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: Disclosures
Disclosures 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 for
Slide 3: NASDAQ: BOKF
NASDAQ: BOKF • Top 30 national/regional bank* • Long-term focused Midwest/Southwest franchise with market cap over $5 billion • Seasoned management team Full Service Banking Markets Additional Wealth Management Markets • Proven ability to deliver Additional Mortgage Banking Markets organic growth Se
Slide 4: Core Strategy
Core Strategy Build a recession-ready bank that will outperform peers across the economic cycle $550,000 $500,000 $450,000 Earnings Per Share CAGR across 28 year history of BOKF is 11% $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 “There is no principle more emphasized in
Slide 5: Diverse Revenue Sources
Diverse Revenue Sources • 40% fee income is a differentiator for BOKF compared to other midsized regional banks Portfolio Composition at 09/30/2019 • Well diversified: no single component of fee income accounts for more than 10% of total revenue Brokerage and Trading • Further diversity within the f
Slide 6: Strong Balance Sheet
Strong Balance Sheet Metric: 09/30/2019 Period End Loans $22.3 billion Period End Deposits $26.2 billion Loan to Deposit Ratio 85% Regulatory minimum Capital Ratios: 09/30/2019 for well-capitalized: Common Equity Tier 1 7% 11.06% Tier 1 Capital Ratio 8.5% 11.06% Total Capital Ratio 10.5% 12.56% Leve
Slide 7: Strong Core Deposit Franchise
Strong Core Deposit Franchise Deposit mix and cost ($bn) Geographic deposit mix Demand Interest-bearing transaction Savings Time TX 23% $30 NM $26 6% $25 9% AR 1% $24 $23 2% $22 $21 OK CO 48% 15% $18 51% AZ KS/MO 5% 2% $12 MSA Branches Deposit share Tulsa, OK 24 32% Dallas-Fort Worth-Arlington, TX 2
Slide 8: Diversified Loan Portfolio
Diversified Loan Portfolio Loan Portfolio Segmentation Loan Portfolio by Collateral Location Commercial TX Personal Real Estate 31% 5% 21% OK Healthcare 16% 14% Residential 9% NM 4% CO Energy Other 14% 18% 21% General C&I AZ 32% KS/MO 8% 6% Disciplined concentration management Diversified by sector
Slide 9: A National Energy Banking Leader
A National Energy Banking Leader Over 100 year history in energy lending Portfolio Composition at 09/30/2019 and a playbook that works • Focus on first lien, senior secured E&P lending – the “sweet spot” in energy lending • Internal staff of 16 petroleum engineers and engineering techs to confirm pr
Slide 10: Healthcare Banking Expertise
Healthcare Banking Expertise • Growing line of business within commercial banking Portfolio Composition at 09/30/2019 • As of September 30, 2019, outstandings totaled $3.0 billion across 31 states • Healthcare portfolio characteristics: Favorable LIBOR spreads Above-average loan utilization rate
Slide 11: Commercial Real Estate
Commercial Real Estate CRE Portfolio by Product Type Office Retail 22% 17% • $4.6 billion outstanding and $1.6 billion unfunded commitments at September 30, 2019 • BOKF allocates 175% of Tier 1 capital plus Industrial reserves to CRE 19% • Further controls and limitations by product type and geograp
Slide 12: Wealth Management
Wealth Management Four primary lines of business 500 Wealth Management Revenue 450 • Private Wealth 400 • BOK Financial Advisors CAGR: 9.6% 350 • Institutional Wealth Management 300 • Cavanal Hill Investment Management 250 200 • Clients include high net worth individuals, corporations, pensions, 150
Slide 13: Transaction Processing
Transaction Processing 800 EFT Transaction Debit Processing & ATM Network 700 Volumes (Mil) • 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 clients outside Oklahoma 400 300 • Clients: Banks / Cr
Slide 14: Mortgage Banking
Mortgage Banking 160,000 140,000 120,000 100,000 80,000 60,000 • Top 50 U.S. mortgage originator 40,000 20,000 • Two lines of business: - 2015 2016 2017 2018 YTD 2019 Direct mortgage origination Servicing Rev. Originating and Marketing Rev. through BOKF retail network Mortgage Servicing 22.5 • A
Slide 15: 3Q 2019 Financial Results
© BOK FINANCIAL 3Q 2019 Financial Results ‘N 15
Slide 16: Third Quarter Summary
Third Quarter Summary Net Income $142.2 $137.6 Q3 Q2 Q3 $117.3 2019 2019 2018 $110.6 $2.00 $108.5 $1.93 Diluted EPS $2.00 $1.93 $1.79 $1.79 $1.54 Net income before taxes $174.3 $175.4 $152.2 $1.50 Net income attributable to BOKF shareholders $142.2 $137.6 $117.3 3Q18 4Q18 1Q19 2Q19 3Q19 Net income a
Slide 17: Loan Portfolio
Loan Portfolio Seq. Sep 30, Jun 30, Loan ($mil) 2019 2019 Growth Energy $4,114.3 $3,921.4 4.9% Services 3,266.2 3,309.5 (1.3)% Healthcare 3,033.0 2,926.5 3.6% Wholesale/retail 1,848.6 1,793.1 3.1% Manufacturing 698.4 761.4 (8.3)% Public Finance 744.8 795.7 (6.4)% Other 719.3 829.5 (13.3)% Total C&I
Slide 18: Net Interest Revenue and Margin
Net Interest Revenue and Margin ($mil) Q3 2019 Q2 2019 Q1 2019 Q4 2018 Q3 2018 Net interest revenue $279.1 $285.4 $278.1 $285.7 $240.9 Provision for credit losses $12.0 $5.0 $8.0 $9.0 $4.0 NIR after provision $267.1 $280.4 $270.1 $276.7 $236.9 Net interest margin 3.01% 3.30% 3.30% 3.40% 3.21% • Net
Slide 19: Fees and Commissions
Fees and Commissions Revenue, $mil Growth: Quarterly, Trailing 12 Q3 2019 Sequential Months Brokerage and Trading $43.8 8.2% 16.8% Transaction Card 22.0 0.5% 0.7% Fiduciary and Asset Management 43.6 (3.1)% (7.3)%* Deposit Service Charges and Fees 28.8 2.7% 0.9% Mortgage Banking 30.2 7.3% 6.8% Other
Slide 20: Expenses
Expenses %Incr. %Incr. ($mil) Q3 2019 Q2 2019 Q3 2018 Seq. Annualized Personnel expense $162.6 $160.3 $143.5 1.4% 5.6% Non-personnel expense $116.7 $116.8 $109.1 (0.1)% (0.3)% Total operating expense $279.3 $277.1 $252.6 0.8% 3.1% Efficiency Ratio 59.31% 59.51% 61.60% • Personnel expense up $2.2 mil
Slide 21: Key Credit Quality Metrics
Key Credit Quality Metrics Non-accruals Net charge-offs (annualized) to average loans $183.8 0.40% $172.5 $163.2 $153.0 $152.6 0.23% 0.20% 0.19% 0.19% 0.20% 0.14% 0.00% 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 Energy Healthcare CRE Residential and Other • Total non-accrual loans down $11.3
Slide 22: Forecast and Assumptions
Forecast and Assumptions • Mid-single digit loan growth from C&I categories expected for the remainder of the year • Provision level in fourth quarter influenced more by loan growth as opposed to any expected credit deterioration • We expect one additional rate decrease before year-end, and are plan
Slide 23: CECL
CECL • CECL models have been developed, tested and validation is being finalized. • Based on the results of test runs, our allowance committee expects the pre- tax transition adjustment from CECL implementation will be between $50 million and $75 million COBZ Acquired loans GNMA VA loans Other liabi