Bok Financial Corporation · NASDAQ:BOKF
Bok Financial — Q2 2013 Earnings Presentation
34 slides from Bok Financial's earnings presentation, August 2013
Slide 1: Investor Presentation: Second Quarter Results
Investor Presentation Second Quarter Results August 2013 BOK Financial Corporation. Member FDIC. Equal Housing Lender. Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and
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-lookin
Slide 3: Second Quarter Results
Second Quarter Results BOK Financial Corporation. Member FDIC. Equal Housing Lender. Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust. 3
Slide 4: Second Quarter Highlights
Second Quarter Highlights Upon Stan Lybarger’s retirement at year end, Steve Bradshaw will become president id t and d CEO andd Dan D Ellinor Elli will ill become b COO Net income of $80 million or $1.16 per share, down $8 million from Q1 No provision for credit losses in Q2 while Q1 included an
Slide 5: Linked Quarter Summary
Linked Quarter Summary 2013Q2 2013Q1 $ change % change Comments Avg AFS Securities $11 060 700 $11,060,700 $11 292 181 $11,292,181 $ (231 (231,481) 481) (2 0) (2.0) No changes in strategy; continue to reinvest in short duration munis, agency RMBS & CMBS Avg Loans $12,277,444 $12,224,960 $ 52,484 0.4
Slide 6: Loan Growth Trends
Loan Growth Trends Growth Driven by C&I Q2 Highlights: C&I Loans C&I increased $290 million: Growth $8.0 across most sectors sectors, primarily in OK & $7.5 TX markets Billions CRE increased $32 million: Growth in $7.0 office, multifamily and industrial partially $6.5 offset by declines in other
Slide 7: Largest C&I Sectors
Largest C&I Sectors Positive Trends in Key Segments $2.5 $1.2 $2.3 $1.1 $2.1 $1.0 $1.9 $0.9 2Q12 3Q12 4Q12 1Q13 2Q13 2Q12 3Q12 4Q12 1Q13 2Q13 Energy Services Wholesale/Retail Healthcare $ in billions BOK Financial Corporation. Member FDIC. Equal Housing Lender. Services provided by BOKF, NA doing bu
Slide 8: $2.4B Energy Portfolio
$2.4B Energy Portfolio Core Competency 50-60% loan to value on proved producing reserves Wholesale/ Service Approximately 59% of production loans are Retail 10% 3% secured by oil Manufac & Regionally diverse oil and gas properties Other 1% E&P line utilization, currently 53%, varies due to c
Slide 9: Select Markets
Select Markets Positive Trends in Regional Markets $6.0 $1.1 $5 0 $5.0 $0.9 $4.0 $0.7 $3.0 $0.5 $2.0 $0.3 2Q12 3Q12 4Q12 1Q13 2Q13 2Q12 3Q12 4Q12 1Q13 2Q13 OK TX CO AZ KC $ in billions BOK Financial Corporation. Member FDIC. Equal Housing Lender. Services provided by BOKF, NA doing business as Bank
Slide 10: Net Interest Revenue
Net Interest Revenue Low Interest Rates Pressure NIR Yields (%) 5 Net Interest Revenue & Margin $185 3.50 4 3 2 NIR ($ in millions) 1 $175 3.25 Marrgin (%) 2Q12 3Q12 4Q12 1Q13 2Q13 AFS Loans Cost of Int Bearing Liab (%) $165 3.00 0.75 0.50 $155 2.75 2Q12 3Q12 4Q12 1Q13 2Q13 0.25 0.00 NIR NIM 2Q12 3Q
Slide 11: $10.7B AFS Portfolio
$10.7B AFS Portfolio High g Quality, y, Activelyy Managed g Agency RMBS Securities portfolio used primarily to Agency 26% CMBS manage interest rate risk and generate 17% incremental net interest revenue Consistent strategy; actively managed for total return Muni & Other Total AFS portfolio est
Slide 12: Operating Revenue
Operating Revenue Diverse Revenue Provides Stability & Growth Opportunity Fees & Commissions 2Q13 % of total 2Q13 2Q13 v. 1Q13 v. 2Q12 Brokerage and trading revenue $ 32,874 20% 3.5% 0.8% T Transaction ti cardd revenue 29 942 29,942 19% 8 1% 8.1% 11 9% 11.9% Trust fees and commissions 24,803 15% 11.
Slide 13: Mortgage Banking
Mortgage Banking Rate Increases Pressure Revenue Mortgage Revenue $60 Record $1.2 billion loans funded for sale Purchase volume increased to 52% of $50 originations from 38% in Q1 Correspondent channel sourced 26% $40 of loan originations, g , up p from 21% in Q1 $30 25% of fundings in OK, 1
Slide 14: Solid Credit Quality
Solid Credit Quality Continued Positive Trends Nonperforming Assets Nonaccruing Loans $300 CO NM 8% 20% $200 AZ 11% Millions Other $100 TX 1% 17% $0 3Q12 4Q12 1Q13 2Q13 OK 43% Coml CRE Res RE Consumer Renegotiated OREO At 6/30, nonperforming assets include $81 million guaranteed by U.S. government
Slide 15: Credit Quality
Credit Quality Net Charge-offs Stable at 8bp in Q2 Allowance Coverage of Annual Net Charge-Offs - in years Net Charge-Offs (%) 20 2.25 15 10 5 1.50 0 2007 2008 2009 2010 2011 2012 2Q13 Allowance to Loans (%) 0.75 3.00 2 25 2.25 1.50 0.00 2007 2008 2009 2010 2011 2012 2Q13 0.75 BOKF Peer Median 2007
Slide 16: Capital
Capital Strength Provides Flexibility Tangible Common Equity Ratio (%) CMA KEY Capital Strength SNV Estimated Tier 1 common equity q y BOKF ratio under proposed Basel III is CBSH ~12.70% at 3/31, well above 7% FITB regulatory threshold HBAN RF FCNCA HBHC Capital Deployment SIVB ASBC Organic grow
Slide 17: Superior Balanced Strategy
Superior Balanced Strategy Superior talent and service delivery Dominant position in OK; in high growth markets outside OK Lending expertise in key sectors including energy and healthcare Strategy delivers through varying cycles Diversified fee-based revenue contributed 49% of revenue YTD
Slide 18: Appendix
Appendix BOK Financial Corporation. Member FDIC. Equal Housing Lender. Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust. 18
Slide 19: BOK Financial at June 30, 2013
BOK Financial at June 30, 2013 21st Largest U.S.-based Bank Holding Company Assets $27.8 B Loans $12.4 B Deposits $19.5 B Tier I Common Equity 13.19 % Fiduciary assets $28.3 B BOK Financial Corporation. Member FDIC. Equal Housing Lender. Services provided by BOKF, NA doing business as Bank
Slide 20: Consistent Execution of Strategy
Consistent Execution of Strategy Long Live Your Money BOK Financial Corporation. Member FDIC. Equal Housing Lender. Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Tr
Slide 21: Continuing to Build Shareholder Value
Continuing to Build Shareholder Value Positioned for Long-term Growth Competitive High-growth markets in TX, CO & AZ position #1 deposit market share in OK Proven core Relationship focus strategies Diversified revenues Prudent risk management Long Long-term term strategic view Solid bala
Slide 22: Strong Competitive Position
Strong Competitive Position Dominant Bank in OK, Growing Share in Other Markets Company Growth in Deposit Percent of Number Deposits Deposits Market National Market of in Market in Market Share Franchise MSA Rank Branches ($000) (%) (%) (%) Tulsa, OK 1 39 6,643,041 12.2 30.8 36.4 Oklahoma City, OK 2
Slide 23: Regional Economic Trends
Regional Economic Trends Non‐Farm Payroll Unemployment 104 11 10 102 9 100 Rate (%) Indexx, Jan‐07=100 8 U.S. U.S. 98 7 BOKF BOKF 6 96 5 94 4 92 3 Non‐Farm Payroll Unemployment 113 12 11 108 10 9 00 Index, Jan‐07=10 103 OK 8 OK Rate (%) TX TX NM 7 NM 98 CO CO AZ 6 AZ 93 5 4 88 3 BOK Financial Corpor
Slide 24: Merger & Acquisitions
Merger & Acquisitions History and Strategy 12 bank acquisitions during the last 15 years Target strong niche banks Emphasize p layering y g on BOKF p products and services rather than cutting g expenses p Several non-bank acquisitions Mortgage servicing rights, trust companies, bank branches
Slide 25: Business Model
Business Model Efficient Structure Supports Client-Focused Service Delivery 3 primary LOBs with deep product sets Executive leadership responsible for line of business performance across markets Local leadership responsible for client service and marketing Centralized operations and administ
Slide 26: Balanced Revenue
Balanced Revenue Fee Businesses Provide Stability and Growth Opportunity Other Fees Mortgage 4% Banking 12% Deposit service charges 7% Net Interest Trust fees Revenue 7% 51% Transaction Card 9% Brokerage & Trading 10% YTD 6/30/13 BOK Financial Corporation. Member FDIC. Equal Housing Lender. Services
Slide 27: $12.4B Loan Portfolio
$12.4B Loan Portfolio Diversified by Sector and Geography Residential Mtge 16% Energy 19% Constr & Land P tf li By Portfolio B Market M k t Dev OK 42% 2% TX 32% Healthcare CO 8% 9% NM 6% CRE AZ 6% 17% Wholesale/ KS/MO 4% Retail AR 2% 9% Consumer 3% Other C&I Services 7% 18% BOK Financial Corporation
Slide 28: $1.1B Healthcare Portfolio
$1.1B Healthcare Portfolio Expanding Line of Business Healthcare Commitments Specialized group formed in OK expanded to regional markets Loans attributed to markets outside OK Medical Skilled increased to 46% from 40% since 2Q11 Svcs Nursing 25% Facilities Portfolio increased at a compound annual
Slide 29: Commercial Real Estate Portfolio Trends
Commercial Real Estate Portfolio Trends Growth in Loans Secured by Income-Producing Properties $600 CRE By y Market $450 KS/MO AZ 5% OK Millions 11% 25% $300 M CO 6% $150 AR 4% $0 TX C&D Retail Office Multifamily Industrial Other CRE NM 35% 14% 9/30/2012 12/31/2012 3/31/2013 6/30/2013 BOK Financial
Slide 30: Shared National Credit Relationships
Shared National Credit Relationships Integrated CRE Food Svcs 1% Other 264 SNCs at 6/30/13 with $5.3 billion Manufact 3% 3% committed itt d and d $2.4 $2 4 billion billi outstanding t t di 5% (19% of loan portfolio) Healthcare 6% 86% of outstanding loans are attributed to relationships in local
Slide 31: Other Real Estate and Other Assets
Other Real Estate and Other Assets Maximize Total Return $110 MM OREO Other NM 28% Undeveloped Land 1% AZ 18% 1- 4 Family 16% Properties OK 15% 19% TX 12% CO 9% Other 8% AR 5% Developed KS/MO 5% CRE Guaranteed 24% 1-4 Familyy 29% Carrying value of OREO evaluated quarterly Residential Land Dev 1-
Slide 32: $19.5B Deposit Portfolio
$19.5B Deposit Portfolio Strong Core Deposit Base Deposit Mix and Cost $24 AZ Other CO 3% Markets 7% $18 14% 17% 3% $12 NM 7% Billions 47% 48% $6 35% 37% $0 2Q12 3Q12 4Q12 1Q13 2Q13 TX OK 26% 54% Demand Interest-bearing Trans Savings Time Cost of interest bearing dep: 0.54% 0.53% 0.54% 0.46% 0.43%
Slide 33: Expense Management
Expense Management Maintaining Expense Discipline Expense & Revenue Trends $400 $300 Millions $200 $100 $0 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 Personnel Expense Non-personnel Expense Net Interest Revenue + Fee Revenue BOK Financial Corporation. Member FDIC. Equal Housing Lender. Services provided by BOKF,
Slide 34: Recent Investments
Recent Investments Support Client Relationships and Revenue Growth Business Banking build out - Business Experts made 2,100 referrals in ‘12 Commercial Healthcare/Commercial Real Estate senior housing initiatives Banking Enhance capacity for sales calls by shifting select administrative duties