EX-99.1 2 a20221231bokfex99.htm EX-99.1 Document

Exhibit 99.1(a)
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                                                    NASD: BOKF
BOK Financial Corporation Reports Annual Earnings of $520 million or $7.68 Per Share and
Quarterly Earnings of $168 million or $2.51 Per Share in the Fourth Quarter
CEO Commentary
Stacy Kymes, president and chief executive officer, stated, “The strong results of the fourth quarter continue to build on the earnings momentum we have been developing throughout 2022. This quarter was the highest pre-provision net revenue in our history. We enjoyed loan growth, net interest margin expansion, strong capital levels and balance sheet liquidity while asset quality remains very strong. We also took actions in the fourth quarter to move toward a more neutral interest rate position. Our fee businesses remained strong for the quarter and for the year in spite of the worst combined equity and fixed income markets since the late 1960’s. I am proud of the results our team is delivering. Our thoughtful growth, diverse business mix, resilient geographic footprint, and proven credit discipline have BOK Financial well-positioned as we begin 2023."
Fourth Quarter 2022 Financial HIghlights
(Unless indicated otherwise, all comparisons are to the prior quarter)
•Net income was $168.4 million or $2.51 per diluted share for the fourth quarter of 2022 and $156.5 million or $2.32 per diluted share for the third quarter of 2022.

•Net interest revenue totaled $352.6 million, an increase of $36.3 million. Net interest margin was 3.54 percent compared to 3.24 percent. In response to rising inflation, the Federal Reserve increased the federal funds rate another 125 basis points in the fourth quarter. The resulting impact on market interest rates increased our net interest margin.
•Fees and commissions revenue was relatively consistent with the prior quarter at $193.6 million. Increased brokerage and trading revenue, transaction card revenue, and other revenue was offset by lower revenue from mortgage banking and deposit service charges.
•The net cost of the changes in fair value of mortgage servicing rights and related economic hedges was $1.2 million for the fourth quarter of 2022 compared to $4.8 million for the third quarter of 2022.
•Operating expense increased $23.7 million to $318.5 million. Personnel expense increased $16.1 million, largely driven by higher incentive compensation expense. Non-personnel expense increased $7.6 million, primarily related to project-related professional fees and data processing and communications costs.
•Period-end loans increased $767 million to $22.6 billion at December 31, 2022. Of this increase, commercial loans increased $591 million, commercial real estate loans grew $133 million, and loans to individuals increased $49 million. In addition, unfunded loan commitments grew by $839 million. Average outstanding loan balances were $22.0 billion, a $377 million increase.
•We recorded a $15.0 million provision for expected credit losses in the fourth quarter of 2022, primarily due to strong growth in loans and loan commitments. The level of uncertainty in the economic outlook remained high and key economic factors were slightly less favorable to economic growth across all scenarios. We also recorded a $15.0 million provision for expected credit losses in the third quarter of 2022, primarily as a result of growth in loans and loan commitments during the quarter. The combined allowance for credit losses totaled $297 million or 1.31 percent of outstanding loans at December 31, 2022. The combined allowance for credit losses was $298 million or 1.37 percent of outstanding loans at September 30, 2022.
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•Average deposits decreased $1.6 billion to $35.5 billion and period-end deposits decreased $1.9 billion to $34.5 billion, consistent with industry trends as customers redeploy resources following the savings trend during the height of the pandemic. Average demand deposits were reduced by $929 million and average interest-bearing deposits decreased $659 million. The loan to deposit ratio was 65 percent at December 31, 2022 and 60 percent at September 30, 2022.
•The company's common equity Tier 1 capital ratio was 11.69 percent at December 31, 2022. In addition, the company's Tier 1 capital ratio was 11.71 percent, total capital ratio was 12.67 percent, and leverage ratio was 9.91 percent at December 31, 2022. At September 30, 2022, the company's common equity Tier 1 capital ratio was 11.80 percent, Tier 1 capital ratio was 11.82 percent, total capital ratio was 12.81 percent, and leverage ratio was 9.76 percent.
•The company repurchased 314,406 shares of common stock at an average price of $103.14 a share in the fourth quarter of 2022.
Fourth Quarter 2022 Segment Highlights
•Commercial Banking contributed $139.4 million to net income in the fourth quarter of 2022, an increase of $5.5 million. Combined net interest revenue and fee revenue increased $25.5 million, primarily due to the increase in the spread on deposits sold to our Funds Management unit. Net loans charged-off increased $14.9 million. Personnel expense increased $3.4 million, driven by incentive compensation costs associated with growth in revenue. Average loans increased $350 million or 2 percent to $18.3 billion. Average deposits decreased $1.1 billion or 6 percent to $16.8 billion.
•Consumer Banking contributed $9.0 million to net income in the fourth quarter of 2022, an increase of $6.0 million over the prior quarter. Combined net interest revenue and fee revenue increased $6.7 million. Net interest revenue increased $9.4 million, largely due to an increase in the spread on deposits sold to our Funds Management unit. Fees and commissions revenue decreased $2.6 million. Deposit service charges decreased $1.5 million from reduced consumer overdraft charges as expected from changes implemented in the fourth quarter. Mortgage banking revenue decreased $1.2 million due to reduced mortgage production volume combined with narrowing margins. Operating expense increased $1.3 million. Average loans increased $39 million or 2 percent to $1.7 billion. Average deposits decreased $196 million or 2 percent to $8.6 billion.

•Wealth Management contributed $41.6 million to net income in the fourth quarter of 2022, consistent with the third quarter of 2022. Our diverse set of investment-focused businesses, which include trading in fixed income securities and other financial instruments and providing wealth management services to institutional and private wealth clients, produced total net interest and fee revenues of $149.1 million, an increase of $2.4 million. Total revenue from institutional trading activities increased $2.7 million, primarily due to a higher volume of residential mortgage-backed securities trading activity. Other revenue decreased $2.3 million due to lower energy hedging in the fourth quarter. Operating expense increased $2.9 million, mainly due to increased volume-driven incentive compensation costs. Average loans increased $59 million or 3 percent to $2.2 billion. Average deposits decreased $110 million or 1 percent to $7.9 billion. Assets under management were $99.7 billion, an increase of $4.3 billion.
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Annual 2022 Financial Highlights
(Unless indicated otherwise, all comparisons are to the prior year)
•Net income was $520.3 million or $7.68 per diluted share for the year ended December 31, 2022 and $618.1 million or $8.95 per diluted share for the year ended December 31, 2021.
•Net interest revenue totaled $1.2 billion, an increase of $93.3 million. Net interest margin was 2.98 percent compared to 2.60 percent. In response to rising inflation, the Federal Reserve increased the federal funds rate 425 basis points since the beginning of 2022. The resulting impact on market interest rates has increased net interest margin.
•Fees and commissions revenue decreased $11.1 million to $657.2 million. A $56.5 million decrease in mortgage banking revenue due to increasing mortgage interest rates and continued inventory shortages was largely offset by increased customer hedging, investment banking, and fiduciary and asset management revenues.
•The net cost of the changes in the fair value of mortgage servicing rights and related economic hedges was $12.5 million for the year ended December 31, 2022 compared to a net benefit of $21.0 million for the year ended December 31, 2021, due to increased market volatility throughout 2022.
•Other gains and losses, net, decreased $63.6 million due to sales of an alternative investment and repossessed assets in the prior year.
•Operating expense decreased $13.2 million to $1.2 billion. Personnel expense decreased $24.5 million, largely driven by lower incentive compensation expense, partially offset by an increase in regular compensation. Non-personnel expense increased $11.2 million, primarily related to additional business promotion fees and project-related data processing and communications and professional fees. These were partially offset by lower mortgage banking costs and expenses on repossessed assets.
•Period-end loans increased $2.4 billion to $22.6 billion at December 31, 2022. Of this increase, commercial loans increased $1.7 billion, commercial real estate loans increased $775 million, and loans to individuals grew by $146 million. Paycheck Protection Program loans decreased $262 million. Average outstanding loan balances were $21.3 billion, a $216 million decrease.
•We recorded a $30.0 million provision for expected credit losses in 2022, primarily due to strong growth in loans and loan commitments, partially offset by improvement in credit quality metrics. The uncertainty in our economic forecast increased and some key economic factors were less favorable to growth across all scenarios. A negative $100.0 million provision for expected credit losses was recorded in 2021. The combined allowance for credit losses totaled $297 million or 1.31 percent of outstanding loans at December 31, 2022. The combined allowance for credit losses was $289 million or 1.43 percent of outstanding loans at December 31, 2021.
•Average deposits decreased $70 million to $37.9 billion and period-end deposits decreased $6.8 billion to $34.5 billion. In the first half of the year, the majority of deposit outflows were driven by institutional clients moving to off-balance sheet alternatives seeking higher yields. Starting in the third quarter, deposit outflows were largely attributed to commercial clients redeploying capital. The fourth quarter also saw seasonal declines due to mortgage tax disbursements.
2022 Annual Segment Highlights
•Commercial Banking contributed $460.4 million to net income in 2022, an increase of $131.8 million compared to 2021. Combined net-interest revenue and fee revenue increased $215.5 million. Net interest revenue increased $208.7 million, primarily due to growth in average deposit balances and an increase in the spread on deposits sold to our Funds Management unit. Fees and commissions revenue increased $6.8 million as increases in customer hedging revenue and transaction card revenue were largely offset by a decline in other revenue. Operating expense increased $9.6 million, primarily due to incentive compensation costs. The prior year also included the sale of an alternative investment that resulted in a $31.1 million pre-tax gain, net of non-controlling interest. Net loans
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charged-off decreased $13.4 million. Average Commercial Banking loans increased $700 million or 4 percent to $17.6 billion. Average Commercial Banking deposits grew $664 million or 4 percent to $18.3 billion.
•Consumer Banking contributed $5.9 million to net income in 2022, a decrease of $21.8 million compared to the prior year. Combined net interest revenue and fee revenue increased $3.3 million. Net interest revenue increased $54.7 million, primarily due to an increase in the spread on deposits sold to our Funds Management unit. Fees and commissions revenue decreased $51.4 million, largely attributable to reduced mortgage production volume and margin compression. The net cost of the changes in fair value of mortgage servicing rights and related economic hedges was $12.5 million for the year ended December 31, 2022 compared to a net benefit of $21.0 million for the year ended December 31, 2021. Interest rate volatility affected the effectiveness of our mortgage servicing rights hedging strategy. Operating expense was consistent with the prior year. Average Consumer Banking loans decreased $81 million or 5 percent to $1.7 billion. Average Consumer Banking deposits increased $323 million or 4 percent to $8.8 billion.
•Wealth Management contributed $106.2 million to net income in 2022, a decrease of $7.1 million compared to 2021. Total Wealth Management revenue decreased $11.7 million. Total revenue from trading activities decreased $89.5 million compared to the year ended December 31, 2021, largely due to disruption in the fixed income markets due to economic uncertainty, primarily in the first quarter, combined with narrowing margins and lower trading volumes. This decrease was partially offset by an increase in the spread on deposits sold to our Funds Management unit. Fiduciary and asset management revenue also increased $18.0 million. Growth in mutual fund fees and decreased waivers were partially offset by lower trust fees and managed account fees due to market driven declines in assets under management or administration. Other revenue increased $26.7 million, largely due to higher derivative margin use fees. Operating expense decreased $8.5 million due to incentive compensation costs related to reduced trading activity. Average Wealth Management loans grew $185 million or 9 percent to $2.2 billion. Average Wealth Management deposits decreased $935 million or 10 percent to $8.5 billion. Average assets under management decreased $5.2 billion or 5 percent compared to the prior year.
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(Unless indicated otherwise, comparisons are to the prior quarter)
Net Interest Revenue
Net interest revenue was $352.6 million for the fourth quarter of 2022, an increase of $36.3 million. The rapid increase in interest rates, combined with our strong loan growth and our asset sensitive position, drove a linked quarter increase in net interest revenue and a 30 basis point increase in net interest margin to 3.54 percent. In response to rising inflation, the Federal Reserve increased the federal funds rate 125 basis points in the fourth quarter bringing the year-to-date total rate increases to 425 basis points. The resulting impact on market interest rates has increased net interest margin as our earning assets, led by our significant percentage of variable-rate commercial loans, reprice at a higher rate and faster pace than our interest-bearing liabilities.
Average earning assets increased $757 million. Average loan balances increased $377 million, largely due to growth in commercial and commercial real estate loans. Average available for sale securities increased $648 million as we reposition our balance for the current rate environment. Average interest bearing cash and cash equivalents decreased $180 million while average trading securities decreased $91 million. Average interest-bearing deposits decreased $659 million as customers redeploy resources following the savings trend during the height of the pandemic. Average other borrowings increased $994 million while funds purchased and repurchase agreements increased $246 million.
The yield on average earning assets was 4.53 percent, up 82 basis points. The loan portfolio yield increased 110 basis points to 5.99 percent while the yield on trading securities was up 98 basis points to 3.70 percent. The yield on the available for sale securities portfolio increased 33 basis points to 2.54 percent. The yield on interest-bearing cash and cash equivalents increased 219 basis points to 4.06 percent.
Funding costs were 1.57 percent, an 81 basis point increase. The cost of interest-bearing deposits increased 59 basis points to 1.22 percent. The cost of other borrowings was up 175 basis points to 4.08 percent while the cost of funds purchased and repurchase agreements increased 133 basis points to 2.05 percent. The benefit to net interest margin from assets funded by non-interest liabilities was 58 basis points, an increase of 29 basis points.
Operating Revenue
Fees and commissions revenue totaled $193.6 million for the fourth quarter of 2022, relatively unchanged from the prior quarter.
Brokerage and trading revenue increased $2.0 million. Trading revenue grew $9.5 million, largely due to an increase in volume and higher margins on U.S. agency residential mortgage-backed securities trading activity driven by favorable market conditions and increased market volatility. A decline from heightened energy derivative activity in the third quarter led to a $4.7 million decrease in customer hedging revenue. Total investment banking revenue decreased $2.4 million, following record levels in the third quarter. Other revenue increased $1.6 million, largely due to higher revenue on repossessed assets while transaction card revenue grew $1.2 million along with a rise in seasonal transaction volumes.
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Deposit service charges decreased $2.3 million. In the fourth quarter, we implemented changes to eliminate non-sufficient funds fees and reduce consumer overdraft fees. Mortgage banking revenue decreased $1.2 million with a reduction in mortgage production revenue partially offset by an increase in mortgage servicing revenue. Mortgage production volume decreased $119 million to $111 million as rising mortgage interest rates and continued inventory constraints place pressure on mortgage loan originations.
Other gains and losses, net, increased $7.4 million, primarily driven by the sale of a repossessed entity combined with a change in the value of deferred compensation investments, which are held to offset the cost of various employee benefit programs. We also recognized a $4.0 million loss on the sale of available for sale securities in the fourth quarter as we repositioned our balance sheet for the current rate environment.
Operating Expense
Total operating expense was $318.5 million for the fourth quarter of 2022, an increase of $23.7 million compared to the third quarter of 2022.
Personnel expense increased $16.1 million. Cash-based incentive compensation increased $9.9 million due to increased sales activity combined with a one-time incentive given to all employees in the fourth quarter. Deferred compensation expense, which is offset by deferred compensation investments in other revenue, increased $4.9 million.
Non-personnel expense was $132.0 million, up $7.6 million. A $4.3 million increase in professional fees and services and $1.3 million increase in data processing and communications expense was largely attributed to ongoing technology projects. The fourth quarter of 2022 also included a $2.5 million charitable donation to the BOKF Foundation as we continue to focus on the communities we serve.
Loans, Deposits and Capital
Loans
Outstanding loans were $22.6 billion at December 31, 2022, growing $767 million over September 30, 2022, largely due to growth in commercial and commercial real estate loans. Unfunded loan commitments were also up $839 million over the third quarter.
Outstanding commercial loan balances, which includes services, general business, energy, and healthcare loans, increased $591 million with strong growth in all categories.
Services sector loan balances increased $151 million to $3.4 billion or 15 percent of total loans. Services loans consist of a large number of loans to a variety of businesses, including Native American tribal and state and local municipal government entities, Native American tribal casino operations, foundations and not-for-profit organizations, educational services and specialty trade contractors.
General business loans increased $368 million to $3.5 billion or 16 percent of total loans. General business loans include $2.1 billion of wholesale/retail loans and $1.4 billion of loans from other commercial industries.
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Energy loan balances increased $53 million to $3.4 billion or 15 percent of total loans. The majority of this portfolio is first lien, senior secured, reserve-based lending to oil and gas producers, which we believe is the lowest risk form of energy lending. Approximately 72 percent of committed production loans are secured by properties primarily producing oil. The remaining 28 percent is secured by properties primarily producing natural gas. Unfunded energy loan commitments were $3.8 billion at December 31, 2022, an increase of $334 million over September 30, 2022.
Healthcare sector loan balances increased $18 million, totaling $3.8 billion or 17 percent of total loans. Our healthcare sector loans primarily consist of $3.2 billion of senior housing and care facilities, including independent living, assisted living and skilled nursing. Generally, we loan to borrowers with a portfolio of multiple facilities, which serves to help diversify risks specific to a single facility.
Commercial real estate loan balances grew $133 million and represent 20 percent of total loans. Loans secured by industrial facilities increased $118 million to $1.2 billion. Loans secured by multifamily residential properties increased $86 million to 1.2 billion. This growth was partially offset by a $33 million decrease in loans secured by office buildings and $27 million decrease in other real estate loans. Unfunded commercial real estate loan commitments were $3.1 billion at December 31, 2022, an increase of $144 million over September 30, 2022.
Loans to individuals increased $49 million and represent 17 percent of total loans. Total residential mortgage loans increased $22 million while personal loans increased $27 million.
Liquidity and Capital
Our funding sources, which primarily include deposits and borrowings from the Federal Home Loan Banks, provide adequate liquidity to meet our needs. The loan to deposit ratio was 65 percent at December 31, 2022 providing significant on-balance sheet liquidity to meet future loan demand and contractual obligations.
Period-end deposits totaled $34.5 billion at December 31, 2022, a $1.9 billion decrease, largely due to commercial clients redeploying capital following the savings trend during the pandemic combined with seasonal mortgage tax disbursements. Demand deposits decreased $1.6 billion while interest-bearing transaction account balances decreased $341 million. Period-end Commercial Banking deposits decreased $1.4 billion, Consumer Banking deposits declined $354 million, and Wealth Management deposits were largely unchanged. Average deposits were $35.5 billion at December 31, 2022, a $1.6 billion decrease. Average demand deposit account balances decreased $929 million and average interest-bearing transaction account balances decreased $658 million.
The company's common equity Tier 1 capital ratio was 11.69 percent at December 31, 2022. In addition, the company's Tier 1 capital ratio was 11.71 percent, total capital ratio was 12.67 percent, and leverage ratio was 9.91 percent at December 31, 2022. At the beginning of 2020, we elected to delay the regulatory capital impact of the transition of the allowance for credit losses from the incurred loss methodology to CECL for two years, followed by a three-year transition period. This election added 8 basis points to the company's common equity tier 1 capital ratio at December 31, 2022. At September 30, 2022, the company's common equity Tier 1 capital ratio was 11.80 percent, Tier 1 capital ratio was 11.82 percent, total capital ratio was 12.81 percent, and leverage ratio was 9.76 percent.
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The company's tangible common equity ratio, a non-GAAP measure, was 7.63 percent at December 31, 2022 and 7.96 percent at September 30, 2022. 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 314,406 shares of common stock at an average price of $103.14 a share in the fourth quarter of 2022. The company repurchased a total of 1,632,401 shares of common stock at an average price of $94.88 a share in 2022. We view share buybacks opportunistically, but within the context of maintaining our strong capital position.
Credit Quality
Expected credit losses on assets carried at amortized cost are recognized over their projected lives based on models that measure the probability of default and loss given default over a 12-month reasonable and supportable forecast period. Our models incorporate base case, downside and upside macroeconomic variables such as real gross domestic product ("GDP") growth, civilian unemployment rates and West Texas Intermediate ("WTI") oil prices on a probability weighted basis.
A $15.0 million provision for credit losses was necessary for the fourth quarter of 2022, primarily related to strong growth in loans and unfunded commitments during the quarter. The level of uncertainty in the economic outlook of our reasonable and supportable forecast remained high, and key economic factors were slightly less favorable to economic growth across all scenarios.
The probability weighting of our base case reasonable and supportable forecast remained at 50 percent in the fourth quarter of 2022 as the level of uncertainty in economic forecasts remained high. Our base case reasonable and supportable forecast assumes inflation continues to improve from the peak experienced in the third quarter of 2022 and slowly normalizes. We expect the impact of the Russian-Ukraine conflict remains isolated. Inflation pressures cause modest declines in real household income compared to pre-pandemic levels, resulting in below-trend GDP growth. GDP is projected to grow by 0.9 percent over the next twelve months. Job openings revert to more normalized levels and overall hiring levels decline, causing the national unemployment rate to modestly increase over the next four quarters. Our forecasted civilian unemployment rate is 3.9 percent for the first quarter of 2023, increasing to 4.1 percent by the fourth quarter of 2023. Our base case also assumes the Federal Reserve increases the federal funds rate twice in the first quarter of 2023, resulting in a target range of 4.75 percent to 5.00 percent. No additional rate increases in 2023 are anticipated. WTI oil prices are projected to generally follow the NYMEX forward curve that existed at the end of December 2022, averaging $75.05 per barrel over the next twelve months.
Our downside case, probability weighted at 40 percent, assumes that inflation moderates slightly from the peak experienced in the third quarter of 2022, but remains elevated through the forecast horizon ending 2023 at 5.0 percent. Higher levels of inflation force the Federal Reserve to adopt a more aggressive monetary policy as compared to the base case scenario. This results in a federal funds target range of 5.75 percent to 6.00 percent by December 2023. The United States economy is pushed into a recession, with a contraction in economic activity and a sharp increase in the unemployment rate from 4.8 percent in the first quarter of 2023 to 6.0 percent in the fourth quarter of 2023. In this scenario, real GDP is expected to contract 1.3 percent over the next four quarters. WTI oil prices are projected to average $65.87 per barrel over the next twelve months, peaking at $70.78 in the first quarter of 2023 and falling 15 percent over the following three quarters.
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Nonperforming assets totaled $300 million or 1.33 percent of outstanding loans and repossessed assets at December 31, 2022, compared to $336 million or 1.54 percent at September 30, 2022. Excluding loans guaranteed by U.S. government agencies, nonperforming assets totaled $121 million or 0.54 percent of outstanding loans and repossessed assets at December 31, 2022, compared to $144 million or 0.67 percent at September 30, 2022.
Nonaccruing loans were $122 million or 0.54 percent of outstanding loans at December 31, 2022. Nonaccruing commercial loans totaled $60 million or 0.42 percent of outstanding commercial loans. Nonaccruing commercial real estate loans totaled $17 million or 0.36 percent of outstanding commercial real estate loans. Nonaccruing loans to individuals totaled $45 million or 1.20 percent of outstanding loans to individuals.
Nonaccruing loans decreased $9.0 million compared to September 30, 2022, primarily related to nonaccruing services, energy and loans to individuals, partially offset by an increase in nonaccruing commercial real estate loans. New nonaccruing loans identified in the fourth quarter totaled $32 million, offset by $9.1 million in payments received.
Potential problem loans, which are defined as performing loans that, based on known information, cause management concern as to the borrowers' ability to continue to perform, totaled $94 million at December 31, 2022, compared to $95 million at September 30, 2022. A decrease in potential problem services, energy and general business loans was offset by an increase in healthcare and commercial real estate potential problem loans.
At December 31, 2022, the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $297 million or 1.31 percent of outstanding loans and 278 percent of nonaccruing loans. The allowance for loan losses totaled $236 million or 1.04 percent of outstanding loans and 221 percent of nonaccruing loans. At September 30, 2022, the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $298 million or 1.37 percent of outstanding loans and 262 percent of nonaccruing loans. The allowance for loan losses was $242 million or 1.11 percent of outstanding loans and 212 percent of nonaccruing loans. The allowance to nonaccruing loan percentages referenced above omit residential mortgage loans guaranteed by U.S. government agencies.
Gross charge-offs were $17.8 million for the fourth quarter compared to $1.8 million for the third quarter of 2022. Gross charge-offs for the fourth quarter were primarily related to a single services borrower. Recoveries totaled $2.3 million for the fourth quarter of 2022 and $1.3 million for the prior quarter. Net charge-offs were $15.5 million or 0.28 percent of average loans on an annualized basis in the fourth quarter compared to net charge-offs of $457 thousand or 0.01 percent of average loans on an annualized basis in the third quarter. Net charge-offs were 0.10 percent of average loans over the last four quarters.
Securities and Derivatives
The fair value of the available for sale securities portfolio totaled $11.5 billion at December 31, 2022, a $1.5 billion increase compared to September 30, 2022. At December 31, 2022, the available for sale securities portfolio consisted primarily of $5.8 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $4.5 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. At December 31, 2022, the available for sale securities portfolio had a net unrealized loss of $866 million compared to $936 million at September 30, 2022.
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We hold an inventory of trading securities in support of sales to a variety of customers. At December 31, 2022, the trading securities portfolio totaled $4.5 billion compared to $2.2 billion at September 30, 2022.
The company also maintains a portfolio of residential mortgage-backed securities issued by U.S. government agencies and interest rate derivative contracts as an economic hedge of the changes in the fair value of our mortgage servicing rights. This portfolio of fair value option securities increased $263 million to $297 million at December 31, 2022.
Derivative contracts are carried at fair value. At December 31, 2022, the net fair values of derivative contracts, before consideration of cash margin, reported as assets under our customer derivative programs totaled $1.0 billion compared to $1.5 billion at September 30, 2022. The aggregate net fair value of derivative contracts, before consideration of cash margin, held under these programs reported as liabilities totaled $1.0 billion at December 31, 2022 and $1.5 billion at September 30, 2022.
The net cost of the changes in the fair value of mortgage servicing rights and related economic hedges was $1.2 million during the fourth quarter of 2022, including a $2.9 million decrease in the fair value of mortgage servicing rights, $1.8 million increase in the fair value of securities and derivative contracts held as an economic hedge, and $118 thousand of related net interest expense.

Conference Call and Webcast
The company will hold a conference call at 9 a.m. Central time on Wednesday, January 25, 2023 to discuss the financial results with investors. The live audio webcast and presentation slides will be available on the company’s website at www.bokf.com. The conference call can also be accessed by dialing 1-201-689-8471. A conference call and webcast replay will also be available shortly after conclusion of the live call at www.bokf.com or by dialing 1-877-407-4018 and referencing conference ID # 13735343.
About BOK Financial Corporation
BOK Financial Corporation is a $48 billion regional financial services company headquartered in Tulsa, Oklahoma with $100 billion in assets under management or administration. The company's stock is publicly traded on NASDAQ under the Global Select market listings (BOKF). BOK Financial Corporation's holdings include BOKF, NA; BOK Financial Securities, Inc., BOK Financial Private Wealth, Inc. and BOK Financial Insurance, Inc. BOKF, NA's holdings include TransFund, Cavanal Hill Investment Management, Inc. and BOK Financial Asset Management, Inc. BOKF, NA operates banking divisions across eight states as: Bank of Albuquerque; Bank of Oklahoma; Bank of Texas; and BOK Financial in Arizona, Arkansas, Colorado, Kansas and Missouri; as well as having limited purpose offices in Nebraska, Wisconsin and Connecticut. Through its subsidiaries, BOK Financial Corporation provides commercial and consumer banking, brokerage trading, investment, trust and insurance services, mortgage origination and servicing, and an electronic funds transfer network. For more information, visit www.bokf.com.
The company will continue to evaluate critical assumptions and estimates, such as the appropriateness of the allowance for credit losses and asset impairment as of December 31, 2022 through the date its financial statements are filed with the Securities and Exchange Commission and will adjust amounts reported if necessary.
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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.
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                                                Exhibit 99.1(b)

BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
Dec. 31, 2022Sep. 30, 2022
ASSETS
Cash and due from banks$943,810 $804,110 
Interest-bearing cash and cash equivalents457,906 804,799 
Trading securities4,464,161 2,194,618 
Investment securities, net of allowance2,513,687 2,572,360 
Available for sale securities11,493,860 10,040,894 
Fair value option securities296,590 33,966 
Restricted equity securities299,651 100,356 
Residential mortgage loans held for sale75,272 148,121 
Loans:
Commercial14,198,187 13,607,686 
Commercial real estate4,606,777 4,473,911 
Paycheck protection program14,312 20,233 
Loans to individuals3,737,874 3,688,627 
Total loans22,557,150 21,790,457 
Allowance for loan losses(235,704)(241,768)
Loans, net of allowance22,321,446 21,548,689 
Premises and equipment, net565,175 569,379 
Receivables273,815 200,343 
Goodwill1,044,749 1,044,749 
Intangible assets, net76,131 79,833 
Mortgage servicing rights277,608 283,806 
Real estate and other repossessed assets, net14,304 29,676 
Derivative contracts, net880,343 1,693,742 
Cash surrender value of bank-owned life insurance406,751 407,722 
Receivable on unsettled securities sales31,004 49,089 
Other assets1,354,379 1,039,194 
TOTAL ASSETS$47,790,642 $43,645,446 
LIABILITIES AND EQUITY
Deposits:
Demand$13,395,337 $14,985,115 
Interest-bearing transaction18,659,115 19,000,023 
Savings964,411 971,634 
Time1,461,842 1,459,143 
Total deposits34,480,705 36,415,915 
Funds purchased and repurchase agreements2,270,377 626,952 
Other borrowings4,736,908 234,933 
Subordinated debentures131,205 131,168 
Accrued interest, taxes and expense296,870 212,342 
Due on unsettled securities purchases147,470 205,388 
Derivative contracts, net554,900 821,275 
Other liabilities484,849 483,165 
TOTAL LIABILITIES43,103,284 39,131,138 
Shareholders' equity:
Capital, surplus and retained earnings5,519,604 5,414,879 
Accumulated other comprehensive loss(836,955)(904,945)
TOTAL SHAREHOLDERS' EQUITY4,682,649 4,509,934 
Non-controlling interests4,709 4,374 
TOTAL EQUITY4,687,358 4,514,308 
TOTAL LIABILITIES AND EQUITY$47,790,642 $43,645,446 

12

AVERAGE BALANCE SHEETS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
Three Months Ended
Dec. 31, 2022Sep. 30, 2022June 30, 2022Mar. 31, 2022Dec. 31, 2021
ASSETS
Interest-bearing cash and cash equivalents$568,307 $748,263 $843,619 $1,050,409 $1,208,552 
Trading securities3,086,985 3,178,068 4,166,954 8,537,390 9,260,778 
Investment securities, net of allowance2,535,305 2,593,989 610,983 195,198 213,188 
Available for sale securities10,953,851 10,306,257 12,258,072 13,092,422 13,247,607 
Fair value option securities92,012 36,846 54,832 75,539 46,458 
Restricted equity securities216,673 173,656 167,732 164,484 137,874 
Residential mortgage loans held for sale98,613 132,685 148,183 179,697 163,433 
Loans:
Commercial13,827,517 13,481,961 13,382,176 12,677,706 12,401,935 
Commercial real estate4,488,091 4,434,650 4,061,129 4,059,148 3,838,336 
Paycheck protection program18,822 26,364 90,312 210,110 404,261 
Loans to individuals3,641,574 3,656,257 3,524,097 3,516,698 3,598,121 
Total loans21,976,004 21,599,232 21,057,714 20,463,662 20,242,653 
Allowance for loan losses(242,450)(241,136)(246,064)(254,191)(271,794)
Loans, net of allowance21,733,554 21,358,096 20,811,650 20,209,471 19,970,859 
Total earning assets39,285,300 38,527,860 39,062,025 43,504,610 44,248,749 
Cash and due from banks865,796 821,801 822,599 790,440 783,670 
Derivative contracts, net
1,239,717 2,019,905 3,051,429 2,126,282 1,441,869 
Cash surrender value of bank-owned life insurance
406,826 410,667 408,489 406,379 404,149 
Receivable on unsettled securities sales194,996 219,113 457,165 375,616 585,901 
Other assets3,216,983 3,119,856 3,486,691 3,357,747 3,139,718 
TOTAL ASSETS$45,209,618 $45,119,202 $47,288,398 $50,561,074 $50,604,056 
LIABILITIES AND EQUITY
Deposits:
Demand$14,176,189 $15,105,305 $15,202,597 $15,062,282 $14,818,841 
Interest-bearing transaction18,898,315 19,556,806 21,037,294 22,763,479 22,326,401 
Savings969,275 978,596 981,493 947,407 909,131 
Time1,417,606 1,409,069 1,373,036 1,589,039 1,747,715 
Total deposits35,461,385 37,049,776 38,594,420 40,362,207 39,802,088 
Funds purchased and repurchase agreements
1,046,447 800,759 1,224,134 2,004,466 2,893,128 
Other borrowings2,523,195 1,528,887 1,301,358 1,148,440 880,837 
Subordinated debentures131,180 131,199 131,219 131,228 131,224 
Derivative contracts, net445,105 105,221 535,574 682,435 320,757 
Due on unsettled securities purchases575,957 331,428 380,332 519,097 629,642 
Other liabilities408,029 396,510 389,031 565,350 578,091 
TOTAL LIABILITIES40,591,298 40,343,780 42,556,068 45,413,223 45,235,767 
Total equity4,618,320 4,775,422 4,732,330 5,147,851 5,368,289 
TOTAL LIABILITIES AND EQUITY$45,209,618 $45,119,202 $47,288,398 $50,561,074 $50,604,056 

13

STATEMENTS OF EARNINGS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except per share data)
Three Months EndedYear Ended
December 31,December 31,
2022202120222021
Interest revenue$451,606 $292,334 $1,392,102 $1,179,929 
Interest expense98,980 15,257 180,722 61,896 
Net interest revenue352,626 277,077 1,211,380 1,118,033 
Provision for credit losses15,000 (17,000)30,000 (100,000)
Net interest revenue after provision for credit losses
337,626 294,077 1,181,380 1,218,033 
Other operating revenue:
Brokerage and trading revenue63,008 14,869 140,978 112,989 
Transaction card revenue27,136 24,998 104,266 96,983 
Fiduciary and asset management revenue49,899 46,872 196,326 178,274 
Deposit service charges and fees26,429 26,718 110,636 104,217 
Mortgage banking revenue10,065 21,278 49,365 105,896 
Other revenue17,034 11,586 55,642 69,950 
Total fees and commissions193,571 146,321 657,213 668,309 
Other gains, net8,427 6,081 123 63,742 
Gain (loss) on derivatives, net4,548 (4,788)(73,011)(19,378)
Gain (loss) on fair value option securities, net(2,568)1,418 (20,358)(2,239)
Change in fair value of mortgage servicing rights(2,904)7,859 80,261 41,637 
Gain (loss) on available for sale securities, net(3,988)552 (971)3,704 
Total other operating revenue197,086 157,443 643,257 755,775 
Other operating expense:
Personnel186,419 174,474 670,918 695,382 
Business promotion7,470 6,452 26,435 16,289 
Charitable contributions to BOKF Foundation2,500 5,000 2,500 9,000 
Professional fees and services18,365 14,129 56,342 50,906 
Net occupancy and equipment29,227 26,897 116,867 108,587 
Insurance4,677 3,889 17,994 15,881 
Data processing and communications43,048 39,358 165,907 151,614 
Printing, postage and supplies3,890 2,935 15,857 14,218 
Amortization of intangible assets3,736 4,438 15,692 18,311 
Mortgage banking costs9,016 8,667 35,834 42,698 
Other expense10,108 13,256 40,134 54,822 
Total other operating expense318,456 299,495 1,164,480 1,177,708 
Net income before taxes216,256 152,025 660,157 796,100 
Federal and state income taxes47,864 34,836 139,864 179,775 
Net income168,392 117,189 520,293 616,325 
Net income (loss) attributable to non-controlling interests(37)(129)20 (1,796)
Net income attributable to BOK Financial Corporation shareholders
$168,429 $117,318 $520,273 $618,121 
Average shares outstanding:
Basic66,627,955 68,069,160 67,212,728 68,591,920 
Diluted66,627,955 68,070,910 67,212,735 68,594,322 
Net income per share:
Basic$2.51 $1.71 $7.68 $8.95 
Diluted$2.51 $1.71 $7.68 $8.95 


14

FINANCIAL HIGHLIGHTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and share data)
Three Months Ended
Dec. 31, 2022Sep. 30, 2022June 30, 2022Mar. 31, 2022Dec. 31, 2021
Capital:
Period-end shareholders' equity$4,682,649 $4,509,934 $4,737,339 $4,849,582 $5,363,732 
Risk weighted assets$38,142,231 $36,866,994 $36,787,092 $37,160,258 $34,575,277 
Risk-based capital ratios:
Common equity tier 111.69 %11.80 %11.61 %11.30 %12.24 %
Tier 111.71 %11.82 %11.63 %11.31 %12.25 %
Total capital12.67 %12.81 %12.59 %12.25 %13.29 %
Leverage ratio9.91 %9.76 %9.12 %8.47 %8.55 %
Tangible common equity ratio1
7.63 %7.96 %8.16 %8.13 %8.61 %
Common stock:
Book value per share$69.93 $67.06 $69.87 $71.21 $78.34 
Tangible book value per share$53.19 $50.34 $53.22 $54.58 $61.74 
Market value per share:
High$110.28 $95.51 $94.76 $119.59 $110.21 
Low$88.46 $69.82 $74.03 $93.76 $89.01 
Cash dividends paid$36,188 $35,661 $35,892 $36,093 $36,256 
Dividend payout ratio21.49 %22.79 %27.02 %57.76 %30.90 %
Shares outstanding, net66,958,634 67,254,383 67,806,005 68,104,043 68,467,772 
Stock buy-back program:
Shares repurchased314,406 548,034 294,084 475,877 128,522 
Amount$32,429 $49,980 $24,404 $48,074 $13,426 
Average price per share$103.14 $91.20 $82.98 $101.02 $104.46 
Performance ratios (quarter annualized):
Return on average assets1.48 %1.38 %1.13 %0.50 %0.92 %
Return on average equity14.48 %13.01 %11.27 %4.93 %8.68 %
Net interest margin3.54 %3.24 %2.76 %2.44 %2.52 %
Efficiency ratio57.87 %57.35 %60.65 %75.07 %70.14 %
Reconciliation of non-GAAP measures:
1 Tangible common equity ratio:
Total shareholders' equity$4,682,649 $4,509,934 $4,737,339 $4,849,582 $5,363,732 
Less: Goodwill and intangible assets, net
1,120,880 1,124,582 1,128,493 1,132,510 1,136,527 
Tangible common equity$3,561,769 $3,385,352 $3,608,846 $3,717,072 $4,227,205 
Total assets$47,790,642 $43,645,446 $45,377,072 $46,826,507 $50,249,431 
Less: Goodwill and intangible assets, net
1,120,880 1,124,582 1,128,493 1,132,510 1,136,527 
Tangible assets$46,669,762 $42,520,864 $44,248,579 $45,693,997 $49,112,904 
Tangible common equity ratio7.63 %7.96 %8.16 %8.13 %8.61 %
15

Three Months Ended
Dec. 31, 2022Sep. 30, 2022June 30, 2022Mar. 31, 2022Dec. 31, 2021
Pre-provision net revenue:
Net income before taxes$216,256 $196,272 $168,980 $78,649 $152,025 
Provision for expected credit losses15,000 15,000 — — (17,000)
Net income (loss) attributable to non-controlling interests(37)81 12 (36)(129)
Pre-provision net revenue$231,293 $211,191 $168,968 $78,685 $135,154 
Other data:
Tax equivalent interest$2,287 $2,163 $2,040 $1,973 $2,104 
Net unrealized gain (loss) on available for sale securities$(865,553)$(935,788)$(522,812)$(546,598)$93,381 
Mortgage banking:
Mortgage production revenue$(3,983)$(2,406)$(504)$5,055 $10,018 
Mortgage loans funded for sale$141,090 $260,210 $360,237 $418,866 $568,507 
Add: current period-end outstanding commitments
45,492 75,779 106,004 160,260 171,412 
Less: prior period end outstanding commitments
75,779 106,004 160,260 171,412 239,066 
Total mortgage production volume
$110,803 $229,985 $305,981 $407,714 $500,853 
Mortgage loan refinances to mortgage loans funded for sale
10 %10 %19 %45 %51 %
Realized margin on funded mortgage loans(1.10)%(0.41)%0.88 %1.64 %2.34 %
Production revenue as a percentage of production volume(3.59)%(1.05)%(0.16)%1.24 %2.00 %
Mortgage servicing revenue$14,048 $13,688 $11,872 $11,595 $11,260 
Average outstanding principal balance of mortgage loans serviced for others
18,923,078 19,070,221 17,336,596 16,155,329 15,930,480 
Average mortgage servicing revenue rates0.29 %0.28 %0.27 %0.29 %0.28 %
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net
$4,373 $(17,027)$(13,639)$(46,694)$(4,862)
Gain (loss) on fair value option securities, net
(2,568)(4,368)(2,221)(11,201)1,418 
Gain (loss) on economic hedge of mortgage servicing rights1,805 (21,395)(15,860)(57,895)(3,444)
Gain (loss) on changes in fair value of mortgage servicing rights(2,904)16,570 17,485 49,110 7,859 
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue(1,099)(4,825)1,625 (8,785)4,415 
Net interest revenue on fair value option securities2
(118)29 275 383 259 
Total economic benefit (cost) of changes in the fair value of mortgage servicing rights, net of economic hedges$(1,217)$(4,796)$1,900 $(8,402)$4,674 
2     Actual interest earned on fair value option securities less internal transfer-priced cost of funds.


16

QUARTERLY EARNINGS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratio and per share data)
Three Months Ended
Dec. 31, 2022Sep. 30, 2022June 30, 2022Mar. 31, 2022Dec. 31, 2021
Interest revenue$451,606 $363,150 $294,247 $283,099 $292,334 
Interest expense98,980 46,825 20,229 14,688 15,257 
Net interest revenue352,626 316,325 274,018 268,411 277,077 
Provision for credit losses15,000 15,000 — — (17,000)
Net interest revenue after provision for credit losses
337,626 301,325 274,018 268,411 294,077 
Other operating revenue:
Brokerage and trading revenue63,008 61,006 44,043 (27,079)14,869 
Transaction card revenue27,136 25,974 26,940 24,216 24,998 
Fiduciary and asset management revenue49,899 50,190 49,838 46,399 46,872 
Deposit service charges and fees26,429 28,703 28,500 27,004 26,718 
Mortgage banking revenue10,065 11,282 11,368 16,650 21,278 
Other revenue17,034 15,479 12,684 10,445 11,586 
Total fees and commissions193,571 192,634 173,373 97,635 146,321 
Other gains (losses), net8,427 979 (7,639)(1,644)6,081 
Gain (loss) on derivatives, net4,548 (17,009)(13,569)(46,981)(4,788)
Gain (loss) on fair value option securities, net
(2,568)(4,368)(2,221)(11,201)1,418 
Change in fair value of mortgage servicing rights
(2,904)16,570 17,485 49,110 7,859 
Gain (loss) on available for sale securities, net(3,988)892 1,188 937 552 
Total other operating revenue197,086 189,698 168,617 87,856 157,443 
Other operating expense:
Personnel186,419 170,348 154,923 159,228 174,474 
Business promotion7,470 6,127 6,325 6,513 6,452 
Charitable contributions to BOKF Foundation
2,500 — — — 5,000 
Professional fees and services18,365 14,089 12,475 11,413 14,129 
Net occupancy and equipment29,227 29,296 27,489 30,855 26,897 
Insurance4,677 4,306 4,728 4,283 3,889 
Data processing and communications
43,048 41,743 41,280 39,836 39,358 
Printing, postage and supplies3,890 4,349 3,929 3,689 2,935 
Amortization of intangible assets
3,736 3,943 4,049 3,964 4,438 
Mortgage banking costs9,016 9,504 9,437 7,877 8,667 
Other expense10,108 11,046 9,020 9,960 13,256 
Total other operating expense318,456 294,751 273,655 277,618 299,495 
Net income before taxes216,256 196,272 168,980 78,649 152,025 
Federal and state income taxes47,864 39,681 36,122 16,197 34,836 
Net income168,392 156,591 132,858 62,452 117,189 
Net income (loss) attributable to non-controlling interests
(37)81 12 (36)(129)
Net income attributable to BOK Financial Corporation shareholders
$168,429 $156,510 $132,846 $62,488 $117,318 
Average shares outstanding:
Basic66,627,955 67,003,199 67,453,748 67,812,400 68,069,160 
Diluted66,627,955 67,004,623 67,455,172 67,813,851 68,070,910 
Net income per share:
Basic$2.51 $2.32 $1.96 $0.91 $1.71 
Diluted$2.51 $2.32 $1.96 $0.91 $1.71 
17

LOANS TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
(In thousands)
Dec. 31, 2022Sep. 30, 2022June 30, 2022Mar. 31, 2022Dec. 31, 2021
Commercial:     
Healthcare$3,845,017 $3,826,623 $3,696,963 $3,441,732 $3,414,940 
Energy3,424,790 3,371,588 3,393,072 3,197,667 3,006,884 
Services3,431,521 3,280,925 3,421,493 3,351,495 3,367,193 
General business3,496,859 3,128,550 3,067,169 2,892,295 2,717,448 
Total commercial14,198,187 13,607,686 13,578,697 12,883,189 12,506,465 
Commercial real estate:
Industrial1,221,501 1,103,905 953,626 911,928 766,125 
Multifamily1,212,883 1,126,700 878,565 867,288 786,404 
Office1,053,331 1,086,615 1,100,115 1,097,516 1,040,963 
Retail620,518 635,021 637,304 667,561 679,917 
Residential construction and land development
95,684 91,690 111,575 120,506 120,016 
Other commercial real estate402,860 429,980 424,963 436,157 437,900 
Total commercial real estate4,606,777 4,473,911 4,106,148 4,100,956 3,831,325 
Paycheck protection program14,312 20,233 43,140 137,365 276,341 
Loans to individuals:     
Residential mortgage1,890,784 1,851,836 1,784,729 1,723,506 1,722,170 
Residential mortgages guaranteed by U.S. government agencies245,940 262,466 293,838 322,581 354,173 
Personal1,601,150 1,574,325 1,484,596 1,506,832 1,515,206 
Total loans to individuals3,737,874 3,688,627 3,563,163 3,552,919 3,591,549 
Total$22,557,150 $21,790,457 $21,291,148 $20,674,429 $20,205,680 
18

LOANS MANAGED BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
Dec. 31, 2022Sep. 30, 2022June 30, 2022Mar. 31, 2022Dec. 31, 2021
Texas:
Commercial$6,869,979 $6,632,610 $6,631,658 $6,254,883 $6,068,700 
Commercial real estate1,555,508 1,448,590 1,339,452 1,345,105 1,253,439 
Paycheck protection program8,639 12,280 14,040 31,242 81,654 
Loans to individuals982,700 970,459 934,856 957,320 942,982 
Total Texas9,416,826 9,063,939 8,920,006 8,588,550 8,346,775 
Oklahoma:
Commercial3,379,468 3,104,037 3,125,764 2,883,663 2,633,014 
Commercial real estate582,109 608,856 576,458 552,310 546,021 
Paycheck protection program3,109 4,571 13,329 52,867 69,817 
Loans to individuals2,077,124 2,054,362 1,982,247 1,977,886 2,024,404 
Total Oklahoma6,041,810 5,771,826 5,697,798 5,466,726 5,273,256 
Colorado:
Commercial2,147,969 2,115,883 2,074,455 1,977,773 1,936,149 
Commercial real estate613,912 565,057 473,231 480,740 470,937 
Paycheck protection program1,230 1,298 8,233 28,584 82,781 
Loans to individuals241,902 237,981 234,105 236,125 256,533 
Total Colorado3,005,013 2,920,219 2,790,024 2,723,222 2,746,400 
Arizona:
Commercial1,123,569 1,101,917 1,080,228 1,074,551 1,130,798 
Commercial real estate860,947 850,319 766,767 719,970 674,309 
Paycheck protection program720 1,083 5,173 11,644 21,594 
Loans to individuals229,872 225,981 212,870 190,746 186,528 
Total Arizona2,215,108 2,179,300 2,065,038 1,996,911 2,013,229 
Kansas/Missouri:
Commercial310,715 307,446 338,337 334,371 338,697 
Commercial real estate479,968 466,955 458,157 436,740 382,761 
Paycheck protection program— 10 573 2,595 4,718 
Loans to individuals131,307 125,039 125,584 121,247 110,889 
Total Kansas/Missouri921,990 899,450 922,651 894,953 837,065 
New Mexico:
Commercial262,735 257,763 252,033 262,533 306,964 
Commercial real estate417,008 426,367 431,606 504,632 442,128 
Paycheck protection program614 991 1,792 9,713 13,510 
Loans to individuals67,163 68,095 67,026 63,299 63,930 
Total New Mexico747,520 753,216 752,457 840,177 826,532 
Arkansas:
Commercial103,752 88,030 76,222 95,415 92,143 
Commercial real estate97,325 107,767 60,477 61,459 61,730 
Paycheck protection program— — — 720 2,267 
Loans to individuals7,806 6,710 6,475 6,296 6,283 
Total Arkansas208,883 202,507 143,174 163,890 162,423 
TOTAL BOK FINANCIAL$22,557,150 $21,790,457 $21,291,148 $20,674,429 $20,205,680 
Loans attributed to a principal market may not always represent the location of the borrower or the collateral.
19

DEPOSITS BY PRINCIPAL MARKET AREA -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands)
Dec. 31, 2022Sep. 30, 2022June 30, 2022Mar. 31, 2022Dec. 31, 2021
Oklahoma:
    Demand$4,585,963 $5,143,405 $5,422,593 $5,205,806 $5,433,405 
    Interest-bearing:
       Transaction9,475,528 9,619,419 10,240,378 11,410,709 12,689,367 
       Savings555,407 558,256 561,413 558,634 521,439 
       Time794,002 776,306 678,127 817,744 978,822 
    Total interest-bearing10,824,937 10,953,981 11,479,918 12,787,087 14,189,628 
Total Oklahoma15,410,900 16,097,386 16,902,511 17,992,893 19,623,033 
Texas:
    Demand3,873,759 4,609,255 4,670,535 4,552,001 4,552,983 
    Interest-bearing:
       Transaction4,878,482 4,781,920 5,344,326 4,963,118 5,345,461 
       Savings178,356 179,049 183,708 182,536 178,458 
       Time356,538 343,015 333,038 329,931 337,559 
    Total interest-bearing5,413,376 5,303,984 5,861,072 5,475,585 5,861,478 
Total Texas9,287,135 9,913,239 10,531,607 10,027,586 10,414,461 
Colorado:
    Demand2,462,891 2,510,179 2,799,798 2,673,352 2,526,855 
    Interest-bearing:
       Transaction2,123,218 2,221,796 2,277,563 2,387,304 2,334,371 
       Savings77,961 80,542 82,976 81,762 78,636 
       Time135,043 151,064 160,795 165,401 174,351 
    Total interest-bearing2,336,222 2,453,402 2,521,334 2,634,467 2,587,358 
Total Colorado4,799,113 4,963,581 5,321,132 5,307,819 5,114,213 
New Mexico:
    Demand1,141,958 1,296,410 1,347,600 1,271,264 1,196,057 
    Interest-bearing:
       Transaction691,915 717,492 845,442 888,257 858,394 
       Savings112,430 113,056 115,660 115,457 107,963 
       Time133,625 142,856 148,532 156,140 163,871 
    Total interest-bearing937,970 973,404 1,109,634 1,159,854 1,130,228 
Total New Mexico2,079,928 2,269,814 2,457,234 2,431,118 2,326,285 
Arizona:
    Demand844,327 903,296 901,543 947,775 934,282 
    Interest-bearing:
       Transaction739,628 788,142 792,269 810,896 834,491 
       Savings16,496 18,258 17,999 18,122 16,182 
       Time24,846 26,704 28,774 27,259 31,274 
    Total interest-bearing780,970 833,104 839,042 856,277 881,947 
Total Arizona1,625,297 1,736,400 1,740,585 1,804,052 1,816,229 
20

Dec. 31, 2022Sep. 30, 2022June 30, 2022Mar. 31, 2022Dec. 31, 2021
Kansas/Missouri:
    Demand436,259 479,459 537,143 553,345 658,342 
    Interest-bearing:
       Transaction694,163 747,981 913,921 1,107,525 1,086,946 
       Savings20,678 19,375 19,943 19,589 18,844 
       Time12,963 13,258 13,962 11,527 12,255 
    Total interest-bearing727,804 780,614 947,826 1,138,641 1,118,045 
Total Kansas/Missouri1,164,063 1,260,073 1,484,969 1,691,986 1,776,387 
Arkansas:
    Demand50,180 43,111 41,084 38,798 42,499 
    Interest-bearing:
       Transaction56,181 123,273 130,300 122,020 119,543 
       Savings3,083 3,098 3,125 3,265 3,213 
       Time4,825 5,940 6,371 6,414 6,196 
    Total interest-bearing64,089 132,311 139,796 131,699 128,952 
Total Arkansas114,269 175,422 180,880 170,497 171,451 
TOTAL BOK FINANCIAL$34,480,705 $36,415,915 $38,618,918 $39,425,951 $41,242,059 

21

NET INTEREST MARGIN TREND -- UNAUDITED
BOK FINANCIAL CORPORATION
Three Months Ended
Dec. 31, 2022Sep. 30, 2022June 30, 2022Mar. 31, 2022Dec. 31, 2021
TAX-EQUIVALENT ASSETS YIELDS
Interest-bearing cash and cash equivalents4.06 %1.87 %0.83 %0.18 %0.16 %
Trading securities3.70 %2.72 %2.00 %1.71 %1.89 %
Investment securities, net of allowance1.46 %1.42 %2.35 %5.07 %4.99 %
Available for sale securities2.54 %2.21 %1.84 %1.77 %1.72 %
Fair value option securities4.40 %2.98 %2.92 %2.81 %2.71 %
Restricted equity securities5.70 %6.23 %3.30 %2.69 %2.98 %
Residential mortgage loans held for sale5.56 %5.05 %4.22 %3.11 %3.06 %
Loans5.99 %4.89 %3.92 %3.57 %3.70 %
Allowance for loan losses
Loans, net of allowance6.06 %4.94 %3.96 %3.61 %3.75 %
Total tax-equivalent yield on earning assets4.53 %3.71 %2.96 %2.58 %2.66 %
COST OF INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
  Interest-bearing transaction1.28 %0.63 %0.22 %0.10 %0.09 %
  Savings0.08 %0.05 %0.03 %0.03 %0.04 %
  Time1.25 %0.93 %0.68 %0.56 %0.53 %
Total interest-bearing deposits1.22 %0.63 %0.24 %0.12 %0.12 %
Funds purchased and repurchase agreements2.05 %0.72 %0.53 %0.95 %0.73 %
Other borrowings4.08 %2.33 %1.01 %0.38 %0.49 %
Subordinated debt6.16 %5.07 %4.50 %4.02 %4.02 %
Total cost of interest-bearing liabilities1.57 %0.76 %0.31 %0.21 %0.21 %
Tax-equivalent net interest revenue spread2.96 %2.95 %2.65 %2.37 %2.45 %
Effect of noninterest-bearing funding sources and other
0.58 %0.29 %0.11 %0.07 %0.07 %
Tax-equivalent net interest margin3.54 %3.24 %2.76 %2.44 %2.52 %

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.

22

CREDIT QUALITY INDICATORS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratios)
Three Months Ended
Dec. 31, 2022Sep. 30, 2022June 30, 2022Mar. 31, 2022Dec. 31, 2021
Nonperforming assets:
Nonaccruing loans:
Commercial:
Healthcare$41,034 $41,438 $14,886 $15,076 $15,762 
Services16,228 27,315 15,259 16,535 17,170 
Energy1,399 4,164 20,924 24,976 31,091 
General business1,636 2,753 3,539 3,750 10,081 
Total commercial60,297 75,670 54,608 60,337 74,104 
Commercial real estate16,570 7,971 10,939 15,989 14,262 
Loans to individuals:
Permanent mortgage29,791 30,066 30,460 30,757 31,574 
Permanent mortgage guaranteed by U.S. government agencies
15,005 16,957 18,000 16,992 13,861 
Personal134 136 132 171 258 
Total loans to individuals44,930 47,159 48,592 47,920 45,693 
Total nonaccruing loans$121,797 $130,800 $114,139 $124,246 $134,059 
Accruing renegotiated loans guaranteed by U.S. government agencies
163,535 176,022 196,420 204,121 210,618 
Real estate and other repossessed assets14,304 29,676 22,221 24,492 24,589 
Total nonperforming assets$299,636 $336,498 $332,780 $352,859 $369,266 
Total nonperforming assets excluding those guaranteed by U.S. government agencies
$121,096 $143,519 $118,360 $131,746 $144,787 
Accruing loans 90 days past due1
$510 $120 $3 $307 $313 
Gross charge-offs$17,807 $1,766 $1,368 $7,805 $6,558 
Recoveries(2,301)(1,309)(2,167)(1,824)(7,272)
Net charge-offs (recoveries)$15,506 $457 $(799)$5,981 $(714)
Provision for loan losses
$9,442 $1,111 $(6,158)$(3,967)$(20,973)
Provision for credit losses from off-balance sheet unfunded loan commitments
4,609 14,060 6,005 3,268 3,738 
Provision for expected credit losses from mortgage banking activities1,003 (66)69 621 150 
Provision for credit losses related to held-to maturity (investment) securities portfolio(54)(105)84 78 85 
Total provision for credit losses$15,000 $15,000 $— $— $(17,000)
23

Three Months Ended
Dec. 31, 2022Sep. 30, 2022June 30, 2022Mar. 31, 2022Dec. 31, 2021
Allowance for loan losses to period end loans
1.04 %1.11 %1.13 %1.19 %1.27 %
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to period end loans
1.31 %1.37 %1.33 %1.37 %1.43 %
Nonperforming assets to period end loans and repossessed assets
1.33 %1.54 %1.56 %1.70 %1.83 %
Net charge-offs (annualized) to average loans
0.28 %0.01 %(0.02)%0.12 %(0.01)%
Allowance for loan losses to nonaccruing loans1
220.71 %212.37 %250.80 %229.80 %213.33 %
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to nonaccruing loans1
277.76 %261.83 %294.74 %263.60 %240.77 %
1    Excludes residential mortgage loans guaranteed by agencies of the U.S. government.

24

SEGMENTS -- UNAUDITED
BOK FINANCIAL CORPORATION
(in thousands, except ratios)
Three Months Ended
4Q22 vs 3Q22
Year Ended2022 vs 2021
Dec. 31, 2022Sep. 30, 2022$ change% changeDec. 31, 2022Dec. 31, 2021$ change% change
Commercial Banking
Net interest revenue$232,834 $208,065 $24,769 11.9 %$744,449 $535,735 $208,714 39.0 %
Fees and commissions revenue58,881 58,147 734 1.3 %233,873 227,081 6,792 3.0 %
Combined net interest and fee revenue291,715 266,212 25,503 9.6 %978,322 762,816 215,506 28.3 %
Other operating expense79,722 75,872 3,850 5.1 %290,717 281,089 9,628 3.4 %
Corporate expense allocations18,007 16,451 1,556 9.5 %67,337 49,941 17,396 34.8 %
Net income139,374 133,830 5,544 4.1 %460,361 328,516 131,845 40.1 %
Average assets28,373,856 28,890,429 (516,573)(1.8)%29,084,957 28,536,881 548,076 1.9 %
Average loans18,254,559 17,904,779 349,780 2.0 %17,553,398 16,853,006 700,392 4.2 %
Average deposits16,832,244 17,966,661 (1,134,417)(6.3)%18,323,412 17,659,695 663,717 3.8 %
Consumer Banking
Net interest revenue$53,302 $43,951 $9,351 21.3 %$158,249 $103,527 $54,722 52.9 %
Fees and commissions revenue27,618 30,230 (2,612)(8.6)%121,926 173,364 (51,438)(29.7)%
Combined net interest and fee revenue80,920 74,181 6,739 9.1 %280,175 276,891 3,284 1.2 %
Other operating expense54,526 53,236 1,290 2.4 %209,210 209,596 (386)(0.2)%
Corporate expense allocations11,972 10,792 1,180 10.9 %44,965 46,010 (1,045)(2.3)%
Net income8,996 2,970 6,026 202.9 %5,889 27,643 (21,754)(78.7)%
Average assets10,078,381 10,233,401 (155,020)(1.5)%10,230,437 10,029,687 200,750 2.0 %
Average loans1,725,555 1,686,498 39,057 2.3 %1,688,697 1,769,384 (80,687)(4.6)%
Average deposits8,617,085 8,812,884 (195,799)(2.2)%8,763,046 8,439,577 323,469 3.8 %
Wealth Management
Net interest revenue$34,498 $33,584 $914 2.7 %$161,597 $214,072 $(52,475)(24.5)%
Fees and commissions revenue114,630 113,113 1,517 1.3 %339,538 298,765 40,773 13.6 %
Combined net interest and fee revenue149,128 146,697 2,431 1.7 %501,135 512,837 (11,702)(2.3)%
Other operating expense82,011 79,151 2,860 3.6 %312,177 320,726 (8,549)(2.7)%
Corporate expense allocations12,733 12,934 (201)(1.6)%50,241 40,341 9,900 24.5 %
Net income41,600 41,808 (208)(0.5)%106,173 113,246 (7,073)(6.2)%
Average assets12,912,630 13,818,299 (905,669)(6.6)%16,209,684 19,425,475 (3,215,791)(16.6)%
Average loans2,223,275 2,163,975 59,300 2.7 %2,166,231 1,981,159 185,072 9.3 %
Average deposits7,888,753 7,999,074 (110,321)(1.4)%8,491,377 9,426,771 (935,394)(9.9)%
Fiduciary assets56,060,496 54,714,705 1,345,791 2.5 %56,060,496 64,536,833 (8,476,337)(13.1)%
Assets under management or administration99,735,041 95,401,638 4,333,403 4.5 %99,735,041 104,917,721 (5,182,680)(4.9)%
25