Bok Financial Corporation · NASDAQ:BOKF
Bok Financial — Q1 2020 Earnings Presentation
25 slides from Bok Financial's earnings presentation, Apr 22, 2020
Slide 1: First Quarter 2020 Earnings Conference Call
First Quarter 2020 Earnings Conference Call April 22, 2020 1
Slide 2: Legal Disclaimers
Legal Disclaimers Forward-Looking Statements: This presentation contains forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about BOK Financial Corporation, the financial services industry, the economy generally and the exp
Slide 3: Steven G. Bradshaw, Chief Executive Officer
Steven G. Bradshaw Chief Executive Officer 3
Slide 4: First Quarter Summary
First Quarter Summary Net Income $142.2 Q1 Q4 Q1 $137.6 ($mil, exc. EPS) 2020 2019 2019 $110.6 $110.4 Net Income $62.1 $110.4 $110.6 Diluted EPS $0.88 $1.56 $1.54 $1.93 $2.00 $1.54 $1.56 $62.1 Net income before taxes $79.3 $141.0 $140.2 $0.88 Provision for credit losses $93.8 $19.0 $8.0 Pre-provisio
Slide 5: Additional Details
Additional Details Quarterly Year over Year ($bil) Q1 2020 Growth Growth Period-End Loans $22.5 3.3% 3.2% Average Loans $21.9 (1.3)% 0.8% Period-End Deposits $29.2 5.9% 15.4% Average Deposits $28.2 4.0% 14.5% Fiduciary Assets $47.1 (10.1)% 1.4% Assets Under Management or in Custody $75.8 (8.4)% (3.9
Slide 6: Marty Grunst, EVP- Chief Risk Officer
Marty Grunst EVP- Chief Risk Officer 6
Slide 7: Coronavirus Response: Our People
Coronavirus Response: Our People Ensuring employee safety Employee support initiatives • Work from home strategy • Incremental compensation for certain employees required to • Modified banking centers to be on site drive-up or appointment only • Up to five additional days of • Adjusted banking cente
Slide 8: Norm Bagwell, EVP- Regional Banking
Norm Bagwell EVP- Regional Banking 8
Slide 9: Coronavirus Response: Our Clients
Coronavirus Response: Our Clients SBA Paycheck Protection Program Began taking applications on April 3 Redeployed hundreds of employees to manage volume Approximately 4,700 applications completed Received $1.8 billion in SBA approvals Focused intently on serving our core client base Expe
Slide 10: Stacy Kymes, EVP-Corporate Banking
Stacy Kymes EVP-Corporate Banking 10
Slide 11: Loan Portfolio
Loan Portfolio Seq. Mar 31, Dec 31, Mar 31, Loan YOY Loan ($mil) 2020 2019 2019 Growth Growth Energy $4,111.7 $3,973.4 $3,705.1 3.5% 11.0% Healthcare 3,165.1 3,033.9 2,915.9 4.3% 8.5% Services 3,955.7 3,832.0 4,090.6 3.2% (3.3)% General business 3,563.5 3,192.3 3,250.3 11.6% 9.6% Total C&I $14,796.0
Slide 12: Energy Banking
Energy Banking Over 100 year history in energy lending Portfolio Composition at 03/31/2020 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 property values Oil
Slide 13: Healthcare Banking
Healthcare Banking Portfolio Composition at 03/31/2020 • As of March 31, 2020, outstandings totaled $3.2 billion across 31 states • Healthcare portfolio characteristics: Favorable LIBOR spreads 12% Above-average loan utilization rates Predominately BOK Financial originated 13% Senior Housing c
Slide 14: Commercial Real Estate
Commercial Real Estate CRE Portfolio by Product Type Retail Office 17% 22% • $4.5 billion outstanding and $1.4 billion unfunded commitments at March 31, 2020 • BOKF allocates 175% of Tier 1 capital plus reserves to CRE Industrial 16% • Further controls and limitations by product type and geography.
Slide 15: Marc Maun, EVP-Chief Credit Officer
Marc Maun EVP-Chief Credit Officer 15
Slide 16: COVID-19 Impact Areas
COVID-19 Impact Areas Total Percent of BOKF ($mil) Outstanding Portfolio Entertainment and Recreation $580.0 2.81% • Gambling Industries 406.6 1.97% • All other Entertainment and Recreation 173.4 0.84% Retail $604.9 2.93% • Convenience Stores & Gas Stations 84.7 0.41% • Restaurants 234.2 1.14% • Spe
Slide 17: Key Credit Quality Metrics
Key Credit Quality Metrics Non-accruals Net charge-offs (annualized) to average loans $183.8 $181.0 0.40% $172.5 $163.2 $152.6 0.31% 0.22% 0.19% 0.19% 0.20% 0.14% 0.00% 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 Energy Healthcare CRE Residential and Other • Total non-accrual loans down $17.8
Slide 18: CECL
CECL Combined ACL Day 1 Economic Portfolio Combined ACL 12/31/19 Adjustment Factors Changes 03/31/20 $16.0 million $66.2 Changes million due to: Impairments Based on: $49.4* Balances $343.8 Macro million economic Risk Grades million variables Payment Includes ACL Weightings Profiles for loans and as
Slide 19: Steven Nell, EVP-Chief Financial Officer
Steven Nell EVP-Chief Financial Officer 19
Slide 20: Net Interest Revenue and Margin
Net Interest Revenue and Margin ($mil) Q1 2020 Q4 2019 Q3 2019 Q2 2019 Q1 2019 Net interest revenue $261.4 $270.2 $279.1 $285.4 $278.1 Net interest margin 2.80% 2.88% 3.01% 3.30% 3.30% Yield on loans 4.50% 4.75% 5.12% 5.39% 5.26% Cost of interest-bearing 0.98% 1.09% 1.17% 1.13% 1.04% deposits Cost o
Slide 21: Fees and Commissions
Fees and Commissions Revenue, $mil Growth: Quarterly, Quarterly, Trailing 12 Q1 2020 Sequential Year over Year Months Brokerage and Trading $50.8 15.8% 60.6% 12.0% Transaction Card 21.9 (3.0)% 5.5% 1.3% Fiduciary and Asset Management 44.5 (1.3)% 2.5% 0.6% Deposit Service Charges and Fees 26.1 (4.4)%
Slide 22: Expenses
Expenses %Incr. %Incr. ($mil) Q1 2020 Q4 2019 Q1 2019 Seq. YOY Personnel expense $156.2 $168.4 $169.2 (7.3)% (7.7)% Other operating expense $112.4 $120.4 $117.9 (6.6)% (4.7)% Total operating expense $268.6 $288.8 $287.2 (7.0)% (6.5)% Efficiency Ratio 58.62% 63.65% 64.80% • Personnel expense down $12
Slide 23: Liquidity & Capital
Liquidity & Capital Q1 2020 Q4 2019 Q1 2019 Loan to Deposit Ratio 76.8% 78.7% 85.9% Period End Deposits $29.2 billion $27.6 billion $25.3 billion Available secured wholesale $12.8 billion - - borrowing capacity Common Equity Tier 1 10.98% 11.39% 10.71% Total Capital Ratio 12.58% 12.94% 12.24% Tangib
Slide 24: Closing Remarks
Steven G. Bradshaw Chief Executive Officer Closing Remarks 24
Slide 25: Question and Answer Session
Question and Answer Session 25