Bok Financial Corporation · NASDAQ:BOKF
Bok Financial — Investor Presentation (May 2014)
32 slides from Bok Financial's investor presentation, May 2014
Slide 1: Investor Presentation May 2014
Investor Presentation May 2014 NASDAQ: BOKF 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. 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: BOK Financial Corp. at a Glance
BOK Financial Corp. at a Glance Top 25 bank holding company Strong franchise throughout the Midwest and Southwest Leading energy and healthcare lender nationwide Seasoned management team with consistent execution and solid performance across all economic cycles At 3/31/14: NASDAQ: BOKF Assets $
Slide 4: BOKF Investment Attributes
BOKF Investment Attributes Attribute Evidence Focused on long-term shareholder value 14.42% compounded annual return from January 1992 through March 2014 Management alignment with Insiders own 69% of outstanding shares shareholders Industry-leading performance across all 23-year track record of prof
Slide 5: Driving Long Term Shareholder Value
Driving Long Term Shareholder Value As of 12/31/13 5 Yr. TSR 10 Yr. TSR 15 Yr. TSR BOKF 129% 110% 276% Peer average 187% 36% 169% Peer median 118% 26% 122% NASDAQ Bank Index 97% 15% 119% KBW Bank Index 179% -6% 28% “There is no principle more emphasized in our organization than managing for long-ter
Slide 6: Diversified Business Platform
Diversified Business Platform Retail and Commercial Banking Wealth Management Transaction Processing Mortgage Banking 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 C
Slide 7: Balanced Revenue
Balanced Revenue Fee Businesses Provide Stability and Growth Opportunity Brokerage & Trading 10% CAGR 2010- LT Growth Rates 2013 Transaction Brokerage and 7.34% Card Trading 9% Transaction Card (1) 1.32% Trust Fees 11.68% Net interest Trust fees revenue 8% Service Charges (1) (2.8%) 53% Mortgage Ban
Slide 8: Retail and Commercial Banking: Strong Core Deposit Base
Retail and Commercial Banking Strong Core Deposit Base Company Company Company Company Percent of Company Total Active Total Total Deposit Company Total Deposit Branches Deposits 2013 Market Share Deposits Market Rank 2013 2013 ($000) 2013 (%) 2013 (%) Tulsa, OK 1 38 6,839,818 31.09 35.63 Dallas-For
Slide 9: Retail and Commercial Banking: Strong Core Deposit Base
Retail and Commercial Banking Strong Core Deposit Base AZ Other CO $24 4% Markets 5% 3% $18 NM Billions 7% $12 $6 TX $0 OK 26% 1Q13 2Q13 3Q13 4Q13 1Q14 55% Demand Interest-bearing Trans Savings Time BOK Financial Corporation. Member FDIC. Equal Housing Lender. Services provided by BOKF, NA doing bus
Slide 10: Commercial Banking: Diversified by Sector and Geography
Commercial Banking Diversified by Sector and Geography Loan Portfolio Breakdown - by Sector: Loans by Principal Market: Commercial (In Millions) 3/31/2014 (In Millions) 3/31/2014 Energy $ 2,344.1 17.9% Oklahoma 5,061.7 38.7% Services $ 2,232.5 17.1% Texas 4,524.1 34.6% Wholesale/Retail $ 1,225.9 9.4
Slide 11: Commercial Banking: Energy Lending
Commercial Banking $2.4 billion energy portfolio at 3/31/13 Energy Lending Core competency of BOK for over 100 years 50-60% loan to value on proved producing reserves Wholesale/ Energy Retail Approximately 59% of production loans are Services 4% 3% secured by oil Midstream Regionally diver
Slide 12: Commercial Banking: Healthcare Lending
Commercial Banking Healthcare Lending Growing line of business within Healthcare Commitments commercial $1.4 billion portfolio at 3/31/14 Medical Skilled Svcs Nursing Portfolio increased at a compound 25% Facilities 33% annual rate of 10% since 2007 National expertise in skilled Specialty nu
Slide 13: Commercial Real Estate Portfolio Trends
Commercial Banking Commercial Real Estate Portfolio Trends CRE By Market OK $600 KS/MO 17% 22% $450 Millions AZ $300 8% TX $150 CO 32% 8% AR $0 NM 3% C&D Retail Office Multifamily Industrial Other CRE 10% 6/30/2013 9/30/2013 12/31/2013 3/31/2014 BOK Financial Corporation. Member FDIC. Equal Housing
Slide 14: Mortgage Banking: Building a Recurring Revenue Model
Mortgage Banking Building a Recurring Revenue Model Housed within the retail banking business 180,000 Mortgage Banking Revenue 160,000 ($000s) Several key strategic 140,000 initiatives: 120,000 100,000 Build servicing portfolio 80,000 Expand correspondent 60,000 network 40,000 20,000 Build
Slide 15: Mortgage Banking: Building a Recurring Revenue Model
Mortgage Banking Building a Recurring Revenue Model Servicing Portfolio ($B) Servicing Revenue ($MM) Consistent 14.5 11.5 growth in 14.0 11.0 13.5 servicing 13.0 10.5 portfolio drives 12.5 10.0 recurring 12.0 servicing 11.5 9.5 11.0 9.0 revenue Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2013 2013 2013 2013 201
Slide 16: Wealth Management
Wealth Management Fiduciary and Asset Management Revenue ($millions) $96.1 $59.1 billion in assets under management or custody $80.1 $73.3 $66.2 $69.0 $31.3 billion in fiduciary assets Clients include high net worth individuals, corporations, pensions, foundations, government entities, 2009 2010
Slide 17: ATM Network and Merchant Payment Processing
ATM Network $2,500 Merchant Volume Among the top 10 networks in the US $Mil $2,000 Operates in 21 states; 50% of clients CAGR: 9.47% outside Oklahoma $1,500 Clients: 207 Banks, 138 Credit Unions, 6 $1,000 C-Store partners $500 In 2013, processed 455 million EFT $- transactions 2008 2013 Merc
Slide 18: Q1 2014 Results
Q1 2014 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. 18
Slide 19: First Quarter Highlights
First Quarter Highlights Q1 2014 Q4 2013 Net Income $76.6 million $73.0 million Diluted EPS $1.11 $1.06 Drivers: • Solid loan growth • Revenue growth from key fee-generating lines of business • Significant reductions in core expense line items while investing in risk and compliance infrastructure •
Slide 20: First Quarter Highlights (Cont'd)
First Quarter Highlights (Cont’d) $billions Q1 2014 Q4 2013 Q1 2013 % Growth, % Growth, Seq. YOY Period-End $13.1 $12.8 $12.1 2.23% 8.14% (8.93% ann.) Loans Avg. Loans 12.9 12.5 12.2 3.90% 5.91% (15.6% ann.) Assets Under $59.1 $57.1 $53.7 3.50% 10.06% Management Drivers: • Growth across substantiall
Slide 21: Commercial Loan Growth
Commercial Loan Growth ($millions) Mar 31, Dec 31, Loan 2014 2013 Growth Energy $2,344.1 $2,351.8 -0.33% Services 2,232.5 2,282.2 -2.18% Wholesale/retail 1,226.0 1,201.4 2.05% Manufacturing 444.2 391.8 13.37% Healthcare 1,396.6 1,274.2 9.61% Integrated food 126.5 150.5 -15.95% services Other C&I 281
Slide 22: Commercial Real Estate Loan Growth
Commercial Real Estate Loan Growth ($millions) Mar 31, Dec 31, Loan 2014 2013 Growth Resi const. and land 184.8 206.3 -10.42% development Retail 640.5 586.0 9.30% Office 436.3 411.5 6.03% Multifamily 662.7 576.5 14.95% Industrial 305.2 243.9 25.13% Other CRE 401.9 391.1 2.60% Total CRE 2,631.4 2,415
Slide 23: $9.9B AFS Portfolio
$9.9B AFS Portfolio High Quality, Actively Managed Securities portfolio used primarily to manage interest Private rate risk and generate Issue MBS, $0.2 incremental net interest revenue Agency Consistent strategy; actively CMBS, $2.1 managed for total return Other, $0.1 Total AFS portfolio est
Slide 24: Net Interest Margin
Net Interest Margin Yields (%) 5 Net Interest Revenue & Margin 3.50 4 $180 3 $170 3.25 2 NIR ($ in millions) 1 $160 3.00 Margin (%) 2Q13 3Q13 3Q13 4Q13 1Q14 $150 AFS Loans 2.75 $140 $130 2.50 Cost of Int Bearing Liab (%) $120 0.75 2.25 $110 0.50 $100 2.00 1Q13 2Q13 3Q13 4Q13 1Q14 0.25 0.00 NIR NIM 1
Slide 25: Net Interest Revenue
Net Interest Revenue Q1 2014 Q4 2013 Net Interest Revenue $162.6 million $166.2 million Drivers: • Lower margins on loan CRE portfolio • (3.89% compared to 4.01% in Q4) • Two fewer days in quarter compared to Q1 2014 • $2 million sequential impact • Lower portfolio of AFS securities BOK Financial Co
Slide 26: Other Operating Revenue
Other Operating Revenue $millions Q1 2014 % Growth, % Growth, Seq. YOY Brokerage and trading $29.5 3.5% -7.0% Strong pipeline in muni I-banking business Transaction card 29.1 - 5.2% Seasonal business, strong YOY growth Fiduciary and asset 25.7 2.6% 15.3% Growth in customer management accounts, asset
Slide 27: Expense Discipline
Expense Discipline $mil Q1 2014 Q4 2013 Decrease Total operating $185.1 $215.4 $30.3 expense Drivers: • $15 million decrease due to True-Up adjustment • Exec comp quarterly accruals $1.7 million lower with end of True-Up Plan • Professional fees down $2.4 million sequentially largely the timing of r
Slide 28: Balance Sheet Highlights
Balance Sheet Highlights Q1 2014 Q4 2013 Available for sale securities $9.9 billion $10.1 billion Average deposits $20.2 billion $19.9 billion Tier 1 Capital Ratio 13.77% 13.77% Total Capital Ratio 15.55% 15.56% Leverage Ratio 10.17% 10.05% Tier 1 Common Equity ratio (1) 13.59% 13.59% 1) Based on Ba
Slide 29: Capital
Capital Tangible Common Equity Ratio Tier 1 common equity ratio 13.59% as of March 31, 2014. Based on our interpretation of the new capital rule, our estimated Tier 1 common equity ratio is approximately 12.60%, nearly 560 basis points above the 7% regulatory threshold. Capital deployment Acqu
Slide 30: Solid Credit Quality at March 31, 2014
Solid Credit Quality at March 31, 2014 Continued Positive Trends ALL to period end loans: Net annualized charge-offs to average loans: 1.44% (.08)% Allowance for loan losses to Non-performing assets* to period nonaccruing loans: end loans and repossessed assets: 179.86% 1.18% All metrics as of 3
Slide 31: 2014 Assumptions
2014 Assumptions Mid- to high-single-digit loan growth Continued nominal pressure on NIM Continued reduction of bond portfolio offset by growth in loan portfolio Reduce the bond portfolio by $1 billion over the full year. Net interest income to be flat to slightly down for the balance of the ye
Slide 32: Superior Balanced Strategy
Superior Balanced Strategy Management alignment with shareholders Industry-leading performance across all market cycles Strong recurring revenue model Sound capital base Pristine credit quality Returning cash to shareholders BOK Financial Corporation. Member FDIC. Equal Housing Lender. Service