Bok Financial Corporation · NASDAQ:BOKF
Bok Financial — Q3 2015 Earnings Presentation
28 slides from Bok Financial's earnings presentation, 2015
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-lookin
Slide 3: BOKF at a Glance
BOKF at a Glance Top 25 U.S bank holding company Valuable midwest/southwest franchise Seasoned management team Consistent execution and solid performance across all economic cycles Proven ability to deliver At 9/30/15: organic growth Assets $30.6 bil Loans $15.4 bil Leading energy and he
Slide 4: BOKF Investment Attributes
BOKF Investment Attributes Attribute Evidence Focused on long-term shareholder Strong growth in total shareholder return value over several economic cycles Management alignment with Insiders own 69% of outstanding shares shareholders Industry-leading performance 25-year track record of profitability
Slide 5: Delivering Long Term Shareholder Value
Delivering Long Term Shareholder Value As of 9/30/15 5 Yr. TSR 10 Yr. TSR 15 Yr. TSR BOKF 65% 68% 395% Rank in Peer Group 19/36 8/36 3/36 Peer average 63% 15% 139% Peer median 65% 4% 100% KBW Bank Index 67% (7%) 17% NASDAQ Bank Index 87% 16% 122% “There is no principle more emphasized in our organiz
Slide 6: Diversified Revenue Sources
Diversified Revenue Sources CAGR 2009-2014: Brokerage & Brokerage and Trading 8.0% Trading Transaction Card (1) 3.2% 9.6% Trans. Trust Fees 11.8% Card Service Charges (1) (4.7%) 9.6% Mortgage Banking 10.9% Overall CAGR 5.3% Net Interest Trust 51.2% Fees (1) Impacted by Regulation E or Durbin. 9.0% S
Slide 7: Strong Core Deposit Franchise
Strong Core Deposit Franchise Market Branches Deposit Share TX Tulsa, OK 26 29.96 Dallas-Fort Worth-Arlington, TX 23 1.71 OK Oklahoma City, OK 20 12.28 NM Houston-The Woodlands-Sugar Land, TX 14 0.66 Denver-Aurora-Lakewood, CO 11 2.05 AR Albuquerque, NM 17 10.05 CO Phoenix-Mesa-Scottsdale, AZ 4 0.99
Slide 8: Commercial Banking
Commercial Banking Diversified by Sector and Geography Loan Portfolio Breakdown - by Sector: Loans by Principal Market: Commercial (Millions) 9/30/2015 (In Millions) 9/30/2015 Energy $ 2,838.1 18.5% Oklahoma 5,782.5 37.6% Services $ 2,706.6 17.6% Texas 5,426.4 35.3% Wholesale/Retail $ 1,461.9 9.5% N
Slide 9: Energy Banking
Energy Banking Wholesale/ Energy Retail 3% Services At 9/30/15: 8% Midstream $5.4 billion commitments and $2.8 billion O/S 4% E&P line utilization 57% SNCs = 53% of commitments, 48% of outstandings ~60/40 split between oil and gas Oil & Gas Producers 85% Gross Losses Fifteen Year Ten Year Wi
Slide 10: Energy Banking
Energy Banking To date, credit migration has been manageable: $mil Q4 2014 Q1 2015 Q2 2015 Q3 2015 Pass Performing Loans 2,832.6 99.0% 2,748.3 94.7% 2,658.5 91.6% 2,527.5 89.1% Spec. Mention Performing (“Criticized”) 10.5 0.4% 108.7 3.7% 112.8 3.9% 196.3 6.9% Potential Problem Loans 15.9 0.6% 44.1 1
Slide 11: Healthcare Banking
Healthcare Banking Healthcare Commitments Growing line of business within Medical commercial Services Skilled 30% Nursing $1.7 billion portfolio at 9/30/15 36% Portfolio has increased at a compounded annual rate of 8% since 2007 National expertise in skilled Senior Care nursing facilities an
Slide 12: Commercial Real Estate Portfolio
Commercial Real Estate Portfolio Disciplined Concentration Management Concentration by Product Type: Concentration by Geography: (In Millions) 9/30/2015 (In Millions) 9/30/2015 Resi Const. & Dev 153.5 4.7% Oklahoma 677.4 20.9% Retail 769.4 23.8% Texas * 1,257.7 38.9% Office 626.2 19.4% New Mexico 31
Slide 13: Wealth Management
Wealth Management $68.6 billion in assets under management or custody Fiduciary and Asset Management Revenue ($millions) $125.6 $37.8 billion in fiduciary assets $115.7 More than $1 trillion in traded securities $96.1 annually $80.1 $69.0 $73.3 Clients include high net worth individuals, $66
Slide 14: ATM Network and Merchant Payment Processing
600 EFT Transaction Volumes (M) 500 400 ATM Network CAGR: 9.93% 300 Among the top 10 networks in the US 200 Operates in 22 states; more than 50% of clients 100 outside Oklahoma 0 Clients: 211 Banks, 139 Credit Unions, 6 C- 2009 2014 Store partners SIG POS PIN POS ATM In 2014, processed 496 m
Slide 15: Mortgage Banking
Mortgage Banking Top 50 U.S. mortgage originator 200,000 Mortgage Banking 702 employees 150,000 Revenue ($000s) Three distinct origination 100,000 channels – Retail, Correspondent, HomeDirect (online) 50,000 Annual origination volume - approaching $7 billion 2010 2011 2012 2013 2014 TTM 9/15
Slide 16: Q3 2015 Financial Results
© BOK FINANCIAL ~ Q3 2015 Financial Results
Slide 17: Q3 2015 Highlights
Q3 2015 Highlights Q3 2015 Q2 2015 Q3 2014 Net Income ($mil) $74.9 $79.2 $75.6 Diluted EPS $1.09 $1.15 $1.09 • Loan growth and loan loss provision in line with BOKF expectations • Good expense controls during the quarter • Lower than expected fee income in the quarter • Higher than expected negative
Slide 18: Additional Q3 2015 Highlights
Additional Q3 2015 Highlights % % Growth, Growth, ($bil) Q3 2015 Q2 2015 Seq. Q3 2014 YOY Period-End Loans $15.4 $15.1 1.6% $13.7 12.3% 6.43% ann. Avg. Loans 15.2 14.9 1.9% 13.5 12.4% 7.7% ann. Fiduciary Assets $37.8 $38.8 (2.6%) $34.0 11.1% Assets Under $67.0 68.6 (2.3%) $62.3 7.5% Management or in
Slide 19: Loan Growth by Market and Category
Loan Growth by Loan Growth by Market: Category: Seq. YOY Seq. YOY Sep 30 Loan Loan Sep 30 Loan Loan ($mil) 2015 Growth Growth ($mil) 2015 Growth Growth OK $5,782.5 0.6% 7.6% Comm’l $9,797.4 0.2% 14.3% TX 5,426.3 2.7% 17.7% CRE 3,235.1 6.6% 18.8% NM 812.7 (0.8%) (2.6%) Resi Mort 1,869.0 (0.8%) (5.6%)
Slide 20: Commercial and CRE Growth
Comm’l Growth: CRE Growth: Seq. YOY Seq. YOY Sep 30 Loan Loan Sep 30 Loan Loan ($mil) 2015 Growth Growth ($mil) 2015 Growth Growth Energy $2,838.1 (2.2%) 11.2% Resi const/ $153.5 3.3% (12.4%) Development Services 2,706.6 1.0% 15.7% Retail 769.4 11.8% 25.9% Wholesale/retail 1,461.9 (4.7%) 2.9% Office
Slide 21: Net Interest Revenue and Margin
Net Interest Revenue and Margin Q3 Q2 Q1 Q4 Q3 ($mil) 2015 2015 2015 2014 2014 Net Interest Revenue $178.6 $175.7 $167.7 $169.7 $166.8 Provision for credit losses $ 7.5 $ 4.0 $ 0.0 $ 0.0 $ 0.0 NIR after provision $171.1 $171.7 $167.7 $169.7 $166.8 Net Interest Margin 2.61% 2.61% 2.55% 2.61% 2.67% NI
Slide 22: Fees and Commissions Revenue
Fees and Commissions Revenue % Growth, % Growth, % Growth, ($mil) Q3 2015 Seq. YOY TTM Brokerage and trading $31.6 (12.3%) (10.4%) (1.8%) Transaction card 32.5 (0.8%) 3.0% 5.3% Fiduciary and asset management 30.8 (5.8%) 3.6% 14.1% Deposit service charges and fees 23.6 5.7% 4.9% (1.7%) Mortgage banki
Slide 23: Expense Review
Expense Review %Incr. %Incr. ($mil) Q3 2015 Q2 2015 Q3 2014 Seq. YOY Personnel Expense $129.1 $132.7 $123.0 (2.7%) 4.9% Other Operating $ 95.5 $ 94.4 $98.8 1.2% (3.3%) Expense Total operating $224.6 $227.1 $221.8 (1.1%) 1.3% expense • Lower personnel costs due to reduction in incentive compensation
Slide 24: Other Balance Sheet Statistics
Other Balance Sheet Statistics Q3 2015 Q2 2015 Q3 2014 Period End AFS Securities $8.8 billion $9.0 billion $9.3 billion Average AFS securities $8.9 billion $9.1 billion $9.5 billion Period End Deposits $20.6 billion $21.1 billion $20.3 billion Average deposits $20.7 billion $21.1 billion $20.2 billi
Slide 25: Available for Sale Securities Portfolio
Available for Sale Securities Portfolio $8.8 Billion at 9/30/15 High quality, actively managed Agency Other, Securities portfolio used primarily CMBS, $0.3 $2.7 to manage interest rate risk and generate incremental net interest revenue Consistent strategy; actively managed for total return A
Slide 26: Industry-Leading Credit Quality
Industry-Leading Credit Quality Combined allowance for credit Net annualized charge-offs to losses to period end loans: average loans: 1.35% 0.05% Combined allowance for credit Non-performing assets to losses to nonaccruing loans: period end loans and repossessed assets*: 232.5% 0.78% *Exclud
Slide 27: 2015 and 2016 Preliminary Assumptions
2015 2016 Preliminary Assumptions Assumptions Mid-to-high single digit loan Mid-to-high single digit loan growth in Q4 growth Stable NIM and increasing NII Stable NIM and increasing NII Provision for credit losses for the Provision for credit losses for the full year of $15-$20 million f
Slide 28: Summary
Summary Diverse sources of revenue Capital and willingness to make accretive acquisitions Deep and experienced Sound financial condition management team Multiple growth drivers Differentiated business model BOK Financial is a high-quality bank holding company that deserves a premium valu