TULSA, Okla., April 22, 2020 (GLOBE NEWSWIRE) — BOK Financial (NASDAQ: BOKF) today reported net earnings applicable to common shareholders for the first quarter of 2020 of $62 million, or $0.88 per diluted common share.CEO Commentary“While this quarter showcased the momentum with which we entered 2020, I am most proud of the resiliency and flexibility of our employees as we navigate this difficult time,” said Steven G. Bradshaw, president, and chief executive officer. “The extreme health concerns surrounding the COVID-19 virus have created a rapidly changing work environment for our 5,000 employees, and the continued health and safety for them and their families remains our top objective. We also embrace the responsibility we have to our many clients and the communities in which we serve to maintain our high standards of customer service and community engagement. The culture of collaboration and commitment our employees have worked hard to build for many years has really revealed itself during this turbulent period. I could not be more proud of the compassion our employees have shown for our customers and those in need. This is the sustaining core of our BOKF culture.”Bradshaw continued, “While the second and third quarters of 2020 will certainly pose unprecedented economic challenges, we continue to be an organization focused on the long-term. We expect our business revenue diversity along with proven credit underwriting in all lending segments to serve as our foundation for continued shareholder value going forward.”COVID-19 Pandemic ResponseWe have implemented our cross-functional crisis management team led by our Chief Human Resources Officer and Chief Risk Officer. This team has focused on ensuring employee and customer safety while continuing to meet customer needs. We have implemented social distancing measures within our internal and external operations. Employees are working from home as able, we have split remaining employees across multiple locations, and we have closed banking center lobbies and converted to drive-thru and by appointment only.We have implemented programs to help our customers through this uncertain time. We are actively participating in programs initiated by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), including the Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”) that began on April 3, 2020 and Mortgage Forbearance program. As of April 17, 2020, we have processed approximately 4,700 PPP applications and currently have SBA approval for $1.8 billion. We have the ability to fund PPP loans through the Federal Reserve’s PPP liquidity facility. We are also evaluating participating in the Main Street Lending Program. We are waiving fees on excessive savings and money market account withdrawals as well as overdraft protection transfer fees for automatic transfers between linked accounts at BOKF through May 31, 2020. Further, we are waiving loan payment late fees on consumer loan payments, mortgage accounts and small business loans in April 2020.We have enhanced our benefits to support our employees as they navigate changes in their working environment. We are providing a temporary child care reimbursement program for those employees that need assistance because of school closures and have also added incremental paid time off hours for employees. We expanded our telemedicine options to deliver medical and behavioral health services at no cost. Further, we have enacted premium pay for certain non-exempt employees who must remain in the office.We are closely monitoring our loan portfolio for effects related to COVID-19. Exposure to highly affected industries include, but are not limited to, oil and gas, entertainment and leisure, and senior housing. Energy loan balances comprise 18 percent of total loans, senior housing comprises 11 percent, and entertainment and leisure comprises approximately 8 percent. While our liquidity remains strong, we have enhanced daily monitoring of liquidity by tracking deposit inflows and outflows by customer, analyzing loan advances by segment, optimizing our borrowing capacity at the Federal Home Loan Bank, and increasing our collateral at the Federal Reserve Discount Window, among other things.First Quarter 2020 Financial Highlights
Net income was $62.1 million or $0.88 per diluted share for the first quarter of 2020 and $110.4 million or $1.56 per diluted share for the fourth quarter of 2019. The first quarter of 2020 included a pre-tax provision for expected credit losses of $93.8 million compared to a pre-tax provision for incurred credit losses of $19.0 million in the prior quarter. The Company adopted the current expected credit loss (“CECL”) model on January 1, 2020.Net interest revenue totaled $261.4 million, a decrease of $8.9 million. Net interest margin was 2.80 percent compared to 2.88 percent in the fourth quarter of 2019. The Federal Reserve reduced the federal funds rate by 1.50 percent in two rate cuts in March 2020.Fees and commissions revenue totaled $192.7 million, an increase of $13.3 million. Falling mortgage interest rates increased mortgage banking revenue and related trading activity.Operating expense decreased $20.2 million to $268.6 million. Personnel expense decreased $12.2 million, largely due to a decrease in incentive compensation expense, partially offset by a seasonal increase in employee benefits expense. Non-personnel expense decreased $7.9 million compared to the fourth quarter of 2019 led by decreases in business promotion and mortgage banking expenses.The allowance for loan losses totaled $315 million or 1.40 percent of outstanding loans at March 31, 2020. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $344 million or 1.53 percent of outstanding loans at March 31, 2020. At December 31, 2019, the allowance for loan losses was $211 million or 0.97 percent of outstanding loans. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $212 million or 0.98 percent of outstanding loans.Average loans decreased $293 million to $21.9 billion. Period-end loans increased $713 million to $22.5 billion.Average deposits increased $1.1 billion to $28.2 billion and period-end deposits increased $1.6 billion to $29.2 billion, primarily due to a combination of our continued focus on growing core customer deposits, inflows from external money funds, and seasonal inflows.The company’s common equity Tier 1 capital ratio was 10.98 percent at March 31, 2020. In addition, the company’s Tier 1 capital ratio was 10.98 percent, total capital ratio was 12.58 percent, and leverage ratio was 8.16 percent at March 31, 2020. 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. At December 31, 2019, the company’s common equity Tier 1 capital ratio was 11.39 percent, Tier 1 capital ratio was 11.39 percent, total capital ratio was 12.94 percent, and leverage ratio was 8.40 percent.The company repurchased 442,000 shares at an average price of $75.52 per share in the first quarter of 2020 and 280,000 shares at an average price of $81.59 in the fourth quarter of 2019. We view share buybacks opportunistically, but within the context of maintaining our strong capital position.Net Interest RevenueNet interest revenue was $261.4 million for the first quarter of 2020, an $8.9 million decrease compared to the fourth quarter of 2019. Discount accretion on acquired loans totaled $4.1 million for the first quarter of 2020 and $5.8 million for the prior quarter.Average earning assets increased $291 million compared to the fourth quarter of 2019. Available for sale securities increased $331 million as we continue to position our balance sheet for the current rate environment. Fair value option securities, held as an economic hedge of the changes in fair value of our mortgage servicing rights, increased $272 million. Interest-bearing cash and cash equivalents increased $148 million. Average loan balances decreased $293 million. In addition, receivables from unsettled securities sales, primarily related to our U.S. agency residential mortgage-backed trading operations, increased $1.1 billion. Growth in average earning assets and non-interest bearing receivables was largely funded by a $1.5 billion increase in interest-bearing deposits.Net interest margin was 2.80 percent compared to 2.88 percent in the previous quarter. While the Federal Reserve reduced the federal funds rate in multiple rates cuts in the latter half of 2019 and first quarter of 2020, LIBOR has remained elevated relative to the rate cuts. This, combined with our ability to move deposit costs down, has preserved a large portion of our margin.The yield on average earning assets was 3.73 percent, a 20 basis point decrease from the prior quarter. The loan portfolio yield was 4.50 percent, down 25 basis points. The yield on the available for sale securities portfolio decreased 4 basis points to 2.48 percent while the yield on interest-bearing cash and cash equivalents decreased 29 basis points.Funding costs were 1.19 percent, down 21 basis points. The cost of interest-bearing deposits decreased 11 basis points to 0.98 percent. The cost of other borrowed funds was down 36 basis points to 1.47 percent. The benefit to net interest margin from assets funded by non-interest liabilities was 26 basis points for the first quarter of 2020 compared to 35 basis points for the fourth quarter of 2019.Fees and Commissions RevenueFees and commissions revenue totaled $192.7 million for the first quarter of 2020, an increase of $13.3 million over the fourth quarter of 2019.Declining interest rates increased mortgage banking revenue and related trading activity. Mortgage banking revenue increased $11.8 million or 46 percent. Mortgage loan production volume increased 65 percent and the gain on sale margin increased 62 basis points to 2.06 percent. Brokerage and trading revenue increased $6.9 million to $50.8 million. Revenue from mortgage trading activity increased $15.0 million over the previous quarter. Mortgage trading revenue was partially offset by widening spreads that decreased the quarter-end fair value of asset-backed and municipal securities.Fiduciary and asset management revenue remained relatively consistent with the prior quarter, even given the current economic environment. Approximately a third of the assets are currently exposed to equities. This diversification, combined with strong sales efforts, has continued to produce strong results during this time.Other revenue decreased $3.0 million, primarily due to lower revenue from repossessed oil and gas properties. Other operating expense related to these properties decreased by a comparable amount.Operating ExpenseTotal operating expense was $268.6 million for the first quarter of 2020, a decrease of $20.2 million compared to the fourth quarter of 2019.Personnel expense decreased $12.2 million. Incentive compensation decreased $13.6 million, largely due to a decrease in deferred compensation, which is partially offset by a decrease in the value of related investments included in Other gains (losses). Cash based incentive compensation was down $4.7 million, primarily due to annual incentives incurred in the fourth quarter. Regular compensation decreased $2.2 million. The fourth quarter included approximately $2.0 million in severance costs due to realignment of personnel. Employee benefits increased $3.6 million as a seasonal increase in payroll taxes and retirement plan expenses was partially offset by a decrease in employee healthcare costs.Non-personnel expense decreased $7.9 million compared to the fourth quarter of 2019. Mortgage banking costs decreased $3.7 million due to a reduction of mortgage servicing rights amortization. Business promotion expense decreased $2.6 million due to a seasonal decrease in advertising costs combined with reduced travel costs largely as a result of the current pandemic. The fourth quarter of 2019 included a $2.0 million charitable contribution to the BOKF Foundation, which provides support to many nonprofit partners in our communities.Loans, Deposits and CapitalLoansOutstanding loans were $22.5 billion at March 31, 2020, up $713 million over December 31, 2019.LoansOutstanding commercial loan balances grew by $764 million or 5 percent over December 31, 2019. Advances on existing commercial revolving lines of credit in the first quarter represented $751 million of this increase, due to both seasonal factors and customer responses to the COVID-19 pandemic. 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.General business loans increased $371 million to $3.6 billion or 16 percent of total loans. General business loans includes $2.0 billion of wholesale/retail loans and $698 million of manufacturing loans.Energy loan balances increased $138 million to $4.1 billion or 18 percent of total loans. Supporting the energy industry has been a hallmark of the Company for over a century. 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.Demand declines related to the COVID-19 pandemic coupled with the OPEC Plus production conflict have led to price declines of current spot and future oil prices. Approximately 62 percent of committed production loans are secured by properties primarily producing oil. The remaining 38 percent is secured by properties primarily producing natural gas, which are not as significantly impacted by the recent downturn. As we have said in the past, the duration of the downturn is a more significant factor affecting performance than the level of prices. If drivers of this decline are short term, meaning less than twelve months, then our expected losses in the portfolio will not be overly impactful to the company.We also conduct quarterly stress tests of our energy borrowers with more than 50 percent funding on their lines of credit and all criticized loans using a price deck discounted at 20 percent. This stress test helps us identify potential issues, although the most recent test resulted in no surprises once hedging was taken into consideration. Of all the energy customers that we stress test, which makes up 92 percent of production loans outstanding, 95 percent of our customers have some level of hedging in the 12-month range and many of them carry into the 24-month range. We believe our disciplined underwriting approach and doing business with high-quality borrowers will work to weather this downturn as we have previous downturns.Healthcare sector loan balances increased $131 million to $3.2 billion or 14 percent of total loans. Our healthcare sector loans primarily consist of $2.4 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. The remaining balance is composed of hospitals and other medical service providers impacted by a deferral of elective procedures to ensure adequate protective equipment and ventilators for those providing acute care to virus patients. The CARES Act does include multiple revenue enhancement measures for both hospitals and skilled nursing facilities as they manage through the risks of the virus.Services loan balances increased $124 million to $4.0 billion or 18 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, educational services, consumer services and commercial services.Our services and general business loans include areas we consider to be more exposed to the economic slowdown as a result of the social distancing measures in place to combat the COVID-19 pandemic such as entertainment and recreation, retail, hotels, churches, airline travel, and higher education that are dependent on large social gatherings to remain profitable. This represents approximately 8 percent of our total portfolio. This risk may be further mitigated as some of these borrowers participate in the Paycheck Protection Program. We will continue to monitor these areas closely in the coming months.Commercial real estate loan balances were largely unchanged compared to December 31, 2019 and represent 20 percent of total loans at March 31, 2020. Loans secured by other commercial real estate properties increased $107 million to $564 million. Loans secured by office buildings increased $34 million to $962 million. Loans secured by industrial facilities decreased $128 million to $728 million. Multifamily residential loans are our largest exposure in commercial real estate loans totaling $1.3 billion at March 31, 2020. Loans secured by retail facilities were $774 million at March 31, 2020. Loans secured by retail facilities are clearly the most vulnerable to the impacts of measures being taken to hinder the spread of the virus, the extent of which is dependent upon the duration of various governmental orders and adjustments in consumer behavior after these orders are lifted. While office and multifamily may also be impacted, we believe our geographic footprint will help in the long term because of strong in-migration over time.Loans to individuals decreased $68 million, including a $38 million decrease in home equity loans and a $26 million decrease in personal loans. Loans to individuals represent 14 percent of total loans at March 31, 2020.DepositsPeriod-end deposits totaled $29.2 billion at March 31, 2020, a $1.6 billion increase over December 31, 2019. Strong deposit growth was driven by a combination of our continued focus on growing core customer deposits, inflows from external money funds, and seasonal inflows. Interest-bearing transaction account balances grew by $1.2 billion and demand deposit balances increased $360 million. Average deposits were $28.2 billion at March 31, 2020, an increase of $1.1 billion compared to December 31, 2019. Total interest-bearing transaction deposits increased $1.5 billion, partially offset by a decrease in demand deposits of $380 million.CapitalThe company’s common equity Tier 1 capital ratio was 10.98 percent at March 31, 2020. In addition, the company’s Tier 1 capital ratio was 10.98 percent, total capital ratio was 12.58 percent, and leverage ratio was 8.16 percent at March 31, 2020. 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. At December 31, 2019, the company’s common equity Tier 1 capital ratio was 11.39 percent, Tier 1 capital ratio was 11.39 percent, total capital ratio was 12.94 percent, and leverage ratio was 8.40 percent.The company’s tangible common equity ratio, a non-GAAP measure, was 8.39 percent at March 31, 2020 and 8.98 percent at December 31, 2019. 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 442,000 shares at an average price of $75.52 per share in the first quarter of 2020 and 280,000 shares at an average price of $81.59 in the fourth quarter of 2019. We view share buybacks opportunistically, but within the context of maintaining our strong capital position.Credit QualityThe Company adopted FASB Accounting Standard Update No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Assets Measured at Amortized Cost (“CECL”) on January 1, 2020 through a pre-tax cumulative-effect adjustment to equity of $61.4 million. CECL requires recognition of expected credit losses on assets carried at amortized cost over their expected lives. The previous incurred loss model incorporated only known information as of the balance sheet date. CECL uses models to measure the probability of default and loss given default over a 12-month reasonable and supportable forecast period. 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.The provision for credit losses was $93.8 million for the first quarter of 2020, with $99.3 million related to lending activity. Changes in our reasonable and supportable forecasts of macroeconomic variables, primarily due to the impact of the COVID-19 pandemic, oil price declines, and other assumptions, required a provision of $66.2 million. All other changes totaled $33.1 million, which included portfolio changes of $15.9 million and net charge-offs of $17.2 million.Our base case reasonable and supportable forecast includes a 20 percent decrease in GDP and an 8.3 percent civilian unemployment rate in the second quarter of 2020. Our forward twelve month forecast through the first quarter of 2021 assumes a 4.6 percent decrease in GDP and a 6.5 percent civilian unemployment rate. WTI oil prices are projected to generally follow the NYMEX forward curve that existed at the end of March 2020, $25.10 per barrel for delivery in the second quarter of 2020 and increasing to $34.73 per barrel for delivery in the first quarter of 2021. Our downside reasonable and supportable forecast reflects a more severe and prolonged disruption in economic activity than the base case and includes a 30 percent decrease in GDP and a 9.5 percent civilian unemployment rate in the second quarter of 2020. Our forward twelve month forecast through the first quarter of 2021 assumes a 10.9 percent decrease in GDP and an 8.0 percent civilian unemployment rate. WTI oil prices are projected to range from $19.10 per barrel for delivery in the second quarter of 2020 to $31.73 per barrel for delivery in the first quarter of 2021.The allowance for loan losses totaled $315 million or 1.40 percent of outstanding loans and 199 percent of nonaccruing loans at March 31, 2020, 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 $344 million or 1.53 percent of outstanding loans and 217 percent of nonaccruing loans at March 31, 2020. The combined allowance for credit losses attributed to energy was 2.43 percent of outstanding energy loans at March 31.At December 31, 2019, the allowance for loan losses was $211 million or 0.97 percent of outstanding loans and 121 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 $212 million or 0.98 percent of outstanding loans and 121 percent of nonaccruing loans.Nonperforming assets totaled $292 million or 1.30 percent of outstanding loans and repossessed assets at March 31, 2020, compared to $294 million or 1.35 percent at December 31, 2019. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $195 million or 0.87 percent of outstanding loans and repossessed assets at March 31, 2020, compared to $195 million or 0.90 percent at December 31, 2019.Nonaccruing loans were $163 million or 0.73 percent of outstanding loans at March 31, 2020. Nonaccruing commercial loans totaled $119 million or 0.80 percent of outstanding commercial loans. Nonaccruing commercial real estate loans totaled $8.5 million or 0.19 percent of outstanding commercial real estate loans. Nonaccruing loans to individuals totaled $36 million or 1.12 percent of outstanding loans to individuals.Nonaccruing loans decreased $18 million from December 31, 2019, primarily due to a $19 million decrease in nonaccruing commercial real estate loans. Nonaccruing energy loans increased $4.7 million. New nonaccruing loans identified in the first quarter totaled $30 million, offset by $8.9 million in payments received, $19 million in charge-offs and $18 million of foreclosures.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 $293 million at March 31, compared to $160 million at December 31. The increase largely resulted from energy and service sector loans.Net charge-offs were $17.2 million or 0.31 percent of average loans on an annualized basis for the first quarter of 2020, compared to $12.5 million or 0.22 percent of average loans on an annualized basis for the fourth quarter of 2019. Net charge-offs were 0.24 percent of average loans over the last four quarters. Gross charge-offs were $18.9 million for the first quarter compared to $14.3 million for the previous quarter. Recoveries totaled $1.7 million for the first quarter of 2020 and $1.8 million for the fourth quarter of 2019.Securities and DerivativesThe fair value of the available for sale securities portfolio totaled $12.7 billion at March 31, 2020, a $1.4 billion increase compared to December 31, 2019. At March 31, 2020, the available for sale securities portfolio consisted primarily of $9.3 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $3.4 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. At March 31, 2020, the available for sale securities portfolio had a net unrealized gain of $436 million compared to $138 million at December 31, 2019.The company also maintains a portfolio of residential mortgage-backed securities issued by U.S. government agencies and interest rate derivative contracts as an economic hedge of the changes in the fair value of our mortgage servicing rights. This portfolio of fair value option securities increased $605 million to $1.7 billion at March 31, 2020.The net economic benefit of the changes in fair value of mortgage servicing rights and related economic hedges was $2.6 million during the first quarter of 2020. The magnitude of declines in mortgage rates resulted in an $88.5 million decrease in the fair value of mortgage servicing rights. However, our securities and derivatives hedges held as the economic hedge offset that decrease by $86.8 million. We also had $4.3 million of related net interest revenue.Conference Call and WebcastThe company will hold a conference call at 9 a.m. Central time on Wednesday, April 22, 2020 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 # 13701466.About BOK Financial CorporationBOK Financial Corporation is a $47 billion regional financial services company headquartered in Tulsa, Oklahoma with $76 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, Milwaukee and Connecticut. Through its subsidiaries, BOK Financial Corporation provides commercial and consumer banking, brokerage trading, investment, trust and insurance services, mortgage origination and servicing, and an electronic funds transfer network. For more information, visit www.bokf.com.The company will continue to evaluate critical assumptions and estimates, such as the appropriateness of the allowance for credit losses and asset impairment as of March 31, 2020 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.



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

Loans attributed to a principal market may not always represent the location of the borrower or the collateral.
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.¹   Included in Provision for credit losses effective with implementation of CECL on January 1, 2020.
²   Excludes residential mortgage loans guaranteed by agencies of the U.S. government.
¹    Acquired assets and liabilities were allocated to segments in the second quarter of 2019.
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