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: 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-looking
Slide 3: Top 30 national/regional bank overview
• Top 30 national/regional bank* • Long-term focused Midwest/Southwest franchise with market cap over $6 billion. • Seasoned management team Full Service Banking Markets Additional Wealth Management Markets • Proven ability to deliver Additional Mortgage Banking Markets organic growth December 31, 2
Slide 4: Core Strategy: Build a recession-proof bank that will outperform peers
Core Strategy: Build a recession-proof bank that will outperform peers across the economic cycle $600,000 $550,000 $500,000 $450,000 Earnings Per Share CAGR across 27 year history of BOKF is 10% $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 91 93 95 97 99 01 03 05 07 09 1
Slide 5: CoBiz Financial Acquisition
CoBiz Financial Acquisition • CoBiz integration costs totaled $30 million; $17 million in 2018 and $13 million in Q1 2019. $12 million under initial budget. • Less outside temporary help or professional engagement than anticipated, saving $3 million • Saved nearly $2 million in contract buyouts • Sa
Slide 6: BOK Financial: Diverse Revenue Sources
BOK Financial: Diverse Revenue Sources • 37% fee income is a differentiator for BOKF compared to other midsized regional banks • Well diversified: no single component of fee Brokerage and income accounts for more than 10% of total Trading revenue 7% • Further diversity within the fee income categori
Slide 7: Strong Balance Sheet
Strong Balance Sheet Metric: 03/31/2019 Period End Loans $21.8 billion Period End Deposits $25.3 billion Loan to Deposit Ratio 86% Regulatory minimum for Capital Ratios: 03/31/2019 well-capitalized: Common Equity Tier 1 7% 10.71% Tier 1 Capital Ratio 8.5% 10.71% Total Capital Ratio 10.5% 12.24% Leve
Slide 8: Strong Core Deposit Franchise
Strong Core Deposit Franchise Deposit mix and cost ($bn) Geographic deposit mix Demand Interest-bearing transaction Savings Time TX 23% NM $25 $25 6% AR $24 $23 9% 1% $22 2% $21 CO OK 16% $18 45% 49% AZ KC 6% 3% $12 MSA Branches Deposit share Tulsa, OK 24 32% Dallas-Fort Worth-Arlington, TX 21 2% $6
Slide 9: Diversified Loan Portfolio
Diversified Loan Portfolio Loan Portfolio Segmentation Loan Portfolio by Market Commercial Personal Real Estate OK 5% 21% 28% Healthcare 13% TX Resi 36% 10% Other 1% KS/MO 5% Energy 17% AZ 10% NM General C&I 4% CO 34% 16% Disciplined concentration management Diversified by sector and geography 9
Slide 10: A National Energy Banking Leader
A National Energy Banking Leader Over 100 year history in energy lending and a Portfolio Composition at 03/31/2019 playbook that works: • Focus on first lien, senior secured E&P lending – Oil & Gas the “sweet spot” in energy lending Producers • Internal staff of 16 petroleum engineers and 82% engine
Slide 11: Healthcare Banking Expertise
Healthcare Banking Expertise • Growing line of business within commercial banking • As of March 31, 2019, outstandings totaled $2.9 billion across 31 states • Healthcare portfolio characteristics: • Favorable LIBOR spreads • Above-average loan utilization rates • Predominately BOK Financial originat
Slide 12: Commercial Real Estate
Commercial Real Estate CRE Portfolio by Product Type • $4.6 billion outstanding and $1.8 billion unfunded commitments at March 31, 2019. Multifamily • BOKF allocates 175% of Tier 1 capital plus reserves to CRE. Retail • Further controls and limitations by product Office type and geography. Concentra
Slide 13: Wealth Management
Wealth Management • Four primary lines of business: 500 Wealth Management Revenue • The Private Bank 400 • BOK Financial Advisors CAGR: 9.6% • Institutional Wealth Management 300 • Cavanal Hill Investment Management 200 • Clients include high net worth individuals, corporations, pensions, foundation
Slide 14: Transaction Processing
Transaction Processing Debit Processing & ATM Network 800 EFT Transaction 700 Volumes (M) • 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 400 clients outside Oklahoma 300 • Clients: Banks / Cred
Slide 15: Mortgage Banking
Mortgage Banking 160,000 140,000 • Top 50 U.S. mortgage originator 120,000 100,000 • Two lines of business: 80,000 60,000 • Direct mortgage origination 40,000 through BOKF retail network 20,000 - • Mortgage Servicing 2015 2016 2017 2018 TTM Mar '19 • Discontinued online sales Servicing Originating a
Slide 16: 1Q 2019 Financial Results
© BOK FINANCIAL 1Q 2019 Financial Results ~
Slide 17: First Quarter Summary
First Quarter Summary: Q1 2019 Q4 2018 Q1 2018 Diluted EPS $1.54 $1.50 $1.61 Net income before taxes $140.2 $128.5 $136.3 Net income attributable to BOKF shareholders $110.6 $108.5 $105.6 Noteworthy items impacting first quarter profitability: • CoBiz integration expense of $12.7 million realized th
Slide 18: Loan Portfolio
Loan Portfolio Seq. Mar 31, Dec 31, Loan ($mil) 2019 2018 Growth Energy $3,705.1 $3,590.3 3.2% Services 3,287.6 3,258.2 0.9% Healthcare 2,915.9 2,799.3 4.2% Wholesale/retail 1,706.9 1,621.2 5.3% Manufacturing 742.4 730.5 1.6% Public Finance 803.1 804.6 (0.2)% Other 801.1 832.0 (3.7)% Total C&I $13,9
Slide 19: Net Interest Revenue and Margin
Net Interest Revenue and Margin ($millions) Q1 2019 Q4 2018 Q3 2018 Q2 2018 Q1 2018 Net interest revenue $278.1 $285.7 $240.9 $238.6 $219.7 Provision for credit losses $8.0 $9.0 $4.0 $— $(5.0) NIR after provision $270.1 $276.7 $236.9 $238.6 $224.7 Net interest margin 3.30% 3.40% 3.21% 3.17% 2.99% •
Slide 20: Fees and Commissions
Fees and Commissions Revenue, $mil Growth: Quarterly, Quarterly, Year Trailing 12 Q1 2019 Sequential over Year Months Brokerage and Trading $31.6 12.5% 3.2% 0.9% Transaction Card 20.7 0.4% (1.2)% (0.3)% Fiduciary and Asset Management 43.4 (0.7)% 3.6% 0.8% Deposit Service Charges and Fees 28.2 (3.9)%
Slide 21: Expenses
Expenses %Incr. %Incr. ($mil) Q1 2019 Q4 2018 Q1 2018 Seq. YOY Personnel expense $169.2 $160.7 $139.9 5.3% 20.9% Other operating expense $117.9 $123.9 $104.5 (4.8)% 12.9% Total operating expense $287.2 $284.6 $244.4 0.9% 17.5% Efficiency Ratio* 61.93% 60.02% 64.94% • CoBiz integration expense totale
Slide 22: Key Credit Quality Metrics
Key Credit Quality Metrics • No material signs of stress in any loan portfolio. • Nonaccrual loans down 6.5% sequentially. Appropriately reserved with a combined allowance of 0.95% with CoBiz portfolio included. • Net charge-offs were 0.19% of average loans over the last four quarters. 22
Slide 23: Forecast and Assumptions
Forecast and Assumptions • Mid single digit loan growth for the consolidated BOKF and COBZ entity. • Provision levels moving forward will be influenced by loan growth, but are expected to be at similar dollar levels to the past couple of quarters. • We now expect no rate hikes in 2019, providing lit