BOK Financial Corporation Reports Quarterly Earnings of $166 million or $2.40 Per Share in the Second Quarter

Rhea-AI Summary

BOK Financial Corporation (NASDAQ: BOKF) reported net earnings of $166.4 million, or $2.40 per diluted share for Q2 2021, marking an increase from the previous quarter’s $146.1 million or $2.10. Key growth drivers included the Wealth Management team and a rebound in oil and gas prices. Operating expenses decreased to $291.2 million, with credit quality metrics improving. However, total loans dropped by $1.1 billion to $21.4 billion, driven by lower PPP loan balances. The Tier 1 capital ratio stood at 12.01%.

Positive

• Net income increased to $166.4 million, or $2.40 per share.
• Operating expenses decreased by $4.6 million to $291.2 million.
• Negative provision for credit losses of $35 million indicates improving credit quality.
• Wealth Management net income increased by $11.7 million to $31.1 million.

Negative

• Total loans decreased by $1.1 billion to $21.4 billion.
• Paycheck Protection Program loans fell by $727 million to $1.1 billion.
• Consumer Banking net income decreased by $5.3 million.

TULSA, Okla., July 21, 2021 (GLOBE NEWSWIRE) -- BOK Financial Corporation (NASDAQ: BOKF) today reported net earnings applicable to common shareholders for the second quarter of 2021 of $166.4 million, or $2.40 per diluted common share.

CEO Commentary

Steven G. Bradshaw, president and chief executive officer, stated, "The organization eclipsed $160 million in net income for the first time on another stellar, broad-based contribution from our Wealth Management team and stable net interest revenues. Additionally, growth in our Healthcare portfolio and steady core C&I this quarter provides a solid foundation as we head into the back half of 2021. While growth in other areas of the loan portfolio remains somewhat constrained by near-term labor and supply chain disruptions, our customers' confidence about future growth is very high, which reaffirms our outlook for the remainder of this year."

Bradshaw continued, "While our top-line strength this quarter was impressive, equally strong was our discipline around operating costs and our excellent credit outcomes. We continue to hold the line on many expense saves gained through the pandemic, driving meaningful earnings leverage. Credit also continues to be a clear differentiator, as oil and natural gas prices rebounded to multi-year highs. Non-performing assets and potential problem loans were both down significantly, and credit costs continue to be at the low end of our historical range. Altogether, this quarter demonstrates just how effectively we can execute on both the top and bottom line and build shareholder value."

Second Quarter 2021 Financial Highlights

• Net income was $166.4 million or $2.40 per diluted share for the second quarter of 2021 and $146.1 million or $2.10 per diluted share for the first quarter of 2021.
• Net interest revenue totaled $280.3 million, consistent with the prior quarter. Net interest margin was 2.60 percent compared to 2.62 percent in the first quarter of 2021.
• Fees and commissions revenue totaled $169.4 million, an increase of $7.3 million. Growth in much of our fee-based business, led by brokerage and trading and fiduciary and asset management revenues, was partially offset by lower mortgage banking revenue.
• Operating expense decreased $4.6 million to $291.2 million. The first quarter of 2021 included a $4.0 million charitable donation to the BOKF Foundation that did not recur in the second quarter.
• Period-end loans decreased $1.1 billion to $21.4 billion at June 30, 2021. Period-end Paycheck Protection Program ("PPP") loans decreased $727 million to $1.1 billion. Paydowns of energy and commercial real estate loans were partially offset by an increase in healthcare and personal loans. Average loans were $22.2 billion, a $590 million decrease compared to the first quarter of 2021.
• Forecasts for improving macroeconomic factors and credit quality metrics resulted in a $35.0 million negative provision for expected credit losses in the second quarter of 2021 and a $25.0 million negative provision in the prior quarter. The combined allowance for credit losses totaled $336 million or 1.66 percent of outstanding loans, excluding PPP loans, at June 30, 2021. The combined allowance for credit losses was $385 million or 1.86 percent of outstanding loans, excluding PPP loans, at March 31, 2021.
• Average deposits increased $968 million to $37.5 billion while period-end deposits decreased $413 million to $37.4 billion. Average demand deposits grew by $877 million and average interest bearing deposits grew by $91 million.
• The company's common equity Tier 1 capital ratio was 11.95 percent at June 30, 2021. In addition, the company's Tier 1 capital ratio was 12.01 percent, total capital ratio was 13.61 percent, and leverage ratio was 8.58 percent at June 30, 2021. At March 31, 2021, the company's common equity Tier 1 capital ratio was 12.14 percent, Tier 1 capital ratio was 12.21 percent, total capital ratio was 13.98 percent, and leverage ratio was 8.42 percent.
• The company repurchased 492,994 shares of common stock at an average price of $88.84 a share in the second quarter of 2021.
• The company intends to redeem the subordinated debt issued in June of 2016 at the interest rate of 5.375 percent using existing capital, saving approximately $8.0 million per year in interest payments.
• Commercial Banking contributed $72.6 million to net income in the second quarter of 2021, an increase of $3.0 million compared to the first quarter of 2021. Combined net interest revenue and fee revenue increased $14.4 million, largely due to an increase of $7.5 million in production revenue from repossessed oil and gas properties. This increase was supplemented by growth in customer hedging revenue, syndication fees and transaction card revenue. These increases were partially offset by a decrease in net gains on sales of repossessed assets. Operating expense increased $4.4 million, primarily due to an increase in operating expenses on repossessed assets. Average Commercial Banking loans decreased $541 million due to purposeful deleveraging by our customers. Average Commercial Banking deposits grew 6 percent to $17.0 billion in the first quarter.
• Consumer Banking contributed $1.7 million to net income in the second quarter of 2021, a decrease of $5.3 million compared to the prior quarter. Combined net interest revenue and fee revenue decreased $10.6 million. Net interest revenue increased $4.0 million, mainly due to favorable yields on deposits sold to our Funds Management unit. Fees and commissions revenue decreased $14.6 million, largely due to reduced mortgage production volume and margin compression. Operating expense decreased $3.2 million, primarily due to lower mortgage banking costs. Average Consumer Banking deposits grew by 5 percent to $8.5 billion.
• Wealth Management contributed $31.1 million to net income in the second quarter of 2021, an increase of $11.7 million compared to the first quarter. Combined net interest revenue and fee revenue increased $17.1 million. Brokerage and trading revenue and related net interest revenue increased $10.5 million to $62.2 million due to growth in agency residential mortgage trading volumes and higher margin market opportunities. Fiduciary and asset management revenue increased $3.7 million to $45 million, largely due to seasonal tax preparation fees combined with higher oil and gas asset management fees. Trust business line fees also grew as a result of higher client asset balances. Assets under management were $96.6 billion, an increase of $4.7 billion compared to the prior quarter.

Net Interest Revenue

Net interest revenue was $280.3 million for the second quarter of 2021, largely unchanged compared to the first quarter of 2021. Net interest margin was 2.60 percent compared to 2.62 percent in the prior quarter.

Average earning assets decreased $354 million compared to the first quarter of 2021. Average loan balances decreased $590 million, largely due to energy and commercial real estate paydowns. Available for sale securities decreased $190 million. Average trading securities grew by $467 million. Other borrowings increased $216 million while funds purchased and repurchase agreements decreased $1.0 billion.

The yield on average earning assets was 2.75 percent, a 3 basis point decrease from the prior quarter. The yield on the available for sale securities portfolio increased 1 basis point to 1.85 percent. The loan portfolio yield decreased 1 basis point to 3.54 percent.

Funding costs were 0.21 percent, down 3 basis points. The cost of interest-bearing deposits decreased 3 basis points to 0.14 percent. The cost of other borrowed funds decreased 2 basis points to 0.28 percent. The benefit to net interest margin from assets funded by non-interest liabilities was 6 basis points for the second quarter of 2021, compared to 8 basis points for the prior quarter.

Operating Revenue

Fees and commissions revenue totaled $169.4 million for the second quarter of 2021, an increase of $7.3 million compared to the prior quarter. Brokerage and trading revenue increased $8.6 million to $29.4 million, including a $9.3 million increase in trading revenue. An increase in agency residential mortgage-backed securities trading volumes and higher margin market opportunities combined to grow trading revenue. Fiduciary and asset management revenue grew $3.5 million, primarily due to seasonal tax preparation fees. Trust business line fees also grew as a result of higher client asset balances. Transaction card revenue increased $2.5 million due to higher transaction volumes with the broader reopening of the U.S. economy. Deposit service charges increased $1.7 million, primarily related to commercial accounts where lower earnings credit rates caused by the low interest rate environment have resulted in higher service charges. Other revenue increased $6.9 million as a result of higher operating revenue from repossessed oil and gas properties.

Mortgage banking revenue decreased $15.9 million compared to the prior quarter due to lower mortgage loan production volume and gain on sale margin compression. Mortgage production volume decreased $206 million to $644 million as a result of industry-wide housing inventory constraints, changes to government-sponsored entity delivery limits on loans secured by second homes and investment properties, and overall market conditions. The realized margin on funded mortgage loans decreased 35 basis points to 2.75 percent while the gain on sale margin, which includes unrealized gains and losses on our mortgage commitment pipeline and related hedges, decreased 143 basis points to 1.55 percent. Margins were compressed largely due to competitive pricing pressure and timing of settlements.

Other gains and losses, net increased $6.3 million over the prior quarter. Increases in gains on alternative investments were partially offset by a decrease in net gains on sales of repossessed assets.

Operating Expense

Total operating expense was $291.2 million for the second quarter of 2021, a decrease of $4.6 million compared to the prior quarter.

The first quarter of 2021 included a $4.0 million charitable donation to the BOKF Foundation that did not recur in the second quarter. Excluding this effect, non-personnel expense was largely unchanged. A decrease in mortgage banking costs related to lower prepayments and data processing and communications expense was offset by increased operating expenses on repossessed assets. Personnel expense decreased $1.0 million.

Loans, Deposits and Capital

Loans

Outstanding loans were $21.4 billion at June 30, 2021, a $1.1 billion decrease compared to March 31, 2021, led by lower PPP loan balances. Additional paydowns of energy loans and commercial real estate loans were partially offset by an increase in healthcare loans.

Outstanding commercial loan balances decreased $185 million compared to March 31, 2021, primarily due to lower energy loan balances. Although the primary source of repayment of our commercial loan portfolio is the on-going cash flow from operations of the customer's business, loans are generally governed by a borrowing base and secured by the customer’s assets.

Energy loan balances decreased $191 million to $3.0 billion or 14 percent of total loans. While commodity prices have continued to improve and stabilize, sourcing new loans sufficient to offset paydowns remains a challenge. 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 66 percent of committed production loans are secured by properties primarily producing oil. The remaining 34 percent is secured by properties primarily producing natural gas. Unfunded energy loan commitments were $2.6 billion at June 30, 2021, consistent with March 31, 2021.

Healthcare sector loan balances increased $91 million compared to the prior quarter, totaling $3.4 billion or 16 percent of total loans. Our healthcare sector loans primarily consist of $2.7 billion of senior housing and care facilities, including independent living, assisted living and skilled nursing. Generally we loan to borrowers with a portfolio of multiple facilities that serves to help diversify risks specific to a single facility.

General business loans decreased $52 million to $2.7 billion or 13 percent of total loans. General business loans include $1.4 billion of wholesale/retail loans and $1.3 billion of loans from other commercial industries.

Services loan balances decreased $32 million to $3.4 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.

Commercial real estate loan balances decreased $256 million compared to March 31, 2021 and represent 20 percent of total loans at June 30, 2021, largely due to refinancing in the long term, non-recourse markets. Multifamily residential loans, decreased $263 million to $965 million at June 30, 2021. Loans secured by office facilities decreased $21 million to $1.1 billion. Loans secured by other commercial real estate properties decreased $14 million to $471 million. Loans secured by industrial facilities increased $35 million to $825 million. Loans secured by retail facilities were largely unchanged compared to March 31, 2021.

PPP loan balances decreased $727 million to $1.1 billion or 5 percent of total loans. The rate of paydowns of the first round of PPP loans has increased in the second quarter.

Loans to individuals increased $51 million and represent 17 percent of total loans at June 30, 2021. Personal loans were up $82 million while residential mortgage loans decreased $25 million.

Deposits

Period-end deposits totaled $37.4 billion at June 30, 2021, a $413 million decrease compared to March 31, 2021. Demand deposit account balances grew by $277 million and interest-bearing transaction account balances decreased by $612 million. Average deposits were $37.5 billion at June 30, 2021, a $968 million increase compared to March 31, 2021. Demand deposit account balances increased $877 million primarily from deposits attributed to the Commercial Banking segment.

Capital

The company's common equity Tier 1 capital ratio was 11.95 percent at June 30, 2021. In addition, the company's Tier 1 capital ratio was 12.01 percent, total capital ratio was 13.61 percent, and leverage ratio was 8.58 percent at June 30, 2021. We have elected to delay the regulatory capital impact of the transition of the allowance for credit losses from the incurred loss methodology to CECL for two years, followed by a three-year transition period, which added 19         basis points to the company's common equity tier 1 capital ratio at June 30. At March 31, 2021, the company's common equity Tier 1 capital ratio was 12.14 percent, Tier 1 capital ratio was 12.21 percent, total capital ratio was 13.98 percent, and leverage ratio was 8.42 percent.

The company's tangible common equity ratio, a non-GAAP measure, was 9.09 percent at June 30, 2021 and 8.82 percent at March 31, 2021. The tangible common equity ratio is primarily based on total shareholders' equity, which includes unrealized gains and losses on available for sale securities. The company has elected to exclude unrealized gains and losses from available for sale securities from its calculation of Tier 1 capital for regulatory capital purposes, consistent with the treatment under the previous capital rules.

The company repurchased 492,994 shares of common stock at an average price of $88.84 a share in the second quarter of 2021. We view share buybacks opportunistically, but within the context of maintaining our strong capital position.

Credit Quality

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

We recorded a $35.0 million negative provision for credit losses in the second quarter of 2021, primarily due to changes in our reasonable and supportable forecasts of macroeconomic variables as a result of continued improvement in the economic outlook related to the anticipated impact of the on-going COVID-19 pandemic and improving credit quality metrics. Decreased allowance due to lower loan balances was offset by losses during the quarter.

Our base case reasonable and supportable forecast assumes that the COVID-19 pandemic continues to improve as virus immunity becomes increasingly more widespread and vaccines prove to be effective against new virus strains. Continued easing of restrictions and the release of pent-up consumer demand results in GDP growth above historical averages throughout 2021, but begins to moderate in 2022. We expect a 4.8 percent increase in GDP over the next twelve months. This scenario also assumes the expiration of expanded unemployment insurance benefits is a catalyst for hiring activity during the second half of 2021. Our forecasted civilian unemployment rate is 5.5 percent for the third quarter of 2021, improving to 4.7 percent by the second quarter of 2022. WTI oil prices are projected to generally follow the NYMEX forward curve that existed at the end of June 2021, averaging $67.04 per barrel over the next twelve months.

The probability weighting of our base case reasonable and supportable forecast increased to 70 percent in the second quarter of 2021 compared to 60 percent in the first quarter of 2021 as the level of uncertainty in the current economic outlook continues to improve. Our downside case, probability weighted at 20 percent, assumes additional waves and hotspots emerge in areas of the country with lower vaccination rates stemming from the impact of new virus strains, such as the current Delta variant, as the U.S. enters the fall and winter months. This results in a relatively mild recession with conditions beginning to improve in the spring of 2022.

The allowance for loan losses totaled $312 million or 1.46 percent of outstanding loans and 183 percent of nonaccruing loans at June 30, 2021, excluding residential mortgage loans guaranteed by U.S. government agencies. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $336 million or 1.57 percent of outstanding loans and 197 percent of nonaccruing loans at June 30, 2021. Excluding PPP loans, the allowance for loan losses was 1.54 percent of outstanding loans and the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was 1.66 percent.

At March 31, 2021, the allowance for loan losses was $352 million or 1.56 percent of outstanding loans and 170 percent of nonaccruing loans, excluding loans guaranteed by U.S. government agencies. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $385 million or 1.71 percent of outstanding loans and 186 percent of nonaccruing loans.

Nonperforming assets totaled $408 million or 1.90 percent of outstanding loans and repossessed assets at June 30, 2021, down from $442 million or 1.95 percent at March 31, 2021. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $228 million or 1.14 percent of outstanding loans and repossessed assets at June 30, 2021, compared to $278 million or 1.37 percent at March 31, 2021. The decrease in nonperforming assets was primarily related to a decrease in nonaccruing energy loans and sales of energy-related repossessed assets during the second quarter of 2021.

Nonaccruing loans were $180 million or 0.89 percent of outstanding loans, excluding PPP loans, at June 30, 2021. Nonaccruing commercial loans totaled $113 million or 0.90 percent of outstanding commercial loans. Nonaccruing commercial real estate loans totaled $26 million or 0.62 percent of outstanding commercial real estate loans. Nonaccruing loans to individuals totaled $41 million or 1.14 percent of outstanding loans to individuals.

Nonaccruing loans decreased $36 million compared to March 31, 2021, primarily due to a decrease in nonaccruing energy loans. New nonaccruing loans identified in the second quarter totaled $13 million, offset by $31 million in payments received and $18 million in charge-offs.

Potential problem loans, which are defined as performing loans that, based on known information, cause management concern as to the borrowers' ability to continue to perform, totaled $384 million at June 30, 2021, down from $422 million at March 31. Potential problem energy, services and general business loans all decreased compared to the prior quarter.

Net charge-offs were $15.4 million or 0.30 percent of average loans on an annualized basis for the second quarter of 2021, excluding PPP loans. Net charge-offs were 0.32 percent of average loans over the last four quarters. Net charge-offs were $14.5 million or 0.28 percent of average loans on an annualized basis for the first quarter of 2021, excluding PPP loans. Gross charge-offs were $18.3 million for the second quarter compared to $16.9 million for the previous quarter. Recoveries totaled $2.9 million for the second quarter of 2021 and $2.4 million for the first quarter of 2021.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $13.3 billion at June 30, 2021, a $92 million decrease compared to March 31, 2021. At June 30, 2021, the available for sale securities portfolio consisted primarily of $8.6 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $4.3 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. At June 30, 2021, the available for sale securities portfolio had a net unrealized gain of $297 million compared to $290 million at March 31, 2021.

The company also maintains a portfolio of residential mortgage-backed securities issued by U.S. government agencies and interest rate derivative contracts as an economic hedge of the changes in the fair value of our mortgage servicing rights. This portfolio of fair value option securities decreased $12 million to $60 million at June 30, 2021.

The net economic benefit of the changes in the fair value of mortgage servicing rights and related economic hedges was $4.4 million during the second quarter of 2021, including a $17.1 million increase in the fair value of securities and derivative contracts held as an economic hedge, $13.0 million decrease in the fair value of mortgage servicing rights, and $341 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, July 21, 2021 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 1-412-317-6671 and referencing conference ID # 13721197.

About BOK Financial Corporation

BOK Financial Corporation is a $47 billion regional financial services company headquartered in Tulsa, Oklahoma with $97 billion in assets under management and administration. The company's stock is publicly traded on NASDAQ under the Global Select market listings (BOKF). BOK Financial Corporation's holdings include BOKF, NA; BOK Financial Securities, Inc., BOK Financial Private Wealth, Inc. and BOK Financial Insurance, Inc. BOKF, NA operates TransFund, Cavanal Hill Investment Management 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 June 30, 2021 through the date its financial statements are filed with the Securities and Exchange Commission and will adjust amounts reported if necessary.

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

BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)

	June 30, 2021				Mar. 31, 2021
ASSETS
Cash and due from banks	$	678,998			$	723,983
Interest-bearing cash and cash equivalents	580,457				695,213
Trading securities	5,699,070				5,085,949
Investment securities, net of allowance	220,832				226,121
Available for sale securities	13,317,922				13,410,057
Fair value option securities	60,432				72,498
Restricted equity securities	134,885				139,614
Residential mortgage loans held for sale	200,842				284,447
Loans:
Commercial	12,472,907				12,657,784
Commercial real estate	4,246,992				4,503,347
Paycheck protection program	1,121,583				1,848,550
Loans to individuals	3,574,967				3,524,166
Total loans	21,416,449				22,533,847
Allowance for loan losses	(311,890		)		(352,402		)
Loans, net of allowance	21,104,559				22,181,445
Premises and equipment, net	556,400				555,455
Receivables	195,763				250,852
Goodwill	1,048,091				1,048,091
Intangible assets, net	105,694				110,585
Mortgage servicing rights	117,629				132,915
Real estate and other repossessed assets, net	57,337				70,911
Derivative contracts, net	1,701,443				1,289,156
Cash surrender value of bank-owned life insurance	401,163				401,320
Receivable on unsettled securities sales	70,954				67,759
Other assets	901,904				696,142
TOTAL ASSETS	$	47,154,375			$	47,442,513
LIABILITIES AND EQUITY
Deposits:
Demand	$	13,380,409			$	13,103,170
Interest-bearing transaction	21,278,719				21,890,874
Savings	875,456				854,226
Time	1,905,349				2,004,356
Total deposits	37,439,933				37,852,626
Funds purchased and repurchase agreements	730,183				795,161
Other borrowings	1,546,231				1,708,517
Subordinated debentures	276,043				276,024
Accrued interest, taxes and expense	199,014				290,328
Due on unsettled securities purchases	576,536				106,835
Derivative contracts, net	612,261				719,556
Other liabilities	419,623				431,122
TOTAL LIABILITIES	41,799,824				42,180,169
Shareholders' equity:
Capital, surplus and retained earnings	5,106,209				5,018,053
Accumulated other comprehensive gain	226,768				221,409
TOTAL SHAREHOLDERS' EQUITY	5,332,977				5,239,462
Non-controlling interests	21,574				22,882
TOTAL EQUITY	5,354,551				5,262,344
TOTAL LIABILITIES AND EQUITY	$	47,154,375			$	47,442,513

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

	Three Months Ended
	June 30, 2021				Mar. 31, 2021				Dec. 31, 2020				Sept. 30, 2020				June 30, 2020
ASSETS
Interest-bearing cash and cash equivalents	$	659,312			$	711,047			$	643,926			$	553,070			$	619,737
Trading securities	7,430,217				6,963,617				6,888,189				1,834,160				1,871,647
Investment securities, net of allowance	221,401				237,313				251,863				258,965				268,947
Available for sale securities	13,243,542				13,433,767				12,949,702				12,580,850				12,480,065
Fair value option securities	64,864				104,662				122,329				387,784				786,757
Restricted equity securities	208,692				189,921				280,428				144,415				273,922
Residential mortgage loans held for sale	218,200				207,013				229,631				213,125				288,588
Loans:
Commercial	12,402,925				12,908,461				13,113,449				13,772,217				14,502,652
Commercial real estate	4,395,848				4,547,945				4,788,393				4,754,269				4,543,511
Paycheck protection program	1,668,047				1,741,534				1,928,665				2,092,933				1,699,369
Loans to individuals	3,700,269				3,559,067				3,617,011				3,491,044				3,353,960
Total loans	22,167,089				22,757,007				23,447,518				24,110,463				24,099,492
Allowance for loan losses	(345,269		)		(382,734		)		(414,225		)		(441,831		)		(367,583		)
Loans, net of allowance	21,821,820				22,374,273				23,033,293				23,668,632				23,731,909
Total earning assets	43,868,048				44,221,613				44,399,361				39,641,001				40,321,572
Cash and due from banks	763,393				760,691				742,432				723,826				678,878
Derivative contracts, net	1,022,137				873,712				553,779				581,839				642,969
Cash surrender value of bank-owned life insurance	401,760				399,830				397,354				394,680				391,951
Receivable on unsettled securities sales	716,700				735,482				1,094,198				4,563,301				4,626,307
Other assets	3,424,884				3,319,305				3,200,040				3,027,108				3,095,354
TOTAL ASSETS	$	50,196,922			$	50,310,633			$	50,387,164			$	48,931,755			$	49,757,031
LIABILITIES AND EQUITY
Deposits:
Demand	$	13,189,954			$	12,312,629			$	12,136,071			$	11,929,694			$	11,489,322
Interest-bearing transaction	21,491,145				21,433,406				20,718,390				19,752,106				18,040,170
Savings	872,618				789,656				737,360				707,121				656,669
Time	1,936,510				1,986,425				1,930,808				2,251,012				2,464,793
Total deposits	37,490,227				36,522,116				35,522,629				34,639,933				32,650,954
Funds purchased and repurchase agreements	1,790,490				2,830,378				2,153,254				2,782,150				5,816,484
Other borrowings	3,608,369				3,392,346				5,193,656				3,382,688				3,527,303
Subordinated debentures	276,034				276,015				275,998				275,980				275,949
Derivative contracts, net	366,202				428,488				399,476				458,390				836,667
Due on unsettled securities purchases	701,495				915,410				957,642				1,516,880				887,973
Other liabilities	634,460				671,715				656,147				712,674				690,087
TOTAL LIABILITIES	44,867,277				45,036,468				45,158,802				43,768,695				44,685,417
Total equity	5,329,645				5,274,165				5,228,362				5,163,060				5,071,614
TOTAL LIABILITIES AND EQUITY	$	50,196,922			$	50,310,633			$	50,387,164			$	48,931,755			$	49,757,031

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

	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2021				2020				2021				2020
Interest revenue	$	295,893			$	306,384			$	594,132			$	655,321
Interest expense	15,584				28,280				33,403				115,857
Net interest revenue	280,309				278,104				560,729				539,464
Provision for credit losses	(35,000		)		135,321				(60,000		)		229,092
Net interest revenue after provision for credit losses	315,309				142,783				620,729				310,372
Other operating revenue:
Brokerage and trading revenue	29,408				62,022				50,190				112,801
Transaction card revenue	24,923				22,940				47,353				44,821
Fiduciary and asset management revenue	44,832				41,257				86,154				85,715
Deposit service charges and fees	25,861				22,046				50,070				48,176
Mortgage banking revenue	21,219				53,936				58,332				91,103
Other revenue	23,172				11,479				39,468				23,788
Total fees and commissions	169,415				213,680				331,567				406,404
Other gains (losses), net	16,449				7,347				26,570				(3,391		)
Gain (loss) on derivatives, net	18,820				21,885				(8,830		)		40,305
Gain (loss) on fair value option securities, net	(1,627		)		(14,459		)		(3,537		)		53,934
Change in fair value of mortgage servicing rights	(13,041		)		(761		)		20,833				(89,241		)
Gain on available for sale securities, net	1,430				5,580				1,897				5,583
Total other operating revenue	191,446				233,272				368,500				413,594
Other operating expense:
Personnel	172,035				176,235				345,045				332,416
Business promotion	2,744				1,935				4,898				8,150
Charitable contributions to BOKF Foundation	—				3,000				4,000				3,000
Professional fees and services	12,361				12,161				24,341				25,109
Net occupancy and equipment	26,633				30,675				53,295				56,736
Insurance	3,660				5,156				8,280				10,136
Data processing and communications	36,418				32,942				73,885				65,685
Printing, postage and supplies	4,285				3,502				7,725				7,774
Amortization of intangible assets	4,578				5,190				9,385				10,284
Mortgage banking costs	11,126				15,598				25,069				26,143
Other expense	17,312				9,572				31,013				19,160
Total other operating expense	291,152				295,966				586,936				564,593
Net income before taxes	215,603				80,089				402,293				159,373
Federal and state income taxes	48,496				15,803				90,878				33,103
Net income	167,107				64,286				311,415				126,270
Net income (loss) attributable to non-controlling interests	686				(407		)		(1,066		)		(502		)
Net income attributable to BOK Financial Corporation shareholders	$	166,421			$	64,693			$	312,481			$	126,772
Average shares outstanding:
Basic	68,815,666				69,876,043				68,975,743				69,999,865
Diluted	68,817,442				69,877,467				68,978,798				70,003,817
Net income per share:
Basic	$	2.40			$	0.92			$	4.50			$	1.80
Diluted	$	2.40			$	0.92			$	4.50			$	1.80

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

	Three Months Ended
	June 30, 2021				Mar. 31, 2021				Dec. 31, 2020				Sept. 30, 2020				June 30, 2020
Capital:
Period-end shareholders' equity	$	5,332,977			$	5,239,462			$	5,266,266			$	5,218,787			$	5,096,995
Risk weighted assets	$	33,824,860			$	32,623,108			$	32,492,277			$	31,529,826			$	32,180,602
Risk-based capital ratios:
Common equity tier 1	11.95		%		12.14		%		11.95		%		12.07		%		11.44		%
Tier 1	12.01		%		12.21		%		11.95		%		12.07		%		11.44		%
Total capital	13.61		%		13.98		%		13.82		%		14.05		%		13.43		%
Leverage ratio	8.58		%		8.42		%		8.28		%		8.39		%		7.74		%
Tangible common equity ratio1	9.09		%		8.82		%		9.02		%		9.02		%		8.79		%
Common stock:
Book value per share	$	77.20			$	75.33			$	75.62			$	74.23			$	72.50
Tangible book value per share	$	60.50			$	58.67			$	58.94			$	57.64			$	55.83
Market value per share:
High	$	93.00			$	98.95			$	73.07			$	62.86			$	67.62
Low	$	83.59			$	67.57			$	50.09			$	48.41			$	37.80
Cash dividends paid	$	35,925			$	36,038			$	36,219			$	35,799			$	35,769
Dividend payout ratio	21.59		%		24.67		%		23.48		%		23.24		%		55.29		%
Shares outstanding, net	69,078,458				69,557,873				69,637,600				70,305,833				70,306,690
Stock buy-back program:
Shares repurchased	492,994				260,000				665,100				—				—
Amount	$	43,797			$	20,071			$	42,450			$	—			$	—
Average price per share	$	88.84			$	77.20			$	63.82			$	—			$	—
Performance ratios (quarter annualized):
Return on average assets	1.33		%		1.18		%		1.22		%		1.25		%		0.52		%
Return on average equity	12.58		%		11.28		%		11.75		%		11.89		%		5.14		%
Net interest margin	2.60		%		2.62		%		2.72		%		2.81		%		2.83		%
Efficiency ratio	64.20		%		66.26		%		62.77		%		59.57		%		59.68		%
Reconciliation of non-GAAP measures:
1 Tangible common equity ratio:
Total shareholders' equity	$	5,332,977			$	5,239,462			$	5,266,266			$	5,218,787			$	5,096,995
Less: Goodwill and intangible assets, net	1,153,785				1,158,676				1,161,527				1,166,615				1,171,686
Tangible common equity	$	4,179,192			$	4,080,786			$	4,104,739			$	4,052,172			$	3,925,309
Total assets	$	47,154,375			$	47,442,513			$	46,671,088			$	46,067,224			$	45,819,874
Less: Goodwill and intangible assets, net	1,153,785				1,158,676				1,161,527				1,166,615				1,171,686
Tangible assets	$	46,000,590			$	46,283,837			$	45,509,561			$	44,900,609			$	44,648,188
Tangible common equity ratio	9.09		%		8.82		%		9.02		%		9.02		%		8.79		%
	Three Months Ended
	June 30, 2021				Mar. 31, 2021				Dec. 31, 2020				Sept. 30, 2020				June 30, 2020
Pre-provision net revenue:
Net income before taxes	$	215,603			$	186,690			$	199,847			$	204,644			$	80,089
Provision for expected credit losses	(35,000		)		(25,000		)		(6,500		)		—				135,321
Net income (loss) attributable to non-controlling interests	686				(1,752		)		485				58				(407		)
Pre-provision net revenue	$	179,917			$	163,442			$	192,862			$	204,586			$	215,817
Other data:
Tax equivalent interest	$	2,320			$	2,301			$	2,414			$	2,457			$	2,630
Net unrealized gain on available for sale securities	$	297,267			$	290,217			$	440,814			$	480,563			$	487,334
Mortgage banking:
Mortgage production revenue	$	10,004			$	25,287			$	26,662			$	38,431			$	39,185
Mortgage loans funded for sale	$	754,893			$	843,053			$	998,435			$	1,032,472			$	1,184,249
Add: current period-end outstanding commitments	276,154				387,465				380,637				560,493				546,304
Less: prior period end outstanding commitments	387,465				380,637				560,493				546,304				657,570
Total mortgage production volume	$	643,582			$	849,881			$	818,579			$	1,046,661			$	1,072,983
Mortgage loan refinances to mortgage loans funded for sale	48		%		65		%		58		%		54		%		71		%
Realized margin on funded mortgage loans	2.75		%		3.10		%		3.78		%		3.52		%		2.04		%
Gain on sale margin	1.55		%		2.98		%		3.26		%		3.67		%		3.65		%
Mortgage servicing revenue	$	11,215			$	11,826			$	12,636			$	13,528			$	14,751
Average outstanding principal balance of mortgage loans serviced for others	15,065,173				15,723,231				16,518,208				17,434,215				19,319,872
Average mortgage servicing revenue rates	0.30		%		0.31		%		0.30		%		0.31		%		0.31		%
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net	$	18,764			$	(27,705	)		$	(385	)		$	2,295			$	21,815
Gain (loss) on fair value option securities, net	(1,627		)		(1,910		)		68				(754		)		(14,459		)
Gain (loss) on economic hedge of mortgage servicing rights	17,137				(29,615		)		(317		)		1,541				7,356
Gain (loss) on changes in fair value of mortgage servicing rights	(13,041		)		33,874				6,276				3,441				(761		)
Gain on changes in fair value of mortgage servicing rights,  net of economic hedges, included in other operating revenue	4,096				4,259				5,959				4,982				6,595
Net interest revenue on fair value option securities2	341				393				550				1,565				2,702
Total economic benefit of changes in the fair value of mortgage  servicing rights, net of economic hedges	$	4,437			$	4,652			$	6,509			$	6,547			$	9,297

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

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

	Three Months Ended
	June 30, 2021				Mar. 31, 2021				Dec. 31, 2020				Sept. 30, 2020				June 30, 2020
Interest revenue	$	295,893			$	298,239			$	319,020			$	294,659			$	306,384
Interest expense	15,584				17,819				21,790				22,909				28,280
Net interest revenue	280,309				280,420				297,230				271,750				278,104
Provision for credit losses	(35,000		)		(25,000		)		(6,500		)		—				135,321
Net interest revenue after provision for  credit losses	315,309				305,420				303,730				271,750				142,783
Other operating revenue:
Brokerage and trading revenue	29,408				20,782				39,506				69,526				62,022
Transaction card revenue	24,923				22,430				21,896				23,465				22,940
Fiduciary and asset management revenue	44,832				41,322				41,799				39,931				41,257
Deposit service charges and fees	25,861				24,209				24,343				24,286				22,046
Mortgage banking revenue	21,219				37,113				39,298				51,959				53,936
Other revenue	23,172				16,296				14,209				13,698				11,479
Total fees and commissions	169,415				162,152				181,051				222,865				213,680
Other gains, net	16,449				10,121				7,394				2,044				7,347
Gain (loss) on derivatives, net	18,820				(27,650		)		(339		)		2,354				21,885
Gain (loss) on fair value option securities, net	(1,627		)		(1,910		)		68				(754		)		(14,459		)
Change in fair value of mortgage servicing rights	(13,041		)		33,874				6,276				3,441				(761		)
Gain (loss) on available for sale securities, net	1,430				467				4,339				(12		)		5,580
Total other operating revenue	191,446				177,054				198,789				229,938				233,272
Other operating expense:
Personnel	172,035				173,010				176,198				179,860				176,235
Business promotion	2,744				2,154				3,728				2,633				1,935
Charitable contributions to BOKF Foundation	—				4,000				6,000				—				3,000
Professional fees and services	12,361				11,980				14,254				14,074				12,161
Net occupancy and equipment	26,633				26,662				27,875				28,111				30,675
Insurance	3,660				4,620				4,006				5,848				5,156
Data processing and communications	36,418				37,467				35,061				34,751				32,942
Printing, postage and supplies	4,285				3,440				3,805				3,482				3,502
Amortization of intangible assets	4,578				4,807				5,088				5,071				5,190
Mortgage banking costs	11,126				13,943				14,765				15,803				15,598
Other expense	17,312				13,701				11,892				7,411				9,572
Total other operating expense	291,152				295,784				302,672				297,044				295,966
Net income before taxes	215,603				186,690				199,847				204,644				80,089
Federal and state income taxes	48,496				42,382				45,138				50,552				15,803
Net income	167,107				144,308				154,709				154,092				64,286
Net income (loss) attributable to non-controlling interests	686				(1,752		)		485				58				(407		)
Net income attributable to BOK Financial  Corporation shareholders	$	166,421			$	146,060			$	154,224			$	154,034			$	64,693
Average shares outstanding:
Basic	68,815,666				69,137,375				69,489,597				69,877,866				69,876,043
Diluted	68,817,442				69,141,710				69,493,050				69,879,290				69,877,467
Net income per share:
Basic	$	2.40			$	2.10			$	2.21			$	2.19			$	0.92
Diluted	$	2.40			$	2.10			$	2.21			$	2.19			$	0.92

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

	June 30, 2021				Mar. 31, 2021				Dec. 31, 2020				Sept. 30, 2020				June 30, 2020
Commercial:
Services	$	3,389,756			$	3,421,948			$	3,508,583			$	3,545,825			$	3,779,881
Healthcare	3,381,261				3,290,758				3,305,990				3,325,790				3,289,343
Energy	3,011,331				3,202,488				3,469,194				3,717,101				3,974,174
General business	2,690,559				2,742,590				2,793,768				2,976,990				3,115,112
Total commercial	12,472,907				12,657,784				13,077,535				13,565,706				14,158,510
Commercial real estate:
Office	1,073,346				1,094,060				1,085,257				1,099,563				973,995
Multifamily	964,824				1,227,915				1,328,045				1,387,461				1,407,107
Industrial	824,577				789,437				810,510				792,389				723,005
Retail	784,445				787,648				796,223				786,211				780,467
Residential construction and land  development	128,939				119,079				119,394				121,258				136,911
Other commercial real estate	470,861				485,208				559,109				506,818				532,659
Total commercial real estate	4,246,992				4,503,347				4,698,538				4,693,700				4,554,144
Paycheck protection program	1,121,583				1,848,550				1,682,310				2,097,325				2,081,428
Loans to individuals:
Residential mortgage	1,772,627				1,797,478				1,863,003				1,849,144				1,813,442
Residential mortgages guaranteed by U.S.  government agencies	413,806				420,051				408,687				384,247				322,269
Personal	1,388,534				1,306,637				1,277,447				1,213,178				1,226,097
Total loans to individuals	3,574,967				3,524,166				3,549,137				3,446,569				3,361,808
Total	$	21,416,449			$	22,533,847			$	23,007,520			$	23,803,300			$	24,155,890

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

	June 30, 2021				Mar. 31, 2021				Dec. 31, 2020				Sept. 30, 2020				June 30, 2020
Texas:
Commercial	$	5,690,901			$	5,748,345			$	5,926,534			$	6,135,471			$	6,359,206
Commercial real estate	1,403,751				1,511,714				1,519,217				1,523,226				1,413,108
Paycheck protection program	342,933				537,899				501,079				614,970				612,133
Loans to individuals	885,619				848,194				855,410				794,055				749,531
Total Texas	8,323,204				8,646,152				8,802,240				9,067,722				9,133,978
Oklahoma:
Commercial	2,840,560				2,975,477				3,144,782				3,332,244				3,489,259
Commercial real estate	552,673				597,840				597,733				608,448				596,419
Paycheck protection program	242,880				468,002				413,108				487,247				442,518
Loans to individuals	2,063,419				2,043,705				2,052,784				2,034,576				1,966,032
Total Oklahoma	5,699,532				6,085,024				6,208,407				6,462,515				6,494,228
Colorado:
Commercial	1,904,182				1,910,826				1,929,320				1,993,364				2,085,294
Commercial real estate	656,521				777,786				879,648				893,626				940,622
Paycheck protection program	299,712				436,540				377,111				494,910				488,279
Loans to individuals	262,796				264,759				264,295				257,832				265,359
Total Colorado	3,123,211				3,389,911				3,450,374				3,639,732				3,779,554
Arizona:
Commercial	1,239,270				1,207,089				1,219,072				1,218,769				1,346,037
Commercial real estate	705,497				667,766				726,111				702,291				698,818
Paycheck protection program	104,946				208,481				211,725				272,114				318,961
Loans to individuals	178,481				179,031				177,948				166,203				177,155
Total Arizona	2,228,194				2,262,367				2,334,856				2,359,377				2,540,971
Kansas/Missouri:
Commercial	388,291				421,974				455,914				493,606				481,162
Commercial real estate	406,055				395,590				366,821				352,663				314,926
Paycheck protection program	41,954				60,741				56,011				80,230				76,724
Loans to individuals	103,092				104,954				105,995				96,598				102,577
Total Kansas/Missouri	939,392				983,259				984,741				1,023,097				975,389
New Mexico:
Commercial	304,804				307,395				303,833				288,374				308,090
Commercial real estate	437,996				448,298				473,204				473,697				458,230
Paycheck protection program	86,716				124,059				109,881				133,244				128,058
Loans to individuals	68,177				70,491				75,665				79,890				83,470
Total New Mexico	897,693				950,243				962,583				975,205				977,848
Arkansas:
Commercial	104,899				86,678				98,080				103,878				89,462
Commercial real estate	84,499				104,353				135,804				139,749				132,021
Paycheck protection program	2,442				12,828				13,395				14,610				14,755
Loans to individuals	13,383				13,032				17,040				17,415				17,684
Total Arkansas	205,223				216,891				264,319				275,652				253,922
TOTAL BOK FINANCIAL	$	21,416,449			$	22,533,847			$	23,007,520			$	23,803,300			$	24,155,890

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)

	June 30, 2021				Mar. 31, 2021				Dec. 31, 2020				Sept. 30, 2020				June 30, 2020
Oklahoma:
Demand	$	4,985,542			$	4,823,436			$	4,329,205			$	4,493,978			$	4,378,786
Interest-bearing:
Transaction	12,065,844				12,828,070				12,603,658				12,586,449				11,438,549
Savings	500,344				487,862				420,996				401,062				387,557
Time	1,139,980				1,197,517				1,134,453				1,081,176				1,330,619
Total interest-bearing	13,706,168				14,513,449				14,159,107				14,068,687				13,156,725
Total Oklahoma	18,691,710				19,336,885				18,488,312				18,562,665				17,535,511
Texas:
Demand	3,752,790				3,592,969				3,449,882				3,152,106				3,070,728
Interest-bearing:
Transaction	4,335,113				4,257,234				3,800,427				3,482,555				3,358,030
Savings	160,805				154,406				139,173				136,787				128,892
Time	346,577				368,086				383,062				438,337				476,867
Total interest-bearing	4,842,495				4,779,726				4,322,662				4,057,679				3,963,789
Total Texas	8,595,285				8,372,695				7,772,544				7,209,785				7,034,517
Colorado:
Demand	1,991,343				2,115,354				2,168,404				2,057,603				2,096,075
Interest-bearing:
Transaction	2,159,819				2,100,135				2,170,485				1,861,763				1,816,604
Savings	73,990				73,446				69,384				68,230				67,477
Time	193,787				204,973				208,778				226,780				254,845
Total interest-bearing	2,427,596				2,378,554				2,448,647				2,156,773				2,138,926
Total Colorado	4,418,939				4,493,908				4,617,051				4,214,376				4,235,001
New Mexico:
Demand	1,197,412				1,131,713				941,074				964,908				965,877
Interest-bearing:
Transaction	723,757				736,923				733,007				713,418				752,565
Savings	105,837				103,591				91,646				85,463				80,242
Time	174,665				181,863				186,307				200,525				222,370
Total interest-bearing	1,004,259				1,022,377				1,010,960				999,406				1,055,177
Total New Mexico	2,201,671				2,154,090				1,952,034				1,964,314				2,021,054
Arizona:
Demand	943,511				915,439				905,201				928,671				985,757
Interest-bearing:
Transaction	820,901				835,795				768,220				771,319				780,500
Savings	13,496				13,235				12,174				11,498				15,669
Time	30,012				30,997				32,721				36,929				42,318
Total interest-bearing	864,409				880,027				813,115				819,746				838,487
Total Arizona	1,807,920				1,795,466				1,718,316				1,748,417				1,824,244
Kansas/Missouri:
Demand	463,339				478,370				426,738				405,360				427,795
Interest-bearing:
Transaction	978,160				991,510				960,237				616,797				526,635
Savings	17,539				18,686				16,286				15,520				15,033
Time	13,509				13,898				14,610				16,430				17,746
Total interest-bearing	1,009,208				1,024,094				991,133				648,747				559,414
Total Kansas/Missouri	1,472,547				1,502,464				1,417,871				1,054,107				987,209
Arkansas:
Demand	46,472				45,889				45,834				44,712				67,147
Interest-bearing:
Transaction	195,125				141,207				122,388				164,439				177,535
Savings	3,445				3,000				2,333				2,389				2,101
Time	6,819				7,022				7,197				7,796				7,995
Total interest-bearing	205,389				151,229				131,918				174,624				187,631
Total Arkansas	251,861				197,118				177,752				219,336				254,778
TOTAL BOK FINANCIAL	$	37,439,933			$	37,852,626			$	36,143,880			$	34,973,000			$	33,892,314

NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION

	Three Months Ended
	June 30, 2021			Mar. 31, 2021			Dec. 31, 2020			Sept. 30, 2020			June 30, 2020
TAX-EQUIVALENT ASSETS YIELDS
Interest-bearing cash and cash equivalents	0.10	%		0.10	%		0.10	%		0.12	%		0.07	%
Trading securities	1.95	%		2.06	%		2.02	%		1.92	%		2.46	%
Investment securities, net of allowance	5.01	%		4.88	%		4.88	%		4.85	%		4.77	%
Available for sale securities	1.85	%		1.84	%		1.98	%		2.11	%		2.29	%
Fair value option securities	2.60	%		1.95	%		2.27	%		1.92	%		2.00	%
Restricted equity securities	3.36	%		2.86	%		3.25	%		2.53	%		2.75	%
Residential mortgage loans held for sale	2.91	%		2.71	%		2.75	%		3.01	%		3.10	%
Loans	3.54	%		3.55	%		3.68	%		3.60	%		3.63	%
Allowance for loan losses
Loans, net of allowance	3.60	%		3.62	%		3.75	%		3.67	%		3.69	%
Total tax-equivalent yield on earning assets	2.75	%		2.78	%		2.92	%		3.04	%		3.12	%
COST OF INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest-bearing transaction	0.10	%		0.12	%		0.14	%		0.17	%		0.21	%
Savings	0.04	%		0.04	%		0.05	%		0.05	%		0.05	%
Time	0.58	%		0.70	%		0.89	%		1.13	%		1.36	%
Total interest-bearing deposits	0.14	%		0.17	%		0.19	%		0.26	%		0.34	%
Funds purchased and repurchase agreements	0.16	%		0.19	%		0.28	%		0.17	%		0.14	%
Other borrowings	0.34	%		0.39	%		0.42	%		0.43	%		0.56	%
Subordinated debt	4.87	%		4.92	%		4.87	%		4.89	%		5.16	%
Total cost of interest-bearing liabilities	0.21	%		0.24	%		0.28	%		0.31	%		0.37	%
Tax-equivalent net interest revenue spread	2.54	%		2.54	%		2.64	%		2.73	%		2.75	%
Effect of noninterest-bearing funding sources and other	0.06	%		0.08	%		0.08	%		0.08	%		0.08	%
Tax-equivalent net interest margin	2.60	%		2.62	%		2.72	%		2.81	%		2.83	%

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
	June 30, 2021				Mar. 31, 2021				Dec. 31, 2020				Sept. 30, 2020				June 30, 2020
Nonperforming assets:
Nonaccruing loans:
Commercial:
Energy	$	70,341			$	101,800			$	125,059			$	126,816			$	162,989
Services	29,913				28,033				25,598				25,817				21,032
Healthcare	527				3,187				3,645				3,645				3,645
General business	11,823				14,053				12,857				13,675				14,333
Total commercial	112,604				147,073				167,159				169,953				201,999
Commercial real estate	26,123				27,243				27,246				12,952				13,956
Loans to individuals:
Permanent mortgage	31,473				32,884				32,228				31,599				33,098
Permanent mortgage guaranteed by U.S  government agencies	9,207				8,564				7,741				6,397				6,110
Personal	229				255				319				252				233
Total loans to individuals	40,909				41,703				40,288				38,248				39,441
Total nonaccruing loans	$	179,636			$	216,019			$	234,693			$	221,153			$	255,396
Accruing renegotiated loans guaranteed by U.S.  government agencies	171,324				154,591				151,775				142,770				114,571
Real estate and other repossessed assets	57,337				70,911				90,526				52,847				35,330
Total nonperforming assets	$	408,297			$	441,521			$	476,994			$	416,770			$	405,297
Total nonperforming assets excluding  those guaranteed by U.S. government agencies	$	227,766			$	278,366			$	317,478			$	267,603			$	284,616
Accruing loans 90 days past due1	$	252			$	395			$	10,369			$	7,684			$	10,992
Gross charge-offs	$	18,304			$	16,905			$	18,251			$	26,661			$	15,570
Recoveries	(2,856		)		(2,437		)		(1,592		)		(4,232		)		(1,491		)
Net charge-offs	$	15,448			$	14,468			$	16,659			$	22,429			$	14,079
Provision for loan losses	$	(25,064	)		$	(21,770	)		$	(14,478	)		$	6,609			$	134,365
Provision for credit losses from off-balance  sheet unfunded loan commitments	(8,590		)		(4,044		)		8,952				(4,950		)		4,405
Provision for expected credit losses from  mortgage banking activities	(1,222		)		885				(923		)		(770		)		(3,575		)
Provision for credit losses related to held-to  maturity (investment) securities portfolio	(124		)		(71		)		(51		)		(889		)		126
Total provision for credit losses	$	(35,000	)		$	(25,000	)		$	(6,500	)		$	—			$	135,321
	Three Months Ended
	June 30, 2021				Mar. 31, 2021				Dec. 31, 2020				Sept. 30, 2020				June 30, 2020
Allowance for loan losses to period end loans	1.46		%		1.56		%		1.69		%		1.76		%		1.80		%
Allowance for loan losses to period end  loans excluding PPP loans2	1.54		%		1.70		%		1.82		%		1.93		%		1.97		%
Combined allowance for loan losses and  accrual for off-balance sheet credit risk  from unfunded loan commitments to  period end loans	1.57		%		1.71		%		1.85		%		1.88		%		1.94		%
Combined allowance for loan losses and  accrual for off-balance sheet credit risk  from unfunded loan commitments to  period end loans excluding PPP loans2	1.66		%		1.86		%		2.00		%		2.06		%		2.12		%
Nonperforming assets to period end loans  and repossessed assets	1.90		%		1.95		%		2.07		%		1.75		%		1.68		%
Net charge-offs (annualized) to average loans	0.28		%		0.25		%		0.28		%		0.37		%		0.23		%
Net charge-offs (annualized) to average loans  excluding PPP loans2	0.30		%		0.28		%		0.31		%		0.41		%		0.25		%
Allowance for loan losses to nonaccruing loans1	183.00		%		169.87		%		171.24		%		195.47		%		174.74		%
Combined allowance for loan losses and  accrual for off-balance sheet credit risk  from unfunded loan commitments to  nonaccruing loans1	197.25		%		185.72		%		187.51		%		208.49		%		187.94		%

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

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

		Three Months Ended												2Q21 vs 1Q21							2Q21 vs 2Q20
		June 30, 2021				Mar. 31, 2021				June 30, 2020				$ change				% change			$ change				% change
Commercial Banking
Net interest revenue		$	130,901			$	130,005			$	145,109			$	896			0.7	%		$	(14,208	)		(9.8	)%
Fees and commissions revenue		63,368				49,847				46,515				13,521				27.1	%		16,853				36.2	%
Combined net interest and fee revenue		194,269				179,852				191,624				14,417				8.0	%		2,645				1.4	%
Other operating expense		71,351				66,979				62,933				4,372				6.5	%		8,418				13.4	%
Corporate expense allocations		12,512				12,734				5,437				(222		)		(1.7	)%		7,075				130.1	%
Net income		72,632				69,673				80,992				2,959				4.2	%		(8,360		)		(10.3	)%
Average assets		28,160,594				28,047,052				27,575,652				113,542				0.4	%		584,942				2.1	%
Average loans		16,981,888				17,522,520				19,262,827				(540,632		)		(3.1	)%		(2,280,939		)		(11.8	)%
Average deposits		17,049,772				16,130,168				14,599,225				919,604				5.7	%		2,450,547				16.8	%
Consumer Banking
Net interest revenue		$	24,945			$	20,974			$	39,270			$	3,971			18.9	%		$	(14,325	)		(36.5	)%
Fees and commissions revenue		37,714				52,300				67,192				(14,586		)		(27.9	)%		(29,478		)		(43.9	)%
Combined net interest and fee revenue		62,659				73,274				106,462				(10,615		)		(14.5	)%		(43,803		)		(41.1	)%
Other operating expense		52,453				55,622				58,249				(3,169		)		(5.7	)%		(5,796		)		(10.0	)%
Corporate expense allocations		11,599				11,475				10,692				124				1.1	%		907				8.5	%
Net income		1,698				6,948				32,501				(5,250		)		(75.6	)%		(30,803		)		(94.8	)%
Average assets		10,087,488				9,755,539				9,920,005				331,949				3.4	%		167,483				1.7	%
Average loans		1,786,242				1,823,732				1,679,164				(37,490		)		(2.1	)%		107,078				6.4	%
Average deposits		8,469,043				8,082,443				7,587,246				386,600				4.8	%		881,797				11.6	%
Wealth Management
Net interest revenue		$	52,293			$	48,354			$	26,880			$	3,939			8.1	%		$	25,413			94.5	%
Fees and commissions revenue		78,841				65,684				106,757				13,157				20.0	%		(27,916		)		(26.1	)%
Combined net interest and fee revenue		131,134				114,038				133,637				17,096				15.0	%		(2,503		)		(1.9	)%
Other operating expense		79,429				78,565				80,567				864				1.1	%		(1,138		)		(1.4	)%
Corporate expense allocations		10,343				9,887				8,204				456				4.6	%		2,139				26.1	%
Net income		31,061				19,382				33,394				11,679				60.3	%		(2,333		)		(7.0	)%
Average assets		19,201,041				18,645,865				15,721,452				555,176				3.0	%		3,479,589				22.1	%
Average loans		1,968,513				1,917,973				1,709,363				50,540				2.6	%		259,150				15.2	%
Average deposits		9,695,319				9,706,295				8,385,681				(10,976		)		(0.1	)%		1,309,638				15.6	%
Fiduciary assets		58,654,788				56,227,268				46,748,292				2,427,520				4.3	%		11,906,496				25.5	%
Assets under management or administration		96,632,748				91,956,188				79,452,502				4,676,560				5.1	%		17,180,246				21.6	%

Contact:

Cody McAlester
Vice President, Investor Relations
918-595-3030

FAQ

What were BOK Financial's earnings for Q2 2021?

BOK Financial reported net earnings of $166.4 million, or $2.40 per diluted share for the second quarter of 2021.

How did loan balances change for BOK Financial in Q2 2021?

Total loans decreased by $1.1 billion to $21.4 billion in Q2 2021.

What is BOK Financial's capital position as of June 30, 2021?

BOK Financial reported a Tier 1 capital ratio of 12.01% as of June 30, 2021.

How did BOK Financial's Wealth Management segment perform in Q2 2021?

Wealth Management contributed $31.1 million to net income, an increase of $11.7 million compared to the prior quarter.

What is the provision for credit losses reported by BOK Financial?

BOK Financial recorded a $35 million negative provision for credit losses in Q2 2021, indicating improved credit quality.