BOK Financial Corporation reported record net income of $351.2 million or $5.13 per diluted share for the year ended December 31, 2012, up $65.3 million or 23% over 2011. Net income for the year ended December 31, 2011 was $285.9 million or $4.17 per diluted share.

"BOK Financial's results for 2012 reflect the value of our diversified revenue business model," said President and CEO Stan Lybarger. "Non-interest revenue increased by $103 million or 20% over 2011, led by tremendous growth in mortgage banking revenue. Our mortgage banking professionals originated over $3.7 billion in loans, assisting a record number of customers in the purchase or refinance of their home during this year. In addition to mortgage banking revenue, brokerage and trading revenue was up nearly $23 million over the previous year, which more than offset the full year effect of regulatory limits on interchange fees."

"Our commercial loan portfolio grew by $1.1 billion or 16% and deposits grew by $2.4 billion or 13% over December 31, 2011," said Lybarger. "Additionally, continued improvements in credit quality in 2012 required us to further reduce our combined allowances for credit losses by $45 million through net charge-offs and a $22 million negative provision for credit losses."

"While persistently low interest rates and modest economic growth present a challenge for all banks, including BOK Financial, we expect the Company to continue to perform well," said Lybarger. "Our outlook for the upcoming year includes continued loan growth, increased non-interest revenue and operating expense discipline."

Net income for the fourth quarter of 2012 totaled $82.6 million or $1.21 per diluted share, compared to net income of $87.4 million or $1.27 per diluted share for the third quarter of 2012 and net income of $67.0 million or $0.98 per diluted share for the fourth quarter of 2011.

Highlights of fourth quarter of 2012 included:

  • Net interest revenue totaled $173.4 million for the fourth quarter of 2012 compared to $176.0 million for the third quarter of 2012. Net interest margin was 2.95% for the fourth quarter of 2012 and 3.12% for the third quarter of 2012. Securities portfolio yield continued to decline as cash flows were reinvested at lower rates.
  • Fees and commissions revenue totaled $165.8 million, largely unchanged compared to the third quarter of 2012. Mortgage banking revenue decreased $3.9 million compared to the prior quarter primarily due to seasonal decreases in mortgage commitments and mortgage loans held for sale. Trust fees and commission revenue increased $2.4 million over the prior quarter. All other revenue sources were up $1.3 million over the prior quarter.
  • Operating expenses, excluding changes in the fair value of mortgage servicing rights, totaled $226.8 million, up $14.0 million over the previous quarter. Personnel expense increased $8.4 million. Non-personnel expense increased $5.6 million.
  • A $14.0 million negative provision for credit losses was recorded in the fourth quarter of 2012. Improving charge-off trends resulted in lower estimated loss rates. Most economic factors are stable or improving in our primary markets. No provision for credit losses was recorded in the third quarter of 2012. Net charge-offs totaled $4.3 million or 0.14% of average loans on an annualized basis in the fourth quarter of 2012 compared to net charge-offs of $5.7 million or 0.19% of average loans on an annualized basis in the third quarter of 2012. Gross charge-offs continue to decline, down $921 thousand from the previous quarter.
  • The combined allowance for credit losses totaled $217 million or 1.77% of outstanding loans at December 31, 2012 compared to $236 million or 1.99% of outstanding loans at September 30, 2012. Nonperforming assets totaled $277 million or 2.23% of outstanding loans and repossessed assets at December 31, 2012 and $264 million or 2.21% of outstanding loans and repossessed assets at September 30, 2012. Nonperforming assets increased $31 million due to the implementation of recent regulatory guidance concerning borrowers who have filed for Chapter 7 bankruptcy. Excluding the impact of this new guidance, nonperforming assets decreased $19 million during the fourth quarter of 2012.
  • Outstanding loan balances were $12.3 billion at December 31, 2012, up $479 million over the prior quarter. Commercial loan balances grew by $351 million or 19% on an annualized basis over September 30, 2012. Commercial real estate loans grew by $68 million, residential mortgage loans grew by $32 million and consumer loans grew by $28 million.
  • Period end deposits totaled $21.2 billion at December 31, 2012 compared to $19.1 billion at September 30, 2012. Demand deposit accounts increased $1.2 billion and interest-bearing transaction accounts increased $885 million, partially offset by a $54 million decrease in time deposits.
  • Tangible common equity ratio was 9.25% at December 31, 2012 and 9.67% at September 30, 2012. The tangible common equity ratio is a non-GAAP measure of capital strength used by the Company and investors based on shareholders' equity minus intangible assets and equity that does not benefit common shareholders. The Company and its subsidiary bank continue to exceed the regulatory definition of well capitalized. The Company's Tier 1 capital ratios, as defined by banking regulations, were 12.78% at December 31, 2012 and 13.21% at September 30, 2012.
  • The Company paid a regular quarterly cash dividend of $26 million or $0.38 per common share and a special cash dividend of $68 million or $1.00 per common share during the fourth quarter of 2012. On January 29, 2013, the board of directors approved a quarterly cash dividend of $0.38 per common share payable on or about March 1, 2013 to shareholders of record as of February 15, 2013.

Net Interest Revenue

Net interest revenue decreased $2.7 million compared to the third quarter of 2012. Net interest margin was 2.95% for the fourth quarter of 2012 compared to 3.12% for the third quarter of 2012.

The yield on average earning assets decreased 17 basis points compared to the prior quarter. The available for sale securities portfolio yield decreased 28 basis points to 2.10% due primarily to the continued reinvestment of cash flows from the portfolio at lower current rates. The loan portfolio yield of 4.33% was unchanged compared to the previous quarter.

"In the present low interest rate environment, our ability to further decrease funding costs is limited," said Steven Nell, Chief Financial Officer. "In addition, our ability to bolster near term net interest revenue through continued securities portfolio growth may be constrained by our conservative approach to interest rate risk management. We intend to focus on supporting net interest revenue through continued loan portfolio growth. Based on the current interest rate environment, we see continued pressure on net interest margin in 2013."

Average earning assets increased $741 million during the fourth quarter of 2012. The average balance of the available for sale securities portfolio increased $424 million over the third quarter of 2012 due primarily to growth in residential and commercial mortgage-backed securities issued by U.S. government agencies. Average outstanding loans increased $250 million due primarily to a $209 million increase in commercial loan balances.

Average deposits increased $1.4 billion over the previous quarter. Demand deposit balances were up $787 million and interest-bearing transaction account balances increased $624 million. Time deposit account balances decreased $59 million. The average balance of borrowed funds decreased $328 million compared to the third quarter of 2012.

Fees and Commissions Revenue

Fees and commissions revenue totaled $165.8 million, largely unchanged compared to the third quarter of 2012. Increased revenue from an acquisition made during the third quarter was mostly offset by decreased mortgage banking revenue.

Mortgage banking revenue totaled $46.4 million, down $3.9 million from the prior quarter. Record mortgage loan production volume during the fourth quarter was offset by a seasonal decrease in mortgage loan commitments and loans held for sale. Residential mortgage loans funded for sale totaled $1.1 billion for the fourth quarter of 2012, up $27 million or 3% over the previous quarter. Refinanced mortgage loans were 62% of loans originated for sale in the fourth quarter of 2012 compared to 61% of the loans originated for sale in the third quarter of 2012. Outstanding mortgage loan commitments decreased $95 million and the unpaid principal balance of loans held for sale decreased $25 million compared to September 30, 2012.

"Despite some industry forecasts of a reduction in mortgage lending activity, we expect our mortgage banking revenue to remain strong in 2013," said Nell. "During 2012, we increased the number of mortgage lenders, expanded further into our regional markets and added correspondent loan origination channels. In addition, it does not appear that government policies that stimulate mortgage lending will end anytime soon. We also expect continued revenue growth from our wealth management business in 2013 through a full year's performance from our Milestone acquisition and further expansion throughout our regional markets."

Trust fees and commissions revenue were up $2.4 million primarily related to revenue from The Milestone Group, Inc., a Denver-based Registered Investment Adviser acquired by BOK Financial in the third quarter. Brokerage and trading revenue increased $697 thousand, transaction card revenue increased $221 thousand and deposit service charges and fees decreased $974 thousand.

Operating Expenses

Total operating expenses were $222.1 million for the fourth quarter of 2012 compared to $222.3 million for the third quarter of 2012. Excluding changes in the fair value of mortgage servicing rights, operating expenses totaled $226.8 million, up $14.0 million over the third quarter of 2012.

Personnel costs increased $8.4 million over the third quarter of 2012 due largely to increased incentive compensation and health care costs. Incentive compensation expense increased $5.8 million. Stock-based incentive compensation expense increased $4.8 million primarily due to increased incentive compensation accruals for executive compensation plans. Cash-based incentive compensation, which rewards employees as they generate business opportunities for the Company by growing loans, deposits, customer relationships or other measurable metrics, increased $1.0 million. Employee health care costs increased $3.0 million over the third quarter of 2012 primarily due to an increased level of large dollar claims.

Non-personnel expense increased $5.6 million over the third quarter of 2012. During the fourth quarter, the Company made a $2.1 million discretionary contribution to the BOKF Foundation. The BOKF Foundation partners with various charitable organizations to support needs within our communities. All other non-personnel expenses were up $3.5 million over the previous quarter.

Loans, Deposits and Capital

Loans

Outstanding loans at December 31, 2012 were $12.3 billion, up $479 million over September 30, 2012. All categories of loans experienced growth during the fourth quarter.

Outstanding commercial loan balances grew by $351 million or 19% on an annualized basis over September 30, 2012. Outstanding balances were up in most geographic markets, including $133 million in Oklahoma, $125 million in Texas, $46 million in Kansas/Missouri and $33 million in Colorado. Service sector loans grew by $134 million primarily in the Texas and Oklahoma markets. Energy sector loans increased $57 million. Energy sector loans grew primarily in the Oklahoma and Colorado markets, partially offset by a decrease in the Texas market. Healthcare sector loans increased $56 million primarily in the Texas market. Wholesale/retail sector loans increased $55 million primarily in the Texas and Kansas/Missouri markets, partially offset by a decrease in the Oklahoma market. Other commercial and industrial sector loans increased $33 million and manufacturing sector loans increased $18 million both primarily in the Oklahoma market. Unfunded energy loan commitments increased $170 million during the fourth quarter to $2.4 billion. All other unfunded commercial loan commitments totaled $3.2 billion at December 31, 2012, up slightly from September 30, 2012.

Commercial real estate loans were up $68 million over September 30, 2012. Loans secured by industrial properties increased by $59 million primarily in the Texas market. Other real estate loans increased $24 million. Growth in the Oklahoma and Colorado markets was partially offset by a decrease in the Texas market. Loans secured by office buildings were up $20 million primarily due to growth in the Texas market, partially offset by a decrease in loans attributed to the Oklahoma market. Growth in these loan classes was partially offset by a $40 million decrease in construction and land development loans primarily in the Oklahoma, Texas and Colorado markets. Unfunded commercial real estate loan commitments totaled $621 million at December 31, 2012, up $47 million over September 30, 2012.

Residential mortgage loans increased $32 million over September 30, 2012. Home equity loans increased $46 million. Growth continues to be primarily focused in first-lien, fully amortizing home equity loans. At December 31, 2012, approximately 63% of our $761 million home equity loan portfolio consisted of first-lien, fully amortizing loans. Non-guaranteed permanent mortgage loans decreased $11.0 million. Permanent mortgage loans guaranteed by U.S. government agencies decreased $2.2 million.

Consumer loans increased $28 million from September 30, 2012. Other consumer loans were up $40 million over September 30, 2012, partially offset by a $13 million decrease primarily related to continued runoff of indirect automobile loans resulting from the previously announced decision to curtail that business in favor of a customer-focused direct approach to consumer lending. Approximately $35 million of indirect automobile loans remain outstanding at December 31, 2012.

Deposits

Deposits totaled $21.2 billion at December 31, 2012 compared to $19.1 billion at September 30, 2012. Demand deposit balances increased $1.2 billion. Interest-bearing transaction account balances increased $885 million and time deposits decreased $54 million. Among the lines of business, commercial deposits increased $1.1 billion, wealth management deposits increased $599 million and consumer deposits increased $80 million. Energy, commercial real estate, treasury services and small business customer account balances all increased over the prior quarter. Commercial customers continue to maintain high account balances due to continued economic uncertainty and persistently low yields available on high-quality investment alternatives. A significant driver of deposit growth in the fourth quarter was sales of businesses or assets by customers. During the first half of January 2013, demand deposit balances decreased by approximately $700 million as customers redeployed these funds.

The temporary unlimited deposit insurance coverage program for noninterest-bearing transaction accounts at all FDIC-insured institutions provided for by the Dodd-Frank Wall Street Reform and Consumer Protection Act expired on December 31, 2012. Noninterest-bearing transaction accounts are now insured up to $250,000.

Capital

The Company and its subsidiary bank exceeded the regulatory definition of well capitalized at December 31, 2012. The Company's Tier 1 capital ratio was 12.78% at December 31, 2012 and 13.21% at September 30, 2012. The total capital ratio was 15.13% at December 31, 2012 and 15.71% at September 30, 2012. In addition, the Company's tangible common equity ratio, a non-GAAP measure, was 9.25% at December 31, 2012 and 9.67% at September 30, 2012. Unrealized securities gains added 48 basis points to the tangible common equity ratio at December 31, 2012. The decrease in Tier 1, total and tangible common equity ratios was largely due to the $1.00 per share special dividend paid in the fourth quarter.

"BOK Financial has increased cash dividends each year since paying its first quarterly cash dividend in 2005," said Nell. "We will consider migrating toward a higher regular dividend payout ratio in the future, subject to attractive capital deployment opportunities."

In June 2012, banking regulators issued a Notice of Proposed Rulemaking that will incorporate Basel III capital changes for substantially all U.S. banking organizations. If adopted as proposed, these changes will establish a 7% threshold for the Tier 1 common equity ratio consisting of a minimum level plus a capital conservation buffer. BOK Financial's Tier 1 common equity ratio based on the existing Basel I standards was 12.59% as of December 31, 2012. Our estimated Tier 1 common equity ratio under a fully phased in Basel III framework is approximately 12.15%, nearly 515 basis points above the 7% regulatory threshold. This estimate is subject to interpretation of rules that are not yet final. Additionally, the proposed definition of Tier 1 common equity includes unrealized gains and losses on available for sale securities which will vary based on market conditions.

Credit Quality

Nonperforming assets increased $13 million during the fourth quarter of 2012 to $277 million or 2.23% of outstanding loans and repossessed assets at December 31, 2012. Excluding the impact of recent regulatory guidance that primarily affected residential mortgage loans, nonperforming assets decreased $19 million. Implementation of this guidance increased nonperforming assets by $31 million in the fourth quarter.

The Office of the Comptroller of the Currency issued interpretive guidance in the third quarter of 2012 regarding accounting for and classification of retail loans to borrowers who have filed for Chapter 7 bankruptcy. This guidance requires that these loans be charged-down to collateral value and classified as nonaccruing and troubled debt restructurings, regardless of current payment status. We have generally been complying with this guidance by charging down such loans to collateral value. Implementation of this guidance in the fourth quarter did not significantly affect charge-offs or provision for credit losses. Nonaccruing loans increased by approximately $19 million. At December 31, 2012, payments on approximately 65% of these newly-identified nonaccruing loans are current. Most of this increase in nonaccruing loans is attributed to residential mortgage loans in the Oklahoma market. Implementation of this guidance also increased renegotiated residential mortgage loans guaranteed by U.S. government agencies by $12 million.

Nonaccruing loans totaled $134 million or 1.09% of outstanding loans at December 31, 2012 and $132 million or 1.11% of outstanding loans at September 30, 2012. New nonaccruing loans identified in the fourth quarter totaled $38 million, including $19 million identified related to the implementation of the recent regulatory guidance on Chapter 7 bankruptcies. This was offset by $16 million in payments received, $8.0 million in charge-offs and $13 million in foreclosures and repossessions.

Nonaccruing commercial loans increased to $24 million or 0.32% of outstanding commercial loans at December 31, 2012 from $22 million or 0.30% of outstanding commercial loans at September 30, 2012. Nonaccruing commercial real estate loans decreased to $61 million or 2.71% of outstanding commercial real estate loans at December 31, 2012 from $76 million or 3.50% of outstanding commercial real estate loans at September 30, 2012. Nonaccruing commercial real estate loans consist primarily of land development and residential construction loans. Nonaccruing land development and residential construction loans totaled $26 million or 10.49% of all land development and construction loans at December 31, 2012, a decrease of $12 million during the fourth quarter.

Nonaccruing residential mortgage loans increased $17 million during the fourth quarter of 2012 to $47 million or 2.27% of outstanding residential mortgage loans. Principally all non-guaranteed residential mortgage loans past due 90 days or more are nonaccruing. Residential mortgage loans past due 30 to 89 days and still accruing interest, excluding loans guaranteed by U.S. government agencies, totaled $11 million at December 31, 2012 and $21 million at September 30, 2012.

The combined allowance for credit losses totaled $217 million or 1.77% of outstanding loans and 161.76% of nonaccruing loans at December 31, 2012. The allowance for loan losses was $216 million and the accrual for off-balance sheet credit losses was $1.9 million. Gross charge-offs continue to decrease, totaling $8.0 million for the fourth quarter, compared to $8.9 million for the previous quarter. Recoveries totaled $3.7 million for the fourth quarter of 2012. Net charge-offs totaled $4.3 million or 0.14% on an annualized basis for the fourth quarter of 2012 compared with net charge-offs of $5.7 million or 0.19% on an annualized basis for the third quarter of 2012.

After evaluating all credit factors, the Company determined that a $14 million negative provision for credit losses was necessary during the fourth quarter of 2012. Improving trends in gross charge-offs and loan portfolio risk grading across most loan classes resulted in lower estimated loss rates used in developing the combined allowance for credit losses. Most economic factors are stable or improving in our primary markets.

Real estate and other repossessed assets totaled $104 million at December 31, 2012, primarily consisting of $44 million of 1-4 family residential properties (including $22 million guaranteed by U.S. government agencies), $25 million of developed commercial real estate properties, $18 million of undeveloped land and $16 million of residential land and land development properties. The distribution of real estate owned and other repossessed assets among various markets included $29 million attributed to Arizona, $18 million attributed to New Mexico, $16 million attributed to Texas, $15 million attributed to Oklahoma and $13 million attributed to Colorado. Real estate and other repossessed assets decreased by $337 thousand during the fourth quarter of 2012. Additions of $36 million were partially offset by $33 million of sales. Additions included $23 million and sales included $24 million of 1-4 family residential properties guaranteed by U.S. government agencies. Write-downs and net losses on sales of real estate and other repossessed assets totaled $4.1 million.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $11.3 billion at December 31, 2012 and $11.5 billion at September 30, 2012. At December 31, 2012, the available for sale portfolio consisted primarily of $9.9 billion of residential mortgage-backed securities fully backed by U.S. government agencies, $895 million of commercial mortgage-backed securities fully backed by U.S. government agencies, and $325 million of residential mortgage-backed securities privately issued by publicly owned financial institutions. Privately issued residential mortgage-backed securities included $202 million backed by Jumbo-A mortgage loans and $123 million backed by Alt-A mortgage loans. Net unamortized premiums are less than 1% of the securities portfolio amortized cost.

Net unrealized gains on available for sale securities totaled $255 million at December 31, 2012 and $281 million at September 30, 2012. Net unrealized gains on residential mortgage-backed securities issued by U.S. government agencies decreased $34 million during the fourth quarter to $239 million at December 31, 2012. The privately issued residential mortgage-backed securities portfolio has a net unrealized gain of $2.3 million at December 31, 2012 compared to a net unrealized loss of $5.3 million at September 30, 2012.

The amortized cost of privately issued residential mortgage-backed securities totaled $323 million at December 31, 2012, down $14 million since September 30, 2012. All of these securities are rated below investment grade by at least one nationally-recognized rating agency. The amortized cost of these securities was reduced during the fourth quarter of 2012 by $14 million of cash payments received and $197 thousand of credit-related impairment charges during the quarter.

In the fourth quarter of 2012, the Company recognized net gains of $1.1 million from sales of $84 million of available for sale securities. These securities were sold either because they had reached their expected maximum potential total return or to mitigate exposure to prepayment risk. Net gains from sales of $209 million of available for sale securities in the third quarter of 2012 totaled $8.0 million.

The Company also maintains a portfolio of residential mortgage-backed securities issued by U.S. government agencies and interest rate derivative contracts designated as an economic hedge of the changes in the fair value of our mortgage servicing rights. Due to changes in residential mortgage interest rates during the fourth quarter of 2012, prepayment speeds decreased and the value of our mortgage servicing rights increased by $4.7 million. This increase was partially offset by a $2.9 million decrease in the value of securities and interest rate derivative contracts held as an economic hedge.

About BOK Financial Corporation

BOK Financial is a $28 billion regional financial services company based in Tulsa, Oklahoma. The Company's stock is publicly traded on NASDAQ under the Global Select market listings (symbol: BOKF). BOK Financial's holdings include BOKF, NA, BOSC, Inc., The Milestone Group, Inc. and Cavanal Hill Investment Management, Inc. BOKF, NA operates the TransFund electronic funds network and seven banking divisions: Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas and Colorado State Bank and Trust. Through its subsidiaries, the Company provides commercial and consumer banking, investment and trust services, mortgage origination and servicing, and an electronic funds transfer network. For more information, visit www.bokf.com.

The Company will continue to evaluate critical assumptions and estimates, such as the adequacy of the allowance for credit losses and asset impairment as of December 31, 2012 through the date its financial statements are filed with the Securities and Exchange Commission and will adjust amounts reported if necessary.

This news release contains forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about BOK Financial, the financial services industry and the economy generally. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "plans," "projects," 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 involve judgments as to future events and are inherently forward-looking statements. Assessments that BOK Financial's acquisitions and other growth endeavors will be profitable are necessary statements of belief as to the outcome of future events based in part on information provided by others which BOK Financial has not independently verified. These statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions which are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what is expected, implied or forecasted in such forward-looking statements. Internal and external factors that might cause such a difference include, but are not limited to (1) the ability to fully realize expected cost savings from mergers within the expected time frames, (2) the ability of other companies on which BOK Financial relies to provide goods and services in a timely and accurate manner, (3) changes in interest rates and interest rate relationships, (4) demand for products and services, (5) the degree of competition by traditional and nontraditional competitors, (6) changes in banking regulations, tax laws, prices, levies and assessments, (7) the impact of technological advances and (8) trends in consumer behavior as well as their ability to repay loans. BOK Financial and its affiliates undertake no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events, or otherwise.

BALANCE SHEETS -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands)

 
      December 31,
2012		   September 30,
2012		   December 31,
2011
ASSETS
Cash and due from banks $ 1,266,834 $ 596,590 $ 976,191
Funds sold and resell agreements 19,405 18,904 10,174
Trading securities 214,102 204,242 76,800
Investment securities 499,534 432,114 439,236
Available for sale securities 11,287,221 11,506,434 10,179,365
Fair value option securities 284,296 331,887 651,226
Residential mortgage loans held for sale 293,762 325,102 188,125
Loans:
Commercial 7,624,420 7,273,217 6,555,070
Commercial real estate 2,233,158 2,165,526 2,291,303
Residential mortgage 2,051,354 2,018,980 1,974,527
Consumer       402,524     374,644     448,843  
Total loans 12,311,456 11,832,367 11,269,743
Less allowance for loan losses       (215,507 )   (233,756 )   (253,481 )
Loans, net of allowance 12,095,949 11,598,611 11,016,262
Premises and equipment, net 265,920 259,195 262,735
Receivables 114,185 116,243 123,257
Goodwill 361,979 358,962 335,601
Intangible assets, net 28,192 33,196 10,219
Mortgage servicing rights, net 100,812 89,653 86,783
Real estate and other repossessed assets 103,791 104,128 122,753
Bankers' acceptances 605 1,605 1,881
Derivative contracts 338,106 435,653 293,859
Cash surrender value of bank-owned life insurance 274,531 271,830 263,318
Receivable on unsettled securities sales 211,052 32,480 75,151
Other assets       388,355     400,812     381,010  
TOTAL ASSETS       $ 28,148,631     $ 27,117,641     $ 25,493,946  
LIABILITIES AND EQUITY
Deposits:
Demand $ 8,038,286 $ 6,848,401 $ 5,799,785
Interest-bearing transaction 9,888,038 9,002,567 9,354,456
Savings 284,744 269,573 226,357
Time       2,967,992     3,022,326     3,381,982  
Total deposits 21,179,060 19,142,867 18,762,580
Funds purchased 1,167,416 1,680,626 1,063,318
Repurchase agreements 887,030 1,109,696 1,233,064
Other borrowings 651,775 639,254 74,485
Subordinated debentures 347,633 347,592 398,881
Accrued interest, taxes, and expense 176,678 182,410 149,508
Bankers' acceptances 605 1,605 1,881
Due on unsettled securities purchases 297,453 556,998 653,371
Derivative contracts 283,589 254,422 236,522
Other liabilities       163,711     189,696     133,684  
TOTAL LIABILITIES 25,154,950 24,105,166 22,707,294
Shareholders' equity:
Capital, surplus and retained earnings 2,807,940 2,813,264 2,621,489
Accumulated other comprehensive income       149,920     162,393     128,979  
TOTAL SHAREHOLDERS' EQUITY 2,957,860 2,975,657 2,750,468
Non-controlling interest       35,821     36,818     36,184  
TOTAL EQUITY       2,993,681     3,012,475     2,786,652  
TOTAL LIABILITIES AND EQUITY       $ 28,148,631     $ 27,117,641     $ 25,493,946  
 
 
AVERAGE BALANCE SHEETS -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands)

    Three Months Ended
December 31,
2012		   September 30,
2012		   June 30,
2012		   March 31,
2012		   December 31,
2011
ASSETS
Funds sold and resell agreements $ 19,553 $ 17,837 $ 19,187 $ 11,385 $ 12,035
Trading securities 165,109 132,213 143,770 95,293 97,972
Investment securities 474,085 408,646 416,284 430,890 443,326
Available for sale securities 11,482,212 11,058,055 10,091,279 9,947,227 9,914,523
Fair value option securities 292,490 336,160 335,965 555,233 660,025
Residential mortgage loans held for sale 272,581 264,024 191,311 182,372 201,242
Loans:
Commercial 7,424,922 7,216,232 7,075,871 6,882,277 6,502,981
Commercial real estate 2,174,726 2,148,559 2,133,247 2,198,832 2,256,153
Residential mortgage 1,997,679 2,003,162 2,011,729 1,944,462 1,949,929
Consumer     391,992     371,709     393,875     411,240     443,252  
Total loans 11,989,319 11,739,662 11,614,722 11,436,811 11,152,315
Less allowance for loan losses     (229,095 )   (231,177 )   (242,605 )   (252,538 )   (266,473 )
Total loans, net     11,760,224     11,508,485     11,372,117     11,184,273     10,885,842  
Total earning assets 24,466,254 23,725,420 22,569,913 22,406,673 22,214,965
Cash and due from banks 849,614 746,364 748,811 908,628 1,234,312
Cash surrender value of bank-owned life insurance 272,778 270,084 267,246 264,354 261,496
Derivative contracts 316,579 291,965 371,690 311,178 247,411
Other assets     1,591,551     1,554,339     1,580,857     1,625,750     1,679,256  
TOTAL ASSETS     $ 27,496,776     $ 26,588,172     $ 25,538,517     $ 25,516,583     $ 25,637,440  
 
LIABILITIES AND EQUITY
Deposits:
Demand $ 7,505,074 $ 6,718,572 $ 6,278,342 $ 5,847,682 $ 5,588,596
Interest-bearing transaction 9,343,421 8,719,648 8,779,659 9,319,978 9,276,608
Savings 278,714 267,498 259,386 241,442 220,236
Time     3,010,367     3,068,870     3,132,220     3,246,362     3,485,059  
Total deposits 20,137,576 18,774,588 18,449,607 18,655,464 18,570,499
Funds purchased 1,295,442 1,678,006 1,740,354 1,337,614 1,197,154
Repurchase agreements 900,131 1,112,847 1,095,298 1,183,778 1,189,861
Other borrowings 364,425 97,003 86,667 72,911 88,489
Subordinated debentures 347,613 352,432 357,609 397,440 398,858
Derivative contracts 246,296 247,148 302,329 207,864 180,623
Other liabilities     1,233,806     1,378,956     637,920     826,279     1,241,469  
TOTAL LIABILITIES 24,525,289 23,640,980 22,669,784 22,681,350 22,866,953
Total equity     2,971,487     2,947,192     2,868,733     2,835,233     2,770,487  
TOTAL LIABILITIES AND EQUITY     $ 27,496,776     $ 26,588,172     $ 25,538,517     $ 25,516,583     $ 25,637,440  
 
 
STATEMENTS OF EARNINGS -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands, except per share data)

    Three Months Ended     Year Ended
December 31, December 31,
2012     2011 2012     2011
 
Interest revenue $ 194,314 $ 198,040 $ 791,648 $ 811,595
Interest expense     20,945       26,570       87,322       120,101  
Net interest revenue 173,369 171,470 704,326 691,494
Provision for credit losses     (14,000 )     (15,000 )     (22,000 )     (6,050 )
Net interest revenue after provision for credit losses     187,369       186,470       726,326       697,544  
Other operating revenue:
Brokerage and trading revenue 31,958 25,629 126,930 104,181
Transaction card revenue 28,009 25,960 107,985 116,757
Trust fees and commissions 22,030 17,865 80,053 73,290
Deposit service charges and fees 24,174 24,921 98,917 95,872
Mortgage banking revenue 46,410 25,438 169,302 91,643
Bank-owned life insurance 2,673 2,784 11,089 11,280
Other revenue     10,554       9,189       37,827       35,620  
Total fees and commissions 165,808 131,786 632,103 528,643
Gain (loss) on other assets, net 137 1,682 (1,415 ) 4,156
Gain (loss) on derivatives, net (637 ) (174 ) (301 ) 2,686
Gain (loss) on fair value option securities, net (2,081 ) 222 9,230 24,413
Gain on available for sale securities, net 1,066 7,080 33,845 34,144
Total other-than-temporary impairment losses (504 ) (1,037 ) (1,144 ) (10,578 )

Portion of loss recognized in (reclassified from) other
comprehensive income

    (1,163 )     (1,747 )     (6,207 )     (12,929 )
Net impairment losses recognized in earnings     (1,667 )     (2,784 )     (7,351 )     (23,507 )
Total other operating revenue 162,626 137,812 666,111 570,535
Other operating expense:
Personnel 131,192 121,129 491,033 429,986
Business promotion 6,150 5,868 23,338 20,549
Contribution to BOKF Charitable Foundation 2,062 -- 2,062 4,000
Professional fees and services 10,082 7,664 34,015 28,798
Net occupancy and equipment 16,883 16,826 66,726 64,611
Insurance 3,789 3,636 15,356 16,799
Data processing and communications 25,010 26,599 98,904 97,976
Printing, postage and supplies 3,403 3,637 14,228 14,085
Net losses and operating expenses of repossessed assets 6,665 6,180 20,528 23,715
Amortization of intangible assets 1,065 895 2,927 3,583
Mortgage banking costs 8,653 10,154 38,965 34,942
Change in fair value of mortgage servicing rights (4,689 ) 5,261 9,210 40,447
Other expense     11,820       11,133       32,281       40,253  
Total other operating expense 222,085 218,982 849,573 819,744
 
Net income before taxes 127,910 105,300 542,864 448,335
Federal and state income taxes     44,293       37,396       188,740       158,511  
 
Net income 83,617 67,904 354,124 289,824
Net income attributable to non-controlling interest     1,051       911       2,933       3,949  
Net income attributable to BOK Financial Corporation shareholders     $ 82,566       $ 66,993       $ 351,191       $ 285,875  
 
Average shares outstanding:
Basic 67,622,777 67,526,009 67,684,043 67,787,676
Diluted 67,914,717 67,774,721 67,964,940 68,038,763
 
Net income per share:
Basic $ 1.21 $ 0.98 $ 5.15 $ 4.18
Diluted $ 1.21 $ 0.98 $ 5.13 $ 4.17
 
 
FINANCIAL HIGHLIGHTS -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands, except ratio and share data)

    Three Months Ended
December 31,
2012		     September 30,
2012		     June 30,
2012		     March 31,
2012		     December 31,
2011
Capital:
Period-end shareholders' equity $ 2,957,860 $ 2,975,657 $ 2,885,934 $ 2,834,419 $ 2,750,468
Risk weighted assets $ 19,016,673 $ 18,448,854 $ 17,758,118 $ 17,993,379 $ 17,291,105
Risk-based capital ratios:
Tier 1 12.78 % 13.21 % 13.62 % 13.03 % 13.27 %
Total capital 15.13 % 15.71 % 16.19 % 16.16 % 16.49 %
Leverage ratio 9.01 % 9.34 % 9.64 % 9.35 % 9.15 %
Tangible common equity ratio1 9.25 % 9.67 % 10.07 % 9.75 % 9.56 %
Tier 1 common equity ratio2 12.59 % 13.01 % 13.41 % 12.83 % 13.06 %
 
Common stock:
Book value per share $ 43.29 $ 43.62 $ 42.35 $ 41.61 $ 40.36
Market value per share:
High $ 59.77 $ 59.47 $ 58.12 $ 59.02 $ 55.90
Low $ 54.19 $ 55.63 $ 53.34 $ 52.56 $ 45.68
Cash dividends paid $ 94,231 $ 25,912 $ 25,904 $ 22,571 $ 22,451
Dividend payout ratio 114.13 % 29.65 % 26.53 % 26.99 % 33.51 %
Shares outstanding, net 68,327,351 68,215,354 68,144,159 68,116,893 68,153,044
Stock buy-back program:
Shares repurchased -- -- 39,496 345,300 69,581
Amount     $ --       $ --       $ 2,125       $ 18,432       $ 3,579  
Average price per share     $ --       $ --       $ 53.81       $ 53.38       $ 51.44  
 
Performance ratios (quarter annualized):
Return on average assets 1.19 % 1.31 % 1.54 % 1.32 % 1.04 %
Return on average equity 11.05 % 11.80 % 13.69 % 11.86 % 9.59 %
Net interest margin 2.95 % 3.12 % 3.30 % 3.19 % 3.20 %
Efficiency ratio 66.00 % 61.18 % 61.98 % 58.76 % 69.66 %
 
Reconciliation of non-GAAP measures:

1 Tangible common equity ratio:

Total shareholders' equity $ 2,957,860 $ 2,975,657 $ 2,885,934 $ 2,834,419 $ 2,750,468

Less: Goodwill and intangible
assets, net

    (390,171 )     (392,158 )     (344,699 )     (345,246 )     (345,820 )
Tangible common equity     $ 2,567,689       $ 2,583,499       $ 2,541,235       $ 2,489,173       $ 2,404,648  
 
Total assets $ 28,148,631 $ 27,117,641 $ 25,576,046 $ 25,884,173 $ 25,493,946

Less: Goodwill and intangible
assets, net

    (390,171 )     (392,158 )     (344,699 )     (345,246 )     (345,820 )
Tangible assets     $ 27,758,460       $ 26,725,483       $ 25,231,347       $ 25,538,927       $ 25,148,126  
 
Tangible common equity ratio     9.25 %     9.67 %     10.07 %     9.75 %     9.56 %
 
2 Tier 1 common equity ratio:
Tier 1 capital $ 2,430,671 $ 2,436,791 $ 2,418,985 $ 2,344,779 $ 2,295,061
Less: Non-controlling interest     (35,821 )     (36,818 )     (36,787 )     (35,982 )     (36,184 )
Tier 1 common equity     $ 2,394,850       $ 2,399,973       $ 2,382,198       $ 2,308,797       $ 2,258,877  
 
Risk weighted assets     $ 19,016,673       $ 18,448,854       $ 17,758,118       $ 17,993,379       $ 17,291,105  
 
Tier 1 common equity ratio     12.59 %     13.01 %     13.41 %     12.83 %     13.06 %
 
 
FINANCIAL HIGHLIGHTS -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands, except ratio and share data)

      Three Months Ended
December 31,
2012		     September 30,
2012		     June 30,
2012		     March 31,
2012		     December 31,
2011
Other data:
Fiduciary assets $ 25,829,038 $ 25,208,276 $ 23,136,625 $ 23,774,788 $ 22,821,813
Mortgage servicing portfolio $ 11,981,624 $ 11,756,350 $ 11,564,643 $ 11,378,806 $ 11,300,986
Mortgage loans funded for sale $ 1,073,541 $ 1,046,608 $ 841,960 $ 746,241 $ 753,215

Mortgage loan refinances to total

fundings 62 % 61 % 51 % 67 % 66 %
Tax equivalent adjustment $ 2,472 $ 2,509 $ 2,252 $ 2,094 $ 2,274

Net unrealized gain on available

for sale securities $ 254,587 $ 281,455 $ 242,253 $ 277,277 $ 222,160
 
Gain (loss) on mortgage servicing rights, net of economic hedge:

Gain (loss) on mortgage hedge

derivative contracts $ (707

)

$ 645 $ 2,623 $ (2,445 ) $ 121

Gain (loss) on mortgage trading

securities       (2,177 )     5,455       6,908       (2,393 )     222  

Gain (loss) on economic hedge of

mortgage servicing rights

(2,884 ) 6,100 9,531 (4,838 ) 343

Gain (loss) on changes in fair

value of mortgage servicing rights

      4,689       (9,576 )     (11,450 )     7,127       (5,261 )

Gain (loss) on changes in fair

value of mortgage servicing

rights, net of economic hedges

      $ 1,805       $ (3,476 )     $ (1,919 )     $ 2,289       $ (4,918 )
 

Net interest revenue on mortgage

trading securities

      $ 748       $ 1,750       $ 2,148       $ 3,165       $ 4,436  
 
 
QUARTERLY EARNINGS TREND -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands, except ratio and per share data)

    Three Months Ended
December 31,
2012		     September 30,
2012		     June 30,
2012		     March 31,
2012		     December 31,
2011
Interest revenue $ 194,314 $ 196,071 $ 203,055 $ 198,208 $ 198,040
Interest expense     20,945       20,044       21,694       24,639       26,570  
Net interest revenue 173,369 176,027 181,361 173,569 171,470
Provision for credit losses     (14,000 )     --       (8,000 )     --       (15,000 )

Net interest revenue after provision for credit

losses

187,369 176,027 189,361 173,569 186,470
Other operating revenue:
Brokerage and trading revenue 31,958 31,261 32,600 31,111 25,629
Transaction card revenue 28,009 27,788 26,758 25,430 25,960
Trust fees and commissions 22,030 19,654 19,931 18,438 17,865
Deposit service charges and fees 24,174 25,148 25,216 24,379 24,921
Mortgage banking revenue 46,410 50,266 39,548 33,078 25,438
Bank-owned life insurance 2,673 2,707 2,838 2,871 2,784
Other revenue     10,554       9,149       8,860       9,264       9,189  
Total fees and commissions 165,808 165,973 155,751 144,571 131,786
Gain (loss) on other assets, net 137 452 1,689 (3,693 ) 1,682
Gain (loss) on derivatives, net (637 ) 464 2,345 (2,473 ) (174 )
Gain (loss) on fair value option securities, net (2,081 ) 6,192 6,852 (1,733 ) 222
Gain on available for sale securities, net 1,066 7,967 20,481 4,331 7,080
Total other-than-temporary impairment losses (504 ) -- (135 ) (505 ) (1,037 )

Portion of loss recognized in (reclassified from)

other comprehensive income

    (1,163 )    

(1,104

)

    (723 )     (3,217 )     (1,747 )
Net impairment losses recognized in earnings     (1,667 )     (1,104 )     (858 )     (3,722 )     (2,784 )
Total other operating revenue 162,626 179,944 186,260 137,281 137,812
Other operating expense:
Personnel 131,192 122,775 122,297 114,769 121,129
Business promotion 6,150 6,054 6,746 4,388 5,868
Contribution to BOKF Charitable Foundation 2,062 -- -- -- --
Professional fees and services 10,082 7,991 8,343 7,599 7,664
Net occupancy and equipment 16,883 16,914 16,906 16,023 16,826
Insurance 3,789 3,690 4,011 3,866 3,636
Data processing and communications 25,010 26,486 25,264 22,144 26,599
Printing, postage and supplies 3,403 3,611 3,903 3,311 3,637

Net losses and operating expenses of

repossessed assets

6,665 5,706 5,912 2,245 6,180
Amortization of intangible assets 1,065 742 545 575 895
Mortgage banking costs 8,653 11,566 11,173 7,573 10,154

Change in fair value of mortgage servicing

rights

(4,689 ) 9,576 11,450 (7,127 ) 5,261
Other expense     11,820       7,229       6,461       6,771       11,133  
Total other operating expense 222,085 222,340 223,011 182,137 218,982
Net income before taxes 127,910 133,631 152,610 128,713 105,300
Federal and state income taxes     44,293       45,778       53,149       45,520       37,396  
Net income 83,617 87,853 99,461 83,193 67,904

Net income (loss) attributable to non-controlling

interest

    1,051       471       1,833       (422 )     911  

Net income attributable to BOK Financial

Corporation shareholders

     $ 82,566       $ 87,382       $ 97,628       $ 83,615       $ 66,993  
 
Average shares outstanding:
Basic 67,622,777 67,966,700 67,472,665 67,665,300 67,526,009
Diluted 67,914,717 68,334,989 67,744,828 67,941,895 67,774,721
Net income per share:
Basic $ 1.21 $ 1.28 $ 1.43 $ 1.22 $ 0.98
Diluted $ 1.21 $ 1.27 $ 1.43 $ 1.22 $ 0.98
 
 
LOANS BY PRINCIPAL MARKET AREA -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands)

      Three Months Ended
December 31,
2012		     September 30,
2012		     June 30,
2012		     March 31,
2012		     December 31,
2011
 
Bank of Oklahoma:
Commercial $ 3,273,833 $ 3,141,217 $ 3,098,651 $ 3,107,726 $ 2,826,649
Commercial real estate 636,398 639,156 644,761 631,891 607,030
Residential mortgage 1,501,000 1,477,583 1,460,173 1,426,827 1,411,560
Consumer       227,115       200,217       205,436       215,693       235,909
Total Bank of Oklahoma       5,638,346       5,458,173       5,409,021       5,382,137       5,081,148
 
Bank of Texas:
Commercial 2,654,875 2,529,473 2,414,824 2,354,593 2,249,888
Commercial real estate 771,791 712,895 678,745 802,979 830,642
Residential mortgage 274,388 266,791 268,639 262,556 268,053
Consumer       116,252       108,854       115,602       124,692       126,570
Total Bank of Texas       3,817,306       3,618,013       3,477,810       3,544,820       3,475,153
 
Bank of Albuquerque:
Commercial 255,382 267,469 262,144 273,284 258,668
Commercial real estate 305,049 294,731 285,871 282,834 303,500
Residential mortgage 128,201 117,783 113,987 106,754 104,695
Consumer       15,456       15,883       15,828       18,378       19,369
Total Bank of Albuquerque       704,088       695,866       677,830       681,250       686,232
 
Bank of Arkansas:
Commercial 62,049 48,097 49,305 64,595 76,199
Commercial real estate 90,821 119,305 119,895 139,670 136,170
Residential mortgage 12,684 12,408 12,513 14,557 15,772
Consumer       15,421       19,720       24,270       28,783       35,911
Total Bank of Arkansas       180,975       199,530       205,983       247,605       264,052
 
Colorado State Bank & Trust:
Commercial 649,203 616,321 610,384 541,280 544,020
Commercial real estate 160,344 145,077 149,541 144,757 156,013
Residential mortgage 57,712 57,637 60,893 61,329 64,627
Consumer       19,333       19,028       20,612       19,790       21,598
Total Colorado State Bank & Trust       886,592       838,063       841,430       767,156       786,258
 
Bank of Arizona:
Commercial 313,294 300,557 278,119 269,099 271,914
Commercial real estate 184,290 186,553 181,513 180,830 198,160
Residential mortgage 57,559 65,234 67,822 76,699 89,315
Consumer       4,686       6,150       6,227       5,381       5,633
Total Bank of Arizona       559,829       558,494       533,681       532,009       565,022
 
Bank of Kansas City:
Commercial 415,784 370,083 339,117 348,515 327,732
Commercial real estate 84,465 67,809 65,888 50,722 59,788
Residential mortgage 19,810 21,544 21,070 19,650 20,505
Consumer       4,261       4,792       4,601       3,580       3,853
Total Bank of Kansas City       524,320       464,228       430,676       422,467       411,878
 
TOTAL BOK FINANCIAL       $ 12,311,456       $ 11,832,367       $ 11,576,431       $ 11,577,444       $ 11,269,743

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

 
DEPOSITS BY PRINCIPAL MARKET AREA -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands)

    Three Months Ended
December 31,
2012		     September 30,
2012		     June 30,
2012		     March 31,
2012		     December 31,
2011
Bank of Oklahoma:
Demand $ 4,223,923 $ 3,734,900 $ 3,499,834 $ 3,445,424 $ 3,223,201
Interest-bearing:
Transaction 6,031,541 5,496,724 5,412,002 5,889,625 6,050,986
Savings 163,512 155,277 150,353 148,556 126,763
Time     1,267,904       1,274,336       1,354,148       1,370,868       1,450,571
Total interest-bearing     7,462,957       6,926,337       6,916,503       7,409,049       7,628,320
Total Bank of Oklahoma     11,686,880       10,661,237       10,416,337       10,854,473       10,851,521
Bank of Texas:
Demand 2,606,176 1,983,678 1,966,465 1,876,133 1,808,491
Interest-bearing:
Transaction 2,129,084 1,782,296 1,813,209 1,734,655 1,940,819
Savings 58,429 52,561 51,114 50,331 45,872
Time     762,233       789,725       772,809       789,860       867,664
Total interest-bearing     2,949,746       2,624,582       2,637,132       2,574,846       2,854,355
Total Bank of Texas     5,555,922       4,608,260       4,603,597       4,450,979       4,662,846
Bank of Albuquerque:
Demand 427,510 416,796 357,367 333,707 319,269
Interest-bearing:
Transaction 511,593 526,029 506,165 503,015 491,068
Savings 31,926 31,940 31,215 32,688 27,487
Time     364,928       375,611       383,350       392,234       410,722
Total interest-bearing     908,447       933,580       920,730       927,937       929,277
Total Bank of Albuquerque     1,335,957       1,350,376       1,278,097       1,261,644       1,248,546
Bank of Arkansas:
Demand 38,935 29,254 16,921 22,843 18,513
Interest-bearing:
Transaction 101,366 168,827 172,829 151,708 131,181
Savings 2,239 2,246 2,220 2,358 1,727
Time     42,573       45,719       48,517       54,157       61,329
Total interest-bearing     146,178       216,792       223,566       208,223       194,237
Total Bank of Arkansas     185,113       246,046       240,487       231,066       212,750
Colorado State Bank & Trust:
Demand 331,157 330,641 301,646 311,057 272,565
Interest-bearing:
Transaction 676,140 627,015 465,276 476,718 511,993
Savings 25,889 24,689 24,202 23,409 22,771
Time     472,305       476,564       491,280       498,124       523,969
Total interest-bearing     1,174,334       1,128,268       980,758       998,251       1,058,733
Total Colorado State Bank & Trust     1,505,491       1,458,909       1,282,404       1,309,308       1,331,298
Bank of Arizona:
Demand 161,094 151,738 137,313 131,539 106,741
Interest-bearing:
Transaction 360,275 298,048 113,310 95,010 104,961
Savings 1,978 2,201 2,313 1,772 1,192
Time     31,371       33,169       31,539       34,199       37,641
Total interest-bearing     393,624       333,418       147,162       130,981       143,794
Total Bank of Arizona     554,718       485,156       284,475       262,520       250,535
Bank of Kansas City:
Demand 249,491 201,393 160,829 68,469 51,004
Interest-bearing:
Transaction 78,039 103,628 69,083 57,666 123,449
Savings 771 660 581 505 545
Time     26,678       27,202       26,307       26,657       30,086
Total interest-bearing     105,488       131,490       95,971       84,828       154,080
Total Bank of Kansas City     354,979       332,883       256,800       153,297       205,084
 
TOTAL BOK FINANCIAL     $ 21,179,060       $ 19,142,867       $ 18,362,197       $ 18,523,287       $ 18,762,580
 
 
NET INTEREST MARGIN TREND -- UNAUDITED

BOK FINANCIAL CORPORATION

    Three Months Ended
December 31,
2012		     September 30,
2012		     June 30,
2012		     March 31,
2012		     December 31,
2011
 
TAX-EQUIVALENT ASSETS YIELDS
Funds sold and resell agreements 0.06 % 0.07 % 0.08 % 0.07 % 0.10 %
Trading securities 1.06 % 2.12 % 1.53 % 1.88 % 2.79 %
Investment securities:
Taxable1 5.86 % 5.83 % 5.93 % 5.89 % 5.91 %
Tax-exempt1     2.93 %     4.12 %     4.90 %     4.87 %     4.81 %
Total investment securities1     4.67 %     5.33 %     5.63 %     5.59 %     5.59 %
Available for sale securities:
Taxable1 2.08 % 2.36 % 2.52 % 2.48 % 2.37 %
Tax-exempt1     3.80 %     4.70 %     4.69 %     5.17 %     5.14 %
Total available for sale securities1     2.10 %     2.38 %     2.54 %     2.50 %     2.39 %
Fair value option securities 1.58 % 2.27 % 2.62 % 2.79 % 2.98 %
Residential mortgage loans held for sale 3.39 % 3.48 % 3.75 % 3.90 % 4.01 %
Loans 4.33 % 4.33 % 4.58 % 4.50 % 4.65 %
Less allowance for loan losses     --       --       --       --       --  
Loans, net of allowance 4.41 % 4.42 % 4.68 % 4.61 % 4.76 %
Total tax-equivalent yield on earning assets1 3.30 % 3.47 % 3.69 % 3.64 % 3.69 %
 
COST OF INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest-bearing transaction 0.15 % 0.16 % 0.16 % 0.17 % 0.18 %
Savings 0.18 % 0.19 % 0.23 % 0.24 % 0.26 %
Time     1.80 %     1.61 %     1.63 %     1.68 %     1.70 %
Total interest-bearing deposits 0.54 % 0.53 % 0.54 % 0.55 % 0.59 %
Funds purchased 0.15 % 0.15 % 0.16 % 0.09 % 0.06 %
Repurchase agreements 0.09 % 0.10 % 0.10 % 0.09 % 0.13 %
Other borrowings 0.90 % 3.03 % 3.96 % 5.58 % 4.75 %
Subordinated debt     2.56 %     2.79 %     3.95 %     5.62 %     5.61 %
Total cost of interest-bearing liabilities     0.54 %     0.52 %     0.56 %     0.63 %     0.66 %
Tax-equivalent net interest revenue spread 2.76 % 2.95 % 3.13 % 3.01 % 3.03 %
Effect of noninterest-bearing funding sources and other     0.19 %     0.17 %     0.17 %     0.18 %     0.17 %
Tax-equivalent net interest margin1     2.95 %     3.12 %     3.30 %     3.19 %     3.20 %

1 Yield calculations exclude security trades that have been recorded on trade date with no corresponding interest income.

 
CREDIT QUALITY INDICATORS

BOK FINANCIAL CORPORATION

(in thousands, except ratios)

    Quarter Ended
December 31,
2012		     September 30,
2012		     June 30,
2012		     March 31,
2012		     December 31,
2011
Nonperforming assets:
Nonaccruing loans:
Commercial $ 24,467 $ 21,762 $ 34,529 $ 61,750 $ 68,811
Commercial real estate 60,626 75,761 80,214 86,475 99,193
Residential mortgage 46,608 29,267 22,727 27,462 29,767
Consumer     2,709       5,109       7,012       7,672       3,515
Total nonaccruing loans 134,410 131,899 144,482 183,359 201,286
Renegotiated loans1 38,515 27,992 28,415 36,764 32,893
Real estate and other repossessed assets     103,791       104,128       105,708       115,790       122,753
Total nonperforming assets     $ 276,716       $ 264,019       $ 278,605       $ 335,913       $ 356,932
 
Nonaccruing loans by principal market2:
Bank of Oklahoma $ 56,424 $ 41,599 $ 49,931 $ 64,097 $ 65,261
Bank of Texas 31,623 28,046 24,553 29,745 28,083
Bank of Albuquerque 13,401 13,233 13,535 15,029 15,297
Bank of Arkansas 1,132 5,958 6,865 18,066 23,450
Colorado State Bank & Trust 14,364 22,878 28,239 28,990 33,522
Bank of Arizona 17,407 20,145 21,326 27,397 35,673
Bank of Kansas City     59       40       33       35       --
Total nonaccruing loans     $ 134,410       $ 131,899       $ 144,482       $ 183,359       $ 201,286
 
Nonaccruing loans by loan portfolio sector:
Commercial:
Energy $ 2,460 $ 3,063 $ 3,087 $ 336 $ 336
Manufacturing 2,007 2,283 12,230 23,402 23,051
Wholesale / retail 3,077 2,007 4,175 15,388 21,180
Integrated food services 684 -- -- -- --
Services 12,090 10,099 10,123 12,890 16,968
Healthcare 3,166 3,305 3,310 7,946 5,486
Other commercial and industrial     983       1,005       1,604       1,788       1,790
Total commercial     24,467       21,762       34,529       61,750       68,811
 
Commercial real estate:
Construction and land development 26,131 38,143 46,050 52,416 61,874
Retail 8,117 6,692 7,908 6,193 6,863
Office 6,829 9,833 10,589 10,733 11,457
Multifamily 2,706 3,145 3,219 3,414 3,513
Industrial 3,968 4,064 -- -- --
Other commercial real estate     12,875       13,884       12,448       13,719       15,486
Total commercial real estate     60,626       75,761       80,214       86,475       99,193
 
 
CREDIT QUALITY INDICATORS

BOK FINANCIAL CORPORATION

(in thousands, except ratios)

    Quarter Ended
December 31,
2012		     September 30,
2012		     June 30,
2012		     March 31,
2012		     December 31,
2011
 
Residential mortgage:
Permanent mortgage 39,863 23,717 18,136 22,822 25,366
Permanent mortgage guaranteed by U.S. government agencies 489 -- -- -- --
Home equity     6,256       5,550         4,591       4,640       4,401  
Total residential mortgage     46,608       29,267         22,727       27,462       29,767  
 
Consumer     2,709       5,109         7,012       7,672       3,515  
Total nonaccruing loans     $ 134,410       $ 131,899         $ 144,482       $ 183,359       $ 201,286  
 
Performing loans 90 days past due3 $ 3,925 $ 1,181 $ 691 $ 6,140 $ 2,496
 
Gross charge-offs $ 8,000 $ 8,921 $ 11,543 $ 13,674 $ 14,771
Recoveries     3,724       3,204   4     6,702       5,189       5,311  
Net charge-offs     $ 4,276       $ 5,717         $ 4,841       $ 8,485       $ 9,460  
 
Provision for (reduction of) allowances for credit losses $ (14,000 ) $ -- $ (8,000 ) $ -- $ (15,000 )
 
Allowance for loan losses to period end loans 1.75 % 1.98 % 2.00 % 2.11 % 2.25 %
Combined allowance for credit losses to period end loans 1.77 % 1.99 % 2.09 % 2.20 % 2.33 %
Nonperforming assets to period end loans and repossessed assets 2.23 % 2.21 % 2.38 % 2.87 % 3.13 %
Net charge-offs (annualized) to average loans 0.14 % 0.19 % 4 0.17 % 0.30 % 0.34 %
Allowance for loan losses to nonaccruing loans 160.34 % 177.22 % 160.34 % 133.19 % 125.93 %
Combined allowance for credit losses to nonaccruing loans 161.76 % 178.70 % 167.09 % 138.67 % 130.53 %
 

1

Includes residential mortgage loans guaranteed by agencies of the U.S. government. These loans have been modified to extend payment terms and/or reduce interest rates to current market.

$ 38,515 $ 24,590 $ 24,760 $ 32,770 $ 28,974
 

2

Nonaccruing loans attributed to a principal market do not always represent the location of the borrower or the collateral.

 

3

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

 

4

Includes $7.1 million of negative recovery related to a refund of a settlement agreement between BOK Financial and the City of Tulsa invalidated by the Oklahoma Supreme Court. Excluding this refund, BOK Financial had net charge-offs (recoveries) to average loans of (0.05%) on an annualized basis.

BOK Financial Corporation
Steven Nell, 918-588-6752
Chief Financial Officer
or
Andrea Myers, 918-594-7794
Corporate Communications