BOK Financial Reports Record Earnings for Second Straight Quarter

/EIN News/ -- $142 million or $2.00 Per Share in the Third Quarter

TULSA, Okla., Oct. 23, 2019 (GLOBE NEWSWIRE) -- BOK Financial (NASDAQ: BOKF) today reported net earnings applicable to common shareholders for the third quarter of 2019 of $142.2 million, or $2.00 per diluted common share.

CEO Commentary

“The third quarter was the second-consecutive record quarter for BOK Financial,” said Steven G. Bradshaw, president and chief executive officer. “It was a quarter that really illustrated the value of having an optimum balance between our banking and fee service businesses. This balance benefits our clients in a meaningful way as we are able to serve a broader spectrum of their needs, while reducing earnings volatility for shareholders. Our results suggest that our entire team is executing at a very high level.”

Bradshaw continued, “This counter-cyclical strength, combined with continued expense management and sound credit underwriting discipline, positions us well for the remainder of 2019 and into 2020.”

Third Quarter 2019 Financial Highlights

• Net income was $142.2 million or $2.00 per diluted share for the third quarter of 2019 and $137.6 million or $1.93 per diluted share for the second quarter of 2019.
• Net interest revenue totaled $279.1 million, a decrease of $6.3 million. Net interest margin was 3.01 percent compared to 3.30 percent in the second quarter of 2019. Falling interest rates compressed the net interest margin by 9 basis points.
• Fees and commissions revenue totaled $186.1 million, an increase of $10.0 million. Falling interest rates led to growth in brokerage and trading revenue and mortgage banking revenue.
• Operating expense increased $2.2 million to $279.3 million. Personnel expense increased $2.2 million while non-personnel expense was consistent with the second quarter of 2019.
• A $12.0 million provision for credit losses was recorded in the third quarter of 2019. The combined allowance for credit losses totaled $206 million or 0.92 percent of outstanding loans compared to $204 million or 0.92 percent in the previous quarter.
• Average loans increased $409 million to $22.4 billion. Period-end loans increased $30 million to $22.3 billion. Average deposits increased $538 million to $25.7 billion. Period-end deposits increased $862 million.
• Income tax expense decreased $5.2 million during the third quarter primarily due to completion of 2018 tax filings and tax credit projects.

Third Quarter 2019 Business Segment Highlights

Commercial Banking

• Contributed $101.6 million to net income, a decrease of $5.4 million compared to the prior quarter. Net interest revenue decreased by $5.5 million. Fee revenue increased $5.1 million, offset by an increase in operating expense of $5.7 million.
• Average loans grew by $414 million and average deposits increased $109 million.

Consumer Banking

• Contributed $16.6 million to net income, consistent with the second quarter. Net interest revenue decreased $4.3 million, fee revenue increased $2.6 million and operating expense increased $2.0 million.
• The recent decrease in mortgage interest rates continues to drive mortgage origination activity. Mortgage production volume increased $102 million to $913 million and gain on sale margin increased 5 basis points to 1.51 percent.

Wealth Management

• Contributed $23.2 million to net income, a decrease of $2.3 million compared to the prior quarter. Net interest revenue decreased $3.9 million, fees and commissions revenue increased $3.5 million and operating expense increased $2.2 million.
• Assets under management or administration were $80.8 billion at September 30, 2019 compared to $81.8 billion at June 30, 2019. Fiduciary assets totaled $49.3 billion at September 30, 2019 and $49.3 billion at June 30, 2019.

Net Interest Revenue

Net interest revenue was $279.1 million for the third quarter of 2019, a $6.3 million decrease compared to the second quarter of 2019. Discount accretion on acquired loans totaled $10.9 million for the third quarter and $13.4 million for the second quarter. Recoveries of foregone interest on nonaccruing loans added $3.4 million to the second quarter of 2019.

Average earning assets increased $2.3 billion compared to the second quarter of 2019. Available for sale securities increased $1.3 billion during the third quarter as the balance sheet was repositioned to reduce the Company's exposure to further interest rate decreases. Fair value option securities balances, which we use as an economic hedge against changes in the fair value of mortgage servicing rights, increased $655 million. Average loan balances were up $409 million. Growth in average earning assets was largely funded by a $2.0 billion increase in borrowed funds and a $662 million increase in interest-bearing deposits.

Net interest margin was 3.01 percent compared to 3.30 percent in the previous quarter. Net interest margin was reduced 9 basis points due to available for sale securities expansion and 4 basis points due to the increase in the fair value hedge portfolio. In addition, lower foregone interest recoveries and discount accretion reduced net interest margin by 7 basis points. Falling interest rates compressed the net interest margin by an additional 9 basis points.

Excluding interest recoveries, the yield on average earning assets was 4.25 percent, a 22 basis point decrease from the second quarter. The loan portfolio yield was 5.12 percent, down 21 basis points. The yield on the available for sale securities portfolio decreased 3 basis points to 2.60 percent.

Funding costs were 1.68 percent, down 2 basis points. The cost of interest-bearing deposits increased 4 basis points to 1.17 percent. The cost of other borrowed funds was down 22 basis points to 2.31 percent. The benefit to net interest margin from assets funded by non-interest liabilities decreased 5 basis points to 44 basis points.

Fees and Commissions Revenue

Fees and commissions revenue totaled $186.1 million for the third quarter of 2019, an increase of $10.0 million over the second quarter of 2019.

Brokerage and trading revenue increased $3.3 million primarily due to higher trading volume and loan syndication activity. Mortgage banking revenue increased $2.0 million. A continued decline in primary mortgage interest rates increased mortgage loan production. Mortgage production volume increased $102 million and the gain on sale margin increased 5 basis points over the second quarter of 2019.Fees and commissions revenue totaled $186.1 million for the third quarter of 2019, an increase of $10.0 million over the second quarter of 2019.

Other revenue increased $5.2 million. This increase is largely due to the combination of an increase in repossessed asset revenue from a certain set of oil and gas properties, which is offset by an increase in related operating expenses, a business insurance credit, and other timing variances.

Fiduciary and asset management revenue decreased $1.4 million compared to the second quarter of 2019, primarily due to seasonal tax fees earned in the second quarter.

Operating Expense

Total operating expense was $279.3 million for the third quarter of 2019, an increase of $2.2 million over the second quarter of 2019.

Personnel expense increased $2.2 million. Incentive compensation increased $5.5 million led by an increase in cash based incentive compensation primarily due to increased sales activities in wealth management and commercial banking. Increased incentive compensation was partially offset by a decrease in regular compensation of $1.2 million and employee benefits of $2.0 million. Employee benefits expense was down largely due to a seasonal decrease in payroll taxes.

Non-personnel expense was largely unchanged in total compared to the second quarter of 2019. Mortgage banking costs increased $3.4 million primarily due to an increase in amortization of mortgage servicing rights as lower interest rates drive an increase in prepayment speeds. In addition, data processing and communications expense increased $2.2 million. Net losses and expenses of repossessed assets increased $1.1 million.

Insurance expense decreased $2.2 million, other expense decreased $1.9 million, and business promotion expense decreased $1.3 million, all following higher activity in the second quarter of 2019 largely related to the CoBiz acquisition.

Income Taxes

The effective tax rate was 18.6 percent for the third quarter of 2019, down from 21.4 percent for the second quarter of 2019.  Tax expense for the third quarter of 2019 included $5.2 million of benefits related to completion of 2018 tax returns for the Company and CoBiz, and the finalization of tax credit projects.

Loans, Deposits and Capital

Loans

Outstanding loans were $22.3 billion at September 30, 2019, up $30 million over June 30, 2019. Growth in commercial and personal loans was partially offset by a decrease in commercial real estate and residential mortgage loans.

Outstanding commercial loan balances grew by $88 million or 1 percent over June 30, 2019. Energy loan balances were up $193 million. Healthcare loans increased $106 million and wholesale/retail sector loans increased $55 million. Other commercial and industrial loans decreased $110 million, manufacturing loans decreased $63 million and public finance loans decreased by $51 million.

Commercial real estate loan balances decreased $84 million or 2 percent compared to June 30, 2019. Loans secured by industrial properties increased $45 million. Loans secured by multifamily residential properties increased $24 million. Other real estate loans decreased $79 million. Loans secured by office buildings decreased $42 million and loans secured by retail properties decreased $26 million.

Deposits

Period-end deposits totaled $26.2 billion at September 30, 2019, an $862 million increase over June 30, 2019. Interest-bearing transaction account balances grew by $670 million and demand deposit balances increased $177 million. Average deposits were $25.7 billion at September 30, 2019, an increase of $538 million compared to June 30, 2019. Total interest-bearing transaction deposits increased $619 million, partially offset by a decrease in demand deposits of $124 million.

Capital

The company's common equity Tier 1 capital ratio was 11.06 percent at September 30, 2019. In addition, the company's Tier 1 capital ratio was 11.06 percent, total capital ratio was 12.56 percent, and leverage ratio was 8.41 percent at September 30, 2019. At June 30, 2019, the company's common equity Tier 1 capital ratio was 10.84 percent, Tier 1 capital ratio was 10.84 percent, total capital ratio was 12.34 percent, and leverage ratio was 8.75 percent.

The company's tangible common equity ratio, a non-GAAP measure, was 8.72 percent at September 30, 2019 and 8.69 percent at June 30, 2019. The tangible common equity ratio is primarily based on total shareholders' equity, which includes unrealized gains and losses on available for sale securities. The company has elected to exclude unrealized gains and losses from available for sale securities from its calculation of Tier 1 capital for regulatory capital purposes, consistent with the treatment under the previous capital rules.

The company repurchased 336,713 shares at an average price of $77.03 per share in the third quarter of 2019 and 250,000 shares at an average price of $80.50 in the second quarter of 2019.

Credit Quality

Nonperforming assets totaled $286 million or 1.28 percent of outstanding loans and repossessed assets at September 30, 2019, compared to $297 million or 1.33 percent at June 30, 2019. Nonperforming assets that are not guaranteed by U.S. government agencies totaled $187 million or 0.85 percent of outstanding loans and repossessed assets at September 30, 2019, compared to $194 million or 0.88 percent at June 30, 2019.

Nonaccruing loans were $172 million or 0.77 percent of outstanding loans at September 30, 2019. Nonaccruing commercial loans totaled $112 million or 0.77 percent of outstanding commercial loans. Nonaccruing commercial real estate loans totaled $23 million or 0.50 percent of outstanding commercial real estate loans. Nonaccruing residential mortgage loans totaled $37 million or 1.76 percent of outstanding residential mortgage loans.

Nonaccruing loans decreased $11 million from June 30, 2019, primarily due to a $15 million decrease in other commercial and industrial loans and a $10 million decrease in healthcare sector loans. Nonaccruing energy loans increased $17 million. New nonaccruing loans identified in the third quarter totaled $36 million, offset by $28 million in payments received and $12 million in charge-offs.

Potential problem loans, which are defined as performing loans that, based on known information, cause management concern as to the borrowers' ability to continue to perform, totaled $143 million at September 30, compared to $161 million at June 30. The decrease largely resulted from energy, wholesale/retail sector and other commercial and industrial loans, partially offset by an increase in services and healthcare sector loans.

Net charge-offs were $10.6 million or 0.19 percent of average loans on an annualized basis for the third quarter of 2019, compared to $7.7 million or 0.14 percent of average loans on an annualized basis for the second quarter of 2019. Net charge-offs were 0.21 percent of average loans over the last four quarters. Gross charge-offs were $11.7 million for the third quarter compared to $13.2 million for the previous quarter. Recoveries totaled $1.1 million for the third quarter of 2019 and $5.5 million for the second quarter of 2019.

Based on an evaluation of all credit factors, including growth in the originated loan portfolio, changes in nonaccruing and potential problem loans and net charge-offs, the company determined that a $12.0 million provision for credit losses was appropriate for the third quarter of 2019. The company recorded a $5.0 million provision for credit losses in the second quarter of 2019.

The combined allowance for credit losses totaled $206 million or 0.92 percent of outstanding loans and 124 percent of nonaccruing loans at September 30, 2019, excluding residential mortgage loans guaranteed by U.S. government agencies. Excluding loans acquired in the CoBiz acquisition, which are measured at acquisition-date fair value, the combined allowance for loan losses was 1.02 percent of outstanding loans and 130 percent of nonaccruing loans at September 30, 2019 compared to 1.03 percent of outstanding loans and 126 percent of nonaccruing loans at June 30, 2019. The allowance for loan losses was $204 million and the accrual for off-balance sheet credit losses was $1.4 million. At June 30, 2019, the combined allowance for credit losses was $204 million or 0.92 percent of outstanding loans and 115 percent of nonaccruing loans, excluding loans guaranteed by U.S. government agencies. The allowance for loan losses was $203 million and the accrual for off-balance sheet credit losses was $1.9 million.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $11.0 billion at September 30, 2019, a $510 million increase compared to June 30, 2019. At September 30, 2019, the available for sale securities portfolio consisted primarily of $7.7 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $3.2 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. At September 30, 2019, the available for sale securities portfolio had a net unrealized gain of $178 million compared to $132 million at June 30, 2019.

The company also maintains a portfolio of residential mortgage-backed securities issued by U.S. government agencies and interest rate derivative contracts as an economic hedge of the changes in the fair value of our mortgage servicing rights. This portfolio of fair value option securities increased $678 million to $1.8 billion at September 30, 2019.

The net economic cost of the changes in fair value of mortgage servicing rights and related economic hedges was $3.0 million during the third quarter of 2019, including a $12.6 million decrease in the fair value of mortgage servicing rights, an $8.3 million increase in the fair value of securities and derivative contracts held as an economic hedge, and $1.2 million of related net interest revenue.

Commercial Banking

Net income for Commercial Banking was $101.6 million for the third quarter of 2019, a decrease of $5.4 million compared to the second quarter of 2019.

Net interest revenue decreased $5.5 million largely as a result of a decrease in interest recoveries on loans paired with a change in the mix of deposits from non-interest bearing to interest bearing. Average loans increased $414 million or 2 percent while average customer deposits increased $109 million or 1 percent.

Fees and commissions revenue increased $5.1 million over the second quarter of 2019. Loan syndication revenue increased $1.9 million based on the timing of completed transactions. Operating expense increased $5.7 million. Personnel expense increased $1.4 million primarily due to incentive compensation related to syndication activity.  Non-personnel expense increased $4.3 million. Other revenue increased $3.3 million, offset by an increase in repossession expense of $2.4 million, largely due to expenses related to repossessed assets on certain oil and gas properties.

Consumer Banking

Net income from Consumer Banking was $16.6 million in the third quarter of 2019, consistent with the second quarter of 2019.

Net interest revenue from Consumer Banking activities decreased $4.3 million largely due to decrease in the yield on deposits sold to our Funds Management unit. Average loans decreased $23 million or 1 percent and average deposits were relatively consistent with the previous quarter.

Revenues from mortgage banking activities increased $2.0 million over the prior quarter due to lower interest rates which have led to an increase in mortgage production and improved gain on sale margin.

Operating expenses increased $2.0 million. Mortgage banking costs increased $3.4 million related to increased payoffs as mortgage interest rates declined during the quarter. This increase was partially offset by a decrease in business promotion expense and personnel expense

Wealth Management

Net income for Wealth Management decreased $2.3 million to $23.2 million during the third quarter of 2019.

Net interest revenue decreased $3.9 million primarily due to a change in deposit mix to interest bearing deposits along with an increase in unsettled securities receivables. Brokerage and trading revenue increased $3.0 million due to higher trading activity and volumes as a result of interest rate changes. Operating expenses increased $2.2 million, largely related to an increase in incentive compensation.

Average loans increased $23 million to $1.7 billion. Average deposits increased $369 million to $6.6 billion, primarily due to an increase in interest-bearing transaction account balances. Assets under management or administration were $80.8 billion at September 30, 2019 compared to $81.8 billion at June 30, 2019. Fiduciary assets totaled $49.3 billion at September 30, 2019 and $49.3 billion at June 30, 2019.

Conference Call and Webcast

The company will hold a conference call at 9 a.m. Central time on Wednesday, October 23, 2019 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 # 13695151.

About BOK Financial Corporation

BOK Financial Corporation is a $43 billion regional financial services company headquartered in Tulsa, Oklahoma with $81 billion in assets under management and administration. The company's stock is publicly traded on NASDAQ under the Global Select market listings (BOKF). BOK Financial Corporation's holdings include BOKF, NA; BOK Financial Securities, Inc., BOK Financial Private Wealth, Inc. and BOK Financial Insurance, Inc. BOKF, NA operates TransFund, Cavanal Hill Investment Management and BOK Financial Asset Management, Inc. BOKF, NA operates banking divisions across eight states as: Bank of Albuquerque; Bank of Arkansas; Bank of Oklahoma; Bank of Texas; BOK Financial in Colorado and Arizona; and Mobank in Kansas and Missouri; as well as having limited purpose offices in Nebraska, Milwaukee and Connecticut. Through its subsidiaries, BOK Financial Corporation provides commercial and consumer banking, brokerage trading, investment, trust and insurance services, mortgage origination and servicing, and an electronic funds transfer network. For more information, visit www.bokf.com.

The company will continue to evaluate critical assumptions and estimates, such as the appropriateness of the allowance for credit losses and asset impairment as of September 30, 2019 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.

Contact:
Cody McAlester
Phone Number: +1 918-295-0486
Email: cmcalester@bokf.com

BALANCE SHEETS -- UNAUDITED BOK FINANCIAL CORPORATION (In thousands)
	Sept. 30, 2019				June 30, 2019
ASSETS
Cash and due from banks	$	761,130			$	739,109
Interest-bearing cash and cash equivalents	465,458				596,382
Trading securities	1,675,212				1,900,395
Investment securities	304,224				327,677
Available for sale securities	11,024,551				10,514,414
Fair value option securities	1,816,398				1,138,819
Restricted equity securities	479,018				461,017
Residential mortgage loans held for sale	282,487				193,570
Loans:
Commercial	14,424,625				14,336,908
Commercial real estate	4,626,057				4,710,033
Residential mortgage	2,117,303				2,170,822
Personal	1,117,382				1,037,889
Total loans	22,285,367				22,255,652
Allowance for loan losses	(204,432		)		(202,534		)
Loans, net of allowance	22,080,935				22,053,118
Premises and equipment, net	516,597				468,368
Receivables	219,420				213,608
Goodwill	1,048,091				1,048,091
Intangible assets, net	124,320				124,473
Mortgage servicing rights	193,661				208,308
Real estate and other repossessed assets, net	21,026				16,940
Derivative contracts, net	352,019				415,221
Cash surrender value of bank-owned life insurance	387,035				384,193
Receivable on unsettled securities sales	904,630				583,421
Other assets	470,993				505,949
TOTAL ASSETS	$	43,127,205			$	41,893,073
LIABILITIES AND EQUITY
Deposits:
Demand	$	9,844,397			$	9,667,557
Interest-bearing transaction	13,521,545				12,851,943
Savings	557,593				557,683
Time	2,243,541				2,227,938
Total deposits	26,167,076				25,305,121
Funds purchased and repurchase agreements	3,413,051				2,331,947
Other borrowings	6,822,334				7,823,809
Subordinated debentures	275,909				275,892
Accrued interest, taxes and expense	218,775				181,413
Due on unsettled securities purchases	703,448				565,268
Derivative contracts, net	336,791				381,454
Other liabilities	352,156				309,694
TOTAL LIABILITIES	38,289,540				37,174,598
Shareholders' equity:
Capital, surplus and retained earnings	4,695,263				4,610,869
Accumulated other comprehensive gain	133,753				98,569
TOTAL SHAREHOLDERS' EQUITY	4,829,016				4,709,438
Non-controlling interests	8,649				9,037
TOTAL EQUITY	4,837,665				4,718,475
TOTAL LIABILITIES AND EQUITY	$	43,127,205			$	41,893,073

AVERAGE BALANCE SHEETS -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands)
	Three Months Ended
	Sept. 30, 2019				June 30, 2019				Mar. 31, 2019				Dec. 31, 2018				Sept. 30, 2018
ASSETS
Interest-bearing cash and cash equivalents	$	500,823			$	535,491			$	537,903			$	563,132			$	688,872
Trading securities	1,696,568				1,757,335				1,968,399				1,929,601				1,762,794
Investment securities	308,090				328,482				343,282				364,737				379,566
Available for sale securities	10,747,439				9,435,668				8,883,054				8,704,963				8,129,214
Fair value option securities	1,553,879				898,772				594,349				277,575				469,398
Restricted equity securities	476,781				413,812				395,432				362,729				328,842
Residential mortgage loans held for sale	203,319				192,102				145,040				179,553				207,488
Loans:
Commercial	14,507,185				14,175,057				13,966,521				13,587,344				11,484,200
Commercial real estate	4,652,534				4,656,861				4,602,149				4,747,784				3,774,470
Residential mortgage	2,129,421				2,146,315				2,193,334				2,222,063				1,956,089
Personal	1,123,778				1,026,172				1,004,061				1,022,140				989,026
Total loans	22,412,918				22,004,405				21,766,065				21,579,331				18,203,785
Allowance for loan losses	(201,714		)		(205,532		)		(206,092		)		(209,613		)		(214,160		)
Total loans, net	22,211,204				21,798,873				21,559,973				21,369,718				17,989,625
Total earning assets	37,698,103				35,360,535				34,427,432				33,752,008				29,955,799
Cash and due from banks	717,338				703,294				705,411				731,700				578,905
Derivative contracts, net	331,834				328,802				262,927				299,319				294,126
Cash surrender value of bank-owned life insurance	385,190				384,974				382,538				379,893				322,038
Receivable on unsettled securities sales	1,742,794				1,437,462				1,224,700				799,548				768,785
Other assets	2,705,089				2,629,710				2,669,673				2,423,275				1,776,164
TOTAL ASSETS	$	43,580,348			$	40,844,777			$	39,672,681			$	38,385,743			$	33,695,817
LIABILITIES AND EQUITY
Deposits:
Demand	$	9,759,710			$	9,883,965			$	9,988,088			$	10,648,683			$	9,325,002
Interest-bearing transaction	13,131,542				12,512,282				11,931,539				11,773,651				10,010,031
Savings	557,122				558,738				541,575				526,275				503,821
Time	2,251,800				2,207,391				2,153,277				2,146,786				2,097,441
Total deposits	25,700,174				25,162,376				24,614,479				25,095,395				21,936,295
Funds purchased and repurchase agreements	3,106,163				2,066,950				2,033,036				1,205,568				1,193,583
Other borrowings	8,125,023				7,175,617				7,040,279				6,361,141				5,765,440
Subordinated debentures	275,900				275,887				275,882				276,378				144,702
Derivative contracts, net	300,051				283,484				273,786				268,848				185,029
Due on unsettled securities purchases	745,893				821,688				453,937				493,887				544,263
Other liabilities	547,144				460,732				501,788				341,438				311,605
TOTAL LIABILITIES	38,800,348				36,246,734				35,193,187				34,042,655				30,080,917
Total equity	4,780,000				4,598,043				4,479,494				4,343,088				3,614,900
TOTAL LIABILITIES AND EQUITY	$	43,580,348			$	40,844,777			$	39,672,681			$	38,385,743			$	33,695,817

STATEMENTS OF EARNINGS -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands, except per share data)
	Three Months Ended								Nine Months Ended
	September 30,								September 30,
	2019				2018				2019				2018
Interest revenue	$	395,207			$	303,247			$	1,162,101			$	862,834
Interest expense	116,111				62,364				319,471				163,653
Net interest revenue	279,096				240,883				842,630				699,181
Provision for credit losses	12,000				4,000				25,000				(1,000		)
Net interest revenue after provision for credit losses	267,096				236,883				817,630				700,181
Other operating revenue:
Brokerage and trading revenue	43,840				23,086				115,983				80,222
Transaction card revenue	22,015				21,396				64,668				63,361
Fiduciary and asset management revenue	43,621				57,514				132,004				141,038
Deposit service charges and fees	28,837				27,765				85,154				82,760
Mortgage banking revenue	30,180				23,536				82,145				75,907
Other revenue	17,626				12,900				42,825				39,781
Total fees and commissions	186,119				166,197				522,779				483,069
Other gains, net	4,544				2,754				11,000				6,040
Gain (loss) on derivatives, net	3,778				(2,847		)		19,595				(11,589		)
Gain (loss) on fair value option securities, net	4,597				(4,385		)		24,115				(25,290		)
Change in fair value of mortgage servicing rights	(12,593		)		5,972				(62,814		)		28,901
Gain (loss) on available for sale securities, net	5				250				1,110				(802		)
Total other operating revenue	186,450				167,941				515,785				480,329
Other operating expense:
Personnel	162,573				143,531				492,143				422,425
Business promotion	8,859				7,620				26,875				21,316
Charitable contributions to BOKF Foundation	—				—				1,000				—
Professional fees and services	12,312				13,209				41,453				38,387
Net occupancy and equipment	27,558				23,394				83,959				70,201
Insurance	4,220				6,232				15,513				19,070
Data processing and communications	31,915				31,665				93,099				87,221
Printing, postage and supplies	3,825				3,837				12,817				11,937
Net losses and operating expenses of repossessed assets	1,728				4,044				4,304				14,471
Amortization of intangible assets	5,064				1,603				15,393				4,289
Mortgage banking costs	14,975				11,741				36,426				34,780
Other expense	6,263				5,741				20,604				19,426
Total other operating expense	279,292				252,617				843,586				743,523
Net income before taxes	174,254				152,207				489,829				436,987
Federal and state income taxes	32,396				34,662				99,926				98,940
Net income	141,858				117,545				389,903				338,047
Net income (loss) attributable to non-controlling interests	(373		)		289				(503		)		857
Net income attributable to BOK Financial Corporation shareholders	$	142,231			$	117,256			$	390,406			$	337,190
Average shares outstanding:
Basic	70,596,307				64,901,095				70,953,544				64,883,319
Diluted	70,609,924				64,934,351				70,968,845				64,919,728
Net income per share:
Basic	$	2.00			$	1.79			$	5.47			$	5.15
Diluted	$	2.00			$	1.79			$	5.47			$	5.15

FINANCIAL HIGHLIGHTS -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands, except ratio and share data)
	Three Months Ended
	Sept. 30, 2019				June 30, 2019				Mar. 31, 2019				Dec. 31, 2018				Sept. 30, 2018
Capital:
Period-end shareholders' equity	$	4,829,016			$	4,709,438			$	4,522,873			$	4,432,109			$	3,615,032
Risk weighted assets	$	32,159,139			$	32,040,741			$	31,601,558			$	30,742,295			$	27,398,072
Risk-based capital ratios:
Common equity tier 1	11.06		%		10.84		%		10.71		%		10.92		%		12.07		%
Tier 1	11.06		%		10.84		%		10.71		%		10.92		%		12.07		%
Total capital	12.56		%		12.34		%		12.24		%		12.50		%		13.37		%
Leverage ratio	8.41		%		8.75		%		8.76		%		8.96		%		9.90		%
Tangible common equity ratio1	8.72		%		8.69		%		8.64		%		8.82		%		9.55		%
Common stock:
Book value per share	$	68.15			$	66.15			$	63.30			$	61.45			$	55.25
Tangible book value per share	51.60				49.68				46.82				45.03				47.90
Market value per share:
High	$	84.35			$	88.17			$	93.72			$	98.29			$	105.22
Low	$	72.96			$	72.60			$	72.11			$	69.96			$	92.40
Cash dividends paid	$	35,472			$	35,631			$	35,885			$	35,977			$	32,591
Dividend payout ratio	24.94		%		25.90		%		32.44		%		33.17		%		27.79		%
Shares outstanding, net	70,858,010				71,193,770				71,449,982				72,122,932				65,434,258
Stock buy-back program:
Shares repurchased	336,713				250,000				705,609				525,000				—
Amount	$	25,937			$	20,125			$	60,577			$	45,057			$	—
Average price per share	$	77.03			$	80.50			$	85.85			$	85.82			$	—
Performance ratios (quarter annualized):
Return on average assets	1.29		%		1.35		%		1.13		%		1.12		%		1.38		%
Return on average equity	11.83		%		12.02		%		10.04		%		9.93		%		12.95		%
Net interest margin	3.01		%		3.30		%		3.30		%		3.40		%		3.21		%
Efficiency ratio	59.31		%		59.51		%		64.80		%		63.25		%		61.60		%
Reconciliation of non-GAAP measures:
1  Tangible common equity ratio:
Total shareholders' equity	$	4,829,016			$	4,709,438			$	4,522,873			$	4,432,109			$	3,615,032
Less: Goodwill and intangible assets, net	1,172,411				1,172,564				1,177,573				1,184,112				480,800
Tangible common equity	$	3,656,605			$	3,536,874			$	3,345,300			$	3,247,997			$	3,134,232
Total assets	$	43,127,205			$	41,893,073			$	39,882,962			$	38,020,504			$	33,289,864
Less: Goodwill and intangible assets, net	1,172,411				1,172,564				1,177,573				1,184,112				480,800
Tangible assets	$	41,954,794			$	40,720,509			$	38,705,389			$	36,836,392			$	32,809,064
Tangible common equity ratio	8.72		%		8.69		%		8.64		%		8.82		%		9.55		%
Other data:
Tax equivalent interest	$	2,936			$	3,481			$	2,529			$	3,067			$	1,894
Net unrealized gain (loss) on available for sale securities	$	178,060			$	131,780			$	(2,609	)		$	(95,271	)		$	(216,793	)
Mortgage banking:
Mortgage production revenue	$	13,814			$	11,869			$	7,868			$	5,073			$	7,250
Mortgage loans funded for sale	$	877,280			$	729,841			$	510,527			$	497,353			$	651,076
Add: current period-end outstanding commitments	379,377				344,087				263,434				160,848				197,752
Less: prior period end outstanding commitments	344,087				263,434				160,848				197,752				251,231
Total mortgage production volume	$	912,570			$	810,494			$	613,113			$	460,449			$	597,597
Mortgage loan refinances to mortgage loans funded for sale	56		%		31		%		30		%		23		%		23		%
Gain on sale margin	1.51		%		1.46		%		1.28		%		1.10		%		1.21		%
Mortgage servicing revenue	$	16,366			$	16,262			$	15,966			$	16,807			$	16,286
Average outstanding principal balance of mortgage loans serviced for others	21,172,874				21,418,690				21,581,835				21,706,541				21,895,041
Average mortgage servicing revenue rates	0.31		%		0.30		%		0.30		%		0.31		%		0.30		%
Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net	$	3,742			$	11,128			$	4,432			$	12,162			$	(2,843	)
Gain (loss) on fair value option securities, net	4,597				9,853				9,665				(282		)		(4,385		)
Gain (loss) on economic hedge of mortgage servicing rights	8,339				20,981				14,097				11,880				(7,228		)
Gain (loss) on changes in fair value of mortgage servicing rights	(12,593		)		(29,555		)		(20,666		)		(24,233		)		5,972
Loss on changes in fair value of mortgage servicing rights, net of economic hedges,  included in other operating revenue	(4,254		)		(8,574		)		(6,569		)		(12,353		)		(1,256		)
Net interest revenue on fair value option securities2	1,245				1,296				1,129				695				1,100
Total economic cost of changes in the fair value of mortgage servicing rights,  net of economic hedges	$	(3,009	)		$	(7,278	)		$	(5,440	)		$	(11,658	)		$	(156	)

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

QUARTERLY EARNINGS TREND -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands, except ratio and per share data)
	Three Months Ended
	Sept. 30, 2019				June 30, 2019				Mar. 31, 2019				Dec. 31, 2018				Sept. 30, 2018
Interest revenue	$	395,207			$	390,820			$	376,074			$	365,592			$	303,247
Interest expense	116,111				105,388				97,972				79,906				62,364
Net interest revenue	279,096				285,432				278,102				285,686				240,883
Provision for credit losses	12,000				5,000				8,000				9,000				4,000
Net interest revenue after provision for credit losses	267,096				280,432				270,102				276,686				236,883
Other operating revenue:
Brokerage and trading revenue	43,840				40,526				31,617				28,101				23,086
Transaction card revenue	22,015				21,915				20,738				20,664				21,396
Fiduciary and asset management revenue	43,621				45,025				43,358				43,665				57,514
Deposit service charges and fees	28,837				28,074				28,243				29,393				27,765
Mortgage banking revenue	30,180				28,131				23,834				21,880				23,536
Other revenue	17,626				12,437				12,762				16,404				12,900
Total fees and commissions	186,119				176,108				160,552				160,107				166,197
Other gains (losses), net	4,544				3,480				2,976				(8,305		)		2,754
Gain (loss) on derivatives, net	3,778				11,150				4,667				11,167				(2,847		)
Gain (loss) on fair value option securities, net	4,597				9,853				9,665				(282		)		(4,385		)
Change in fair value of mortgage servicing rights	(12,593		)		(29,555		)		(20,666		)		(24,233		)		5,972
Gain (loss) on available for sale securities, net	5				1,029				76				(1,999		)		250
Total other operating revenue	186,450				172,065				157,270				136,455				167,941
Other operating expense:
Personnel	162,573				160,342				169,228				160,706				143,531
Business promotion	8,859				10,142				7,874				9,207				7,620
Charitable contributions to BOKF Foundation	—				1,000				—				2,846				—
Professional fees and services	12,312				13,002				16,139				20,712				13,209
Net occupancy and equipment	27,558				26,880				29,521				27,780				23,394
Insurance	4,220				6,454				4,839				4,248				6,232
Data processing and communications	31,915				29,735				31,449				27,575				31,665
Printing, postage and supplies	3,825				4,107				4,885				5,232				3,837
Net losses and operating expenses of repossessed assets	1,728				580				1,996				2,581				4,044
Amortization of intangible assets	5,064				5,138				5,191				5,331				1,603
Mortgage banking costs	14,975				11,545				9,906				11,518				11,741
Other expense	6,263				8,212				6,129				6,907				5,741
Total other operating expense	279,292				277,137				287,157				284,643				252,617
Net income before taxes	174,254				175,360				140,215				128,498				152,207
Federal and state income taxes	32,396				37,580				29,950				20,121				34,662
Net income	141,858				137,780				110,265				108,377				117,545
Net income (loss) attributable to non-controlling interests	(373		)		217				(347		)		(79		)		289
Net income attributable to BOK Financial Corporation shareholders	$	142,231			$	137,563			$	110,612			$	108,456			$	117,256
Average shares outstanding:
Basic	70,596,307				70,887,063				71,387,070				71,808,029				64,901,095
Diluted	70,609,924				70,902,033				71,404,388				71,833,334				64,934,351
Net income per share:
Basic	$	2.00			$	1.93			$	1.54			$	1.50			$	1.79
Diluted	$	2.00			$	1.93			$	1.54			$	1.50			$	1.79

LOANS TREND -- UNAUDITED BOK FINANCIAL CORPORATION (In thousands)
		Sept. 30, 2019				June 30, 2019				Mar. 31, 2019				Dec. 31, 2018				Sept. 30, 2018
Commercial:
Energy		$	4,114,269			$	3,921,353			$	3,705,099			$	3,590,333			$	3,294,867
Services		3,266,249				3,309,458				3,287,563				3,258,192				2,603,862
Healthcare		3,032,968				2,926,510				2,915,885				2,799,277				2,437,323
Wholesale/retail		1,848,617				1,793,118				1,706,900				1,621,158				1,650,729
Public finance		744,840				795,659				803,083				804,550				418,578
Manufacturing		698,408				761,357				742,374				730,521				660,582
Other commercial and industrial		719,274				829,453				801,071				832,047				510,160
Total commercial		14,424,625				14,336,908				13,961,975				13,636,078				11,576,101
Commercial real estate:
Multifamily		1,324,839				1,300,372				1,210,358				1,288,065				1,120,166
Office		1,014,275				1,056,306				1,033,158				1,072,920				824,829
Retail		799,169				825,399				890,685				919,082				759,423
Industrial		873,536				828,569				767,757				778,106				696,774
Residential construction and land development		135,361				141,509				149,686				148,584				101,872
Other commercial real estate		478,877				557,878				549,007				558,056				301,611
Total commercial real estate		4,626,057				4,710,033				4,600,651				4,764,813				3,804,675
Residential mortgage:
Permanent mortgage		1,066,460				1,088,370				1,098,481				1,122,610				1,094,926
Permanent mortgages guaranteed by U.S. government agencies		191,764				195,373				193,308				190,866				180,718
Home equity		859,079				887,079				900,831				916,557				696,098
Total residential mortgage		2,117,303				2,170,822				2,192,620				2,230,033				1,971,742
Personal		1,117,382				1,037,889				1,003,734				1,025,806				996,941
Total		$	22,285,367			$	22,255,652			$	21,758,980			$	21,656,730			$	18,349,459

LOANS BY PRINCIPAL MARKET AREA -- UNAUDITED BOK FINANCIAL CORPORATION (in thousands)
	Sept. 30, 2019				June 30, 2019				Mar. 31, 2019				Dec. 31, 2018				Sept. 30, 2018
Oklahoma:
Commercial	$	3,690,100			$	3,762,234			$	3,551,054			$	3,491,117			$	3,609,109
Commercial real estate	679,786				717,970				665,190				700,756				651,315
Residential mortgage	1,370,452				1,403,398				1,417,381				1,440,566				1,429,843
Personal	383,246				382,764				374,807				375,543				376,201
Total Oklahoma	6,123,584				6,266,366				6,008,432				6,007,982				6,066,468
Texas:
Commercial	6,220,227				5,877,265				5,754,018				5,438,133				5,115,646
Commercial real estate	1,292,116				1,341,609				1,344,810				1,341,783				1,354,679
Residential mortgage	273,931				272,878				265,927				266,805				253,265
Personal	475,430				400,585				396,794				394,743				381,452
Total Texas	8,261,704				7,892,337				7,761,549				7,441,464				7,105,042
New Mexico:
Commercial	335,409				350,520				342,915				340,489				325,048
Commercial real estate	374,331				385,058				371,416				383,670				392,494
Residential mortgage	81,383				82,390				85,326				87,346				88,110
Personal	10,887				10,236				11,065				10,662				11,659
Total New Mexico	802,010				828,204				810,722				822,167				817,311
Arkansas:
Commercial	87,588				87,896				79,286				111,338				102,237
Commercial real estate	158,538				149,300				142,551				141,898				106,701
Residential mortgage	7,509				7,463				7,731				7,537				7,278
Personal	10,905				11,208				11,550				11,955				12,126
Total Arkansas	264,540				255,867				241,118				272,728				228,342
Colorado:
Commercial	2,247,798				2,325,742				2,231,703				2,275,069				1,132,500
Commercial real estate	975,066				1,023,410				957,348				963,575				354,543
Residential mortgage	224,872				241,780				241,722				251,849				68,694
Personal	78,733				72,537				65,812				72,916				56,999
Total Colorado	3,526,469				3,663,469				3,496,585				3,563,409				1,612,736
Arizona:
Commercial	1,276,534				1,330,415				1,335,140				1,320,139				621,658
Commercial real estate	771,425				761,243				791,466				889,903				666,562
Residential mortgage	92,121				91,684				98,973				97,959				44,659
Personal	78,694				76,335				61,875				68,546				67,280
Total Arizona	2,218,774				2,259,677				2,287,454				2,376,547				1,400,159
Kansas/Missouri:
Commercial	566,969				602,836				667,859				659,793				669,903
Commercial real estate	374,795				331,443				327,870				343,228				278,381
Residential mortgage	67,035				71,229				75,560				77,971				79,893
Personal	79,487				84,224				81,831				91,441				91,224
Total Kansas/Missouri	1,088,286				1,089,732				1,153,120				1,172,433				1,119,401
TOTAL BOK FINANCIAL	$	22,285,367			$	22,255,652			$	21,758,980			$	21,656,730			$	18,349,459

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, 2019				June 30, 2019				Mar. 31, 2019				Dec. 31, 2018				Sept. 30, 2018
Oklahoma:
Demand	$	3,515,312			$	3,279,359			$	3,432,239			$	3,610,593			$	3,564,307
Interest-bearing:
Transaction	7,447,799				7,020,484				6,542,548				6,445,831				6,010,972
Savings	308,103				307,785				309,875				288,210				288,080
Time	1,198,170				1,253,804				1,217,371				1,118,643				1,128,810
Total interest-bearing	8,954,072				8,582,073				8,069,794				7,852,684				7,427,862
Total Oklahoma	12,469,384				11,861,432				11,502,033				11,463,277				10,992,169
Texas:
Demand	2,870,429				2,974,005				2,966,743				3,291,433				3,357,669
Interest-bearing:
Transaction	2,589,511				2,453,619				2,385,305				2,295,169				2,182,114
Savings	100,597				103,125				101,849				99,624				97,909
Time	464,264				425,253				419,269				423,880				453,119
Total interest-bearing	3,154,372				2,981,997				2,906,423				2,818,673				2,733,142
Total Texas	6,024,801				5,956,002				5,873,166				6,110,106				6,090,811
New Mexico:
Demand	645,698				630,861				662,362				691,692				722,188
Interest-bearing:
Transaction	539,260				557,881				573,203				571,347				593,760
Savings	62,863				62,636				61,497				58,194				57,794
Time	236,135				232,569				228,212				224,515				221,513
Total interest-bearing	838,258				853,086				862,912				854,056				873,067
Total New Mexico	1,483,956				1,483,947				1,525,274				1,545,748				1,595,255
Arkansas:
Demand	39,513				29,176				31,624				36,800				36,579
Interest-bearing:
Transaction	149,506				148,485				147,964				91,593				128,001
Savings	1,747				1,783				1,785				1,632				1,826
Time	7,877				7,810				8,321				8,726				10,214
Total interest-bearing	159,130				158,078				158,070				101,951				140,041
Total Arkansas	198,643				187,254				189,694				138,751				176,620
Colorado:
Demand	1,694,044				1,621,820				1,897,547				1,658,473				593,442
Interest-bearing:
Transaction	1,910,874				1,800,271				1,844,632				1,899,203				622,520
Savings	60,107				57,263				58,919				57,289				40,308
Time	273,622				246,198				261,235				274,877				217,628
Total interest-bearing	2,244,603				2,103,732				2,164,786				2,231,369				880,456
Total Colorado	3,938,647				3,725,552				4,062,333				3,889,842				1,473,898
Arizona:
Demand	703,381				700,480				695,238				707,402				365,878
Interest-bearing:
Transaction	599,655				560,429				621,735				575,567				130,105
Savings	12,487				11,966				12,144				10,545				3,559
Time	44,347				43,099				44,004				43,051				23,927
Total interest-bearing	656,489				615,494				677,883				629,163				157,591
Total Arizona	1,359,870				1,315,974				1,373,121				1,336,565				523,469
Kansas/Missouri:
Demand	376,020				431,856				410,799				418,199				423,560
Interest-bearing:
Transaction	284,940				310,774				361,590				327,866				322,747
Savings	11,689				13,125				13,815				13,721				13,125
Time	19,126				19,205				19,977				19,688				20,635
Total interest-bearing	315,755				343,104				395,382				361,275				356,507
Total Kansas/Missouri	691,775				774,960				806,181				779,474				780,067
TOTAL BOK FINANCIAL	$	26,167,076			$	25,305,121			$	25,331,802			$	25,263,763			$	21,632,289

NET INTEREST MARGIN TREND -- UNAUDITED BOK FINANCIAL CORPORATION
	Three Months Ended
	Sept. 30, 2019			June 30, 2019			Mar. 31, 2019			Dec. 31, 2018			Sept. 30, 2018
TAX-EQUIVALENT ASSETS YIELDS
Interest-bearing cash and cash equivalents	2.42	%		2.57	%		2.56	%		2.23	%		1.98	%
Trading securities	3.49	%		3.59	%		3.88	%		4.10	%		3.98	%
Investment securities	4.46	%		4.41	%		4.50	%		4.26	%		4.06	%
Available for sale securities	2.60	%		2.63	%		2.57	%		2.51	%		2.37	%
Fair value option securities	2.79	%		3.34	%		3.62	%		3.56	%		3.25	%
Restricted equity securities	6.34	%		6.30	%		6.42	%		6.39	%		6.36	%
Residential mortgage loans held for sale	3.73	%		3.65	%		4.58	%		4.00	%		4.27	%
Loans	5.12	%		5.39	%		5.26	%		5.09	%		4.80	%
Allowance for loan losses
Loans, net of allowance	5.17	%		5.45	%		5.31	%		5.14	%		4.86	%
Total tax-equivalent yield on earning assets	4.25	%		4.51	%		4.46	%		4.33	%		4.04	%
COST OF INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest-bearing transaction	1.08	%		1.04	%		0.94	%		0.79	%		0.67	%
Savings	0.14	%		0.12	%		0.12	%		0.11	%		0.09	%
Time	1.94	%		1.90	%		1.80	%		1.54	%		1.40	%
Total interest-bearing deposits	1.17	%		1.13	%		1.04	%		0.87	%		0.77	%
Funds purchased and repurchase agreements	2.01	%		2.08	%		2.07	%		1.36	%		1.25	%
Other borrowings	2.42	%		2.67	%		2.68	%		2.51	%		2.20	%
Subordinated debt	5.48	%		5.53	%		5.51	%		5.38	%		5.55	%
Total cost of interest-bearing liabilities	1.68	%		1.70	%		1.66	%		1.42	%		1.25	%
Tax-equivalent net interest revenue spread	2.57	%		2.81	%		2.80	%		2.91	%		2.79	%
Effect of noninterest-bearing funding sources and other	0.44	%		0.49	%		0.50	%		0.49	%		0.42	%
Tax-equivalent net interest margin	3.01	%		3.30	%		3.30	%		3.40	%		3.21	%

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, 2019				June 30, 2019				Mar. 31, 2019				Dec. 31, 2018				Sept. 30, 2018
Nonperforming assets:
Nonaccruing loans:
Commercial	$	111,706			$	123,395			$	90,358			$	99,841			$	109,490
Commercial real estate	23,185				21,670				21,508				21,621				1,316
Residential mortgage	37,304				38,477				40,409				41,555				41,917
Personal	271				237				302				230				269
Total nonaccruing loans	172,466				183,779				152,577				163,247				152,992
Accruing renegotiated loans guaranteed by U.S. government agencies	92,718				95,989				91,787				86,428				83,347
Real estate and other repossessed assets	21,026				16,940				17,139				17,487				24,515
Total nonperforming assets	$	286,210			$	296,708			$	261,503			$	267,162			$	260,854
Total nonperforming assets excluding those guaranteed by U.S. government agencies	$	187,160			$	193,976			$	162,770			$	173,602			$	169,717
Nonaccruing loans by loan class:
Commercial:
Energy	$	88,894			$	71,632			$	35,332			$	47,494			$	54,033
Services	6,119				10,087				9,555				8,567				4,097
Healthcare	5,978				16,148				18,768				16,538				15,704
Manufacturing	8,741				8,613				9,548				8,919				9,202
Wholesale/retail	1,504				1,390				1,425				1,316				9,249
Public finance	—				—				—				—				—
Other commercial and industrial	470				15,525				15,730				17,007				17,205
Total commercial	111,706				123,395				90,358				99,841				109,490
Commercial real estate:
Retail	20,132				20,057				20,159				20,279				777
Residential construction and land development	350				350				350				350				350
Multifamily	286				275				—				301				—
Office	855				855				855				—				—
Industrial	909				—				—				—				—
Other commercial real estate	653				133				144				691				189
Total commercial real estate	23,185				21,670				21,508				21,621				1,316
Residential mortgage:
Permanent mortgage	20,165				21,803				22,937				23,951				22,855
Permanent mortgage guaranteed by U.S. government agencies	6,332				6,743				6,946				7,132				7,790
Home equity	10,807				9,931				10,526				10,472				11,272
Total residential mortgage	37,304				38,477				40,409				41,555				41,917
Personal	271				237				302				230				269
Total nonaccruing loans	$	172,466			$	183,779			$	152,577			$	163,247			$	152,992
Performing loans 90 days past due1	$	1,541			$	2,698			$	610			$	1,338			$	518
Gross charge-offs	$	11,707			$	13,227			$	11,775			$	14,515			$	11,073
Recoveries	(1,066		)		(5,503		)		(1,689		)		(2,168		)		(2,092		)
Net charge-offs	$	10,641			$	7,724			$	10,086			$	12,347			$	8,981
Provision for credit losses	$	12,000			$	5,000			$	8,000			$	9,000			$	4,000
Allowance for loan losses to period end loans	0.92		%		0.91		%		0.94		%		0.96		%		1.15		%
Combined allowance for credit losses to period end loans	0.92		%		0.92		%		0.95		%		0.97		%		1.16		%
Nonperforming assets to period end loans and repossessed assets	1.28		%		1.33		%		1.20		%		1.23		%		1.42		%
Net charge-offs (annualized) to average loans	0.19		%		0.14		%		0.19		%		0.23		%		0.20		%
Allowance for loan losses to nonaccruing loans1	123.05		%		114.40		%		141.00		%		132.89		%		145.02		%
Combined allowance for credit losses to nonaccruing loans1	123.87		%		115.48		%		142.25		%		134.03		%		146.41		%

^{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, 2019				June 30, 2019				Sept. 30, 2018				3Q19 vs 2Q19			3Q19 vs 3Q18
Net interest revenue		$	180,147			$	185,614			$	145,147			(2.9	)%		24.1	%
Fees and commissions revenue		46,159				41,105				39,391				12.3	%		17.2	%
Other operating expense		68,685				62,947				51,039				9.1	%		34.6	%
Corporate expense allocations		12,613				11,385				9,124				10.8	%		38.2	%
Net income		101,573				106,935				84,964				(5.0	)%		19.5	%
Average assets		23,973,067				22,910,071				18,499,979				4.6	%		29.6	%
Average loans		19,226,347				18,812,800				15,321,600				2.2	%		25.5	%
Average deposits		10,833,057				10,724,206				8,633,204				1.0	%		25.5	%
Consumer Banking
Net interest revenue		$	48,462			$	52,715			$	39,044			(8.1	)%		24.1	%
Fees and commissions revenue		51,460				48,830				44,039				5.4	%		16.9	%
Other operating expense		59,699				57,694				58,482				3.5	%		2.1	%
Corporate expense allocations		11,776				11,695				11,037				0.7	%		6.7	%
Net income		16,640				16,342				8,015				1.8	%		107.6	%
Average assets		9,827,130				9,212,667				8,323,543				6.7	%		18.1	%
Average loans		1,773,831				1,796,823				1,719,679				(1.3	)%		3.1	%
Average deposits		6,983,018				6,998,677				6,580,395				(0.2	)%		6.1	%
Wealth Management
Net interest revenue		$	23,066			$	26,941			$	28,776			(14.4	)%		(19.8	)%
Fees and commissions revenue		89,422				85,925				83,562				4.1	%		7.0	%
Other operating expense		71,619				69,452				62,256				3.1	%		15.0	%
Corporate expense allocations		9,416				9,168				11,127				2.7	%		(15.4	)%
Net income		23,206				25,544				28,866				(9.2	)%		(19.6	)%
Average assets		10,392,988				9,849,396				8,498,363				5.5	%		22.3	%
Average loans		1,671,102				1,647,680				1,439,774				1.4	%		16.1	%
Average deposits		6,590,332				6,220,848				5,492,048				5.9	%		20.0	%
Fiduciary assets		49,259,697				49,296,896				45,560,107				(0.1	)%		8.1	%
Assets under management or administration		80,796,949				81,774,602				77,628,015				(1.2	)%		4.1	%

Acquired assets and liabilities were allocated to segments in the second quarter of 2019.