Form 8-K BOK FINANCIAL CORP ET For: Oct 24

October 24, 2018 8:03 AM

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

October 24, 2018

Commission File No. 0-19341

BOK FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)



Oklahoma		73-1373454
(State or other jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)

Bank of Oklahoma Tower
Boston Avenue at Second Street
Tulsa, Oklahoma		74192
(Address of Principal Executive Offices)		(Zip Code)

(918) 588-6000

(Registrant’s telephone number, including area code)

N/A

___________________________________________

(Former name or former address, if changes since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).

|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).

|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).

|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

¨ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

INFORMATION TO BE INCLUDED IN THE REPORT

ITEM 2.02. Results of Operations and Financial Condition.

On October 24, 2018, BOK Financial Corporation (“BOK Financial”) issued a press release announcing its financial results for the three and nine months ended September 30, 2018 (“Press Release”). The full text of the Press Release is attached as Exhibit 99(a) to this report and is incorporated herein by reference. On October 24, 2018, in connection with issuance of the Press Release, BOK Financial released financial information related to the three and nine months ended September 30, 2018 (“Financial Information”), which includes certain historical financial information relating to BOK Financial. The Financial Information is attached as Exhibit 99(b) to this report and is incorporated herein by reference.

ITEM 9.01. Financial Statements and Exhibits.


(a)	Exhibits


99	Text of Press Release, dated October 24, 2018, titled "BOK Financial Reports Record Quarterly Earnings of $117 million or $1.79 Per Share" and Financial Information for the Three and Nine Months Ended September 30, 2018.

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

BOK FINANCIAL CORPORATION

By: /s/ Steven E. Nell

Steven E. Nell

Executive Vice President

Chief Financial Officer

Date: October 24, 2018

Exhibit 99(a)

NASD: BOKF

BOK Financial Reports Record Quarterly Earnings of $117 million or $1.79 Per Share

CEO Commentary

Steven G. Bradshaw, president, and chief executive officer, stated, “This is yet another record quarter for BOK Financial, with continued growth in both our loan portfolio and net interest revenue. We added $346 million in new loan production to last quarter’s record loan growth. The competitive ability and scale of our wealth management business allowed us to earn a $15 million fee in client asset management. These factors, combined with a stable credit environment and diligent expense management, cause us to see earnings leverage continuing.”

Bradshaw added, “We are proud to have closed our acquisition of CoBiz Financial on October 1st in record time, in part due to our strong community engagement track record and Outstanding CRA rating. We welcome CoBiz employees into our organization and look forward to many great things to come. The combination of CoBiz and BOK Financial creates the premier commercial bank in Colorado and Arizona, and we are excited to see how it helps drive earnings into 2019 and beyond."



Third Quarter 2018 Financial Highlights	Third Quarter 2018 Business Segment Highlights


•	Net income was $117.3 million and $1.79 per diluted share for the third quarter of 2018, including 18 cents per share from a client asset management fee. Net income was $114.4 million and $1.75 per diluted share for the second quarter of 2018.


•	Net interest revenue totaled $240.9 million, up $2.3 million compared to the second quarter of 2018.


•	Net interest margin increased to 3.21 percent from 3.17 percent. Net interest margin grew 11 basis points excluding recoveries of foregone interest on nonaccruing loans from the previous quarter.


•	Fees and commissions revenue totaled $167.5 million, an increase of $9.7 million or 6 percent compared to the previous quarter, led by an increase in trust fees and commissions.


•	Operating expense increased $6.1 million or 2 percent to $252.6 million. Personnel expense increased $4.6 million and non-personnel expense increased $1.6 million.


•	A $4.0 million provision for credit losses was recorded in the third quarter of 2018. Net charge-offs were $9.0 million in the third quarter compared to $10.5 million in the previous quarter.


•	Combined allowance for credit losses totaled $213 million or 1.16 percent of outstanding loans compared to $218 million or 1.21 percent of outstanding loans in the previous quarter.


•	Average loans increased $453 million while period-end loans increased $346 million to $18.3 billion.


•	Common equity Tier 1 capital ratio was 12.07 percent, Tier 1 capital ratio was 12.07 percent, total capital ratio was 13.37 percent and leverage ratio was 9.90 percent.

Commercial Banking


•	Contributed $85.0 million to net income, down $2.6 million or 3 percent compared to the prior quarter.


•	Net interest revenue remained consistent compared to the second quarter of 2018 at $145 million.


•	Fees and commissions revenue decreased $3.5 million or 8 percent and operating expenses increased $1.7 million or 3 percent.


•	Average loans increased $421 million or 3 percent.

Consumer Banking


•	Contributed $9.2 million to net income, up $3.1 million, primarily due to improved hedge performance related to mortgage servicing rights.


•	Net interest revenue increased $820 thousand or 2 percent.


•	Fees and commissions revenue decreased $2.3 million or 5 percent and operating expenses decreased $2.7 million or 5 percent.

Wealth Management


•	Contributed $29.3 million to net income, up 44 percent compared to the prior quarter.


•	Net interest revenue remained consistent compared to the prior quarter at $29.4 million.


•	Fees and commissions revenue increased $13.1 million or 19 percent due to a fee earned from the sale of client assets in the third quarter of 2018 while operating expenses increased only 1 percent.


•	Average loans grew $26.6 million or 2 percent.


•	Assets under management or administration were $77.6 billion at September 30, 2018 compared to $78.9 billion at June 30, 2018. Fiduciary assets totaled $45.6 billion at September 30, 2018 and $46.5 billion at June 30, 2018.



Net Interest Revenue

Net interest revenue was $240.9 million for the third quarter of 2018, a $2.3 million increase over the second quarter of 2018. Recoveries of foregone interest on nonaccruing loans added $5.3 million to net interest revenue or 7 basis points to net interest margin in the previous quarter. Excluding this impact, net interest margin was 3.21 percent for the third quarter of 2018, up 11 basis points over the second quarter of 2018. The Company reduced excess cash balances held at the Federal Reserve funded by borrowings from the Federal Home Loan Banks. The spread narrowed at the end of the second quarter and was no longer contributing to net interest revenue, which resulted in a 10 basis point improvement to net interest margin in the third quarter of 2018.

Excluding the impact of interest recoveries, the yield on average earning assets was 4.04 percent, a 20 basis point increase, and the yield on the loan portfolio was 4.80 percent up 12 basis points. This increase is due primarily to an increase in short-term market interest rates related to the Federal Reserve's 25 basis point rate increase in June. The yield on the available for sale securities portfolio increased 7 basis points to 2.37 percent. The yield on the trading securities portfolio was up 35 basis points.

Funding costs were 1.25 percent, up 14 basis points. The cost of interest-bearing deposits increased 11 basis points to 0.77 percent. The cost of other borrowed funds was up 20 basis points to 2.04 percent. The benefit to net interest margin from assets funded by non-interest liabilities increased to 42 basis points from 37 basis points in the second quarter of 2018.

Average earning assets decreased $345 million compared to the second quarter of 2018. Average loan balances grew by $453 million. Trading securities balances increased $280 million. Average interest-bearing cash and cash equivalents balances decreased $985 million. Average available for sale securities decreased $34 million. Average interest-bearing deposit balances decreased $221 million compared to the second quarter of 2018. The average balance of borrowed funds decreased $131 million.



Fees and Commissions Revenue

Fees and commissions revenue totaled $167.5 million for the third quarter of 2018, an increase of $9.7 million or 6 percent over the second quarter of 2018. A fee earned in the sale of client assets added $15.4 million to trust fees and commissions in the third quarter.

Rising interest rates have slowed the origination of mortgage loans and related investment products leading to compressed margins. This has adversely affected both our trading revenue as well as our mortgage banking revenue. Brokerage and trading revenue decreased $3.4 million and mortgage banking revenue decreased $2.8 million compared to the second quarter of 2018.



Operating Expense

Total operating expense was $252.6 million for the third quarter of 2018, an increase of $6.1 million or 2 percent compared to the second quarter of 2018.

Personnel expense increased $4.6 million, primarily due to an increase in incentive compensation expense of $6.0 million. Share-based compensation expense was $3.9 million in the third quarter of 2018 and a negative $1.4 million in the previous quarter. Changes in assumptions for the number of performance-based awards that will ultimately vest reduced share-based compensation expense by $4.3 million in the second quarter of 2018. Employee benefits expense decreased $1.5 million compared to the second quarter of 2018, primarily due to a seasonal decrease in payroll taxes.

Non-personnel expense increased $1.6 million. Data processing and communications expense increased $3.9 million, primarily due to impairment of a software license. Net losses and operating expenses of repossessed assets increased $1.3 million as a result of a write down on a healthcare property.

Professional fees and services expense decreased $1.8 million, primarily due to seasonal wealth management tax service fees in the second quarter of 2018. Other expense and mortgage banking costs decreased due to lower loss contingency accruals.



Loans, Deposits and Capital

Loans

Outstanding loans were $18.3 billion at September 30, 2018, up $346 million or 1.9 percent over June 30, 2018, primarily due to continued growth in commercial and commercial real estate loans.

Outstanding commercial loan balances grew by $227 million or 2 percent over June 30, 2018. Energy loan balances were up $148 million, consistent with our ongoing support and commitment to the oil and gas industry. Healthcare sector loans increased by $84 million. The healthcare lending group celebrated their 5 year anniversary as a distinct line of business and continues to be a driver of our core loan growth. Service sector loans increased $73 million. This growth was partially offset by a $49 million decrease in wholesale/retail sector loans and a $41 million decrease in other commercial and industrial loans.

Commercial real estate loan balances continued to grow, up $92 million or 2 percent over June 30, 2018. Multifamily residential loan balances were up $63 million. Loans secured by industrial properties grew by $43 million. Construction and land development loans decreased $17 million.

Deposits

Period-end deposits totaled $21.6 billion at September 30, 2018, a $537 million decrease compared to June 30, 2018. Demand deposit balances decreased $310 million, interest-bearing transaction account balances decreased $174 million and time deposit balances decreased by $52 million.

Capital

The company's common equity Tier 1 capital ratio was 12.07 percent at September 30, 2018. In addition, the company's Tier 1 capital ratio was 12.07 percent, total capital ratio was 13.37 percent, and leverage ratio was 9.90 percent at September 30, 2018. At June 30, 2018, the company's common equity Tier 1 capital ratio was 11.92 percent, Tier 1 capital ratio was 11.92 percent, total capital ratio was 13.26 percent, and leverage ratio was 9.57 percent.

The company's tangible common equity ratio, a non-GAAP measure, was 9.55 percent at September 30, 2018 and 9.21 percent at June 30, 2018. 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.



Credit Quality

Nonperforming assets totaled $261 million or 1.42 percent of outstanding loans and repossessed assets at September 30, 2018, compared to $269 million or 1.49 percent at June 30, 2018. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $170 million or 0.93 percent of outstanding loans and repossessed assets (excluding those guaranteed by U.S. government agencies) at September 30, 2018, down from $186 million or 1.04 percent at June 30, 2018.

Nonaccruing loans were $153 million or 0.83 percent of outstanding loans at September 30, 2018, compared to $166 million or 0.92 percent of outstanding loans at June 30, 2018. The decrease in nonaccruing loans was primarily due to a $12 million decrease in energy loans and a $4.8 million decrease in wholesale/retail sector loans, partially offset by a $6.2 million increase in manufacturing sector loans. New nonaccruing loans identified in the third quarter totaled $20 million, offset by $20 million in payments received, $11 million in charge-offs, and $1.6 million in foreclosures and repossessions. At September 30, 2018, nonaccruing commercial loans totaled $109 million or 0.95 percent of outstanding commercial loans, nonaccruing commercial real estate loans totaled $1.3 million or 0.03 percent of outstanding commercial real estate loans, and nonaccruing residential mortgage loans totaled $42 million or 2.13 percent of outstanding residential mortgage loans.

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 $176 million at September 30, compared to $140 million at June 30. The increase largely resulted from commercial real estate loans secured by retail facilities, energy sector and services sector loans.

The company had net charge-offs of $9.0 million or 0.20 percent of average loans on an annualized basis for third quarter of 2018, compared to net charge-offs of $10.5 million or 0.24 percent of average loans on an annualized basis for the second quarter of 2018. Net charge-offs were 0.18 percent of average loans over the last four quarters. Net charge-offs for the third quarter were primarily related to a single energy production borrower and single wholesale/retail sector borrower, both of which had previously been identified as impaired and appropriately reserved. Gross charge-offs were $11.1 million for the third quarter compared to $15.1 million for the previous quarter. Recoveries totaled $2.1 million for the third quarter of 2018 and $4.6 million for the second quarter of 2018.

Based on an evaluation of all credit factors, including overall loan portfolio growth, changes in nonaccruing and potential problem loans and net charge-offs, the company determined that a $4.0 million provision for credit losses was appropriate for the third quarter of 2018. The company recorded no provision for credit losses in the second quarter of 2018.

The combined allowance for credit losses totaled $213 million or 1.16 percent of outstanding loans and 146 percent of nonaccruing loans at September 30, 2018, excluding residential mortgage loans guaranteed by U.S. government agencies. The allowance for loan losses was $211 million and the accrual for off-balance sheet credit losses was $2.0 million. At June 30, 2018, the combined allowance for credit losses was $218 million or 1.21 percent of outstanding loans and 138 percent of nonaccruing loans, excluding loans guaranteed by U.S. government agencies. The allowance for loan losses was $215 million and the accrual for off-balance sheet credit losses was $2.4 million.



Commercial Banking

Net income for Commercial Banking was $85.0 million for the third quarter of 2018, a decrease of $2.6 million compared to the second quarter of 2018. Second quarter earnings included $5.3 million in interest recoveries on nonaccrual loans. Excluding the impact of interest recoveries, growth in net interest revenue was driven by strong growth in loan balances and improved loan yields. This growth was partially offset by a modest increase in our internal cost of funds allocation.

Average loan balances increased $421 million or 3 percent, largely impacted by energy, commercial real estate, service and other commercial and industrial loans. Average customer deposits were $8.6 billion, an increase of $254 million or 3 percent, mostly due to energy, real estate, and general commercial and industrial deposits.

Fees and commissions revenue decreased $3.5 million or 8 percent as a result of reduced customer hedging revenue and the timing of closing loan syndication transactions after an exceptionally strong second quarter. Expense growth outpaced revenue growth primarily due to an increase in incentive compensation as a result of continued loan growth as well as a $1.7 million write down of a repossessed property in the third quarter.



Consumer Banking

Net income from Consumer Banking was $9.2 million in the third quarter of 2018, an increase of $3.1 million or 50 percent. The net economic cost of the changes in fair value of mortgage servicing rights and related economic hedges was $156 thousand for the third quarter of 2018 compared to $3.5 million for the second quarter of 2018.

Revenues from mortgage banking activities decreased $2.8 million from the prior quarter. Continued rising interest rates and increased market competition slowed origination activity, which declined 16 percent compared to the prior quarter. Efforts to right size current capacity have resulted in personnel expense savings of $1.7 million from the previous quarter.

Net interest revenue from Consumer Banking activities increased $820 thousand while deposit service charges and fees increased $588 thousand over the second quarter of 2018. The introduction of a new time deposit product as well as interest rate increases on existing money market products have positively impacted runoff trends.

Average consumer loans and deposits remained relatively consistent compared to the prior quarter at $1.7 billion and $6.6 billion, respectively.



Wealth Management

Net income for Wealth Management increased $9.0 million to $29.3 million during the third quarter of 2018. This increase included an after tax benefit of $11.5 million as a result of a fee earned on the sale of client assets. Excluding this fee, fiduciary and asset management fees produced relatively consistent results compared to the second quarter of 2018.

Average loans increased $27 million or 2 percent to $1.4 billion. Average deposits decreased $343 million or 6 percent, primarily due to client migrations to investments. Assets under management decreased $1.2 billion or 1.6 percent to $77.6 billion at September 30, 2018.

Brokerage and trading revenue decreased $1.7 million or 8 percent compared to the second quarter of 2018 due to a decreased demand in investment products related to rising interest rates and slowing mortgage production.



Conference Call and Webcast

The company will hold a conference call at 9 a.m. Central time on Wednesday, October 24, 2018 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 # 13683709.



About BOK Financial Corporation

BOK Financial Corporation is a $33 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, BOK Financial Securities, Inc. and The Milestone Group, Inc. BOKF, NA operates TransFund, Cavanal Hill Investment Management, BOK Financial Asset Management, Inc. and seven banking divisions: Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Mobank, 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 appropriateness of the allowance for credit losses and asset impairment as of September 30, 2018 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,” “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 BOK Financial's acquisitions, including its latest acquisition of CoBiz Financial, Inc., 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 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. There may also be difficulties and delays in integrating CoBiz Financial Inc.'s business or fully realizing cost savings and other benefits including, but not limited to, business disruption and customer acceptance of BOK Financial Corporation's products and

services. 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.

Exhibit 99(b)

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

	Sept. 30, 2018			June 30, 2018			Sept. 30, 2017
ASSETS
Cash and due from banks	$	815,458		$	585,801		$	547,203
Interest-bearing cash and cash equivalents	430,789			872,999			1,926,779
Trading securities	1,613,400			1,909,615			614,117
Investment securities	374,039			392,013			466,562
Available for sale debt securities	8,072,014			8,162,866			8,383,199
Fair value option securities	452,150			482,227			819,531
Restricted equity securities	311,189			347,721			347,542
Residential mortgage loans held for sale	175,866			223,301			275,643
Loans:
Commercial	11,576,101			11,349,039			10,795,934
Commercial real estate	3,804,675			3,712,220			3,518,142
Residential mortgage	1,971,742			1,942,250			1,945,750
Personal	996,941			1,000,187			947,008
Total loans	18,349,459			18,003,696			17,206,834
Allowance for loan losses	(210,569		)	(215,142		)	(247,703		)
Loans, net of allowance	18,138,890			17,788,554			16,959,131
Premises and equipment, net	327,129			320,810			320,060
Receivables	277,738			212,893			173,990
Goodwill	447,430			453,093			446,697
Intangible assets, net	33,370			28,273			39,013
Mortgage servicing rights	284,673			278,719			245,858
Real estate and other repossessed assets, net	24,515			27,891			32,535
Derivative contracts, net	349,481			373,373			352,559
Cash surrender value of bank-owned life insurance	323,628			321,024			314,201
Receivable on unsettled securities sales	421,313			604,552			370,486
Other assets	416,792			447,382			370,409
TOTAL ASSETS	$	33,289,864		$	33,833,107		$	33,005,515

LIABILITIES AND EQUITY
Deposits:
Demand	$	9,063,623		$	9,373,959		$	9,185,481
Interest-bearing transaction	9,990,219			10,164,099			10,025,084
Savings	502,601			503,474			465,225
Time	2,075,846			2,127,732			2,172,289
Total deposits	21,632,289			22,169,264			21,848,079
Funds purchased and repurchase agreements	790,741			880,027			390,545
Other borrowings	6,025,483			5,929,445			6,241,275
Subordinated debentures	144,707			144,697			144,668
Accrued interest, taxes and expense	231,592			160,568			152,029
Due on unsettled securities purchases	414,283			571,034			176,498
Derivative contracts, net	252,387			234,856			336,327
Other liabilities	172,622			167,171			201,655
TOTAL LIABILITIES	29,664,104			30,257,062			29,491,076
Shareholders' equity:
Capital, surplus and retained earnings	3,777,394			3,688,736			3,482,057
Accumulated other comprehensive gain (loss)	(162,362		)	(135,305		)	6,757
TOTAL SHAREHOLDERS' EQUITY	3,615,032			3,553,431			3,488,814
Non-controlling interests	10,728			22,614			25,625
TOTAL EQUITY	3,625,760			3,576,045			3,514,439
TOTAL LIABILITIES AND EQUITY	$	33,289,864		$	33,833,107		$	33,005,515

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

	Three Months Ended
	Sept. 30, 2018			June 30, 2018			Mar. 31, 2018			Dec. 31, 2017			Sept. 30, 2017
ASSETS
Interest-bearing cash and cash equivalents	$	688,872		$	1,673,387		$	2,059,517		$	1,976,395		$	1,965,645
Trading securities	1,762,794			1,482,302			933,404			560,321			491,613
Investment securities	379,566			399,088			441,207			462,869			475,705
Available for sale debt securities	8,129,214			8,163,142			8,236,938			8,435,916			8,428,353
Fair value option securities	469,398			487,192			626,251			792,647			684,571
Restricted equity securities	328,842			348,546			349,176			337,673			328,677
Residential mortgage loans held for sale	207,488			218,600			199,380			257,927			256,343
Loans:
Commercial	11,484,200			11,189,899			10,871,569			10,751,235			10,827,198
Commercial real estate	3,774,470			3,660,166			3,491,335			3,485,583			3,528,330
Residential mortgage	1,956,089			1,915,015			1,937,198			1,976,860			1,951,385
Personal	989,026			986,162			961,379			967,329			949,750
Total loans	18,203,785			17,751,242			17,261,481			17,181,007			17,256,663
Allowance for loan losses	(214,160		)	(222,856		)	(228,996		)	(246,143		)	(250,590		)
Total loans, net	17,989,625			17,528,386			17,032,485			16,934,864			17,006,073
Total earning assets	29,955,799			30,300,643			29,878,358			29,758,612			29,636,980
Cash and due from banks	578,905			571,333			564,585			576,737			546,653
Derivative contracts, net	294,126			318,375			278,694			292,961			238,583
Cash surrender value of bank-owned life insurance	322,038			319,507			317,334			315,034			313,079
Receivable on unsettled securities sales	768,785			618,240			998,803			821,275			608,412
Other assets	1,776,164			1,777,937			1,687,178			1,687,496			1,664,463
TOTAL ASSETS	$	33,695,817		$	33,906,035		$	33,724,952		$	33,452,115		$	33,008,170

LIABILITIES AND EQUITY
Deposits:
Demand	$	9,325,002		$	9,223,327		$	9,151,272		$	9,417,351		$	9,389,849
Interest-bearing transaction	10,010,031			10,189,354			10,344,469			10,142,744			10,088,522
Savings	503,821			503,671			480,110			466,496			464,130
Time	2,097,441			2,138,880			2,151,044			2,134,469			2,176,820
Total deposits	21,936,295			22,055,232			22,126,895			22,161,060			22,119,321
Funds purchased and repurchase agreements	1,193,583			593,250			532,412			488,330			411,286
Other borrowings	5,765,440			6,497,020			6,326,967			6,209,903			6,162,641
Subordinated debentures	144,702			144,692			144,682			144,673			144,663
Derivative contracts, net	185,029			235,543			223,373			288,408			221,371
Due on unsettled securities purchases	544,263			527,804			558,898			332,155			145,977
Other liabilities	311,605			340,322			333,151			312,196			318,270
TOTAL LIABILITIES	30,080,917			30,393,863			30,246,378			29,936,725			29,523,529
Total equity	3,614,900			3,512,172			3,478,574			3,515,390			3,484,641
TOTAL LIABILITIES AND EQUITY	$	33,695,817		$	33,906,035		$	33,724,952		$	33,452,115		$	33,008,170

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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017

Interest revenue	$	303,247		$	255,413		$	862,834		$	716,984
Interest expense	62,364			36,961			163,653			92,146
Net interest revenue	240,883			218,452			699,181			624,838
Provision for credit losses	4,000			—			(1,000		)	—
Net interest revenue after provision for credit losses	236,883			218,452			700,181			624,838
Other operating revenue:
Brokerage and trading revenue	23,086			33,169			80,222			98,556
Transaction card revenue¹	21,396			22,929			63,361			61,115
Fiduciary and asset management revenue	57,514			40,687			141,045			121,126
Deposit service charges and fees	27,765			28,191			82,753			84,390
Mortgage banking revenue	23,536			24,890			75,907			80,357
Other revenue	14,213			13,670			41,061			40,406
Total fees and commissions	167,510			163,536			484,349			485,950
Other gains (losses), net	1,441			(1,283		)	4,760			8,452
Gain (loss) on derivatives, net	(2,847		)	1,033			(11,589		)	3,824
Gain (loss) on fair value option securities, net	(4,385		)	661			(25,290		)	1,505
Change in fair value of mortgage servicing rights	5,972			(639		)	28,901			(5,726		)
Gain (loss) on available for sale securities, net	250			2,487			(802		)	4,916
Total other operating revenue	167,941			165,795			480,329			498,921
Other operating expense:
Personnel	143,531			147,910			422,425			428,079
Business promotion	7,620			7,105			21,316			21,560
Professional fees and services	13,209			11,887			38,387			35,723
Net occupancy and equipment	23,394			21,325			70,201			64,074
Insurance	6,232			6,005			19,070			13,098
Data processing and communications¹	31,665			27,412			87,221			79,222
Printing, postage and supplies	3,837			3,917			11,937			11,908
Net losses and operating expenses of repossessed assets	4,044			6,071			14,471			9,347
Amortization of intangible assets	1,603			1,744			4,289			5,349
Mortgage banking costs	11,741			13,450			34,780			38,525
Other expense	5,741			9,193			19,426			25,308
Total other operating expense	252,617			256,019			743,523			732,193

Net income before taxes	152,207			128,228			436,987			391,566
Federal and state income taxes	34,662			42,438			98,940			128,246

Net income	117,545			85,790			338,047			263,320
Net income attributable to non-controlling interests	289			141			857			1,168
Net income attributable to BOK Financial Corporation shareholders	$	117,256		$	85,649		$	337,190		$	262,152

Average shares outstanding:
Basic	64,901,095			64,742,822			64,883,319			64,729,391
Diluted	64,934,351			64,805,172			64,919,728			64,793,893

Net income per share:
Basic	$	1.79		$	1.31		$	5.15		$	4.01
Diluted	$	1.79		$	1.31		$	5.15		$	4.00


¹	Non-GAAP measure to net interchange charges for periods prior to 2018 between transaction card revenue and data processing and communications expense. This measure has no effect on net income or earnings per share.

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

	Three Months Ended
	Sept. 30, 2018			June 30, 2018			Mar. 31, 2018			Dec. 31, 2017			Sept. 30, 2017
Capital:
Period-end shareholders' equity	$	3,615,032		$	3,553,431		$	3,495,029		$	3,495,367		$	3,488,814
Risk weighted assets	$	27,398,072		$	27,004,559		$	26,025,660		$	25,733,711		$	25,409,728
Risk-based capital ratios:
Common equity tier 1	12.07		%	11.92		%	12.06		%	12.05		%	11.90		%
Tier 1	12.07		%	11.92		%	12.06		%	12.05		%	11.90		%
Total capital	13.37		%	13.26		%	13.49		%	13.54		%	13.47		%
Leverage ratio	9.90		%	9.57		%	9.40		%	9.31		%	9.30		%
Tangible common equity ratio¹	9.55		%	9.21		%	9.18		%	9.50		%	9.23		%

Common stock:
Book value per share	$	55.25		$	54.30		$	53.39		$	53.45		$	53.30
Tangible book value per share	47.90			46.95			46.10			46.17			45.88
Market value per share:
High	$	105.22		$	106.65		$	107.00		$	93.97		$	90.69
Low	$	92.40		$	92.39		$	89.82		$	79.67		$	77.10
Cash dividends paid	$	32,591		$	29,340		$	29,342		$	29,328		$	28,655
Dividend payout ratio	27.79		%	25.65		%	27.80		%	40.46		%	33.46		%
Shares outstanding, net	65,434,258			65,439,090			65,459,505			65,394,937			65,456,786
Stock buy-back program:
Shares repurchased	—			8,257			82,583			80,000			—
Amount	$	—		$	824		$	7,584		$	7,403		$	—
Average price per share	$	—		$	99.84		$	91.83		$	92.54		$	—

Performance ratios (quarter annualized):
Return on average assets	1.38		%	1.35		%	1.27		%	0.86		%	1.03		%
Return on average equity	12.95		%	13.14		%	12.39		%	8.24		%	9.83		%
Net interest margin	3.21		%	3.17		%	2.99		%	2.97		%	3.01		%
Efficiency ratio³	61.41		%	61.68		%	65.09		%	66.07		%	65.92		%

Reconciliation of non-GAAP measures:
¹ Tangible common equity ratio:
Total shareholders' equity	$	3,615,032		$	3,553,431		$	3,495,029		$	3,495,367		$	3,488,814
Less: Goodwill and intangible assets, net	480,800			481,366			477,088			476,088			485,710
Tangible common equity	$	3,134,232		$	3,072,065		$	3,017,941		$	3,019,279		$	3,003,104

Total assets	$	33,289,864		$	33,833,107		$	33,361,492		$	32,272,160		$	33,005,515
Less: Goodwill and intangible assets, net	480,800			481,366			477,088			476,088			485,710
Tangible assets	$	32,809,064		$	33,351,741		$	32,884,404		$	31,796,072		$	32,519,805

Tangible common equity ratio	9.55		%	9.21		%	9.18		%	9.50		%	9.23		%

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

	Three Months Ended
	Sept. 30, 2018			June 30, 2018			Mar. 31, 2018			Dec. 31, 2017			Sept. 30, 2017
Other data:
Fiduciary assets	$	45,560,107		$	46,531,900		$	46,648,290		$	48,761,477		$	45,177,185
Tax equivalent interest	$	1,894		$	1,983		$	2,010		$	4,131		$	4,314
Net unrealized gain (loss) on available for sale securities	$	(216,793	)	$	(180,602	)	$	(148,247	)	$	(47,497	)	$	14,061

Mortgage banking:
Mortgage production revenue	$	7,250		$	9,915		$	9,452		$	7,786		$	8,329

Mortgage loans funded for sale	$	651,076		$	773,910		$	664,958		$	840,080		$	832,796
Add: current period-end outstanding commitments	197,752			251,231			298,318			222,919			334,337
Less: prior period end outstanding commitments	251,231			298,318			222,919			334,337			362,088
Total mortgage production volume	$	597,597		$	726,823		$	740,357		$	728,662		$	805,045

Mortgage loan refinances to mortgage loans funded for sale	23		%	22		%	42		%	47		%	38		%
Gain on sale margin	1.21		%	1.36		%	1.28		%	1.07		%	1.03		%

Mortgage servicing revenue	$	16,286		$	16,431		$	16,573		$	16,576		$	16,561
Average outstanding principal balance of mortgage loans serviced for others	21,895,041			21,986,065			22,027,726			22,054,877			22,079,177
Average mortgage servicing revenue rates	0.30		%	0.30		%	0.31		%	0.30		%	0.30		%

Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net	$	(2,843	)	$	(3,070	)	$	(5,698	)	$	(3,057	)	$	1,025
Gain (loss) on fair value option securities, net	(4,385		)	(3,341		)	(17,564		)	(4,238		)	661
Gain (loss) on economic hedge of mortgage servicing rights	(7,228		)	(6,411		)	(23,262		)	(7,295		)	1,686
Gain (loss) on changes in fair value of mortgage servicing rights	5,972			1,723			21,206			5,898			(639		)
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue	(1,256		)	(4,688		)	(2,056		)	(1,397		)	1,047
Net interest revenue on fair value option securities²	1,100			1,203			1,800			2,656			2,543
Total economic benefit (cost) of changes in the fair value of mortgage servicing rights, net of economic hedges	$	(156	)	$	(3,485	)	$	(256	)	$	1,259		$	3,590


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


³	Periods prior to 2018 are shown on a comparable basis to net interchange charges between transaction card revenue and data processing and communications expense.

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

	Three Months Ended
	Sept. 30, 2018			June 30, 2018			Mar. 31, 2018			Dec. 31, 2017			Sept. 30, 2017

Interest revenue	$	303,247		$	294,180		$	265,407		$	255,767		$	255,413
Interest expense	62,364			55,618			45,671			38,904			36,961
Net interest revenue	240,883			238,562			219,736			216,863			218,452
Provision for credit losses	4,000			—			(5,000		)	(7,000		)	—
Net interest revenue after provision for credit losses	236,883			238,562			224,736			223,863			218,452
Other operating revenue:
Brokerage and trading revenue	23,086			26,488			30,648			33,045			33,169
Transaction card revenue¹	21,396			20,975			20,990			20,028			22,929
Fiduciary and asset management revenue	57,514			41,699			41,832			41,767			40,687
Deposit service charges and fees	27,765			27,827			27,161			27,685			28,191
Mortgage banking revenue	23,536			26,346			26,025			24,362			24,890
Other revenue	14,213			14,518			12,330			11,762			13,670
Total fees and commissions	167,510			157,853			158,986			158,649			163,536
Other gains (losses), net	1,441			3,983			(664		)	552			(1,283		)
Gain (loss) on derivatives, net	(2,847		)	(3,057		)	(5,685		)	(3,045		)	1,033
Gain (loss) on fair value option securities, net	(4,385		)	(3,341		)	(17,564		)	(4,238		)	661
Change in fair value of mortgage servicing rights	5,972			1,723			21,206			5,898			(639		)
Gain (loss) on available for sale securities, net	250			(762		)	(290		)	(488		)	2,487
Total other operating revenue	167,941			156,399			155,989			157,328			165,795
Other operating expense:
Personnel	143,531			138,947			139,947			145,329			147,910
Business promotion	7,620			7,686			6,010			7,317			7,105
Charitable contributions to BOKF Foundation	—			—			—			2,000			—
Professional fees and services	13,209			14,978			10,200			15,344			11,887
Net occupancy and equipment	23,394			22,761			24,046			22,403			21,325
Insurance	6,232			6,245			6,593			6,555			6,005
Data processing and communications¹	31,665			27,739			27,817			28,903			27,412
Printing, postage and supplies	3,837			4,011			4,089			3,781			3,917
Net losses (gains) and operating expenses of repossessed assets	4,044			2,722			7,705			340			6,071
Amortization of intangible assets	1,603			1,386			1,300			1,430			1,744
Mortgage banking costs	11,741			12,890			10,149			14,331			13,450
Other expense	5,741			7,111			6,574			6,746			9,193
Total other operating expense	252,617			246,476			244,430			254,479			256,019
Net income before taxes	152,207			148,485			136,295			126,712			128,228
Federal and state income taxes	34,662			33,330			30,948			54,347			42,438
Net income	117,545			115,155			105,347			72,365			85,790
Net income (loss) attributable to non-controlling interests	289			783			(215		)	(127		)	141
Net income attributable to BOK Financial Corporation shareholders	$	117,256		$	114,372		$	105,562		$	72,492		$	85,649

Average shares outstanding:
Basic	64,901,095			64,901,975			64,847,334			64,793,005			64,742,822
Diluted	64,934,351			64,937,226			64,888,033			64,843,179			64,805,172
Net income per share:
Basic	$	1.79		$	1.75		$	1.61		$	1.11		$	1.31
Diluted	$	1.79		$	1.75		$	1.61		$	1.11		$	1.31


¹	Non-GAAP measure to net interchange charges for periods prior to 2018 between transaction card revenue and data processing and communications expense. This measure has no effect on net income or earnings per share.

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

	Sept. 30, 2018		June 30, 2018		Mar. 31, 2018		Dec. 31, 2017		Sept. 30, 2017
Commercial:
Energy	$	3,294,867	$	3,147,219	$	2,969,618	$	2,930,156	$	2,867,981
Services	3,017,311		2,944,499		2,928,294		2,986,949		2,967,513
Healthcare	2,437,323		2,353,722		2,359,928		2,314,753		2,239,451
Wholesale/retail	1,650,729		1,699,554		1,531,576		1,471,256		1,658,098
Manufacturing	660,582		647,816		559,695		496,774		519,446
Other commercial and industrial	515,289		556,229		570,556		534,087		543,445
Total commercial	11,576,101		11,349,039		10,919,667		10,733,975		10,795,934

Commercial real estate:
Multifamily	1,120,166		1,056,984		1,008,903		980,017		999,009
Office	824,829		820,127		737,144		831,770		797,089
Retail	759,423		768,024		750,396		691,532		725,865
Industrial	696,774		653,384		613,608		573,014		591,080
Residential construction and land development	101,872		118,999		117,458		117,245		112,102
Other commercial real estate	301,611		294,702		279,273		286,409		292,997
Total commercial real estate	3,804,675		3,712,220		3,506,782		3,479,987		3,518,142

Residential mortgage:
Permanent mortgage	1,094,926		1,068,412		1,047,785		1,043,435		1,013,965
Permanent mortgages guaranteed by U.S. government agencies	180,718		169,653		177,880		197,506		187,370
Home equity	696,098		704,185		720,104		732,745		744,415
Total residential mortgage	1,971,742		1,942,250		1,945,769		1,973,686		1,945,750

Personal	996,941		1,000,187		965,632		965,776		947,008

Total	$	18,349,459	$	18,003,696	$	17,337,850	$	17,153,424	$	17,206,834

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

	Sept. 30, 2018		June 30, 2018		Mar. 31, 2018		Dec. 31, 2017		Sept. 30, 2017

Oklahoma:
Commercial	$	3,609,109	$	3,465,407	$	3,265,013	$	3,238,720	$	3,408,973
Commercial real estate	651,315		662,665		668,031		682,037		712,915
Residential mortgage	1,429,843		1,403,658		1,419,281		1,435,432		1,405,900
Personal	376,201		362,846		353,128		342,212		322,320
Total Oklahoma	6,066,468		5,894,576		5,705,453		5,698,401		5,850,108

Texas:
Commercial	5,115,646		4,922,451		4,715,841		4,520,401		4,434,595
Commercial real estate	1,354,679		1,336,101		1,254,421		1,261,864		1,236,702
Residential mortgage	253,265		243,400		229,761		233,675		229,993
Personal	381,452		394,021		363,608		375,084		375,173
Total Texas	7,105,042		6,895,973		6,563,631		6,391,024		6,276,463

New Mexico:
Commercial	325,048		305,167		315,701		343,296		367,747
Commercial real estate	392,494		386,878		348,485		341,282		319,208
Residential mortgage	88,110		90,581		93,490		98,018		101,983
Personal	11,659		11,107		11,667		11,721		12,953
Total New Mexico	817,311		793,733		769,343		794,317		801,891

Arkansas:
Commercial	102,237		93,217		94,430		95,644		91,051
Commercial real estate	106,701		90,807		88,700		87,393		80,917
Residential mortgage	7,278		6,927		7,033		6,596		6,318
Personal	12,126		12,331		9,916		9,992		10,388
Total Arkansas	228,342		203,282		200,079		199,625		188,674

Colorado:
Commercial	1,132,500		1,165,721		1,180,655		1,130,714		1,124,200
Commercial real estate	354,543		267,065		210,801		174,201		186,427
Residential mortgage	68,694		64,839		64,530		63,350		63,734
Personal	56,999		60,504		63,118		63,115		60,513
Total Colorado	1,612,736		1,558,129		1,519,104		1,431,380		1,434,874

Arizona:
Commercial	621,658		681,852		624,106		687,792		634,809
Commercial real estate	666,562		710,784		672,319		660,094		706,188
Residential mortgage	44,659		47,010		39,227		41,771		40,730
Personal	67,280		65,541		57,023		57,140		55,050
Total Arizona	1,400,159		1,505,187		1,392,675		1,446,797		1,436,777

Kansas/Missouri:
Commercial	669,903		715,224		723,921		717,408		734,559
Commercial real estate	278,381		257,920		264,025		273,116		275,785
Residential mortgage	79,893		85,835		92,447		94,844		97,092
Personal	91,224		93,837		107,172		106,512		110,611
Total Kansas/Missouri	1,119,401		1,152,816		1,187,565		1,191,880		1,218,047

TOTAL BOK FINANCIAL	$	18,349,459	$	18,003,696	$	17,337,850	$	17,153,424	$	17,206,834

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)

	Sept. 30, 2018		June 30, 2018		Mar. 31, 2018		Dec. 31, 2017		Sept. 30, 2017
Oklahoma:
Demand	$	3,564,307	$	3,867,933	$	4,201,842	$	3,885,008	$	4,061,612
Interest-bearing:
Transaction	6,010,972		5,968,460		6,051,302		5,901,293		5,909,259
Savings	288,080		289,202		289,351		265,870		265,023
Time	1,128,810		1,207,471		1,203,534		1,092,133		1,131,547
Total interest-bearing	7,427,862		7,465,133		7,544,187		7,259,296		7,305,829
Total Oklahoma	10,992,169		11,333,066		11,746,029		11,144,304		11,367,441

Texas:
Demand	3,353,248		3,317,656		3,015,869		3,239,098		3,094,184
Interest-bearing:
Transaction	2,181,382		2,168,488		2,208,480		2,397,071		2,272,987
Savings	97,909		97,809		98,852		93,620		93,400
Time	453,119		445,500		475,967		502,879		521,072
Total interest-bearing	2,732,410		2,711,797		2,783,299		2,993,570		2,887,459
Total Texas	6,085,658		6,029,453		5,799,168		6,232,668		5,981,643

New Mexico:
Demand	722,188		770,974		695,060		663,353		659,793
Interest-bearing:
Transaction	593,760		586,593		555,414		552,393		551,884
Savings	57,794		59,415		60,596		55,647		53,532
Time	221,513		212,689		216,306		216,743		224,773
Total interest-bearing	873,067		858,697		832,316		824,783		830,189
Total New Mexico	1,595,255		1,629,671		1,527,376		1,488,136		1,489,982

Arkansas:
Demand	36,579		39,896		35,291		30,384		31,442
Interest-bearing:
Transaction	128,001		143,298		94,206		85,095		126,746
Savings	1,826		1,885		1,960		1,881		1,876
Time	10,214		10,771		11,878		14,045		14,434
Total interest-bearing	140,041		155,954		108,044		101,021		143,056
Total Arkansas	176,620		195,850		143,335		131,405		174,498

Colorado:
Demand	593,442		529,912		521,963		633,714		540,300
Interest-bearing:
Transaction	622,520		701,362		687,785		657,629		628,807
Savings	40,308		38,176		37,232		35,223		34,776
Time	217,628		208,049		215,330		224,962		231,927
Total interest-bearing	880,456		947,587		940,347		917,814		895,510
Total Colorado	1,473,898		1,477,499		1,462,310		1,551,528		1,435,810

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

	Sept. 30, 2018		June 30, 2018		Mar. 31, 2018		Dec. 31, 2017		Sept. 30, 2017
Arizona:
Demand	370,299		387,952		330,196		334,701		335,740
Interest-bearing:
Transaction	130,837		194,353		248,337		274,846		174,010
Savings	3,559		3,935		4,116		3,343		4,105
Time	23,927		22,447		21,009		20,394		20,831
Total interest-bearing	158,323		220,735		273,462		298,583		198,946
Total Arizona	528,622		608,687		603,658		633,284		534,686

Kansas/Missouri:
Demand	423,560		459,636		505,802		457,080		462,410
Interest-bearing:
Transaction	322,747		401,545		381,447		382,066		361,391
Savings	13,125		13,052		13,845		13,574		12,513
Time	20,635		20,805		22,230		27,260		27,705
Total interest-bearing	356,507		435,402		417,522		422,900		401,609
Total Kansas/Missouri	780,067		895,038		923,324		879,980		864,019

TOTAL BOK FINANCIAL	$	21,632,289	$	22,169,264	$	22,205,200	$	22,061,305	$	21,848,079

NET INTEREST MARGIN TREND -- UNAUDITED BOK FINANCIAL CORPORATION

	Three Months Ended
	Sept. 30, 2018		June 30, 2018		Mar. 31, 2018		Dec. 30, 2017		Sept. 30, 2017

TAX-EQUIVALENT ASSETS YIELDS
Interest-bearing cash and cash equivalents	1.98	%	1.86	%	1.57	%	1.27	%	1.29	%
Trading securities	3.98	%	3.63	%	3.40	%	3.38	%	3.47	%
Investment securities	4.06	%	3.95	%	3.78	%	3.98	%	3.86	%
Available for sale securities	2.37	%	2.30	%	2.23	%	2.21	%	2.17	%
Fair value option securities	3.25	%	3.16	%	2.95	%	2.90	%	2.97	%
Restricted equity securities	6.36	%	6.21	%	5.86	%	5.87	%	5.87	%
Residential mortgage loans held for sale	4.27	%	4.28	%	3.71	%	3.72	%	3.36	%
Loans	4.80	%	4.80	%	4.45	%	4.29	%	4.31	%
Allowance for loan losses
Loans, net of allowance	4.86	%	4.86	%	4.51	%	4.35	%	4.38	%
Total tax-equivalent yield on earning assets	4.04	%	3.91	%	3.61	%	3.49	%	3.50	%

COST OF INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest-bearing transaction	0.67	%	0.55	%	0.45	%	0.35	%	0.32	%
Savings	0.09	%	0.08	%	0.07	%	0.07	%	0.08	%
Time	1.40	%	1.29	%	1.25	%	1.17	%	1.16	%
Total interest-bearing deposits	0.77	%	0.66	%	0.57	%	0.48	%	0.45	%
Funds purchased and repurchase agreements	1.25	%	0.53	%	0.40	%	0.28	%	0.25	%
Other borrowings	2.20	%	1.96	%	1.60	%	1.36	%	1.29	%
Subordinated debt	5.55	%	5.67	%	5.61	%	5.55	%	5.68	%
Total cost of interest-bearing liabilities	1.25	%	1.11	%	0.93	%	0.79	%	0.75	%
Tax-equivalent net interest revenue spread	2.79	%	2.80	%	2.68	%	2.70	%	2.75	%
Effect of noninterest-bearing funding sources and other	0.42	%	0.37	%	0.31	%	0.27	%	0.26	%
Tax-equivalent net interest margin	3.21	%	3.17	%	2.99	%	2.97	%	3.01	%

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
	Sept. 30, 2018		June 30, 2018		Mar. 31, 2018		Dec. 31, 2017		Sept. 30, 2017
Nonperforming assets:
Nonaccruing loans:
Commercial	$	109,490	$	120,978	$	131,460	$	137,303	$	176,900
Commercial real estate	1,316		1,996		2,470		2,855		2,975
Residential mortgage	41,917		42,343		45,794		47,447		45,506
Personal	269		340		340		269		255
Total nonaccruing loans	152,992		165,657		180,064		187,874		225,636
Accruing renegotiated loans guaranteed by U.S. government agencies	83,347		75,374		74,418		73,994		69,440
Real estate and other repossessed assets	24,515		27,891		23,652		28,437		32,535
Total nonperforming assets	$	260,854	$	268,922	$	278,134	$	290,305	$	327,611
Total nonperforming assets excluding those guaranteed by U.S. government agencies	$	169,717	$	185,981	$	194,833	$	207,132	$	249,280

Nonaccruing loans by loan class:
Commercial:
Energy	$	54,033	$	65,597	$	89,942	$	92,284	$	110,683
Healthcare	15,704		16,125		15,342		14,765		24,446
Wholesale/retail	9,249		14,095		2,564		2,574		1,893
Manufacturing	9,202		2,991		3,002		5,962		9,059
Services	4,097		4,377		2,109		2,620		1,174
Other commercial and industrial	17,205		17,793		18,501		19,098		29,645
Total commercial	109,490		120,978		131,460		137,303		176,900
Commercial real estate:
Retail	777		1,068		264		276		289
Residential construction and land development	350		350		1,613		1,832		1,924
Office	—		275		275		275		275
Industrial	—		—		—		—		—
Multifamily	—		—		—		—		—
Other commercial real estate	189		303		318		472		487
Total commercial real estate	1,316		1,996		2,470		2,855		2,975
Residential mortgage:
Permanent mortgage	22,855		23,105		24,578		25,193		24,623
Permanent mortgage guaranteed by U.S. government agencies	7,790		7,567		8,883		9,179		8,891
Home equity	11,272		11,671		12,333		13,075		11,992
Total residential mortgage	41,917		42,343		45,794		47,447		45,506
Personal	269		340		340		269		255
Total nonaccruing loans	$	152,992	$	165,657	$	180,064	$	187,874	$	225,636

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

	Three Months Ended
	Sept. 30, 2018			June 30, 2018			Mar. 31, 2018			Dec. 31, 2017			Sept. 30, 2017

Performing loans 90 days past due¹	$	518		$	879		$	90		$	633		$	253

Gross charge-offs	$	11,073		$	15,105		$	2,890		$	14,749		$	5,825
Recoveries	(2,092		)	(4,578		)	(1,576		)	(3,061		)	(2,437		)
Net charge-offs	$	8,981		$	10,527		$	1,314		$	11,688		$	3,388

Provision for credit losses	$	4,000		$	—		$	(5,000	)	$	(7,000	)	$	—

Allowance for loan losses to period end loans	1.15		%	1.19		%	1.29		%	1.34		%	1.44		%
Combined allowance for credit losses to period end loans	1.16		%	1.21		%	1.32		%	1.37		%	1.47		%
Nonperforming assets to period end loans and repossessed assets	1.42		%	1.49		%	1.60		%	1.69		%	1.90		%
Net charge-offs (annualized) to average loans	0.20		%	0.24		%	0.03		%	0.27		%	0.08		%
Allowance for loan losses to nonaccruing loans¹	145.02		%	136.09		%	130.84		%	129.09		%	114.28		%
Combined allowance for credit losses to nonaccruing loans¹	146.41		%	137.63		%	133.25		%	131.18		%	116.78		%


¹	Excludes residential mortgage loans guaranteed by agencies of the U.S. government.

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

	Three Months Ended						Change
Commercial Banking	Sept. 30, 2018		June 30, 2018		Sept. 30, 2017		3Q18 vs 2Q18		3Q18 vs 3Q17
Net interest revenue	$	145,147	$	145,025	$	135,112	0.1	%	7.4	%
Fees and commissions revenue	39,391		42,874		44,747		(8.1	)%	(12.0	)%
Other operating expense	49,136		47,483		47,430		3.5	%	3.6	%
Corporate expense allocations	11,027		11,269		8,733		(2.1	)%	26.3	%
Net income	84,964		87,577		68,610		(3.0	)%	23.8	%

Average assets	18,499,979		18,072,155		17,780,494		2.4	%	4.0	%
Average loans	15,321,600		14,900,918		14,511,639		2.8	%	5.6	%
Average deposits	8,633,204		8,379,584		8,727,221		3.0	%	(1.1	)%

Consumer Banking
Net interest revenue	$	40,114	$	39,294	$	35,946	2.1	%	11.6	%
Fees and commissions revenue	44,038		46,332		45,006		(5.0	)%	(2.2	)%
Other operating expense	53,187		55,906		56,147		(4.9	)%	(5.3	)%
Corporate expense allocations	15,863		15,867		16,920		—	%	(6.2	)%
Net income	9,162		6,102		4,809		50.1	%	90.5	%

Average assets	8,323,542		8,353,558		8,683,998		(0.4	)%	(4.2	)%
Average loans	1,719,679		1,716,259		1,724,523		0.2	%	(0.3	)%
Average deposits	6,580,395		6,579,635		6,663,969		—	%	(1.3	)%

Wealth Management
Net interest revenue	$	29,398	$	29,306	$	20,774	0.3	%	41.5	%
Fees and commissions revenue	83,562		70,489		75,915		18.5	%	10.1	%
Other operating expense	62,255		61,491		61,792		1.2	%	0.7	%
Corporate expense allocations	11,126		11,142		9,819		(0.1	)%	13.3	%
Net income	29,331		20,358		15,472		44.1	%	89.6	%

Average assets	8,498,363		8,495,557		6,992,021		—	%	21.5	%
Average loans	1,439,774		1,413,170		1,324,574		1.9	%	8.7	%
Average deposits	5,492,048		5,834,669		5,495,250		(5.9	)%	(0.1	)%
Fiduciary assets	45,560,107		46,531,900		45,177,185		(2.1	)%	0.8	%
Assets under management or administration	77,628,015		78,873,446		77,650,909		(1.6	)%	—	%

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Form 8-K BOK FINANCIAL CORP ET For: Oct 24

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