Bok Financial Corporation · NASDAQ:BOKF
Bok Financial — Q2 2015 Earnings Presentation
30 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 T 25 b bank khholding ldi 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 6/30/15: NASDAQ: BOKF Assets $
Slide 4: BOKF Investment Attributes
BOKF Investment Attributes Attribute Evidence Focused on long-term shareholder Strong growth in total shareholder return over value several economic cycles Management alignment with Insiders own 69% of outstanding shares shareholders Industry-leading performance across 24-year track record of profit
Slide 5: Driving Long Term Shareholder Value
Driving Long Term Shareholder Value As of 6/30/15 5 Yr. TSR 10 Yr. TSR 15 Yr. TSR BOKF 69% 88% 457% Peer average 80% 26% 204% Peer median 75% 21% 178% KBW Bank Index 84% 0% 56% NASDAQ Bank Index 91% 20% 175% “There There is no principle more emphasized in our organization than managing for long-term
Slide 6: Diversified Business Platform
Diversified Business Platform Retail and Commercial Banking Wealth Management Transaction Processing Mortgage Banking 6
Slide 7: Diversified Revenue Sources
Diversified Revenue Sources CAGR 2009- Brokerage & LT Growth G th Rates R t 2014 Trading 10.0% Brokerage and Trading 8.0% Trans. Transaction Card (1) 3.2% Card Trust Fees 11.8% 9 6% 9.6% Service Charges (1) (4.7%) Mortgage Banking 10.9% Net Interest Trust 50.8% Fees Overall CAGR 5.3% 9.0% ((1)) Impa
Slide 8: Deposit Franchise
Deposit Franchise Market Branches Deposit Share Tulsa, OK 26 29.96 TX Dallas-Fort Worth-Arlington, TX 23 1.71 OK Oklahoma City, OK 20 12.28 Houston-The Woodlands-Sugar Land, TX 14 0.66 NM Denver-Aurora-Lakewood, CO 11 2.05 AR Albuquerque, NM 17 10.05 Phoenix-Mesa-Scottsdale, AZ 4 0.99 CO Kansas City
Slide 9: 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) 6/30/2015 (In Millions) 6/30/2015 Energy $ 2 902 1 2,902.1 19.2% 19 2% Okl h Oklahoma 5 749 0 5,749.0 38.0% 38 0% Services $ 2,837.6 18.8% Texas 5,281.7 34
Slide 10: Commercial Banking: Energy Lending
Commercial Banking Energy Lending At 6/30/15: $5.6 billion commitments and $2.9 billion O/S Wholesale/Energy Retail Services E&P line utilization 58% 3% 8% Mid t Midstream 52% of commitments, commitments 48% of outstandings are SNCs 4% Approx. 61% of production loans secured by oil Nonaccr
Slide 11: Commercial Banking: Healthcare Lending
Commercial Banking Healthcare Lending Healthcare Commitments Growing line of business within commercial Medical Services Skilled 30% $1 7 billion portfolio at 6/30/15 $1.7 Nursing 36% Portfolio increased at a compound annual rate of 8% since 2007 National expertise in skilled nursing facilit
Slide 12: Commercial Real Estate Portfolio Trends
Commercial Banking Commercial Real Estate Portfolio Trends CRE By Market $750 KS/MO 6% OK AZ 20% $600 15% Millions $450 CO M 8% $300 AR $150 3% TX NM 38% $0 10% C&D Retail Office Multifamily Industrial Other CRE 9/30/2014 12/31/2014 3/31/2015 6/30/2015 12
Slide 13: Wealth Management
Wealth Management Fiduciary and Asset Management Revenue ($millions) $124.6 $68.6 billion in assets under $115.7 management or custody $96.1 $38.8 billion in fiduciary assets $80.1 $69.0 $73.3 $66.2 More than $1 trillion in traded securities annually Clients include high net worth 2009 2010 2011
Slide 14: Transaction Processing
ATM Network 600 EFT Transaction Among the top 10 networks in the US 500 Volumes (M) Operates in 22 states; more than 50% of clients 400 CAGR: 9.93% outside Oklahoma 300 Clients: 211 Banks, 139 Credit Unions, 6 C- 200 Store partners 100 In 2014, processed 496 million EFT transactions 0 Mercha
Slide 15: Mortgage Banking: Building a Recurring Revenue Model
Mortgage Banking Building a Recurring Revenue Model Housed within the consumer banking business 180,000 Several key strategic Mortgage 160,000 Banking initiatives: 140,000 Revenue 120,000 ($000s) Build servicing portfolio 100,000 80,000 Expand correspondent 60,000 network 40,000 20,000 Bui
Slide 16: Q2 2015 Financial Results
© BOK FINANCIAL N Q2 2015 Financial Results
Slide 17: Q2 2015 Highlights
Q2 2015 Highlights Q2 2015 Q1 2015 Q2 2014 Net Income ($mil) $79.2 $74.8 $75.7 Diluted EPS $1.15 $1.08 $1.10 Record net interest income, driven by continued double digit loan growth and net interest margin expansion Second consecutive quarter of record fees and commissions, with all key f fee-ge
Slide 18: Additional Q2 2015 Highlights
Additional Q2 2015 Highlights % Growth, % Growth, $billions Q2 2015 Q1 2015 Q2 2014 Seq. YOY Period-End $15.1 $14.7 $13.4 3.0% 12.6% (12 0% ann (12.0% ann.)) Loans Avg. Loans 14.9 14.6 13.3 2.4% 12.4% (9.6% ann.) Fiduciary $38.8 $37.5 $32.7 3.4% 18.5% (13.4% ann.) Assets Drivers: • Loans: Continued
Slide 19: Commercial Loan Growth
Commercial Loan Growth Sequential YOY Jun 30, Mar 31, Loan Jun 30, Jun 30, Loan ($millions)) ($ 2015 2015 Growth 2015 2014 Growth Energy $2,902.1 $2,903.0 0.0% $2,902.1 $2,419.8 19.9% Services 2,837.6 2,728.4 4.0% 2,837.6 2,377.1 19.4% Wh l Wholesale/retail l / t il 1 377 3 1,377.3 1 270 3 1,270.3 8
Slide 20: Commercial Real Estate
Commercial Real Estate Sequential YOY Jun 30, Mar 31, Loan Jun 30, Jun 30, Loan ($millions)) ($ 2015 2015 Growth 2015 2014 Growth Residential construction and $148.6 $139.1 6.8% $148.6 $184.5 (19.6%) land development Retail 688 4 688.4 658 9 658.9 4 5% 4.5% 688 4 688.4 642 1 642.1 7 2% 7.2% Office 5
Slide 21: Total Loans
Total Loans ($millions) Jun 30, Mar 31, Sequential Jun 30, Jun 30, YOY 2015 2015 Loan 2015 2014 Loan Growth Growth Total Commercial $9,775.7 $9,391.2 4.1% $9,775.7 $8,367.7 16.8% Total CRE 3,033.5 2,935.5 3.3% 3,033.5 2,655.0 14.3% Total Residential 1,884.7 1,927.0 (2.2%) 1,884.7 2,008.2 (6.1%) Mort
Slide 22: Loan Portfolio by Geography
Loan Portfolio by Geography ($millions) Jun 30, Mar 31, Sequential Jun 30, Jun 30, YOY 2015 2015 Loan 2015 2014 Loan Growth Growth Oklahoma $5,749.0 $5,537.0 3.8% $5,749.0 $5,378.4 6.9% Texas 5,281.7 5,228.3 1.0% 5,281.7 4,501.6 17.3% Albuquerque 819.6 824.1 (0.5%) 819.6 840.7 (2.5%) Arkansas 197.3
Slide 23: Net Interest Revenue and Margin
Net Interest Revenue and Margin Q2 Q1 Q4 Q3 Q2 2015 2015 2014 2014 2014 Net Interest Revenue ($mil) $175.7 $167.7 $169.7 $166.8 $166.1 Provision for credit losses $ 4.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0 NIR after provision $171.7 $167.7 $169.7 $166.8 $166.1 Net Interest Margin 2.61% 2.55% 2.61% 2.67% 2.75% NI
Slide 24: Record Quarterly Fees and Commissions Revenue
Record Quarterly Fees and Commissions Revenue ($millions) Q2 2015 % Growth, % Growth, Seq Seq. YOY Brokerage and trading $36.0 13.6% (7.9%) Transaction card 32.8 5.7% 4.0% Fiduciary and asset management 32 7 32.7 4 0% 4.0% 10 7% 10.7% Deposit service charges and fees 22.3 3.0% (3.5%) Mortgage bankin
Slide 25: Expense Review
Expense Review (($millions)) Q2 2015 Q1 2015 Q2 2014 %Incr. %Incr. Seq. YOY Personnel Expense $132.7 $128.5 $123.7 3.2% 7.3% Other Operating Expense $ 94.4 $ 91.8 $91.0 2.9% 3.8% Total operating expense $227.1 $220.3 $214.7 3.1% 5.8% • $6.3 $6 3 million increase in incentive compensation expense due
Slide 26: Balance Sheet Strength
Balance Sheet Strength Q2 2015 Q1 2015 Q2 2014 Period End AFS Securities $9.0 billion $9.2 billion $9.7 billion Average AFS securities $9.1 billion $9.1 billion $9.8 billion Period End Deposits $21.1 billion $21.2 billion $20.6 billion A Average deposits d it $21 1 billi $21.1 billion $21 2 billi $2
Slide 27: $9.0B AFS Portfolio
$9.0B AFS Portfolio High Quality, Actively Managed Securities portfolio used primarily to manage interest rate risk and generate incremental net Agency interest revenue CMBS, $2.4 Consistent strategy; actively managed for total return Total AFS portfolio estimated duration of 3.2 Agency g y yy
Slide 28: Solid Credit Quality at June 30, 2015
Solid Credit Quality at June 30, 2015 Continued Positive Trends Allowance for credit losses to Net annualized charge-offs to period end loans: average loans: 1.33% 0.02% Allowance for credit losses to Non-performing assets to period nonaccruing loans: end loans and repossessed assets*: 222.21
Slide 29: Second Half 2015 Assumptions
Second Half 2015 Assumptions Mid-to-high Mid t hi h single i l didigit it lloan growth th iin Q3 and d Q4 Q4, low l double d bl didigit it loan growth for the full year. NII will continue to increase slightly in 2015 from earning asset composition and stable to improving NIM Provision for cred
Slide 30: Summary
Summary Diverse sources of revenue Capital and willingness to make accretive acquisitions Deep and experienced Sound financial condition management team Exceptional bench strength Differentiated business model Multiple growth drivers BOK Financial is a tenacious competitor BOK Financ