Bok Financial Corporation · NASDAQ:BOKF
Bok Financial — Investor Presentation (2019)
23 slides from Bok Financial's investor presentation, 2019
Slide 1: Investor Presentation
Investor Presentation NASDAQ: BOKF 1
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation contains statements that are based on management’s beliefs, assumptions, current expectations, estimates, and projections about BOK Financial Corporation, the financial services industry, and the economy generally. These remarks constitute forward-looking
Slide 3: Top 30 national/regional bank overview
• Top 30 national/regional bank* • Long-term focused Midwest/Southwest franchise with market cap over $6 billion. • Seasoned management team • Proven ability to deliver organic growth • Consistent execution December 31, 2018 • Consistent strategy Assets $38 billion Loans $22 billion • NASDAQ: BOKF D
Slide 4: Core Strategy: Build a recession-proof bank that will outperform peers
Core Strategy: Build a recession-proof bank that will outperform peers across the economic cycle • Consistent organic growth • Robust portfolio of fee 10 Yr. 15 Yr. generating businesses provides As of 12/31/18 TSR TSR balance in periods of economic BOKF 134% 165% instability Peer average 132% 78% •
Slide 5: CoBiz Financial Acquisition
Cobiz Financial Acquisition • Closed October 1, 2018 -- Only 3.5 months after announcement • Acquisition of a “Best in Class” commercial bank is manifesting itself in both the quality of the people and the client relationships • Full business integration of revenue producers and client facing employ
Slide 6: BOK Financial: Diverse Revenue Sources
BOK Financial: Diverse Revenue Sources • 39% fee income is a differentiator for BOKF compared to other midsized regional banks • Well diversified: no single component of fee Brokerage and Trading income accounts for more than 12% of total 7% revenue Transaction • Further diversity within the fee inc
Slide 7: Strong Balance Sheet
Strong Balance Sheet Metric: 12/31/2018 Period End Loans $21.7 billion Period End Deposits $25.3 billion Loan to Deposit Ratio 85.7% Regulatory minimum for Capital Ratios: 12/31/2018 well-capitalized: Common Equity Tier 1 7% 10.92% Tier 1 Capital Ratio 8.5% 10.92% Total Capital Ratio 10.5% 12.50% Le
Slide 8: Strong Core Deposit Franchise
Strong Core Deposit Franchise Deposit mix and cost ($bn) Geographic deposit mix Demand Interest-bearing transaction Savings Time TX 24% NM $25 6% $24 10% AR $23 1% $22 2% $21 $21 CO OK 16% $18 45% 46% AZ KC 5% 3% $12 MSA Branches Deposit share Tulsa, OK 24 32% Dallas-Fort Worth-Arlington, TX 21 2% $
Slide 9: Diversified Loan Portfolio
Diversified Loan Portfolio Loan Portfolio Segmentation Loan Portfolio by Market Commercial Real Estate TX 23% 29% Personal 5% OK 19% Resi 11% Healthcare 13% NM 4% Other 19% CO Energy 15% 17% General C&I 31% KS/MO AZ 6% 8% Disciplined concentration management Diversified by sector and geography 9
Slide 10: A National Energy Banking Leader
A National Energy Banking Leader 100 year history in energy lending and a playbook Portfolio Composition at 12/31/2018 that works: • Focus on first lien, senior secured E&P lending – Oil & Gas the “sweet spot” in energy lending Producers • Internal staff of 13 petroleum engineers and 82% engineering
Slide 11: Healthcare Banking Expertise
Healthcare Banking Expertise • Growing line of business within commercial banking • As of December 31, 2018, outstandings totaled $2.4 billion across 31 states • Healthcare portfolio characteristics: • Favorable LIBOR spreads • Above-average loan utilization rates • Predominately BOK Financial origi
Slide 12: Commercial Real Estate
Commercial Real Estate • $4.8 billion outstanding and $1.8 billion CRE Portfolio by Product Type unfunded commitments at December 31, 2018. • Over two-thirds of outstanding collateral Multifamily within BOKF footprint. Retail Office • BOKF allocates 175% of Tier 1 capital plus Industrial reserves to
Slide 13: Wealth Management
Wealth Management • Four primary lines of business: 500 Wealth Management Revenue • The Private Bank 400 • BOK Financial Advisors CAGR: 9.6% • Institutional Wealth Management 300 • Cavanal Hill Investment Management 200 • Clients include high net worth individuals, corporations, pensions, foundation
Slide 14: Transaction Processing
Transaction Processing Debit Processing & ATM Network 800 EFT Transaction 700 Volumes (M) • Among the top 10 networks in the US 600 CAGR: 7.6% • Operates nationally with customers based in 26 500 states and the Virgin Islands; more than 65% of 400 clients outside Oklahoma 300 • Clients: Banks / Cred
Slide 15: Mortgage Banking
Mortgage Banking 160,000 • Top 50 U.S. mortgage originator 140,000 120,000 • Three lines of business: 100,000 • Direct mortgage origination through 80,000 BOKF retail network 60,000 • Growing online sales channel – 40,000 HomeDirect Mortgage 20,000 - • Mortgage Servicing 2014 2015 2016 2017 2018 • A
Slide 16: 4Q 2018 Financial Results
© BOK FINANCIAL ‘N 4Q 2018 Financial Results 16
Slide 17: Fourth Quarter and FY2018 Summary
Fourth Quarter and FY2018 Summary: Noteworthy items impacting FY 2018 Noteworthy items impacting Q4 2018 profitability: profitability: • Strong growth in net interest margin and • CoBiz integration expense of $14.5 million net interest income realized this quarter • Outstanding loan growth • $9.0 mi
Slide 18: Loan Portfolio
Loan Portfolio Seq. YOY ($mil) Dec 31, Sep 30, Dec 31, Loan Loan Dec 31, 2018 Ex 2018 Ex 2017 Ex Growth Ex Growth Ex 2018 COBZ COBZ COBZ COBZ COBZ Energy $3,590.3 $3,570.2 $3,294.9 $2,930.2 8.4% 21.8% Services 3,252.1 2,647.8 2,597.7 2,522.0 1.9% 5.0% Healthcare 2,733.5 2,417.8 2,370.5 2,243.5 2.0%
Slide 19: Net Interest Revenue and Margin
Net Interest Revenue and Margin ($millions) Q4 2018 Q3 2018 Q2 2018 Q1 2018 Q4 2017 Net interest revenue $285.7 $240.9 $238.6 $219.7 $216.9 Provision for credit losses $9.0 $4.0 $— $(5.0) $(7.0) NIR after provision $276.7 $236.9 $238.6 $224.7 $223.9 Net interest margin 3.40% 3.21% 3.17% 2.99% 2.97%
Slide 20: Fees and Commissions
Fees and Commissions Revenue, $mil Growth: Quarterly, Quarterly, Year Trailing 12 Q4 2018 Sequential over Year Months Brokerage and Trading $28.1 21.7% (15.0)% (17.7)% Transaction Card 20.7 (3.4)% 3.2% 3.6% Fiduciary and Asset Management 43.7 (24.1)% 4.5% 13.4% Deposit Service Charges and Fees 29.4
Slide 21: Expenses
Expenses %Incr. %Incr. ($mil) Q4 2018 Q3 2018 Q4 2017 Seq. YOY Personnel expense $160.7 $143.5 $145.3 12.0% 10.6% Other operating expense $123.9 $109.1 $109.2 13.6% 13.5% Total operating expense $284.6 $252.6 $254.5 12.7% 11.9% Efficiency Ratio 63.24% 61.59% 66.07% • CoBiz acquisition and integratio
Slide 22: Key Credit Quality Metrics
Key Credit Quality Metrics ▪ No material signs of stress in any loan portfolio. ▪ Nonaccrual loans down 1.4 percent sequentially on a legacy BOKF basis. ▪ Appropriately reserved with a combined allowance of 0.97 percent with CoBiz portfolio included. Reserve of legacy portfolio is 1.12 percent. ▪ Ne
Slide 23: Forecast and Assumptions
Forecast and Assumptions • Mid single digit loan growth for the consolidated BOKF and COBZ entity. • Provision levels moving forward will be influenced by loan growth, but are expected to be at similar dollar levels to the past couple of quarters. • We now expect no rate hikes in 2019, providing no