746
Total Arizona		2,237,994			2,215,108			2,179,300			2,065,038			1,996,911
Kansas/Missouri:
Commercial		318,782			310,715			307,456			338,910			336,966
Commercial real estate		489,951			479,968			466,955			458,157			436,740
Loans to individuals		129,580			131,307			125,039			125,584			121,247
Total Kansas/Missouri		938,313			921,990			899,450			922,651			894,953
New Mexico:
Commercial		280,945			263,349			258,754			253,825			272,246
Commercial real estate		449,715			417,008			426,367			431,606			504,632
Loans to individuals		65,770			67,163			68,095			67,026			63,299
Total New Mexico		796,430			747,520			753,216			752,457			840,177
Arkansas:
Commercial		71,483			103,752			88,030			76,222			96,135
Commercial real estate		97,109			97,325			107,767			60,477			61,459
Loans to individuals		8,299			7,806			6,710			6,475			6,296
Total Arkansas		176,891			208,883			202,507			143,174			163,890
TOTAL BOK FINANCIAL	$	22,750,053		$	22,557,150		$	21,790,457		$	21,291,148		$	20,674,429

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

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

	Mar. 31, 2023			Dec. 31, 2022			Sep. 30, 2022			June 30, 2022			Mar. 31, 2022
Oklahoma:
Demand	$	4,369,944		$	4,585,963		$	5,143,405		$	5,422,593		$	5,205,806
Interest-bearing:
Transaction		9,468,100			9,475,528			9,619,419			10,240,378			11,410,709
Savings		564,829			555,407			558,256			561,413			558,634
Time		942,787			794,002			776,306			678,127			817,744
Total interest-bearing		10,975,716			10,824,937			10,953,981			11,479,918			12,787,087
Total Oklahoma		15,345,660			15,410,900			16,097,386			16,902,511			17,992,893
Texas:
Demand		3,154,789			3,873,759			4,609,255			4,670,535			4,552,001
Interest-bearing:
Transaction		4,366,932			4,878,482			4,781,920			5,344,326			4,963,118
Savings		175,012			178,356			179,049			183,708			182,536
Time		321,774			356,538			343,015			333,038			329,931
Total interest-bearing		4,863,718			5,413,376			5,303,984			5,861,072			5,475,585
Total Texas		8,018,507			9,287,135			9,913,239			10,531,607			10,027,586
Colorado:
Demand		1,869,194			2,462,891			2,510,179			2,799,798			2,673,352
Interest-bearing:
Transaction		2,126,435			2,123,218			2,221,796			2,277,563			2,387,304
Savings		72,548			77,961			80,542			82,976			81,762
Time		128,583			135,043			151,064			160,795			165,401
Total interest-bearing		2,327,566			2,336,222			2,453,402			2,521,334			2,634,467
Total Colorado		4,196,760			4,799,113			4,963,581			5,321,132			5,307,819
New Mexico:
Demand		997,364			1,141,958			1,296,410			1,347,600			1,271,264
Interest-bearing:
Transaction		674,328			691,915			717,492			845,442			888,257
Savings		111,771			112,430			113,056			115,660			115,457
Time		137,875			133,625			142,856			148,532			156,140
Total interest-bearing		923,974			937,970			973,404			1,109,634			1,159,854
Total New Mexico		1,921,338			2,079,928			2,269,814			2,457,234			2,431,118
Arizona:
Demand		780,051			844,327			903,296			901,543			947,775
Interest-bearing:
Transaction		687,527			739,628			788,142			792,269			810,896
Savings		16,993			16,496			18,258			17,999			18,122
Time		27,755			24,846			26,704			28,774			27,259
Total interest-bearing		732,275			780,970			833,104			839,042			856,277
Total Arizona		1,512,326			1,625,297			1,736,400			1,740,585			1,804,052
Kansas/Missouri:
Demand		393,321			436,259			479,459			537,143			553,345
Interest-bearing:
Transaction		1,040,009			694,163			747,981			913,921			1,107,525
Savings		18,292			20,678			19,375			19,943			19,589
Time		13,061			12,963			13,258			13,962			11,527
Total interest-bearing		1,071,362			727,804			780,614			947,826			1,138,641
Total Kansas/Missouri		1,464,683			1,164,063			1,260,073			1,484,969			1,691,986
Arkansas:
Demand		42,312			50,180			43,111			41,084			38,798
Interest-bearing:
Transaction		71,158			56,181			123,273			130,300			122,020
Savings		3,228			3,083			3,098			3,125			3,265
Time		4,775			4,825			5,940			6,371			6,414
Total interest-bearing		79,161			64,089			132,311			139,796			131,699
Total Arkansas		121,473			114,269			175,422			180,880			170,497
TOTAL BOK FINANCIAL	$	32,580,747		$	34,480,705		$	36,415,915		$	38,618,918		$	39,425,951

NET INTEREST MARGIN TREND – UNAUDITED
BOK FINANCIAL CORPORATION

	Three Months Ended
	Mar. 31, 2023		Dec. 31, 2022		Sep. 30, 2022		June 30, 2022		Mar. 31, 2022
TAX-EQUIVALENT ASSETS YIELDS
Interest-bearing cash and cash equivalents	4.28%		4.06%		1.87%		0.83%		0.18%
Trading securities	4.52%		3.70%		2.72%		2.00%		1.71%
Investment securities, net of allowance	1.46%		1.46%		1.42%		2.35%		5.07%
Available for sale securities	2.87%		2.54%		2.21%		1.84%		1.77%
Fair value option securities	5.17%		4.40%		2.98%		2.92%		2.81%
Restricted equity securities	7.34%		5.70%		6.23%		3.30%		2.69%
Residential mortgage loans held for sale	5.79%		5.56%		5.05%		4.22%		3.11%
Loans	6.67%		5.99%		4.89%		3.92%		3.57%
Allowance for loan losses
Loans, net of allowance	6.74%		6.06%		4.94%		3.96%		3.61%
Total tax-equivalent yield on earning assets	5.06%		4.53%		3.71%		2.96%		2.58%
COST OF INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest-bearing transaction	1.91%		1.28%		0.63%		0.22%		0.10%
Savings	0.10%		0.08%		0.05%		0.03%		0.03%
Time	1.95%		1.25%		0.93%		0.68%		0.56%
Total interest-bearing deposits	1.83%		1.22%		0.63%		0.24%		0.12%
Funds purchased and repurchase agreements	3.33%		2.05%		0.72%		0.53%		0.95%
Other borrowings	4.73%		4.08%		2.33%		1.01%		0.38%
Subordinated debt	6.40%		6.16%		5.07%		4.50%		4.02%
Total cost of interest-bearing liabilities	2.43%		1.57%		0.76%		0.31%		0.21%
Tax-equivalent net interest revenue spread	2.63%		2.96%		2.95%		2.65%		2.37%
Effect of noninterest-bearing funding sources and other	0.82%		0.58%		0.29%		0.11%		0.07%
Tax-equivalent net interest margin	3.45%		3.54%		3.24%		2.76%		2.44%

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

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

	Three Months Ended
	Mar. 31, 2023				Dec. 31, 2022				Sep. 30, 2022				June 30, 2022				Mar. 31, 2022
Nonperforming assets:
Nonaccruing loans:
Commercial:
Healthcare	$	37,247			$	41,034			$	41,438			$	14,886			$	15,076
Services		8,097				16,228				27,315				15,259				16,535
Energy		127				1,399				4,164				20,924				24,976
General business		8,961				1,636				2,753				3,539				3,750
Total commercial		54,432				60,297				75,670				54,608				60,337
Commercial real estate		21,668				16,570				7,971				10,939				15,989
Loans to individuals:
Permanent mortgage		29,693				29,791				30,066				30,460				30,757
Permanent mortgage guaranteed by U.S. government agencies		14,302				15,005				16,957				18,000				16,992
Personal		200				134				136				132				171
Total loans to individuals		44,195				44,930				47,159				48,592				47,920
Total nonaccruing loans	$	120,295			$	121,797			$	130,800			$	114,139			$	124,246
Accruing renegotiated loans guaranteed by U.S. government agencies1		—				163,535				176,022				196,420				204,121
Real estate and other repossessed assets		12,651				14,304				29,676				22,221				24,492
Total nonperforming assets	$	132,946			$	299,636			$	336,498			$	332,780			$	352,859
Total nonperforming assets excluding those guaranteed by U.S. government agencies	$	118,644			$	121,096			$	143,519			$	118,360			$	131,746
Accruing loans 90 days past due2	$	76			$	510			$	120			$	3			$	307
Gross charge-offs	$	3,667			$	17,807			$	1,766			$	1,368			$	7,805
Recoveries		(2,898	)			(2,301	)			(1,309	)			(2,167	)			(1,824	)
Net charge-offs (recoveries)	$	769			$	15,506			$	457			$	(799	)		$	5,981
Provision for loan losses	$	14,525			$	9,442			$	1,111			$	(6,158	)		$	(3,967	)
Provision for credit losses from off-balance sheet unfunded loan commitments		2,024				4,609				14,060				6,005				3,268
Provision for expected credit losses from mortgage banking activities		(488	)			1,003				(66	)			69				621
Provision for credit losses related to held-to maturity (investment) securities portfolio		(61	)			(54	)			(105	)			84				78
Total provision for credit losses	$	16,000			$	15,000			$	15,000			$	—			$	—
Allowance for loan losses to period end loans		1.10	%			1.04	%			1.11	%			1.13	%			1.19	%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans		1.37	%			1.31	%			1.37	%			1.33	%			1.37	%
Nonperforming assets to period end loans and repossessed assets		0.58	%			1.33	%			1.54	%			1.56	%			1.70	%
Net charge-offs (annualized) to average loans		0.01	%			0.28	%			0.01	%		(0.02)%					0.12	%
Allowance for loan losses to nonaccruing loans2		235.36	%			220.71	%			212.37	%			250.80	%			229.80	%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to nonaccruing loans2		294.74	%			277.76	%			261.83	%			294.74	%			263.60	%

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

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

		Three Months Ended										1Q23 vs 4Q22						1Q23 vs 1Q22
		Mar. 31, 2023			Dec. 31, 2022			Mar. 31, 2022				$ change				% change		$ change				% change
Commercial Banking
Net interest revenue		$	266,545		$	232,834		$	137,011			$	33,711			14.5%		$	129,534			94.5%
Fees and commissions revenue			55,835			58,881			56,964				(3,046	)		(5.2)%			(1,129)			(2.0)%
Combined net interest and fee revenue			322,380			291,715			193,975				30,665			10.5%			128,405			66.2%
Other operating expense			73,504			79,722			65,114				(6,218	)		(7.8)%			8,390			12.9%
Corporate expense allocations			17,729			18,007			16,246				(278	)		(1.5)%			1,483			9.1%
Net income			176,547			139,374			82,344				37,173			26.7%			94,203			114.4%
Average assets			28,162,934			28,373,856			29,823,905				(210,922	)		(0.7)%			(1,660,971)			(5.6)%
Average loans			18,750,426			18,254,559			16,696,428				495,867			2.7%			2,053,998			12.3%
Average deposits			15,861,285			16,832,244			19,595,260				(970,959	)		(5.8)%			(3,733,975)			(19.1)%
Consumer Banking
Net interest revenue		$	109,381		$	53,302		$	27,207			$	56,079			105.2%		$	82,174			302.0%
Fees and commissions revenue			30,581			27,618			33,977				2,963			10.7%			(3,396)			(10.0)%
Combined net interest and fee revenue			139,962			80,920			61,184				59,042			73.0%			78,778			128.8%
Other operating expense			50,198			54,526			48,789				(4,328	)		(7.9)%			1,409			2.9%
Corporate expense allocations			11,618			11,972			12,080				(354	)		(3.0)%			(462)			(3.8)%
Net income (loss)			50,687			8,996			(7,317	)			41,691			463.4%			58,004			(792.7)%
Average assets			9,934,511			10,078,381			10,273,890				(143,870	)		(1.4)%			(339,379)			(3.3)%
Average loans			1,747,237			1,725,555			1,672,346				21,682			1.3%			74,891			4.5%
Average deposits			8,248,541			8,617,085			8,746,622				(368,544	)		(4.3)%			(498,081)			(5.7)%
Wealth Management
Net interest revenue		$	54,106		$	34,498		$	55,766			$	19,608			56.8%		$	(1,660)			(3.0)%
Fees and commissions revenue			108,911			114,630			25,023				(5,719	)		(5.0)%			83,888			335.2%
Combined net interest and fee revenue			163,017			149,128			80,789				13,889			9.3%			82,228			101.8%
Other operating expense			82,039			82,211			74,620				(172	)		(0.2)%			7,419			9.9%
Corporate expense allocations			12,386			12,733			12,071				(347	)		(2.7)%			315			2.6%
Net income (loss)			52,427			41,447			(4,521	)			10,980			26.5%			56,948			(1,259.6)%
Average assets			11,663,096			12,912,630			21,323,795				(1,249,534	)		(9.7)%			(9,660,699)			(45.3)%
Average loans			2,201,622			2,223,275			2,118,780				(21,653	)		(1.0)%			82,842			3.9%
Average deposits			7,432,413			7,888,753			9,619,323				(456,340	)		(5.8)%			(2,186,910)			(22.7)%
Fiduciary assets			57,457,925			56,060,496			61,095,320				1,397,429			2.5%			(3,637,395)			(6.0)%
Assets under management or administration			102,310,126			99,735,040			101,081,355				2,575,086			2.6%			1,228,771			1.2%

 

FAQ

What were BOK Financial's earnings for Q1 2023?

BOK Financial reported net income of $162.4 million or $2.43 per diluted share for Q1 2023.

What caused the decrease in BOK Financial's net interest margin?

The net interest margin decreased to 3.45% due to rising funding costs amid interest rate volatility.

How much did BOK Financial's loans increase in Q1 2023?

Loans increased by $193 million to $22.8 billion, mainly driven by growth in commercial real estate.

What was the provision for expected credit losses for BOK Financial in Q1 2023?

BOK Financial recorded a provision for expected credit losses of $16.0 million.

What is BOK Financial's common equity Tier 1 capital ratio as of March 31, 2023?

The common equity Tier 1 capital ratio improved to 12.19%.